January 24, 2006

Dear Animas Stockholder:

      You are cordially invited to attend the special meeting of stockholders of Animas Corporation, to be held on February 17, 2006 at 10:00 a.m., local time, at 200 Lawrence Drive, West Chester, PA 19380.

      At the special meeting, we will ask you to adopt the merger agreement among us, Johnson & Johnson and a wholly owned subsidiary of Johnson & Johnson. If the merger is completed, you will be entitled to receive $24.50 in cash, without interest, for each share of our common stock that you own.

      Our board of directors has carefully reviewed and considered the terms and conditions of the proposed merger. Based on its review, the board of directors has determined that the merger agreement, the merger and the transactions described in the merger agreement are fair to and in the best interests of our stockholders. ACCORDINGLY, OUR BOARD OF DIRECTORS HAS APPROVED AND DECLARED ADVISABLE THE MERGER AGREEMENT AND RECOMMENDS THAT YOU VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT.

      Your vote is important. We cannot complete the merger unless the merger agreement is adopted by the affirmative vote of the holders of a majority of our shares of common stock outstanding and entitled to vote at the special meeting. Failure to submit a signed proxy or vote in person at the special meeting will have the same effect as a vote against the adoption of the merger agreement. Only stockholders who owned shares of our common stock at the close of business on January 23, 2006 will be entitled to vote at the special meeting.

      Certain of our stockholders have entered into a stockholder agreement in which they agreed to vote, in the aggregate, 6,153,393 shares of common stock (representing approximately 29.58% of the shares of our common stock outstanding as of the record date) in favor of adopting the merger agreement.

      In addition to the number of shares of common stock covered by the stockholder agreement, an affiliate of Johnson & Johnson currently owns approximately 7.77% of the shares of our common stock outstanding as of the record date, which are expected to be voted in favor of adopting the merger agreement.

      PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY. If you hold your shares in “street name”, you should instruct your broker how to vote in accordance with your voting instruction form.

      This proxy statement explains the proposed merger and merger agreement, and provides specific information concerning the special meeting. Please review this document carefully.

This proxy statement is dated January 24, 2006, and is first being mailed to stockholders of Animas Corporation on or about January 24, 2006.

ANIMAS CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To be Held on February 17, 2006

To the stockholders of Animas Corporation:

      We will hold a special meeting of the stockholders of Animas Corporation at 200 Lawrence Drive, West Chester, PA 19380, on February 17, 2006 at 10:00 a.m., local time, and any adjournments or postponements thereof, for the following purposes:

      We will transact no other business at the special meeting except such business as may properly be brought before the special meeting or any adjournments or postponements of the special meeting. Only stockholders who owned shares of our common stock at the close of business on January 23, 2006, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.

      We cannot complete the merger unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the shares of our common stock outstanding and entitled to vote at the special meeting. This proxy statement describes the proposed merger and the actions to be taken in connection with the merger and provides additional information about the parties involved. Please give this information your careful attention.

      Under Delaware law, holders of our common stock who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for an appraisal prior to the vote on the merger agreement and they comply with the Delaware law procedures explained in the accompanying proxy statement. See “The Merger — Appraisal Rights” on page 29.

      OUR BOARD OF DIRECTORS RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT.

      Whether or not you plan to attend the special meeting, please complete, sign and date the enclosed proxy and return it promptly in the enclosed postage-paid return envelope. You may revoke the proxy at any time prior to its exercise in the manner described in this proxy statement. Any stockholder present at the special meeting, including any adjournments or postponements of it, may revoke such stockholder’s proxy and vote personally on the proposal to adopt the merger agreement. Executed proxies with no instructions indicated thereon will be voted “FOR” the adoption of the merger agreement. If you fail to return your proxy or to vote in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting, and will effectively be counted as a vote against the adoption of the merger agreement. PLEASE DO NOT SEND ANY STOCK CERTIFICATES AT THIS TIME.

West Chester, Pennsylvania

January 24, 2006

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE MERGER

SUMMARY

      This summary highlights selected information from this proxy statement and may not contain all the information that is important to you. You should carefully read this entire proxy statement and the other documents to which we have referred you. See also “Where You Can Find Additional Information” on page 51. We have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.

The Companies

      200 Lawrence Drive, West Chester, Pennsylvania 19380, Telephone: (610) 644-8990. Animas designs, develops, manufactures, and sells external insulin pumps for people with diabetes. Animas was incorporated in Delaware in July 1996 and introduced its first generation pump in July 2000. Animas believes that it is the second largest supplier of insulin pumps to the United States market in terms of new insulin pump placements. Animas began shipping its third generation pump, the IR 1200, in April of 2004. Animas believes that the IR 1200 is the smallest full-featured insulin pump on the market. The IR 1200 has a large display, long battery life, precise insulin delivery, and enhanced waterproof integrity. In February 2005, Animas began to ship the IR 1250. The IR 1250 utilizes the IR 1200 platform but includes additional software which incorporates a food database of up to 500 items and tunes for alerts. Animas also provides ancillary supplies on an ongoing basis for patients using our pumps, including insulin cartridges, infusion sets, batteries, and various accessories. Animas provides extensive education programs and services to people with diabetes.

      Animas has approximately 130 full-time sales and clinical personnel located throughout the United States. Animas’ approximately 55 person direct sales force promotes its pump in the United States to healthcare professionals who advise patients on monitoring and managing their diabetes and to patients who express interest in pump therapy. Animas’ approximately 75 full-time equivalent diabetes educators, or clinical managers, train and provide clinical support to patients.

