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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

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FORM 10-Q

[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2003

OR

[   ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to____________.

Commission File Number: 000-04829

Nabi Biopharmaceuticals

(Exact name of registrant as specified in its charter)

Delaware		59-1212264
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

5800 Park of Commerce Boulevard N.W., Boca Raton, FL 33487

(561) 989-5800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [   ] No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [   ] No

The number of shares outstanding of the registrant’s common stock, par value $0.10 per share, at October 22, 2003 was 46,659,503 shares.

 

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PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EX-10.1 Letter Agreement with David J. Gury
EX-31.1 CEO Cert. Rule 13a-14(a)/15d-14a
EX-31.2 CFO Cert. Rule 13a-14(a)/15d-14a
EX-32.1 Section 1350 Certification of CEO & CFO

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Nabi Biopharmaceuticals

INDEX

				Page No.
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements			3
		- Consolidated Balance Sheets, as of September 27, 2003 (unaudited) and December 28, 2002			3
		- Consolidated Statements of Operations for the Three Months and Nine Months Ended September 27, 2003 and September 28, 2002 (unaudited)			4
		- Consolidated Statements of Cash Flows for the Nine Months Ended September 27, 2003 and September 28, 2002 (unaudited)			5
		- Notes to Consolidated Financial Statements (unaudited)			6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk			26
	Item 4.	Controls and Procedures			26
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings			27
	Item 2.	Changes in Securities and Use of Proceeds			27
	Item 3.	Defaults Upon Senior Securities			28
	Item 4.	Submission of Matters to a Vote of Security Holders			28
	Item 5.	Other Information			28
	Item 6.	Exhibits and Reports on Form 8-K			28
		Signatures			29
		Certifications			30

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Nabi Biopharmaceuticals

CONSOLIDATED BALANCE SHEETS

					(UNAUDITED)
					September 27,				December 28,
(Amounts in Thousands)					2003				2002
Assets
Current assets:
	Cash and cash equivalents				$	26,248			$	51,737
	Trade accounts receivable, net					35,954				36,326
	Inventories, net					25,819				19,388
	Prepaid expenses and other current assets					5,224				5,595
			Total current assets			93,245				113,046
Property, plant and equipment, net						100,444				104,066
Other assets:
	Intangible assets, net					109,390				12,690
	Other, net					3,948				3,014
Total assets					$	307,027			$	232,816
Liabilities and stockholders’ equity
Current liabilities:
	Trade accounts payable				$	7,826			$	21,654
	Accrued expenses					23,944				16,897
	Notes payable, PhosLo acquisition					4,014				—
	Notes payable					2,000				—
			Total current liabilities			37,784				38,551
Notes payable, PhosLo acquisition						23,047				—
Notes payable						8,000				—
Other liabilities						7,129				5,236
			Total liabilities			75,960				43,787
Stockholders’ equity:
	Convertible preferred stock, par value $.10 per share: 5,000 shares authorized; no shares outstanding					—				—
	Common stock, par value $.10 per share: 75,000 shares authorized; 47,239 and 38,947 shares outstanding, respectively					4,724				3,895
	Capital in excess of par value					204,134				159,568
	Treasury stock, 800 and 386 shares at cost					(5,240	)			(2,140	)
	Retained earnings					27,449				27,706
		Total stockholders’ equity				231,067				189,029
Total liabilities and stockholders’ equity					$	307,027			$	232,816

See accompanying notes to consolidated financial statements

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Nabi Biopharmaceuticals

CONSOLIDATED STATEMENTS OF OPERATIONS

								(UNAUDITED)
				For the Three Months								For the Nine Months
				Ended								Ended
				September				September				September				September
(Amounts in Thousands, Except Per Share Data)				27, 2003				28, 2002				27, 2003				28, 2002
Sales				$	42,435			$	46,100			$	128,595			$	137,871
Costs and expenses:
		Costs of products sold			16,101				26,352				62,781				81,649
		Royalty expense			5,423				4,249				13,722				10,105
	Gross margin				20,911				15,499				52,092				46,117
		Selling, general and administrative expense			9,351				8,732				32,189				28,155
		Research and development expense			6,454				5,597				18,183				14,939
		Other operating expense, principally amortization and freight			1,588				153				1,953				551
Operating income (loss)					3,518				1,017				(233	)			2,472
Interest income					131				192				502				1,085
Interest expense					(506	)			(95	)			(570	)			(2,039	)
Other income (expense), net					12				13				30				(169	)
Income (loss) before (provision) benefit for income taxes					3,155				1,127				(271	)			1,349
(Provision) benefit for income taxes					(962	)			(302	)			14				(364	)
Net income (loss)				$	2,193			$	825			$	(257	)		$	985
Basic earnings (loss) per share				$	0.05			$	0.02			$	(0.01	)		$	0.03
Diluted earnings (loss) per share				$	0.05			$	0.02			$	(0.01	)		$	0.02
Basic weighted average shares outstanding					45,355				38,704				41,152				38,625
Diluted weighted average shares outstanding					46,285				39,299				41,152				39,611

See accompanying notes to consolidated financial statements

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Nabi Biopharmaceuticals

CONSOLIDATED STATEMENTS OF CASH FLOWS

				(UNAUDITED)
				For the Nine Months Ended
				September 27,				September 28,
(Dollars in Thousands)				2003				2002
Cash flow from operating activities:
	Net income			$	(257	)		$	985
	Adjustments to reconcile net income to net cash used in operating activities:
		Depreciation and amortization			9,422				7,465
		(Recovery) provision for doubtful accounts			(3	)			391
		Provision for slow moving or obsolete inventory			1,641				23
		Write-off of loan origination fees			—				400
		Non-cash compensation			689				334
		Imputed interest on notes payable			201				—
		Write-off obsolete fixed assets			23				269
	Changes in assets and liabilities:
		Decrease in trade accounts receivable			375				706
		Increase in inventories			(7,918	)			(3,564	)
		Decrease in prepaid expenses and other assets			372				2,382
		Increase in other assets			(1,027	)			(20	)
		Decrease in accounts payable and accrued liabilities			(5,314	)			(10,704	)
		Total adjustments			(1,539	)			(2,318	)
Net cash used in operating activities					(1,796	)			(1,333	)
Cash flow from investing activities:
		Capital expenditures			(4,082	)			(4,841	)
		Expenditures for other assets			(2,019	)			(2,760	)
		Acquisition of PhosLo			(61,255	)			—
Net cash used in investing activities					(67,356	)			(7,601	)
Cash flow from financing activities:
		Borrowings under debt agreement			10,000				—
		Proceeds from the issuance of common stock			31,270
		Retirement of convertible subordinated notes			—				(78,500	)
		Purchase of treasury stock			—				(917	)
		Proceeds from exercise of employee stock options			2,393				699
Net cash provided by (used in) financing activities					43,663				(78,718	)
Net decrease in cash and cash equivalents					(25,489	)			(87,652	)
Cash and cash equivalents at beginning of period					51,737				131,192
Cash and cash equivalents at end of period				$	26,248			$	43,540

See accompanying notes to consolidated financial statements

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Nabi Biopharmaceuticals

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 OVERVIEW

Nabi Biopharmaceuticals discovers, develops, manufactures and markets products that power the immune system to help people with serious, unmet medical needs. We have a broad product portfolio and significant research capabilities focused on developing and commercializing novel vaccines and antibody-based therapies that prevent and treat infectious, autoimmune and addictive diseases, such as Staphylococcus aureus and hepatitis infections, immune thrombocytopenia purpura (“ITP”) and nicotine addiction. We have five marketed products, Nabi-HB^® [Hepatitis B Immune Globulin (Human)] for the prevention of hepatitis B infections, WinRho SDF^® [Rh_o (D) Immune Globulin Intravenous (Human)] for the treatment of acute, chronic and HIV-related ITP, PhosLo^® (calcium acetate) for the control of elevated phosphate levels (hyperphosphatemia) in patients with end-stage kidney (renal) failure, Autoplex^® T [Anti-Inhibitor Coagulant Complex, Heat Treated] and Aloprim™ [(Allopurinol sodium) for injection]. We have a significant clinical trials program including clinical trials of our lead investigational products StaphVAX^® (Staphylococcus aureus Polysaccharide Conjugate Vaccine), Altastaph™ [Staphylococcus aureus Immune Globulin (Human)], Civacir™ [Hepatitis C Immune Globulin (Human)], and NicVAX™ (Nicotine Conjugate Vaccine). We have a state-of-the-art fractionation facility for the manufacture of Nabi-HB and our investigational antibody products and for contract manufacturing. We also collect specialty and non-specific antibodies for use in our products as well as to supply pharmaceutical and diagnostic customers for the subsequent manufacture of their products.

