U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 40-F
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REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2007
Commission File Number 000-50393
NEUROCHEM INC.
(Exact name of Registrant as specified in its charter)
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Canada
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2834
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Not Applicable
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(Province or other jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer
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incorporation or organization)
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Classification Code Number)
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Identification No.)
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275 Armand-Frappier Boulevard
Laval, Quebec H7V 4A7, Canada
(450) 680-4500
(Address and telephone number of Registrants principal executive offices)
CT Corporation System
111 Eighth Avenue, 13
th
Floor
New York, New York 10011
(212) 894-8400
(Name, address (including zip code) and telephone number
(including area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of exchange on which registered
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Common Shares, no par value
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The NASDAQ Stock Market
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Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
For annual reports, indicate by check mark the information filed with this Form:
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Annual information form
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Audited annual financial statements
Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report:
The Registrant had 48,848,095 Common Shares
outstanding as at December 31, 2007
Indicate by check mark whether the Registrant by filing the information contained in this Form is
also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934 (the Exchange Act). If Yes is marked, indicate the filing
number assigned to the Registrant in connection with such Rule. Yes
o
. 82-
o
. No
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 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. Yes
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. No
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PRINCIPAL DOCUMENTS
The following documents have been filed as part of this Annual Report on Form 40-F:
A. Annual Information Form
The Annual Information Form of Neurochem Inc. (the Company) for the year ended December 31, 2007.
B. Consolidated Audited Annual Financial Statements
The audited consolidated balance sheets of the Company as at December 31, 2007 and 2006 and the
consolidated statements of operations, comprehensive loss, shareholders equity and cash flows for
the years ended December 31, 2007, December 31, 2006, and December 31, 2005, and for the period
from inception (June 17, 1993) to December 31, 2007, together with the auditors report thereon.
C. Managements Discussion and Analysis
Managements Discussion and Analysis of the Company for the year ended December 31, 2007 compared
to the year ended December 31, 2006, and for the year ended December 31, 2006 compared to the year
ended December 31, 2005.
D. US GAAP Reconciliation Note
A supplemental note entitled Reconciliation to United States Generally Accepted Accounting
Principles in respect of the Companys consolidated financial statements as at December 31, 2007
and 2006 and for the years ended December 31, 2007, 2006 and 2005 and for the period from inception
(June 17, 1993) to December 31, 2007, together with the auditors report thereon.
DISCLOSURE CONTROLS AND PROCEDURES
Based on their evaluation as of the end of the period covered by this report, the Companys Chief
Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls
and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act are effective to
ensure that information required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms and is accumulated and communicated
to management, including the Companys Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Internal control over financial reporting (ICFR) is designed to provide reasonable assurance
regarding the reliability of the Companys financial reporting and the preparation of financial
statements in accordance with Canadian Generally Accepted Accounting Principles. Management,
including the Companys Chief Executive Officer and its Chief Financial Officer, is responsible for
establishing and maintaining adequate ICFR. Management assessed the effectiveness of the Companys
ICFR as of December 31, 2007, based on the framework established in Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, management concluded that the Companys ICFR was effective as of December
31, 2007.
ATTESTATION REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP (KPMG), the Companys independent registered public accounting firm, has issued an
attestation report on the effectiveness of the Companys ICFR as of December 31, 2007, and audited
the Companys Consolidated Financial Statements as at and for the year ended December 31, 2007,
filed as part of this annual report on Form 40-F and is incorporated by reference herein.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There was no change in the Companys internal control over financial reporting that occurred during
the period covered by this annual report on Form 40-F that has materially affected, or is
reasonably likely to materially affect, the Companys internal control over financial reporting.
NOTICES PURSUANT TO REGULATION BTR
None.
AUDIT COMMITTEE
A. Identification of Audit Committee
The following persons comprise the audit committee of the Companys Board of Directors: Mr. Graeme
K. Rutledge (Chair), Dr. Colin Bier and Mr. Jean-Guy Desjardins.
B. Audit Committee Financial Expert
The Board of Directors of the Company has determined that Mr. Graeme K. Rutledge is an audit
committee financial expert (as defined in paragraph 8(b) of General Instruction B to Form 40-F).
The Board of Directors has determined that Mr. Rutledge is independent, as this term is defined
in the listing standards of the NASDAQ Stock Market.
CODE OF ETHICS
The Company has adopted a code of ethics (as that term is defined in Form 40-F) that applies to its
employees (including its principal executive officer, principal financial officer and controller).
The code of ethics was amended on February 21, 2007. The code of ethics, as amended, is attached as
an exhibit to and filed with this Form 40-F. Since the adoption of the code of ethics, there have
not been any waivers, including implicit waivers, from any provision of the code of ethics.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company has paid KPMG, its external auditors, the following fees in each of the last two fiscal
years.
Annual Audit and Interim Financial Statements Review Fees
The following sets forth the aggregate fees paid for each of the last two fiscal years for
professional fees to KPMG for the audit of the annual financial statements and, in 2007, for the
audit of ICFR, or for services normally provided by KPMG in connection with statutory and
regulatory filings or engagements for those fiscal periods.