      One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, Telephone: (732) 524-0400. Johnson & Johnson, a holding company of over 200 operating subsidiaries, is one of the world’s most comprehensive and broadly based manufacturers of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 200 operating companies employ approximately 115,000 men and women in 57 countries and sell products throughout the world.

      One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, Telephone: (732) 524-0400. Emerald Merger Sub, Inc. is a wholly-owned subsidiary of Johnson & Johnson. Emerald Merger Sub, Inc. was formed solely for the purpose of facilitating the acquisition of our company by Johnson & Johnson.

The Special Meeting

      The special meeting of our stockholders will be held at 200 Lawrence Drive, West Chester, Pennsylvania 19380, at 10:00 a.m., local time, on February 17, 2006. At the special meeting, our stockholders will be asked to adopt the merger agreement.

      Our stockholders are entitled to vote at the special meeting if they owned shares of our common stock as of the close of business on January 23, 2006, the record date. On the record date, there were 20,805,637 shares

of our common stock outstanding. Stockholders will have one vote at the special meeting for each share of our common stock that they owned on the record date.

      Stockholders should complete, date and sign the accompanying proxy and promptly return it in the pre-addressed accompanying envelope. Brokers or banks holding shares in “street name” may vote the shares only if the stockholder provides instructions on how to vote. Brokers or banks will provide stockholders with directions on how to instruct the broker or bank to vote the shares. All properly executed proxies that we receive prior to the vote at the special meeting, and that are not revoked, will be voted in accordance with the instructions indicated on the proxies. If no direction is indicated on a properly executed proxy returned to us, the underlying shares will be voted “FOR” the adoption of the merger agreement.

      You can also authorize a proxy to vote your shares by telephone or via the internet in accordance with the instructions provided in the accompanying proxy. Voting by proxy via telephone or via the internet is fast, convenient and your proxy is immediately tabulated. Also, by using the telephone or the internet, you help us reduce postage and proxy tabulation costs. Instructions to authorize a proxy to vote your shares by telephone or via the internet may be found on your proxy card, or can be provided by your broker, our transfer agent, StockTrans, Inc., or our proxy solicitor, Georgeson Stockholder Communications, Inc. Please do not return the enclosed proxy card if you authorize a proxy to vote your shares by telephone or via the internet.

      We do not expect any other business to come before the special meeting. If other business properly comes before the special meeting, the persons named as proxies will vote in accordance with their judgment.

      A stockholder may revoke its proxy at any time prior to its use by delivering a signed notice of revocation or a later-dated, signed proxy to our Secretary. In addition, a stockholder may revoke its proxy by delivering, on the day of the special meeting, a signed notice of revocation or a later-dated signed proxy to the chairman of the special meeting. A stockholder also may revoke such stockholder’s proxy by attending the special meeting and voting in person. Attendance at the special meeting does not in itself result in the revocation of a proxy or cause shares to be voted.

      The adoption of the merger agreement requires the affirmative vote of stockholders holding a majority of the shares of our common stock outstanding at the close of business on the record date.

      On the record date, our directors and executive officers beneficially owned and were entitled to vote shares of our common stock, which represented approximately 31.6% of the shares of our common stock outstanding on that date.

      Certain of our stockholders have entered into a stockholder agreement with Johnson & Johnson. Under the terms of the stockholder agreement, these stockholders have agreed to vote, in the aggregate, 6,153,393 shares of our common stock (representing approximately 29.58% of our outstanding shares as of the record date) in favor of the adoption of the merger agreement and to take or refrain from taking certain related actions. A copy of the stockholder agreement is included in this proxy statement as Annex B. You are encouraged to read it carefully and in its entirety.

      In addition to the number of shares of common stock covered by the stockholder agreement, an affiliate of Johnson & Johnson currently owns approximately 7.77% of our outstanding shares as of the record date, which are expected to be voted in favor of adopting the merger agreement.

      We will bear the cost and expense associated with the solicitation of proxies from our stockholders. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from our stockholders by telephone, internet, facsimile, or other electronic means or in person. Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting materials to beneficial owners and will be reimbursed for their reasonable expenses incurred in sending proxy materials to beneficial owners. We have retained Georgeson Shareholder Communications, Inc. to assist in soliciting proxies.

The Merger

      This proxy statement relates to the proposed acquisition of our company by Johnson & Johnson pursuant to a merger agreement, dated as of December 16, 2005, among Johnson & Johnson, Emerald Merger Sub, Inc., a wholly owned subsidiary of Johnson & Johnson, and us. If the merger is completed, we will become a wholly owned subsidiary of Johnson & Johnson.

      At the closing of the merger, our stockholders will be entitled to receive, for each share of our common stock they hold, $24.50 in cash, without interest. Based on the number of shares of our common stock outstanding on January 23, 2006, the record date, and assuming the conversion of all options and the exercise of all warrants exercisable for our common stock, the aggregate consideration paid by Johnson & Johnson to our stockholders will be approximately $538 million.

      Pursuant to the merger agreement, we have taken all action necessary to adjust the terms of all outstanding options to acquire shares of our common stock, whether vested or unvested, to provide that, upon completion of the merger, each option outstanding immediately prior to the completion of the merger will be canceled and the holder of that option will be entitled to receive a single lump sum cash payment equal to the number of shares of our common stock for which the option was exercisable, multiplied by the excess of the $24.50 per share merger consideration over the per share exercise price of the option.