The consolidated financial statements include the accounts of Nabi Biopharmaceuticals and its subsidiaries. All significant intercompany accounts and transactions were eliminated during consolidation. These statements should be read in conjunction with the Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 28, 2002.

In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present fairly our consolidated financial position as of September 27, 2003 and September 28, 2002, the consolidated results of our operations for the three months and nine months ended September 27, 2003 and September 28, 2002 and our cash flows for the nine months then ended. The interim results of operations are not necessarily indicative of the results that may occur for the fiscal year.

NOTE 2 ACCOUNTING POLICIES

Accounting estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.

New accounting pronouncements: In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 addresses the consolidation of entities whose equity holders have either (a) not provided sufficient equity at risk to allow the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the consolidation of these entities, known as variable interest entities (“VIE’s”), by the primary beneficiary of the entity. The primary beneficiary is the entity, if any, that is subject to a majority of the risk of loss from the VIE’s activities, entitled to receive a majority of the VIE’s residual returns, or both. FIN 46 applies immediately to variable interests in VIEs created or obtained after January 31, 2003. As amended by FASB Staff Position (“FSP”) No. FIN 46-6, FIN 46 is effective for variable interests in a VIE created before February 1, 2003 at the end of the first interim or annual period ending after December 15, 2003 (the end of fiscal 2003, December 27, 2003, for the Company). We are currently reviewing the potential impact of FIN 46 on our financial statements.

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Basis of presentation: Certain items in the 2002 consolidated financial statements have been reclassified to conform to the current year’s presentation.

Stock-Based Compensation: On December 31, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure. This Statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of that Statement to require prominent disclosure about the effects on reported net income of an entity’s accounting policy decisions with respect to stock-based employee compensation. Finally, this Statement amends Accounting Principles Board (“APB”) Opinion No. 28, Interim Financial Reporting, to require disclosure about those effects in interim financial information. We continue to account for stock-based compensation based on the provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees.

The following table summarizes our results as if we had recorded stock-based compensation expense for the three months ended September 27, 2003 and September 28, 2002 and for the nine months then ended, based on the provisions of SFAS 123, as amended by SFAS 148:

			For the Three Months Ended
(Dollars in Thousands, except per share amounts)			September 27, 2003				September 28, 2002
Net income (loss):
	As reported		$	2,193			$	825
	Compensation expense, net of tax			(1,982	)			(1,586	)
	Pro forma		$	211			$	(761	)
Basic earnings (loss) per share:
	As reported		$	0.05			$	0.02
	Compensation expense, net of tax			(0.04	)			(0.04	)
	Pro forma		$	0.01			$	(0.02	)
Diluted earnings (loss) per share:
	As reported		$	0.05			$	0.02
	Compensation expense, net of tax			(0.04	)			(0.04	)
	Pro forma		$	0.01			$	(0.02	)

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			For the Nine Months Ended
(Dollars in Thousands, except per share amounts)			September 27, 2003				September 28, 2002
Net (loss) income:
	As reported		$	(257	)		$	985
	Compensation expense, net of tax			(6,222	)			(3,114	)
	Pro forma		$	(6,480	)		$	(2,129	)
Basic (loss) earnings per share:
	As reported		$	(0.01	)		$	0.03
	Compensation expense, net of tax			(0.15	)			(0.09	)
	Pro forma		$	(0.16	)		$	(0.06	)
Diluted (loss) earnings per share:
	As reported		$	(0.01	)		$	0.02
	Compensation expense, net of tax			(0.15	)			(0.08	)
	Pro forma		$	(0.16	)		$	(0.06	)

NOTE 3 INVENTORIES

The components of inventories, stated at the lower of cost or market with cost determined on the first-in first-out (FIFO) method, are as follows:

(Dollars in Thousands)			September 27, 2003				December 28, 2002
Finished goods			$	16,764			$	12,142
Work in process				8,280				6,235
Raw materials				775				1,011
	Total		$	25,819			$	19,388

The increase in inventory as of September 27, 2003 is primarily the result of higher levels of Nabi-HB inventory as compared to December 28, 2002.

NOTE 4 EARNINGS PER SHARE

Basic earnings (loss) per share is computed by dividing our net income (loss) by the weighted average number of shares outstanding during the period.

When the effects are not anti-dilutive, diluted earnings per share is computed by dividing our net income by the weighted average number of shares outstanding and the impact of all dilutive potential common shares, primarily stock options. The dilutive impact of stock options is determined by applying the “treasury stock” method. The following table reconciles net income (loss) and shares for the basic and diluted earnings (loss) per share computations:

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			For the Three Months Ended
			September 27, 2003												September 28, 2002
			Net								Per Share				Net								Per Share
(Amounts in Thousands, Except Per Share Amounts)			Income				Shares				Amount				Income				Shares				Amount
Basic earnings per share			$	2,193				45,355			$	0.05			$	825				38,704			$	0.02
Effect of dilutive securities:
	Stock options and other dilutive Securities			—				930				—				—				595				—
Diluted earnings per share			$	2,193				46,285			$	0.05			$	825				39,299			$	0.02

			For the Nine Months Ended
			September 27, 2003												September 28, 2002
			Net								Per Share				Net								Per Share
(Amounts in Thousands, Except Per Share Amounts)			(Loss)				Shares				Amount				Income				Shares				Amount
Basic (loss) earnings per share			$	(257	)			41,152			$	(0.01	)		$	985				38,625			$	0.03
Effect of dilutive securities:
	Stock options and other dilutive Securities			—				—				—				—				986				—
Diluted (loss) earnings per share			$	(257	)			41,152			$	(0.01	)		$	985				39,611			$	0.02

NOTE 5 OPERATING SEGMENT INFORMATION

The following table presents information related to our two reportable segments:

				For the Three Months Ended								For the Nine Months Ended
				September				September				September				September
(Dollars in Thousands)				27, 2003				28, 2002				27, 2003				28, 2002
Sales:
	Biopharmaceutical products			$	30,710			$	21,682			$	75,363			$	61,818
	Antibody products				11,725				24,418				53,232				76,053
		Total		$	42,435			$	46,100			$	128,595			$	137,871
Gross Margin:
	Biopharmaceutical products			$	20,251			$	13,362			$	48,602			$	39,212
	Antibody products				660				2,137				3,490				6,905
		Total		$	20,911			$	15,499			$	52,092			$	46,117
Operating (loss) income:
	Biopharmaceutical products			$	4,193			$	1,651			$	4,518			$	4,426
	Antibody products				(675	)			(634	)			(4,750	)			(1,954	)
		Total		$	3,518			$	1,017			$	(233	)		$	2,472

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Selling and marketing expense and research and development expense are allocated almost fully to the biopharmaceutical products segment based on the allocation of effort within those functions. General and administrative expenses are allocated to each segment based primarily on relative sales levels.

The following table reconciles reportable segment operating (loss) income to income (loss) before (provision) benefit for income taxes:

		For the Three Months Ended								For the Nine Months Ended
		September				September				September				September
(Dollars in Thousands)		27, 2003				28, 2002				27, 2003				28, 2002
Reportable segment operating income(loss)		$	3,518			$	1,017			$	(233	)		$	2,472
Unallocated interest income			131				192				502				1,085
Unallocated interest expense			(506	)			(95	)			(570	)			(2,039	)
Unallocated other income (expenses), net			12				13				30				(169	)
Income (loss) before (provision) benefit for income taxes		$	3,155			$	1,127			$	(271	)		$	1,349

Assets are allocated based on area to which they are directly related. For assets that are not directly associated with one segment of the business, they are allocated based on a percentage of sales.