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Fiscal year ended December 31, 2007
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CDN$213,000
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Fiscal year ended December 31, 2006
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CDN$158,500
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Audit-Related Fees
The following sets forth additional aggregate fees to those reported under Audit Fees in each of
the last two fiscal years for assurance and related services by KPMG that are reasonably related to
the performance of the audit or review of the financial statements:
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Fiscal year ended December 31, 2007
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Short form base self prospectus and related
prospectus supplement
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CDN$52,500
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Sundry accounting
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CDN$15,575
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Translation services
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CDN$8,305
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Fiscal year ended December 31, 2006
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Public offering
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CDN$74,000
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Sundry consultations
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CDN$47,500
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Translation services
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CDN$18,800
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Tax Fees
The following sets forth the aggregate fees billed in each of the last two fiscal years for
professional services rendered by KPMG for tax compliance, tax advice and tax planning:
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Fiscal year ended December 31, 2007
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CDN$15,000
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Fiscal year ended December 31, 2006
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CDN$20,940
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All Other Fees
The following sets forth the aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant not described above:
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Fiscal year ended December 31, 2007
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None
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Fiscal year ended December 31, 2006
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None
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Audit Committee Approval
The Companys audit committee pre-approves every significant engagement by KPMG to render audit or
non-audit services. All of the services described above were approved by the audit committee.
Prior to the beginning of each fiscal period, the Company seeks audit committee approval for all
services expected to be rendered by KPMG during the coming year. If during the course of the year,
the Company requires a service to be performed that is not contemplated in the list of pre-approved
services the Company seeks approval from the Chairman of the audit committee for KPMG to proceed
with such service, which approval requires subsequent ratification at the next meeting of the audit
committee.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements required to be disclosed in this annual report on
Form 40-F other than those described in Note 14(d) of the audited consolidated financial statements
of the Company as at December 31, 2007. Furthermore, the Company entered into a securities purchase
agreement in respect of an equity line of credit facility, as described at Note 11(e) and the
subsequent events note of the audited consolidated financial statements.
CONTRACTUAL OBLIGATIONS
The Companys contractual obligations as of December 31, 2007 are set forth in the following table:
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Payments Due by Period
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(in thousands of US $)
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Contractual Obligations
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Total
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Less than 1 year
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1-3 years
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3-5 years
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More than 5 years
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Operating leases
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42,724
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2,916
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5,966
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6,298
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27,544
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Clinical trial agreements
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3,732
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3,716
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16
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Nil
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Nil
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Management fees
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2,317
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2,317
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Nil
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Nil
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Nil
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Convertible notes
(1)
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46,585
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Nil
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Nil
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46,585
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Nil
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Interest payments on
convertible notes
(1)
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11,180
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2,795
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5,590
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2,995
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Nil
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Total
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106,538
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11,744
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11,572
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55,678
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27,544
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Note:
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(1)
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Assumes redemption of convertible notes in November 2011.
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The Company has not engaged in commodity contract trading or off-balance sheet financing, other
than in relation to operating leases and the sale-leaseback transaction, for which the contractual
obligations under the operating leases are stated above. In addition, the Company is also
responsible for operating costs and taxes under the operating leases. Furthermore, the Company
entered into a securities purchase agreement in respect of an equity line of credit facility, as
discussed previously.
The Company has letters of credit granted in favour of Centocor, Inc. for US$6,000,000 and a
landlord for CDN$640,000; marketable securities are pledged under these letters of credit and are
presented as restricted cash on the Consolidated Balance Sheet as at December 31, 2007.
In December 2004, the Company entered into an agreement with its Chief Executive Officer, Dr.
Francesco Bellini, to issue to him up to 220,000 common shares upon the execution of the agreement
and upon achievement of specified performance targets. In 2005, the Company recorded stock-based
compensation in relation to 140,000 common shares to be issued to the Chief Executive Officer in
connection with his execution and achievement of certain specified performance targets; these
shares will be issued by the Company upon formal notification by the Chief Executive Officer.
The Company has entered into a number of other agreements, which involve future commitments,
including agreements with PARTEQ Research and Development Innovations and the federal Ministry of
Industry (Technology Partnerships Canada Program).
DISCLOSURE PURSUANT TO THE REQUIREMENTS OF THE NASDAQ STOCK MARKET (NASDAQ)
The Company has elected to follow Canadian and Toronto Stock Exchange practices in lieu of certain
requirements of NASDAQ Stock Exchange Marketplace Rule 4350. Specifically:
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The Company is exempt from Rule 4350(f), which requires a quorum of no less than 33-1/3%
of the outstanding shares of common stock at any meeting of the holders of common stock.
Following Canadian practice, a quorum for meetings of the holders of the Companys common
stock is no less than 10% of such holders present or represented by proxy at the meeting.