      Pursuant to the merger agreement, we have taken, or will take, all action necessary to cause each warrant to acquire shares of our common stock outstanding immediately prior to the completion of the merger to be canceled in exchange for a lump sum cash payment equal to the number of shares of our common stock subject to the warrant, multiplied by the excess of the $24.50 per share merger consideration over the per share exercise price of the warrant.

      Pursuant to the merger agreement, we have taken all action necessary under the employee stock purchase plan to provide that: (1) participants will not be permitted to increase their payroll deductions or purchase elections from those in effect on the date of the merger agreement, (2) no offering period will be commenced after the date of the merger agreement, (3) each participant’s outstanding right to purchase shares of our common stock under the plan was suspended on December 31, 2005, with all amounts allocated for each participant’s account under the employee stock purchase plan as of the suspension date being used to purchase shares of our common stock at the applicable price determined pursuant to the plan, using the suspension date as the final purchase date for the then outstanding offering period, and (4) the employee stock purchase plan will terminate immediately preceding the closing of the merger.

      We expect to close the merger promptly after the adoption of the merger agreement by our stockholders and after all other conditions to the merger have been satisfied or waived. At present, we anticipate that the closing will occur promptly following the special meeting of our stockholders.

Recommendation of our Board of Directors (see page 18)

      Our board of directors has determined that the merger agreement is advisable, and that the terms of the merger agreement and the transactions described in the merger agreement are fair to, and in the best interests of, our stockholders. The board of directors recommends that our stockholders vote “FOR” the adoption of the merger agreement.

Opinion of our Financial Advisor (see page 18)

      In connection with the merger, our board of directors received a written opinion from our financial advisor, Piper Jaffray & Co. (which we refer to in this proxy statement as “Piper Jaffray”), as to the fairness, from a financial point of view, of the merger consideration to be received by holders of our common stock. The full text of Piper Jaffray’s written opinion, dated December 15, 2005 is included in this proxy statement as Annex C. You are encouraged to read this opinion carefully and in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken. Piper Jaffray’s opinion was provided to our board of directors in its evaluation of the merger consideration, does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how to vote or act with respect to any matters relating to the merger.

Interests of Our Directors and Executive Officers in the Merger (see page 25)

      In considering the recommendation of our board of directors to vote for the proposal to adopt the merger agreement, you should be aware that all of our directors and executive officers have personal interests in the merger that are, or may be, different from, or in addition to, your interests. Our executive officers are entitled to benefits under employment and/or change in control agreements pursuant to which they will receive severance benefits if their employment is terminated following the completion of the merger under specified circumstances.

      In connection with the execution of the merger agreement and as an inducement to Johnson & Johnson to enter into the merger agreement, on December 16, 2005, we entered into an amendment to the employment agreement of our Chief Executive Officer, Katherine D. Crothall, which provides that Dr. Crothall will continue to be employed by us as President for a period of six months after the consummation of the merger. Upon the expiration of the six months or if Dr. Crothall’s employment is terminated by us without cause following the consummation of the merger but prior to the expiration of such six-month period, the cash severance payments she would otherwise be entitled to receive in eighteen monthly installments shall instead be paid in a lump sum subject to her providing Animas with a release. Richard Baron, our Chief Financial Officer, is also entitled to severance payments upon a termination without cause under the terms of his employment agreement. Mr. Baron’s severance under his employment agreement will be in addition to the amounts payable under his change of control agreement.

      We also have change in control agreements with Richard Baron, Audrey Finkelstein, James McGee, Douglas Schumer, Eric Schwartz, Daniel Sunday and Doug Woodruff, each of whom are executive officers of Animas, that provide that in the event that we terminate such individual’s employment without cause or such individual resigns with good reason during the period commencing 30 days before or one year after the date of a change of control, such individual is entitled to receive a lump sum payment equal to one year of his or her then-current base salary. In addition, in the event that such individual has remained employed from the consummation of a change of control through the one-year anniversary of such change of control, such individual is entitled to receive a lump sum payment equal to one year of his or her then-current base salary.

      In addition, upon completion of the merger, each outstanding option and warrant to purchase shares of our common stock held by directors and executive officers as well as our employees and former employees, whether or not the option is vested, will be canceled in exchange for a cash payment equal to the excess of the $24.50 per share merger consideration over the per share option and warrant exercise price, multiplied by the number of shares of our common stock subject to the option or warrant. Finally, the terms of the merger agreement provide for continued indemnification and liability insurance coverage of our current directors and executive officers. Our board of directors was aware of these interests and considered them, among other matters, when approving the merger agreement. For a more complete description, see “The Merger — Interests of Our Directors and Executive Officers in the Merger.”

Material U.S. Federal Income Tax Consequences of the Merger (see page 28)

      The receipt of $24.50 in cash for each share of our common stock pursuant to the merger will be a taxable transaction for U.S. Federal income tax purposes. For U.S. Federal income tax purposes, generally you will realize a taxable gain or loss as a result of the merger measured by the difference, if any, between $24.50 per share and your adjusted tax basis in that share.

      You should read “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 28 for a more complete discussion of the Federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. We urge you to consult your tax advisor to fully understand the tax consequences of the merger to you.