The following table reconciles reportable segment assets:

(Dollars in Thousands)				September 27, 2003				December 28, 2002
Assets:
	Pharmaceutical assets			$	261,233			$	159,890
	Antibody assets				38,093				68,206
	Corporate assets				7,721				4,720
		Total		$	307,027			$	232,816

NOTE 6 TREASURY STOCK

In various transactions in each of the third, second, and first quarters of 2003 and the first quarter of 2002, a member of our Board of Directors exercised stock options for 215,949 shares, 355,735 shares, 67,627 shares and 60,000 shares, respectively, of our common stock. Additionally, in the second quarter of 2003 a different member of our Board of Directors exercised stock options for 4,500 shares of our common stock. These purchases were paid for by delivery of 182,915 shares of common stock, 190,683 shares of common stock, 38,358 shares of common stock, 40,107 shares of common stock, and 2,371 shares of common stock, respectively, which were valued at $1.5 million, $1.4 million, $0.2 million, $0.2 million and $16 thousand for the respective transactions. In each of the transactions, the shares delivered had been acquired more than six months earlier by the members of our Board of Directors. These shares have been accounted for as treasury stock.

On September 19, 2001, our Board of Directors approved the buy back of up to $5.0 million of our common stock in the open market or in privately negotiated transactions. Repurchases will allow us to have treasury stock available to support our stock option and stock purchase programs. During the first nine months of 2003 we did not purchase any shares of our common stock. During the first nine months of 2002, we purchased 171,483 shares of our common stock for $0.9 million under this buy back program.

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To date we have acquired 345,883 shares of our common stock for a total of $1.9 million since the inception of this buy back program. Repurchased shares have been accounted for as treasury stock.

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NOTE 7 INTANGIBLE ASSETS

The components of our intangible assets are as follows:

(Dollars in Thousands)					September 27, 2003				December 28, 2002
PhosLo Related:
	Trademark/tradename				$	1,423				—
	Tablet patent					11,381				—
	Gelcap patent					80,680				—
	Customer relationships					2,337				—
	Covenant not to compete					508				—
Manufacturing right Dow						12,520			$	10,551
Manufacturing right Cambrex						50				—
Other intangible assets						4,603				4,603
		Total intangible assets				113,502				15,154
Less accumulated amortization						(4,112	)			(2,464	)
			Total		$	109,390			$	12,690

The estimated useful lives of the acquired intangible assets are as follows:

							Estimated Remaining
(Dollars in Thousands)			September 27, 2003				Useful Life
PhosLo Intangibles:
	Trademark/tradename		$	1,423				17.7 years
	Tablet patent			11,381				3.7 years
	Gelcap patent			80,680				17.7 years
	Customer relationships			2,337				5 years
	Covenant not to compete			508				15 years
Total PhosLo Related Intangible Assets			$	96,329

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NOTE 8 RELATED PARTY TRANSACTIONS

On June 20, 2003, we entered into a retirement agreement with David J. Gury, our former Chief Executive Officer. As a result we incurred a charge of $3.3 million comprising approximately $3.0 million in future cash payments and $0.3 million of costs related to modification of certain of his outstanding stock options. The liability for future cash payments is included in accrued expenses for the current portion, and in other liabilities for the long-term portion, as of September 27, 2003. Future cash payments will be paid over three years commencing January 2004. In addition, we entered into a consulting agreement with Mr. Gury for provision of transition services through December 31, 2003. Mr. Gury continues to serve as non-executive Chairman of our Board of Directors.

Notes payable consist of the following:

		September 27,				December 28,
Dollars in Thousands		2003				2002
Notes Payable:
Term loan		$	10,000			$	—
Less: Current maturities			(2,000	)			—
Notes payable, long-term		$	8,000			$	—

On June 20, 2003, we entered into a three year credit facility agreement with Wells Fargo Foothill, Inc., part of Wells Fargo & Company, which allows for borrowings of up to $35 million. The credit facility is comprised of a term loan of $10 million, which was drawn on June 20, 2003, and a revolving line of credit facility of up to $25 million. The term loan is repayable on an amortization schedule over the term of the credit agreement with a balloon payment due at the end of the term. Borrowings under the revolving line of credit are limited by borrowing base restrictions, and are comprised of eligible accounts receivable and inventory balances, as defined. Under the terms of the credit facility, the term loan bears interest at LIBOR plus 4.5% and the revolving line of credit bears interest at either the base rate plus 0.5% or LIBOR plus a percentage based upon our financial performance. Our obligations under the credit agreement are secured by all of the assets of the Company. Under the terms of the credit agreement we must comply with certain covenants, including a restriction on payment of dividends. As of September 27, 2003 we were in compliance with these covenants. Under the revolving line of credit facility we had no borrowings and borrowing capacity of approximately $18.8 million as of September 27, 2003.

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NOTE 10 PRODUCT ACQUISITION

		September 27,				December 28,
Dollars in Thousands		2003				2002
Notes Payable, PhosLo acquisition:
Notes payable, PhosLo acquisition		$	27,061			$	—
Less: Current maturities			(4,014	)			—
Notes payable, PhosLo acquisition long-term		$	23,047			$	—

The following table is a reconciliation of the purchase price of PhosLo and the consideration paid:

Dollars in Thousands		August 4, 2003
Cash paid at closing and related expenses		$	60,325
Closing costs, including professional fees			930
Total Cash paid			61,255
Common shares issued			8,400
Notes payable, PhosLo acquisition, net			26,860
Inventory received			(186	)
Total purchase price of PhosLo		$	96,329

NOTE 11 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

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NOTE 12 SUPPLEMENTAL CASH FLOW INFORMATION

				For the Nine Months Ended
				September 27,				September 28,
(Dollars in Thousands)				2003				2002
	Interest paid			$	135			$	3,569
		Income taxes (refunded) paid		$	(573	)		$	1,698
Supplemental non-cash financing activities:
	Notes payable, PhosLo acquisition			$	26,860			$	—
	Issuance of common stock, PhosLo acquisition			$	8,400			$	—
	Stock options exercised for common stock			$	3,100			$	247

NOTE 13 EQUITY OFFERING

On July 17, 2003, we completed a placement of 5,577,000 shares of common stock to a group of institutional investors and realized approximately $31.3 million, net of issuance costs. Proceeds from the private placement were used for our acquisition of PhosLo. Refer to Note 10.

NOTE 14 SUBSEQUENT EVENT

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Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion and analysis of the major factors contributing to our financial condition and results of operations for the three months and nine months ended September 27, 2003 and September 28, 2002. The discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

RESULTS OF OPERATIONS

Information concerning our sales by operating segments is set forth in the following tables:

				For the Three Months Ended
(Dollars in Thousands)				September 27, 2003								September 28, 2002
Biopharmaceutical products:
	-Nabi-HB			$	8,933				21.1	%		$	7,816				17.0	%
	-WinRho SDF				13,521				31.9				12,203				26.4
	-PhosLo				5,027				11.8				—				—
	-Other biopharmaceuticals				3,229				7.6				1,663				3.6
	Biopharmaceutical subtotal				30,710				72.4				21,682				47.0
Antibody products:
	-Specialty antibodies				3,679				8.7				9,011				19.6
	-Non-specific antibodies				8,046				18.9				15,407				33.4
	Antibody subtotal				11,725				27.6				24,418				53.0
Total				$	42,435				100.0	%		$	46,100				100.0	%

				For the Nine Months Ended
(Dollars in Thousands)				September 27, 2003								September 28, 2002
Biopharmaceutical products:
	-Nabi-HB			$	26,336				20.5	%		$	25,479				18.5	%
	-WinRho SDF				37,633				29.3				26,818				19.4
	-PhosLo				5,027				3.9				—				—
	-Other biopharmaceuticals				6,367				4.9				9,521				6.9
	Biopharmaceutical subtotal				75,363				58.6				61,818				44.8
Antibody products:
	-Specialty antibodies				16,157				12.6				24,347				17.7
	-Non-specific antibodies				37,075				28.8				51,706				37.5
	Antibody subtotal				53,232				41.4				76,053				55.2
Total				$	128,595				100.0	%		$	137,871				100.0	%

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FOR THE THREE MONTHS ENDED SEPTEMBER 27, 2003 AND SEPTEMBER 28, 2002

Sales. Sales for the third quarter of 2003 were $42.4 million compared to sales of $46.1 million for the third quarter of 2002.