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The Company will follow Toronto Stock Exchange rules for shareholder approval of new
issuances of its common stock. Following Toronto Stock Exchange rules, shareholder approval
is required for certain
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issuances of shares that: (i) materially affect control of the Company; or (ii) provide
consideration to insiders in aggregate of 10% or greater of the market capitalization of the
listed issuer and have not been negotiated at arms length. Shareholder approval is also
required, pursuant to Toronto Stock Exchange rules, in the case of private placements: (x)
for an aggregate number of listed securities issuable greater than 25% of the number of
securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the
date of closing of the transaction if the price per security is less than the market price;
or (y) that during any six month period are to insiders for listed securities or options,
rights or other entitlements to listed securities greater than 10% of the number of
securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the
date of the closing of the first private placement to an insider during the six month
period.
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DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS:
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Number
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Document
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99.1
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Annual Information Form of the Company for the fiscal year ended December 31, 2007.
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99.2
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The audited consolidated balance sheets of the Company as at December 31, 2007 and 2006 and
the consolidated statements of operations, comprehensive loss, shareholders equity and cash
flows for the years ended December 31, 2007, December 31, 2006, and December 31, 2005, and for
the period from inception (June 17, 1993) to December 31, 2007, together with the auditors
report thereon.
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99.3
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Managements Discussion and Analysis of the Company for the year ended December 31, 2007
compared to the year ended December 31, 2006, and for the year ended December 31, 2006
compared to the year ended December 31, 2005.
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99.4
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A supplemental note entitled Reconciliation to United States Generally Accepted Accounting
Principles in respect of the Companys consolidated financial statements as at December 31,
2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 and for the period from
inception (June 17, 1993) to December 31, 2007, together with the auditors report thereon.
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INCORPORATION BY REFERENCE
The following documents included in or filed as an exhibit to this Annual Report on Form 40-F
are hereby incorporated by reference into, and as exhibits to, the Companys registration
statements on Form F-10 (SEC Reg. Nos. 333-140039 and 333-142770):
1.
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The Annual Information Form of the Company for the year ended December 31, 2007 (filed as
Exhibit 99.1 hereto).
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2.
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The audited consolidated balance sheets of the Company as at December 31, 2007 and 2006 and
the consolidated statements of operations, comprehensive loss, shareholders equity and cash
flows for the years ended December 31, 2007, December 31, 2006, and December 31, 2005, and for
the period from inception (June 17, 1993) to December 31, 2007, together with the auditors
report thereon (filed as Exhibit 99.2 hereto).
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3.
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Managements Discussion and Analysis of the Company for the year ended December 31, 2007
compared to the year ended December 31, 2006, and for the year ended December 31, 2006
compared to the year ended December 31, 2005 (filed as Exhibit 99.3 hereto).
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4.
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A supplemental note entitled Reconciliation to United States Generally Accepted Accounting
Principles in respect of the Companys consolidated financial statements as at December 31,
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2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 and for the
period from inception (June 17, 1993) to December 31, 2007, together with the
auditors report thereon (filed as Exhibit 99.4 hereto).
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5.
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The consent of KPMG LLP (filed as Exhibit 99.5 hereto).
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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
The Company undertakes to make available, in person or by telephone, representatives to
respond to inquiries made by the Commission staff, and to furnish promptly, when required to do so
by the Commission staff, information relating to: the securities registered pursuant to Form 40-F;
the securities in relation to which the obligation to file an annual report on Form 40-F arises; or
transactions in said securities.
B.
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Consent to Service of Process
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The Company has previously filed with the Commission a Form F-X.
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TABLE OF CONTENTS
SIGNATURE
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all
of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized.
March 14, 2008
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NEUROCHEM INC.
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By:
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/s/ Francesco Bellini
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Dr. Francesco Bellini
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Chairman of the Board, President and Chief Executive Officer
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EXHIBIT INDEX
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Number
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Document
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99.1
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Annual Information Form of the Company for the fiscal year ended December 31, 2007.
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99.2
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The audited consolidated balance sheets of the Company as at December 31, 2007 and 2006 and
the consolidated statements of operations, comprehensive loss, shareholders equity and cash
flows for the year ended December 31, 2007, December 31, 2006, and December 31, 2005, and for
the period from inception (June 17, 1993) to December 31, 2007, together with the auditors
report thereon, including the attestation report on the Companys ICFR as of December 31,
2007.
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99.3
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Managements Discussion and Analysis of the Company for the year ended December 31, 2007
compared to the year ended December 31, 2006, and for the year ended December 31, 2006
compared to the year ended December 31, 2005.
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99.4
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Supplemental note entitled Reconciliation to United States Generally Accepted Accounting
Principles in respect of the Companys consolidated financial statements as at December 31,
2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 and for the period from
inception (June 17, 1993) to December 31, 2007, together with the auditors report thereon.
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99.5
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Consent of KPMG
LLP.
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99.6
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Certification pursuant to Rule 13a-14 or 15d-14 of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Dr. Francesco Bellini).
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99.7
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Certification pursuant to Rule 13a-14 or 15d-14 of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Mariano Rodriguez).
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99.8
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Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (Dr. Francesco Bellini).
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99.9
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Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (Mariano Rodriguez).
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99.10
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Code of Ethics.
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