Appraisal Rights (see page 29)

      Stockholders who do not wish to accept the $24.50 per share cash consideration payable pursuant to the merger may seek, under Delaware law, judicial appraisal of the fair value of their shares by the Delaware Court of Chancery. This value could be more or less than or the same as the $24.50 in cash per share merger consideration. This right of appraisal is subject to a number of restrictions and technical requirements. Generally, in order to exercise appraisal rights, among other things:

      Merely voting against the merger agreement will not preserve your right of appraisal under Delaware law. Also, because a submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. If you hold shares in the name of a broker or other nominee, you must instruct your nominee to take the steps necessary to enable you to assert appraisal rights. If you or your nominee fails to follow all of the steps required by the statute, you will lose your right of appraisal.

      Annex D to this proxy statement contains the relevant provisions of Delaware law relating to your right of appraisal. We encourage you to read these provisions carefully and in their entirety.

The Paying Agent

      JPMorgan Chase Bank, N.A. or another comparable institution will act as the paying agent in connection with the merger.

Regulatory Filings and Approvals Required to Complete the Merger (see page 29)

      The merger is subject to discretionary review by the Antitrust Division of the U.S. Department of Justice and the U.S. Federal Trade Commission to determine whether it is in compliance with applicable antitrust laws. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 prohibits us from completing the merger

until we have furnished certain information and materials to the Antitrust Division of the Department of Justice and the Federal Trade Commission, and the required waiting period has ended. Both Johnson & Johnson and we filed the required notification and report forms on December 23, 2005. The completion of the merger also is subject to compliance with applicable laws of the State of Delaware. In addition, we have made filings in Germany and Austria, and the antitrust authorities in those countries must give us approval prior to the consummation of the merger. The German antitrust authorities have cleared the proposed merger.

The Merger Agreement (see page 35)

      The merger agreement provides a detailed description of our representations and warranties to Johnson & Johnson, covenants relating to the conduct of our business, consents and approvals required for and conditions to the completion of the merger and our ability to consider other acquisition proposals. The merger agreement also provides for the automatic conversion of shares of our common stock into the right to receive the $24.50 per share merger consideration at the effective time of the merger.

Termination of the Merger Agreement (see page 44)

      The merger agreement contains provisions addressing the circumstances under which Johnson & Johnson or we may terminate the merger agreement. In addition, the merger agreement provides that, in certain circumstances, we may be required to pay Johnson & Johnson a termination fee of $19.7 million. For a more complete description, see “The Merger Agreement — Termination” and “— Fees and Expenses”.

      A COPY OF THE MERGER AGREEMENT IS INCLUDED IN THIS PROXY STATEMENT AS ANNEX A. YOU ARE STRONGLY ENCOURAGED TO READ IT CAREFULLY AND IN ITS ENTIRETY.

THE COMPANIES

Animas Corporation

      We design, develop, manufacture, and sell external insulin pumps for people with diabetes. We were incorporated in Delaware in July 1996 and introduced our first generation pump in July 2000. We believe that we are the second largest supplier of insulin pumps to the United States market in terms of new insulin pump placements. We began shipping our third generation pump, the IR 1200, in April of 2004. We believe that the IR 1200 is the smallest full-featured insulin pump on the market. The IR 1200 has a large display, long battery life, precise insulin delivery, and enhanced waterproof integrity. In February 2005, we began to ship the IR 1250. The IR 1250 utilizes the IR 1200 platform but includes additional software which incorporates a food database of up to 500 items and tunes for alerts. We also provide ancillary supplies on an ongoing basis for patients using our pumps, including insulin cartridges, infusion sets, batteries, and various accessories. We provide extensive education programs and services to people with diabetes.

      From the introduction of the R1000, in July 2000, through September 30, 2005, we recorded over $134.5 million of revenue in pumps and $65.0 million of revenue in ancillary supplies. For the years ended December 31, 2004, 2003, and 2002, our net revenues were $67.9 million, $34.1 million, and $23.6 million, respectively. For the nine months ended September 30, 2005 and 2004, our net revenues were $62.4 million and $47.9 million, respectively. For the three months ended September 30, 2005 and 2004, our net revenues were $21.7 million and $22.6 million, respectively.

      We estimate that the size of the insulin pump and ancillary supplies market was over $540 million in the United States and over $780 million worldwide in 2004 and that the United States market has grown at a compound annual rate of over 20% during the past four years. We believe that approximately 250,000 people in the United States are using insulin pumps and that there is an estimated domestic market potential of over 1 million users. Given the increasing focus on intensive diabetes management and the opportunity to continue penetrating the potential user base, we believe that the insulin pump market is positioned for sustained growth.

      We have approximately 130 full-time sales and clinical personnel located throughout the United States. Our approximately 55 person direct sales force promotes our pumps in the United States to healthcare professionals who advise patients on monitoring and managing their diabetes and to patients who express interest in pump therapy. Our approximately 75 full-time equivalent diabetes educators, or clinical managers, train and provide clinical support to patients. Our sales force and clinical managers also participate in many local community diabetes education programs and meetings and sponsor a number of courses both to educate the community in diabetes management generally and to increase awareness of pump therapy specifically.

Johnson & Johnson

      Johnson & Johnson, a holding company of over 200 operating subsidiaries, is one of the world’s most comprehensive and broadly based manufacturers of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 200 operating companies employ approximately 115,000 men and women in 57 countries and sell products throughout the world.

      Johnson & Johnson is organized into three business segments: consumer, pharmaceutical, and medical devices and diagnostics. The consumer segment manufactures and markets a broad range of products used in the baby and child care, skin care, oral and wound care and women’s health care fields, as well as nutritional and over-the-counter pharmaceutical products. These products are marketed principally to the general public and sold both to wholesalers and directly to independent and chain retail outlets throughout the world.