Total antibody sales in the third quarter of 2003 were $11.7 million compared to $24.4 million in the third quarter of 2002. Non-specific antibody sales decreased due to the impact of completing our obligations under a single contract in April 2003, which was retained by us following the sale of the majority of the antibody collection business and testing laboratory in September 2001. We reported sales under this arrangement because we retained the risk of credit loss associated with this customer but did not record any margin. There were no such non-specific antibody sales in the third quarter of 2003 and $12.1 million in the third quarter of 2002. Non-specific antibody sales from our antibody collection centers were $8.0 million in the third quarter of 2003 compared to $3.3 million in the third quarter of 2002 reflecting increased production levels and unit sales in the third quarter of 2003. Specialty antibody sales were $3.7 million in the third quarter of 2003 compared to $9.0 million in the third quarter of 2002, a decrease of approximately

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Royalty expense for the third quarter of 2003 was $5.4 million, or 18% of biopharmaceutical sales compared to $4.2 million, or 19% of biopharmaceutical sales, in the third quarter of 2002, primarily reflecting increased sales of Aloprim and WinRho SDF.

Selling, general and administrative expense. Selling, general and administrative expense was $9.4 million for the third quarter of 2003 compared to $8.7 million in the third quarter of 2002. Increased selling, general and administrative expenses was primarily related to marketing and sales activities to launch PhosLo.

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Interest income. Interest income for the third quarter of 2003 was $0.1 million compared to $0.2 million for the comparable period of 2002. Interest income is earned from investing cash and cash equivalents on hand in money market funds and auction rate securities with maturities of three months or less.

Other factors. The provision for income taxes reflected a provision of $1.0 million for the third quarter of 2003, compared to $0.3 million for the third quarter of 2002. The 30% effective tax rate in the third quarter of 2003 differs from the statutory rate of 35% due to the impact of research and development tax credits.

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FOR THE NINE MONTHS ENDED SEPTEMBER 27, 2003 AND SEPTEMBER 28, 2002

Sales. Sales for the first nine months of 2003 were $128.6 million compared to sales of $137.9 million for the first nine months of 2002.

Total antibody sales in the first nine months of 2003 were $53.2 million compared to $76.1 million in the comparable period of 2002. Non-specific antibody sales include shipments to a single customer under a supply contract that we fulfilled in April 2003, which was retained by us following the sale of the majority of

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Royalty expense for the first nine months of 2003 was $13.7 million, or 18% of biopharmaceutical sales, compared to $10.1 million, or 16% of biopharmaceutical sales, in the comparable period of 2002, primarily reflecting increased sales of WinRho SDF.

Selling, general and administrative expense. Selling, general and administrative expense was $32.2 million for the first nine months of 2003 compared to $28.2 million in the comparable period of 2002. Increased selling, general and administrative expense in the first nine months of 2003 included a charge of $3.3 million related to the retirement of our former Chief Executive Officer as well as increased use of tax consultants compared to the comparable period of 2002 and costs to launch PhosLo.

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Interest income. Interest income for the first nine months of 2003 was $0.5 million compared to $1.1 million for the comparable period of 2002. Interest income is earned from investing cash and cash equivalents on hand in money market funds and auction rate securities with maturities of three months or less. The decrease in interest income is due to lower average outstanding cash balances and reduced interest rates. In September 2001, we received proceeds of $135 million, net of repayment of then outstanding bank debt and closing costs, from the sale of the majority of our antibody collection business and testing laboratory. These funds were invested in the financial instruments discussed above. In April 2002, a portion of these funds was utilized to redeem our $78.5 million 6.5% Convertible Subordinated Notes (the “Notes”).

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LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents at September 27, 2003 were $26.2 million.

On August 4, 2003, we acquired from Braintree Laboratories, Inc. (“Braintree”) the worldwide rights to PhosLo, which is currently approved for the control of elevated phosphate levels (hyperphosphatemia) in patients with end-stage kidney (renal) failure. Under the terms of the acquisition, we purchased patent rights, trade secrets, the PhosLo trademarks, regulatory approvals and licenses, certain customer and regulatory data and finished product inventory and did not assume any liabilities. In conjunction with the acquisition we entered into an obligation to pay Braintree $30.0 million over the period ending March 1, 2007. This obligation, net of imputed discount, is included in Notes Payable, PhosLo at September 27, 2003.

On October 9, 2003 we announced that we had signed a manufacturing agreement with a term of up to ten years for the manufacture of StaphVAX at a contract manufacturer’s site. Under the agreement we have a commitment of $7.6 million related to establishing a manufacturing right for the commercial manufacture of StaphVAX.

Capital expenditures were $4.1 million for the first nine months of 2003. At September 27, 2003, we had total capital commitments of $2.7 million related to construction of our laboratory and cold storage facilities on our property in Boca Raton, Florida.

In connection with an agreement related to the retirement of our former Chief Executive Officer announced on June 20, 2003, we incurred a charge of $3.3 million including $3.0 million in future cash payments over the three years commencing January 2004 and $0.3 million of costs related to modification of the rights under certain of his outstanding stock options. The liability for future cash payments is included in accrued expenses for the current portion, and in other liabilities for the long-term portion as of September 27, 2003.

On September 19, 2001, our Board of Directors approved the expenditure of up to $5.0 million to repurchase shares of our common stock in the open market or in privately negotiated transactions. Repurchases will allow us to have treasury stock available to support our stock option and stock purchase programs. We have acquired no shares under this program in 2003. We will evaluate market conditions in the future and make decisions to repurchase additional shares of our common stock on a case-by-case basis in accordance with our Board of Directors’ approval. To date, we have acquired 345,883 shares of

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our common stock for a total of $1.9 million since the inception of this buy back program.

We believe that cash flow from operations and cash and cash equivalents on hand, together with our ability to borrow funds should the need arise, will be sufficient to meet our anticipated cash requirements for operations for at least the next twelve months.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.

Intangible Assets

On August 4, 2003 we acquired the world wide rights to PhosLo. Under the terms of the agreement we purchased patent rights, trade secrets, the PhosLo trademarks, regulatory approvals and licenses, certain customer and regulatory data and finished product inventory. All assets purchased except for inventory, have been recorded at their estimated fair value, adjusted by pro rata portion of the excess of purchase price and are included in intangible assets. Management believes the estimated remaining useful lives of the intangible assets are as follows:

							Estimated Remaining
(Dollars in Thousands)			September 27, 2003				Useful Life
PhosLo Intangibles
	Trademark/tradename		$	1,423				17.7 years
	Tablet patent			11,381				3.7 years
	Gelcap patent			80,680				17.7 years
	Customer relationships			2,337				5 years
	Covenant not to compete			508				15 years
Total PhosLo Related Intangible Assets			$	96,329

Manufacturing Right

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Property, Plant and Equipment and Depreciation

We incurred $90.3 million to construct our biopharmaceutical manufacturing facility in Boca Raton, Florida. We received approval to manufacture our antibody-based biopharmaceutical product, Nabi-HB, at this facility from the FDA in October 2001. In constructing the facility we incurred approximately $26.8 million in direct costs of acquiring the building, building systems, manufacturing equipment and computer systems. We also incurred a total of $63.5 million of costs related to validation of the facility to operate in an FDA approved environment and capitalized interest. Costs related to validation and capitalized interest have been allocated to the building, building systems, manufacturing equipment and computer systems. Buildings and building systems are depreciated on a straight-line basis over 39 years and 20 years, respectively, the estimated useful lives of these assets. The specialized manufacturing equipment and computer systems are depreciated using the units-of-production method of depreciation subject to a minimum level of depreciation based on straight-line depreciation. The units-of-production method of depreciation is based on management’s estimate of production levels. Management believes the units-of-production method is appropriate for these specialized assets. Use of the units-of-production method of depreciation may result in significantly different financial results of operation than straight-line depreciation in periods of lower than average or higher than average production levels. However, this differential is limited in periods of lower than average production, as we record a minimum of 60% of the depreciation that would have otherwise been recorded had we used the straight-line method. In the first nine months of 2003, we recorded additional depreciation of $1.3 million under this policy, including additional depreciation of $0.4 million in the third quarter of 2003. For the comparable periods of 2002 we recorded additional depreciation of $1.6 million and $0.7 million, respectively.

Accounts Receivable and Revenue Recognition

In the first nine months of 2003 and 2002, we had biopharmaceutical product sales of $75.4 million and $61.8 million, respectively. At September 27, 2003 and December 28, 2002 we had $36.0 million and $36.3 million, respectively, of accounts receivable including $28.8 million and $22.2 million, respectively, from biopharmaceuticals sales. Our primary customers for biopharmaceutical products are pharmaceutical wholesalers. In accordance with our revenue recognition policy, revenue from biopharmaceutical product sales is recognized when title and risk of loss are transferred to the customer. Reported sales are net of estimated customer prompt pay discounts, contractual allowances in accordance with managed care agreements, government payer rebates and other wholesaler fees. At September 27, 2003 and December 28, 2003 we had $7.3 million and $3.9 million, respectively, recorded in accrued expenses related to these contractual obligations.

Inventory and Reserves for Slow Moving or Obsolete Inventory

At September 27, 2003 and December 28, 2002, we had inventory on hand of $25.8 million and $19.4 million respectively. In the nine months ended September 27, 2003, we recorded a provision for inventory valuation allowance of $1.6 million. For the comparable period of 2002 we did not record any provision for inventory valuation allowance. We review inventory on hand at each reporting period to assess that inventory is stated at the lower of cost or market and that inventory on hand is saleable. Our assessment of inventory includes review of selling price compared to inventory carrying cost, recent sales trends, our expectations for sales trends in future periods and product shelf life expiration. Based on these assessments, we provide for an inventory valuation allowance in the period in which the requirement is identified.

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NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 addresses the consolidation of entities whose equity holders have either (a) not provided sufficient equity at risk to allow the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the consolidation of these entities, known as variable interest entities (“VIE’s”), by the primary beneficiary of the entity. The primary beneficiary is the entity, if any, that is subject to a majority of the risk of loss from the VIE’s activities, entitled to receive a majority of the VIE’s residual returns, or both. FIN 46 applies immediately to variable interests in VIEs created or obtained after January 31, 2003. As amended by FASB Staff Position (“FSP”) No. FIN 46-6, FIN 46 is effective for variable interests in a VIE created before February 1, 2003 at the end of the first interim or annual period ending after December 15, 2003 (the end of fiscal 2003, December 27, 2003, for the Company). We are currently reviewing the potential impact of FIN 46 on our financial statements.

FORWARD LOOKING STATEMENTS

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Item 3.		Quantitative and Qualitative Disclosures About Market Risk

We do not engage in trading market risk sensitive instruments or purchasing hedging instruments or “other than trading” instruments that are likely to expose us to significant market risk, whether interest rate, foreign currency exchange, commodity price or equity price risk.

Interest Rate Risk. At September 27, 2003, we had a term loan under our credit facility of $10.0 million and cash and cash equivalents in the amount of $26.2 million. Cash equivalents consist of money market funds and auction rate securities with maturities of three months or less placed with major financial institutions.

Our exposure to market risk relates to our borrowings and to our cash and investments. Our borrowings under our credit facility are subject to changes in interest rates, specifically LIBOR, and expire in June 2006. We maintain an investment portfolio of money market funds, qualified purchaser funds, and auction rate securities. The securities in our investment portfolio are not leveraged, and are, due to their very short-term nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that a change in market rates would have a significant negative impact on the value of our investment portfolio.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we invest our excess cash in debt instruments of the U.S. Government and its agencies, bank obligations, repurchase agreements and high-quality corporate issuers, and, by policy, restrict our exposure to any single corporate issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity of generally less than one month. The table below presents the principal amount and weighted-average interest rate for our investment and debt portfolio:

			Fair Value at
Dollars in Millions			September 27, 2003
Assets:
	Cash equivalents		$	26.2
	Average interest rate			1.4	%
Liabilities:
	Notes payable		$	37.1
	Average interest rate			4.9	%

Item 4.		Controls and Procedures

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PART II		OTHER INFORMATION

Item 1.		Legal Proceedings

We are a party to litigation in the ordinary course of business. We do not believe that such litigation will have a material adverse effect on our future business, financial condition or results of operations.

During 2002, we were named as one of over 40 pharmaceutical and biopharmaceutical defendants in three lawsuits filed in the Superior Court of the State of California; two filed in the County of San Francisco on August 23, 2002 and September 9, 2002 and one filed in the County of Alameda on July 12, 2002. To date we have been served in only one suit. All three cases were removed to United States District Court for the Northern District of California. The cases each involve claims that insurers and consumers of the defendants’ products made overpayments for those products based on an alleged manipulation of Average Wholesale Price, a standard which governs amounts that physicians, hospitals and other providers receive as reimbursement for purchases of the defendants’ products. The plaintiffs seek damages, equitable relief and disgorgement of profits. The three lawsuits are in their preliminary stages. As described in our Quarterly Report on Form 10-Q for the quarter ended March 29, 2003, all three cases have been transferred to the United States District Court for the District of Massachusetts for inclusion in the consolidated multi-district litigation (“MDL”). We were not a named defendant in this proceeding’s Master Consolidated Complaint, nor were we included as a defendant in the Amended Master Consolidated Complaint, which was filed by the MDL plaintiffs in June 2003. However, we are still a named defendant in the California cases that were transferred to Massachusetts federal court.

Item 2.		Changes in Securities and Use of Proceeds

On July 11, 2003, we sold 5,557,000 shares of our common stock to the following purchasers:

Baystar Capital II L.P.
Bonzar Master Fund Ltd.
Common Fund Hedged Equity
Deerfield International Limited
Deerfield Partners, L.P.
JALAA Equities, L.P.
Knott Partners, L.P.
Lehman Brothers, Inc.
Matterhorn Offshore Fund
Merlin BioMed Long Term Appreciation Fund, L.P.
Merlin BioMed Offshore Master Fund, L.P.
Merlin BioMed Private Equity Fund, L.P.
Richard H. Morrison, LLC
SF Capital Partners, Ltd.
Shoshone Partners, LP
Smithfield Fiduciary, LLC
Special Situations Cayman Fund, L.P.
Special Situations Fund III, L.P.
UBS O’Connor LLC F/B/O O’Connor Global Convertible Arbitrage Master Ltd.
UBS O’Connor LLC F/B/O PIPES Corporate Strategies Ltd.

The aggregate offering price was $33.4 million. The shares of stock were issued in transactions exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof and Rule 506 promulgated thereunder. All of the purchasers represented that they were accredited investors and that they were acquiring the securities for themselves and not for other persons; the offering did not involve any general advertising or solicitation.

On August 4, 2003, we issued 1,500,000 shares of our common stock to Braintree Laboratories, Inc. in connection with the acquisition of PhosLo. Under the terms of the acquisition, we purchased patent rights, trade secrets, the PhosLo trademarks, regulatory approvals and licenses, certain customer and regulatory data and finished product inventory in exchange for the payment of $60.3 million in cash and the issuance

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of 1,500,000 shares of our common stock on August 4, 2003 and our agreement to pay $30.0 million over the period ending March 1, 2007. The shares of stock were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof and Rule 506 promulgated thereunder. The purchaser represented that it was an accredited investor and that it was acquiring the securities for itself and not for other persons; the offering did not involve any general advertising or solicitation.

Under the terms of our credit agreement with Wells Fargo Foothill, Inc., we may not declare or pay dividends on our common stock.