      The pharmaceutical segment includes products in the following therapeutic areas: anti-fungal, anti-infective, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, psychotropic (central nervous system) and urology areas. These products are distributed directly to retailers, wholesalers and healthcare professionals for prescription use by the general public.

      The medical devices and diagnostics segment includes a broad range of products used principally in the professional fields by physicians, nurses, therapists, diagnostic laboratories and clinics. These products include circulatory disease management products, orthopedic joint reconstruction and spinal care products, wound care and women’s health products, minimally invasive surgical products, blood glucose monitoring products, professional diagnostic products and disposable contact lenses.

      Johnson & Johnson was organized in the State of New Jersey in 1887. The address of its principal executive offices is One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, and the telephone number at that address is (732) 524-0400.

Emerald Merger Sub, Inc.

      Emerald Merger Sub, Inc. is a wholly owned subsidiary of Johnson & Johnson. Emerald Merger Sub, Inc. is a Delaware corporation that was formed solely for the purpose of facilitating the acquisition of our company by Johnson & Johnson. The address of its principal executive offices is One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, and the telephone number at that address is (732) 524-0400.

THE SPECIAL MEETING

      We are furnishing this proxy statement to our stockholders as of the record date, as part of the solicitation of proxies by our board of directors for use at the special meeting.

Date, Time and Place

      The special meeting of our stockholders will be held at 200 Lawrence Drive, West Chester, PA 19380, at 10:00 a.m., local time, on February 17, 2006.

Purpose of the Special Meeting

      At the special meeting, we will ask our stockholders to adopt the merger agreement. Our board of directors has determined that the merger and the other transactions described in the merger agreement are fair to, and in the best interests of, our stockholders, and has approved and declared advisable the merger agreement and recommends that our stockholders vote “FOR” the adoption of the merger agreement.

Record Date; Shares Entitled to Vote; Quorum

      Only holders of record of our common stock at the close of business on January 23, 2006, the record date, are entitled to notice of and to vote at the special meeting. On the record date, 20,805,637 shares of our common stock were issued and outstanding and held by approximately 111 holders of record. A quorum will be considered present at the special meeting if a majority of all the shares of our common stock issued and outstanding on the record date and entitled to vote at the special meeting are represented at the special meeting in person or by a properly executed proxy. Holders of record of our common stock on the record date are entitled to one vote per share on each matter submitted to a vote at the special meeting.

      Under Delaware law and our certificate of incorporation and bylaws, if a quorum is present, the affirmative vote of a majority of the shares present in person or represented by proxy at the special meeting and voting is necessary to vote to adjourn or postpone the special meeting, assuming such a motion is made. Abstentions and broker non-votes will have no effect on any motion to adjourn or postpone the special meeting for purposes of determining whether there are sufficient votes at the time of the special meeting to approve and adopt the merger agreement.

Vote Required

      The adoption of the merger agreement requires the affirmative vote of stockholders holding a majority of the shares of our common stock outstanding on the record date. Because the required vote of our stockholders is based upon the number of outstanding shares of our common stock, rather than upon the shares actually voted, the failure by the holder of any such shares to submit a proxy or to vote in person at the special meeting, including abstentions and broker non-votes, will have the same effect as a vote against the adoption of the merger agreement.

Shares Owned by Our Directors and Executive Officers

      At the close of business on the record date, our directors and executive officers beneficially owned and were entitled to vote an aggregate of 6,774,132 shares of our common stock, which represented approximately 31.6% of the shares of our common stock outstanding on that date. Under the terms of the stockholder agreement, certain of our stockholders have agreed to vote, in the aggregate, 6,153,393 shares of our common stock for the adoption of the merger agreement. As of the record date, such shares represented approximately 29.58% of the shares of our common stock outstanding. In addition to the number of shares of common stock covered by the stockholder agreement, an affiliate of Johnson & Johnson currently owns approximately 7.77% of the shares of our common stock outstanding as of the record date, which are expected to be voted in favor of adopting the merger agreement.

Voting of Proxies

      All shares represented by properly executed proxies received prior to the special meeting will be voted at the special meeting in the manner specified by such proxies. Properly executed proxies that do not contain voting instructions will be voted “FOR” the adoption of the merger agreement. Shares of our common stock represented at the special meeting but not voting, including shares of our common stock for which proxies have been received but with respect to which holders of shares have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business.

      You can also authorize a proxy to vote your shares by telephone or via the internet in accordance with the instructions provided. Voting by proxy via telephone or via the internet is fast, convenient and your proxy is immediately tabulated. Also, by using the telephone or the internet, you help us reduce postage and proxy tabulation costs. Instructions to authorize a proxy to vote your shares by telephone or via the internet may be found on your proxy card, or can be provided by your broker, our transfer agent, StockTrans, Inc., or our proxy solicitor, Georgeson Shareholder Communications, Inc. Please do not return the enclosed proxy card if you authorize a proxy to vote your shares by telephone or via the internet.

      Only shares affirmatively voted for the adoption of the merger agreement, including properly executed proxies that do not contain voting instructions, will be counted as favorable votes for that proposal. If a stockholder abstains from voting or does not execute a proxy, it will effectively count as a vote against the adoption of the merger agreement. Brokers or banks who hold shares of our common stock in “street name” for customers who are the beneficial owners of such shares may not give a proxy to vote those customers’ shares in the absence of specific instructions from those customers. If no instructions are given to the broker or bank holding shares, or if instructions are given to the broker or bank indicating that the broker or bank does not have authority to vote on the proposal to adopt the merger agreement, then, in either case, the shares will be counted as present for purposes of determining whether a quorum exists, will not be voted on the proposal to adopt the merger agreement and will effectively count as votes against the adoption of the merger agreement.