Item 3.		Defaults Upon Senior Securities

None.

Item 4.		Submission of Matters to a Vote of Security Holders

None.

Item 5.		Other Information

None.

Item 6.		Exhibits and Reports on Form 8-K

(a)

Exhibits:

	10.1		Letter Agreement between Nabi Biopharmaceuticals and David J. Gury
	31.1		Rule 13a-14(a)/15d-14(a) Certification
	31.2		Rule 13a-14(a)/15d-14(a) Certification
	32.1		Section 1350 Certification

(b)

Reports on Form 8-K:

On July 14, 2003, we filed a current report on Form 8-K, reporting under Item 5 “Other Events and Regulation FD Disclosure” and Item 7 “Financial Statements, Pro Forma Financial Information and Exhibits.”

On July 23, 2003, we filed a current report on Form 8-K, reporting under Item 12, “Results of Operations and Financial Condition.”

On August 15, 2003, we filed a current report on Form 8-K, reporting under Item 2 “Acquisition or Disposition of Assets”, Item 5 “Other Events and Required FD Disclosure”, and Item 7 “Financial Statements, Pro Forma Financial Information and Exhibits.”

On October 7, 2003, we filed a current report on Form 8-K/A reporting under Item 7. “Financial Statements. Pro Forma Financial Information and Exhibits.”

On October 7, 2003, we filed a current report on Form 8-K/A reporting under Item 7. “Financial Statements. Pro Forma Financial Information and Exhibits.”

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Nabi Biopharmaceuticals

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Nabi Biopharmaceuticals
Date: October 27, 2003		By:	/s/ Mark L. Smith
		Mark L. Smith
		Senior Vice President, Finance,
		Chief Financial Officer,
		Chief Accounting Officer and Treasurer

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                                                                    EXHIBIT 10.1

                             NABI BIOPHARMACEUTICALS
                      5800 PARK OF COMMERCE BOULEVARD, N.W.
                              BOCA RATON, FL 33487


                                                   Effective as of June 20, 2003

Mr. David J. Gury
2360 N.W. 43rd Street
Boca Raton, FL  33431

                  Re:  Retirement Agreement

Dear Mr. Gury:

         This letter agreement (the "Agreement") between Nabi Biopharmaceuticals
("Nabi") and you (the "Executive") is intended to set forth the arrangements
with respect to your retirement from Nabi. The Executive and Nabi are referred
to together herein as the "Parties."

         1. The Executive hereby retires as chief executive officer and an
employee of Nabi effective at the close of business June 20, 2003 (such time and
date the "Retirement Date") and resigns effective as of the Retirement Date as
an officer and director of each subsidiary of Nabi in which he holds office. The
Executive shall serve as non-executive Chairman of the Board of Directors of
Nabi, and as such shall preside at meetings of Nabi's Board of Directors.

         2. For the period beginning June 21, 2003 and ending December 31, 2003
(the "Consulting Period"), the Executive will be available as a consultant to
assist Thomas H. McLain in his transition as chief executive officer of Nabi.
The Executive shall provide these consulting services at the request of Mr.
McLain at times reasonably satisfactory to the Executive and Mr. McLain
consistent with the Executive's other commitments and plans. During or with
respect to the Consulting Period the Executive will continue to receive the
compensation and he and, to the extent applicable, his family will continue to
receive or participate in the benefits and perquisites (including, without
limitation, participation in the cash incentive portion of Nabi's VIP Management
Compensation Program and in Nabi's group life insurance and health insurance
programs) he was or they were entitled to receive or participate in immediately
preceding the Retirement Date as though he continued to be employed in the same
position(s) and with the same compensation as an employee of Nabi, provided that
the Executive's right to continue to participate in Nabi's 401(k) and Employee




Stock Purchase Plan shall terminate as of the Retirement Date and provided
further that any compensation payable to the Executive pursuant to this Section
2 during the Consulting Period shall be reduced by any compensation he receives
during and relating to the Consulting Period as a non-employee Director of Nabi.
In addition, Nabi will reimburse all reasonably necessary medical, dental and
optical costs incurred by Executive or his spouse during the Consulting Period.
All Company payments and reimbursements with respect to life insurance and
medical, dental and optical coverages and costs, as well as the SERP payment
described below and the SERP payment of $22,000 for 2002 made in June 2003, will
be grossed-up for taxes payable by Executive/spouse with respect thereto. At
such time or times as Nabi otherwise would make matching contributions for
Executive's 2003 contributions to Nabi's 401(k) plan for 2003, Nabi shall pay
Executive an amount equal to the matching contributions, grossed-up for taxes
payable by Executive with respect thereto, the Company would have then been
required to pay to the 401(k) plan for the Executive's benefit. Furthermore, on
or about August 1, 2003 Nabi shall pay to the Executive unused accrued paid
leave benefit of $117,904.62 subject to such deductions and withholdings as may
be required by law and on or about December 1, 2003 Nabi shall make a final
payment of $22,000 (plus a tax gross-up) with respect to the Executive's SERP
benefit. The Executive acknowledges that he will provide the services
contemplated by this Section 2 as a non-employee, independent contractor of Nabi
and except with respect to gross-up provisions in this Agreement he shall be
responsible in full for all taxes associated with the payments received as a
result of the services provided under this Section 2. Nabi acknowledges that (a)
Executive shall be entitled to the benefits of this Section 2 whether or not his
consulting services are so requested, and that he need not be available to
perform, or in fact perform, such services in person but may do so by telephone
or other manner of electronic or written communication and (b) in the event of
Executive's unavailability to perform consulting services, due to illness,
accident or other similar reason (but not including death), compensation and
benefits under this Section 2 shall continue to be provided. While serving as a
consultant to Nabi, the Executive shall not enter into any verbal or written
agreement or make any binding commitments on behalf of Nabi or make on behalf of
Nabi any statements concerning Nabi or its business, financial condition,
operations or prospects to the media, investment professionals or Nabi
stockholders. Nabi agrees that Executive may refer to himself as Founding Chief
Executive Officer of Nabi, Retired. During the Consulting Period, Executive's
current office shall be maintained, and part-time administrative assistance
shall be available. The Executive agrees that no later than 60 days from receipt
of his COBRA election forms, he shall elect to continue, at Nabi's expense,
health insurance coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985.

         3. During the 2004, 2005 and 2006 calendar years, Nabi shall pay to the
Executive $1,166,468, $1,056,468 and $1,056,468 respectively. Each such amount
shall be paid bi-weekly over the year in approximately equal installments, the
first such installment to be made on or about January 15 of the year and the
last such installment to be made on or about December 31 of the year. Each such
payment shall be subject to such deductions and withholdings as may be required
by law.

         4. The right of the Executive to exercise his stock options identified
on Exhibit A attached hereto shall be accelerated to the extent provided in said
Exhibit A and each such stock option as to which there has been acceleration of
exercise shall remain exercisable through the earlier of June 19, 2006 and the
date such stock option would otherwise expire in accordance with its terms,
subject otherwise to the terms of the option plan pursuant to which such stock
option was granted. The right of the Executive to exercise his stock options
identified on Exhibit B attached hereto, to the extent such options are not
exercisable on the Retirement Date, shall be accelerated to the extent provided


                                       2


in said Exhibit B, and each stock option identified on said Exhibit B shall
remain exercisable until the date such stock option would otherwise expire in
accordance with its terms, subject otherwise to the terms of the option plan
pursuant to which such stock option was granted.

         5. Nabi agrees that following the Consulting Period, Nabi shall not
take any action to terminate or cancel the life insurance policies listed on
Exhibit C attached hereto (the "Life Insurance Policies") or otherwise request a
refund of premiums paid to date by Nabi to any issuer of the Life Insurance
Policies. The Parties agree that, effective as of the end of the Consulting
Period, Nabi shall neither make nor be required to make further premium payments
on behalf of the Executive with respect to the Life Insurance Policies and that
the Executive will, therefore, be solely responsible for making any premium
payments under the Life Insurance Policies in order to maintain the Executive's
coverage thereunder. Nabi hereby confirms that it has no rights, or if it has
any rights hereby waives them, under the terms of the Life Insurance Policies or
any related agreement, arrangement or instrument or otherwise, to receive upon
or as a result of the payment of a death benefit, cash surrender or other
disposition of the Life Insurance Policies an amount equal to the premium
payments made by Nabi with respect to the Life Insurance Policies.