      The persons named as proxies by a stockholder who votes for the proposal to adopt the merger agreement may propose and vote the shares underlying any such proxies for one or more adjournments of the special meeting, including adjournments to permit further solicitations of proxies. No proxy voted against the proposal to adopt the merger agreement will be voted in favor of any such adjournment or postponement.

      We do not expect that any matter other than the proposal to adopt the merger agreement will be brought before the special meeting. If, however, other matters are brought before the special meeting, the persons named as proxies will vote in accordance with their judgment.

Revocability of Proxies

      A stockholder can change its vote or revoke its proxy at any time before the proxy is voted at the special meeting. A proxy may be revoked by the person who executed it at, or before, the special meeting by:

      If a stockholder chooses either of the first two methods, it must submit its notice of revocation or its new proxy to us prior to the special meeting at 200 Lawrence Drive, West Chester, PA 19380, Attention: Richard A. Baron, Secretary. Attendance at the special meeting will not in and of itself result in the revocation of a proxy or cause shares to be voted. If you have instructed your broker to vote your shares, you must follow directions from your broker to change these instructions.

Solicitation of Proxies

      We will bear the cost of the solicitation of proxies from our stockholders. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone or other electronic means or in person. We will cause brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of stock held of record by such persons. We will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in doing so.

      Georgeson Shareholder Communications, Inc., will assist in our solicitation of proxies. We will pay Georgeson a fee (not to exceed $12,000), will reimburse Georgeson for certain out-of-pocket expenses, and will indemnify Georgeson against certain losses arising out of its proxy solicitation services on our behalf.

      STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR PROXIES. A transmittal form with instructions for the surrender of certificates representing shares of our common stock will be mailed to stockholders shortly after completion of the merger.

Delivery of Proxy Statement to Multiple Stockholders with the Same Address

      The U.S. Securities and Exchange Commission (the “SEC”) has adopted rules that permit companies and intermediaries (for example, brokers) to satisfy the delivery requirements for proxy statements with respect to two or more stockholders sharing the same address if we believe the stockholders are members of the same family by delivering a single proxy statement addressed to those stockholders. Each stockholder will continue to receive a separate proxy card or voting instruction card. This process, which is commonly referred to as “householding”, potentially means extra convenience for stockholders and cost savings for companies by reducing the volume of duplicate information.

      A number of brokers with account holders who are our stockholders will be “householding” our proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or us that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If your household received a single proxy statement, but you would prefer to retrieve your own copy, please notify your broker and direct your written request to Georgeson Shareholder Communications, Inc. at 17 State Street, 10th Floor, New York, New York 10004, or call (888) 877-5360. If you would like to receive your own set of our proxy materials in the future, please contact your broker and Georgeson to inform them of your request. Be sure to include your name, the name of your brokerage firm and your account number.

THE MERGER

      While we believe that the following description covers the material terms of the merger and the related transactions, this summary may not contain all of the information that is important to you. You should carefully read this entire document, including the annexes, and the other documents we refer to for a more complete understanding of the merger and the related transactions.

Background of the Merger

      In January 2001, Johnson & Johnson Development Corporation, which we refer to as JJDC, a Johnson & Johnson subsidiary, invested $4 million in Animas in an equity financing including other investors. JJDC invested in subsequent equity financing rounds in February 2002 and June 2003. The total investment made by JJDC in Animas was $12.2 million. As of the record date, JJDC owns 1,616,488 shares of Animas representing approximately 7.77% of the outstanding shares of the common stock of Animas.

      From January 2001 until the initial public offering of Animas in May 2004, JJDC had the right to receive materials delivered to our board of directors and had “observer rights” with respect to our board of directors meetings.

      Since June 2003, a Marketing Agreement has been in place between LifeScan, Inc., which we refer to as LifeScan, a Johnson & Johnson subsidiary, and Animas pursuant to which we have provided LifeScan’s One Touch^® UltraSmart^®, a glucose meter, to users of our insulin pumps.

      In December 2003, LifeScan and Animas met to discuss Johnson & Johnson’s possible interest in acquiring Animas. In February 2004, Animas Directors Edward Cahill, Thomas Morse, and Dr. Crothall met with Johnson & Johnson and LifeScan executives at Johnson & Johnson’s headquarters to continue these

discussions. At a meeting on February 18, 2004, our board of directors concluded that it was not in the best interests of stockholders to pursue the matter further at that time.

      In April 2004, Johnson & Johnson contacted Dr. Crothall and requested a meeting. The meeting was attended by Mr. Morse and Dr. Crothall, representing Animas, and Eric Milledge, Company Group Chairman of LifeScan, John Klopp, Vice-President of Business Development at LifeScan, Nick Valeriani, Worldwide Chairman, Cardiovascular Devices and Diagnostics at Johnson & Johnson, and Dominic Caruso, Vice President of Group Finance, Medical Devices and Diagnostics at Johnson & Johnson. At the meeting, Johnson & Johnson expressed its possible interest in acquiring Animas and requested three months to perform due diligence. At that time, Animas was in the process of its initial public offering which it expected to complete in May 2004. At a meeting on April 22, 2004, the board of directors of Animas concluded that allowing Johnson & Johnson to conduct due diligence and pursuing the possible transaction at that time would require that Animas not proceed with its initial public offering. The board determined that, given the financial position of Animas, it was not in the best interest of stockholders to delay completion of the initial public offering when there was no guarantee that a satisfactory transaction with Johnson & Johnson could be completed.

      On its own initiative, Piper Jaffray & Co., which has provided strategic and financial advisory services to Animas from time to time and which acted as joint book-running manager with respect to the initial public offering of Animas in May 2004, discussed the possible acquisition of Animas with a number of parties in the medical device industry that Piper Jaffray thought might have an interest in an acquisition of Animas. In the course of these discussions, one third party expressed an interest in meeting with management of Animas and receiving an overview of the business. In July 2004, Dr. Crothall and a representative of Piper Jaffray met with senior management of such third party and made a presentation. No further discussions were held with the third party, which we refer to as Company X, in 2004.

      In January 2005, representatives of Piper Jaffray met with Mr. Dakers and John Papa, Treasurer of Johnson & Johnson. The representatives of Johnson & Johnson indicated a desire to continue a dialogue with Animas but informed Animas that they had no immediate interest in pursuing an acquisition of Animas.

      On May 6, 2005, senior management of Company X contacted Piper Jaffray and communicated that the board of directors of Company X had authorized its management to formally approach Animas to open discussions with respect to a potential acquisition of Animas. Piper Jaffray contacted Dr. Crothall to convey this message.

      During May 2005, representatives of Piper Jaffray met with the board of directors of Animas and representatives of Pepper Hamilton LLP (“Pepper Hamilton”), Animas’ outside counsel. The parties discussed Company X’s interest and the potential interest of other parties, including Johnson & Johnson. The board directed management to communicate with Johnson & Johnson and solicit its potential interest in a transaction. In light of the discussions Piper Jaffray had with industry participants and its assessment of the competitive position and interest of others, the board directed management to solicit only the interest of Johnson & Johnson in addition to Company X. The board authorized management to engage Piper Jaffray as financial advisor to Animas.

      On May 23, 2005, Dr. Crothall met with a member of senior management of Company X. Company X expressed interest in receiving non-public information and to meet again for a more detailed presentation of Animas.

      In May 2005, Piper Jaffray requested Johnson & Johnson to formally express its interest in acquiring Animas, should it exist. Johnson & Johnson requested a meeting with management of Animas and the receipt of non-public information.

      On May 29, 2005, Dr. Crothall met with John Klopp to generally discuss Animas and Johnson & Johnson based on publicly available information. Mr. Klopp expressed interest in receiving non-public information and to meet subsequently for a more detailed presentation.

      In June 2005, representatives of Animas and Pepper Hamilton negotiated confidentiality agreements with Company X and Johnson & Johnson. Johnson & Johnson signed a confidentiality agreement on July 12, 2005, and Animas thereafter shared non-public information with Johnson & Johnson. Company X signed a

confidentiality agreement on July 26, 2005, and was subsequently given access to Animas’ non-public information.

      On July 25, 2005, Dr. Crothall, Audrey Finkelstein, Animas’ Executive Vice-President of Sales, Marketing, and Clinical Affairs, and a representative of Piper Jaffray met with senior management of Johnson & Johnson and LifeScan, including Nick Valeriani, Mr. Milledge, Mr. Caruso, Mr. Dakers and several other members of Johnson & Johnson’s management. Dr. Crothall and Ms. Finkelstein made a presentation concerning Animas. Johnson & Johnson conveyed an interest in engaging in formal due diligence and continuing to consider an acquisition of Animas.

      On August 4, 2005, Dr. Crothall, Patrick Paul, then-Vice-President of Advanced Technology at Animas, and a representative of Piper Jaffray met with senior management of Company X. Dr. Crothall and Mr. Paul made a presentation concerning Animas. Company X conveyed an interest in engaging in formal due diligence and continuing to consider an acquisition of Animas.

      From August 19 to August 22, 2005, representatives of Johnson & Johnson visited Animas and received certain due diligence materials. Animas also arranged for certain members of its senior management to meet with Johnson & Johnson’s representatives to answer questions.

      From August 22 to September 2, 2005, representatives of Company X had several teleconferences with Animas and received certain due diligence materials.

      On September 7, 2005, Dr. Crothall and a representative of Piper Jaffray met with senior management of Johnson & Johnson, including Mr. Dakers and Mr. Milledge. Johnson & Johnson expressed continued interest in an acquisition of Animas and a desire to continue due diligence.

      On September 8, 2005, a senior manager of Company X contacted Piper Jaffray and expressed continued interest in pursuing due diligence of Company and continuing to consider an acquisition of Animas.

      On September 8, 2005, the board of directors of Animas convened telephonically for a discussion with Dr. Crothall and Piper Jaffray regarding Animas’ ongoing discussions with Company X and with Johnson & Johnson. Our board authorized continued discussions with both parties.

      On September 12, Dr. Crothall and Mr. Paul met with Mr. Milledge and Mr. Klopp at Johnson & Johnson’s headquarters in New Brunswick to discuss Animas’ technology and product pipeline.

      On September 22, 2005, the board of directors of Animas met to discuss the interest of both parties. Our board instructed Piper Jaffray to contact both parties and inform them that a competitive process for pursuing a potential acquisition of Animas was ongoing and to invite both parties to complete their due diligence and submit their proposals to acquire Animas.