         6. Except as provided in Sections 2, 3, 4 and 5 of this Agreement, the
Executive acknowledges and agrees that his eligibility to participate in and/or
receive benefits under any compensation, benefit or perquisite plan, program,
policy, agreement, arrangement or practice in connection with his employment
with Nabi or the termination of that employment shall terminate as of the
Retirement Date and he shall not be entitled to any other compensation or
benefit from Nabi except to the extent provided herein and except to the extent
the right to receive a benefit accrued but was not paid prior to the Retirement
Date, the Executive shall be entitled to be paid this benefit after the
Retirement Date.

         7. The Executive agrees that all trade secrets and other confidential
and/or proprietary materials or information of Nabi or any of its affiliates
(the "Nabi Group") (including, without limitation, source code, object code,
memoranda, notes, records, charts, reports, letters and other documents and
software relating to Nabi's present and/or future operations) made, compiled,
received, held or used by the Executive while employed by Nabi or during his
period of consultancy as provided in Section 2 concerning any phase of the
business of the Nabi Group or any of its members (the "Nabi Information") are
the property of Nabi and/or the Nabi Group and, together with all reproductions
or abstracts thereof (i) shall neither be used nor disclosed by the Executive
after the Retirement Date (except such use as is contemplated under Section 2 of
this Agreement or in connection with the enforcement of Executive's rights under
this Agreement) and (ii) together with all other Nabi property used or obtained
by the Executive, such as computers, equipment, credit cards and keys, shall be
returned to Nabi no later than January 5, 2004. Notwithstanding the foregoing,
Executive shall be entitled to retain the laptop computer previously provided to
him by Nabi, as his personal property, after removal by Nabi of any Nabi
Information, and Nabi shall assist Executive in Internet and e-mail set-up for
such computer upon removal of access through Nabi.



                                       3


         8. The Executive hereby acknowledges and agrees that this Agreement is
intended to be a complete and final settlement of any and all causes of action
or claims that the Executive has had, now has or may now have, whether known or
unknown against the Nabi Group or any of the persons or entities specified
below, with respect to the matters hereinafter specified. The Executive hereby,
on behalf of the Executive, the Executive's executors, heirs, administrators,
assigns and anyone else claiming by, through or under the Executive, waives,
releases, covenants not to sue and forever discharges the Nabi Group, its
predecessors, successors, related corporations, subsidiaries, divisions,
employee benefit plans and affiliated organizations, and each and all of their
respective present and former officers, directors, shareholders, fiduciaries,
representatives, agents, promoters, employees and attorneys (hereinafter
"Releasees"), and each and all of them of, from and with respect to any and all
debts, demands, actions, causes of action, suits, covenants, contracts,
agreements, promises, torts, damages, claims, demands and liabilities whatsoever
of any name and nature, both in law and in equity (hereinafter "Claims"), that
the Executive now has, ever had, or may in the future have against each or any
of the Releasees by reason of any matter, cause or thing whatsoever from the
beginning of the world to the Effective Date (as defined in Section 18) arising
out of, based upon or connected with the Executive's employment by any member of
the Nabi Group, the compensation, benefits and working conditions for that
employment and/or the termination of that employment (including without
limitation any Claims arising out of or relating to the Employment Agreement or
the Change of Control Agreement (each as defined in Section 19)) including any
Claims that may exist under federal, state or local laws, including, but not
limited to, any Claims based on race, disability, color, national origin,
marital status, age or sex, but excluding any Claim or Claims (i) with respect
to indemnification, advances or contribution to which the Executive may be
entitled, whether by contract, by charter or by-law provision, or otherwise,
(ii) with respect to reimbursement of medical, dental and optical expenses and
business and travel expenses incurred prior to the Retirement Date for which the
Executive is entitled to reimbursement under the terms of his employment as of
the Retirement Date, or (iii) under, based upon or arising out of this Agreement
or the benefit plans or programs contemplated by this Agreement. The foregoing
waiver and release includes, without limitation, a waiver and release of any
rights and Claims that the Executive may have under Title VII of the Civil
Rights Act of 1964, the Equal Pay Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act of
1974, the Worker Adjustment and Retraining Notification Act, the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. ss. 621 et seq.
(the "ADEA") (except that this Agreement does not waive or release any rights or
claims under the ADEA that may arise after the execution of this Agreement or
otherwise bar the Executive from challenging this Agreement's compliance with
the provisions of 29 U.S.C. ss. 627(f)(1)), the Fair Labor Standards Act, or the
state and local laws of Florida.

         9. Nabi represents and warrants that as of the date hereof, it knows of
no claims or causes of action of whatever kind or nature that the Nabi Group has
or may have against the Executive that arose on or before the date of execution
of this Agreement.

         10. Until such time as this Agreement is filed, or its material terms
are disclosed in a filing, with the Securities and Exchange Commission, Nabi and
the Executive each hereby agrees not to disclose to any person, organization or


                                       4


agency (except, in the case of the Executive, his spouse, attorney, accountant
or financial advisor) the terms of this Agreement except (a) as required by law
or legal process and, with respect to legal process, only after notice is given
by the disclosing party or his or its attorney to the other party such that,
where feasible, the non-disclosing party will have a reasonable prior
opportunity to oppose such disclosure or (b) in connection with Nabi's or the
Executive's enforcement of its or his rights under this Agreement. The Parties
agree with one another not to discuss with any person or entity the
circumstances surrounding the Executive's employment with or separation from the
Nabi Group, except to the extent required by law or legal process. The Executive
agrees not to make any adverse remarks whatsoever concerning any of the officers
or directors of the Nabi Group or the business, operations, strategies,
policies, prospects, affairs or financial condition of the Nabi Group. Nabi
agrees that it will not make any adverse remarks whatsoever concerning the
Executive and that it will instruct its directors and officers not to make any
adverse remarks whatsoever concerning the Executive.

         11. The Executive acknowledges and agrees that the restrictions against
disclosure and use of confidential information set forth in Section 12 of the
Employment Agreement shall remain in full force and effect.

         12. It is expressly understood and agreed that by entering into this
Agreement Nabi in no way thereby admits that it unlawfully or wrongfully
discriminated against the Executive due to the Executive's age or status or
otherwise treated the Executive unlawfully.

         13. The Executive agrees and recognizes that should a court of
competent jurisdiction determine that he has breached any of his obligations
under the fourth from last sentence of Section 2 of this Agreement or Sections 7
or 10 of this Agreement or Section 12 of the Employment Agreement or any
material provision of Section 14 of this Agreement or should he attempt to
pursue any Claim covered by the release set forth in Section 8 of the Agreement,
in addition to its other rights and remedies Nabi will thereafter have no
further obligation to provide the Executive with the consideration set forth
herein and in the event of such a court determination will be entitled to
repayment of all consideration paid after the date of such breach.

         14. At the request of Nabi, the Executive shall cooperate fully with
Nabi and each member of the Nabi Group in the defense or prosecution of any
claims or actions now in existence or which may be brought or threatened in the
future against or on behalf of any member of the Nabi Group, including without
limitation any claims or actions against any officers, directors or employees of
any member of the Nabi Group (but excluding any claim or action brought with
respect to this Agreement). The Executive's cooperation in connection with such
actions or claims shall include, without limitation, his being available to meet
with Nabi or its designees at reasonably convenient times and places in
connection with any regulatory matters, to prepare for any proceeding
(including, without limitation, depositions, consultation, discovery or trial),
to provide affidavits, to assist with any audit, inspection, proceeding or other


                                       5


inquiry, or to act as a witness in connection with any litigation or other legal
proceeding affecting any member of the Nabi Group. Should the Executive be
contacted (directly or indirectly) by any person known by him to be adverse to
any member of the Nabi Group with respect to any dispute with any member of the
Nabi Group, the Executive shall promptly notify Nabi's internal general counsel.
Nabi shall directly pay, or advance to the Executive, the reasonable out of
pocket expenses incurred by him in complying with his obligations under this
Section 14.

         15. The Executive agrees that Nabi shall be entitled to injunctive
relief and/or specific performance, without the necessity of proving actual
damages, as well as to an equitable accounting of all earnings, profits and
other benefits, with respect to any violations of this Agreement by the
Executive, which rights shall be cumulative and in addition to any other rights
or remedies to which Nabi may be entitled.

         16. Nabi may assign this Agreement to any successor by merger,
reorganization, consolidation or statutory share exchange provided that there
has been no breach of this Agreement by Nabi, and such successor (i) is a
corporation incorporated in any of the states of the United States and (ii)
specifically agrees with the Executive in writing to assume Nabi's obligations
hereunder. This Agreement may not be assigned by the Executive except that the
Executive may assign monetary benefits to which he may be entitled hereunder to
the extent that such assignment is permitted by the terms of any plan governing
such benefits. This Agreement shall be binding upon and shall inure to the
benefit of Nabi and the Executive and Nabi's and the Executive's respective
heirs, personal representatives and permitted successors and assigns. Nabi
acknowledges that, except as specified in Section 2, in the event of Executive's
death at a time when any amount would be payable to Executive hereunder if he
had continued to live, all such amounts shall be paid in accordance with the
terms of this Agreement to his devisee, legatee, or other designee or, if there
be no such designee, to his estate.

         17. If any term or provision of this Agreement or the application
thereof to any person, property or circumstance shall to any extent be found by
a court of competent jurisdiction to be invalid or unenforceable, then at the
election of the party primarily benefited by such term or provision, the
remainder of this Agreement or the application of such term or provision to
persons, property or circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.




                                       6


         18. The Executive is hereby advised to consult with an attorney before
signing this Agreement and, by the Executive's signature below, the Executive
acknowledges that he has consulted with an attorney before signing this
Agreement, that his execution of this Agreement is knowing and voluntary and
that he has been afforded a full and reasonable opportunity to consider its
terms. Without limiting the foregoing, the Executive acknowledges that from the
date that the Executive receives this Agreement, the Executive has twenty-one
(21) days to consider it. Should the Executive decide to sign the Agreement, the
Executive has seven (7) days following the signing to revoke the Agreement, and
the Agreement will not become effective and enforceable until that seven (7) day
revocation period has expired (the "Effective Date"). Should the Executive
either decide not to sign this Agreement or should the Executive sign it and
elect to revoke it during the seven (7) day revocation period, then this
Agreement shall be null and void. No payments or benefits provided for by this
Agreement (other than payments or benefits accrued and unpaid as of the
Retirement Date) will be made until after this seven (7) day period has expired
without the Executive revoking this Agreement. Nabi shall pay up to $35,000 of
legal and accounting expenses incurred by Executive in connection with
retirement discussions and this Agreement.

         19. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida without regard to conflicts of law
principles. The parties agree that exclusive jurisdiction for any action brought
with respect to this Agreement shall lie in the state circuit court in
Miami-Dade County, Florida. This Agreement embodies the entire agreement and
understanding among the Parties concerning the Executive's employment and the
termination thereof and incorporates and supersedes all other agreements with
regard to the Executive's employment and the termination thereof. Without
limiting the foregoing, (i) reference is made to that certain employment
agreement dated January 1, 1993 between the Executive and Nabi, as amended (the
"Employment Agreement"), which provides, INTER ALIA, that (a) the Executive will
receive certain compensation and benefits under specified circumstances in the
event of termination of employment, and (b) the Employment Agreement may be
amended by a written agreement signed by the party to be charged with such
amendment, (ii) reference is made to that certain letter agreement dated
September 18, 1998, between the Executive and Nabi, as amended (the "Change of
Control Agreement"), which provides, INTER ALIA, that (a) the Executive will
receive certain compensation and benefits under specified circumstances in the
event of a change of control (as defined in such Change of Control Agreement),
and (b) the Change of Control Agreement may be modified by written agreement
signed by the Executive and such officer of Nabi as may be specifically
designated by the Board, and (iii) the Employment Agreement and Change of
Control Agreement are hereby amended and modified so as to be superseded, as to
termination of employment, in their entirety by this Agreement, except to the
extent provided in Section 11 of this Agreement.

         20. This Agreement may be amended or modified only upon the written
mutual consent of the parties.



                                       7

     21. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. This Agreement may be executed by facsimile signature.


                                       8





         If the foregoing is in accordance with your understanding, please sign
and return the enclosed copy of this letter, whereupon this letter and such copy
will constitute a binding agreement between Nabi and you on the basis set forth
above.

                                             Very truly yours,

                                             NABI BIOPHARMACEUTICALS


                                             By:
                                                 -------------------------------
                                                   Name:
                                                   Title:
Acknowledged and agreed to:


- ----------------------------
David J. Gury



                                       9



                                    EXHIBIT A




                                                  NUMBER OF OPTIONS FOR WHICH
      GRANT DATE          EXPIRATION DATE           VESTING IS ACCELERATED
       2/07/2000             2/07/2010                     18,133
       2/07/2000             2/07/2010                      6,250
       2/05/2001             2/05/2011                     22,875
       2/05/2001             2/05/2011                     15,000
       2/04/2002             2/04/2012                     45,354
       2/04/2002             2/03/2012                      3,750
       2/03/2003             2/03/2013                     54,685
       2/03/2003             2/03/2013                      5,000









                                    EXHIBIT B


                                        NUMBER OF OPTIONS     NUMBER OF OPTIONS
                                           FOR WHICH          EXERCISABLE UNTIL
                                           VESTING IS         OPTIONS OTHERWISE
                                           ACCELERATED              EXPIRE
 GRANT DATE      EXPIRATION DATE
 2/07/2000          2/07/2010                18,133                126,934
 2/07/2000          2/07/2010                 6,250                 43,750
 2/05/2001          2/05/2011                22,875                 42,800
 8/02/2001          8/02/2011                  0                    33,800
 2/04/2002          2/04/2012                45,354                 75,591
 2/04/2002          2/04/2012                 3,750                  6,250
 2/03/2003          2/03/2013                54,685                 54,685
 2/03/2003          2/03/2013                 5,000                  5,000










                                    EXHIBIT C

1.  The Guardian policy number 4021183 in the face amount of $1,250,000

2.  The Guardian policy number 4040228 in the face amount of $250,000

3.  MONY policy number 11562350 in the amount of $10,000

4.  MONY policy number 11562352 in the amount of $10,000

 

DRAFT

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) CERTIFICATION

		I, Thomas H. McLain, certify that:
1.		I have reviewed this quarterly report on Form 10-Q of Nabi Biopharmaceuticals;
2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	c)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 27, 2003		By:	/s/ Thomas H. McLain
		Thomas H. McLain Chief Executive Officer and President

31

 

DRAFT

		I, Mark L. Smith, certify that:
1.		I have reviewed this quarterly report on Form 10-Q of Nabi Biopharmaceuticals;
2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	c)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 27, 2003		By:	/s/ Mark L. Smith
		Mark L. Smith Senior Vice President, Finance, Chief Financial Officer, Chief Accounting Officer and Treasurer

32

 

DRAFT

Nabi Biopharmaceuticals

SECTION 1350 CERTIFICATION

The undersigned officers of Nabi Biopharmaceuticals (the “Company”) hereby certify that, as of the date of this statement, the Company’s quarterly report on Form 10-Q for the quarter ended September 27, 2003 (the “Report”) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 and that, to the best of their knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of September 27, 2003 and the results of operations of the Company for the three and nine months ended September 27, 2003.

The purpose of this certification is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002. This statement is not “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Act or any other federal or state law or regulation.

Date:		October 27, 2003		By:	/s/ Thomas H. McLain
				Name: Thomas H. McLain Title: Chief Executive Officer
Date:		October 27, 2003		By:	/s/ Mark L. Smith
				Name: Mark L. Smith Title: Chief Financial Officer

33