      On October 9, 2005, Animas made a data room available to both parties. During the months of October and November, 2005, Johnson & Johnson and Company X each continued to conduct due diligence of Animas, including meetings with senior management and the receipt of non-public information.

      On November 11, 2005, Company X contacted Piper Jaffray, indicated a desire to continue due diligence of Animas and provided an indicative value for Animas.

      On November 17, 2005, Johnson & Johnson provided an indicative value for Animas that was higher than that provided by Company X. Johnson & Johnson also stated that it had substantially completed its due diligence of Animas and was prepared to move quickly toward a definitive agreement to acquire Animas.

      At a meeting on November 17, 2005, Piper Jaffray discussed with the board of directors of Animas the indicative valuations of each of Johnson & Johnson and Company X, as well as each party’s statements regarding its ability to move definitively and timely toward an acquisition of Animas. Our board instructed Piper Jaffray to indicate to Johnson & Johnson an interest in considering a transaction if Johnson & Johnson was able to increase its indicative value for Animas. In light of the valuation proposed by Company X and its requirement for further due diligence, our board of directors determined that it was unlikely that a satisfactory

transaction would result with Company X. As a result, no further proprietary information was provided to Company X.

      On December 3, 2005, Mr. Valeriani contacted Dr. Crothall and proposed an acquisition of Animas at a valuation that was higher than its indicative valuation. Our board of directors convened on December 3, 2005 to discuss Johnson & Johnson’s revised proposal. No formal action was taken at this meeting.

      On December 6, 2005, Dr. Crothall and Mr. Morse met with Mr. Valeriani and Mr. Dakers to further discuss Johnson & Johnson’s proposal. Following those discussions, Johnson & Johnson proposed a revised valuation of $24.50 per common share for the acquisition of Animas, which was higher than the valuation proposed by Johnson & Johnson on December 3, 2005. The board of directors of Animas convened that evening and received a presentation from Piper Jaffray addressing the valuation proposed by Johnson & Johnson. Our board authorized management to negotiate a definitive merger agreement with Johnson & Johnson to present to our board for its consideration and approval.

      From December 7 until December 15, 2005, Animas and Johnson & Johnson negotiated the merger agreement and related documentation. On December 15, 2005, the board of directors of Animas convened to discuss the merger agreement and related documentation, as well as an analysis of the proposed transaction prepared by Piper Jaffray. The Piper Jaffrey analysis, which had been distributed to our board of directors for consideration prior to the meeting, addressed the fairness, from a financial point of view, of Johnson & Johnson’s offer to the holders of Animas common stock. Following the presentations made by the legal and financial advisors of Animas, our board of directors approved the merger agreement and the merger.

Reasons for the Merger

      The board of directors of Animas in attendance at a special meeting held on December 15, 2005 unanimously determined that the merger agreement and the transactions contemplated thereby are fair, advisable to and in the best interests of our stockholders and unanimously approved the merger agreement. The board of directors unanimously recommends that you vote “FOR” the adoption of the merger agreement at the special meeting.

      In the course of determining that the merger agreement is fair, advisable to and in the best interests of our stockholders, our board of directors consulted with management, as well as its legal and financial advisors, and considered the following potentially positive factors:

        Our board of directors also considered a number of potentially negative factors in its deliberations concerning the merger, including, but not limited to:

      During its consideration of the transaction with Johnson & Johnson, our board of directors was also aware that all of our directors and executive officers have interests in the merger that are, or may be, different from,

or in addition to, those of our stockholders generally, as described under “The Merger — Interests of Our Directors and Executive Officers in the Merger”.

      While our board of directors considered potentially negative and potentially positive factors, our board of directors concluded that, overall, the potentially positive factors outweighed the potentially negative factors.

      The foregoing discussion summarizes the material information and factors considered by our board of directors in its consideration of the merger. Our board of directors collectively reached the decision to approve the merger agreement in light of the factors described above and other factors that each member of our board of directors felt were appropriate. In view of the variety of factors and the quality and amount of information considered, our board of directors did not find it practicable to and did not make specific assessments of, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. Individual members of our board of directors may have given different weight to different factors.

Recommendation of Our Board of Directors

      Our board of directors has determined that the merger and the other transactions described in the merger agreement are fair to, and in the best interests of, our stockholders. Accordingly, our board of directors has approved and declared advisable the merger agreement and unanimously recommends that our stockholders vote “FOR” the adoption of the merger agreement.

Opinion of Our Financial Advisor — Piper Jaffray & Co.

      Animas retained Piper Jaffray to act as its financial advisor, and, if requested, to render to the board of directors of Animas an opinion as to the fairness, from a financial point of view, to the holders of common stock of the merger consideration proposed to be paid in the merger.

      The full text of the Piper Jaffray written opinion dated December 15, 2005, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Piper Jaffray in rendering its opinion, is attached as Annex C and is incorporated in its entirety herein by reference. Holders of our common stock are urged to, and should, carefully read the Piper Jaffray opinion in its entirety. The Piper Jaffray opinion addresses only the fairness of the merger consideration, from a financial point of view and as of the date of the opinion, to holders of common stock of the merger consideration proposed to be paid in the merger. The Piper Jaffray opinion was directed to Animas’ board of directors and was not intended to be, and does not constitute, a recommendation to any of our stockholders as to how our stockholders should vote or act on any matter relating to the proposed merger.

      In arriving at its opinion, Piper Jaffray, among other things, reviewed:

      In addition, Piper Jaffray performed a discounted cash flow analysis for Animas on a stand-alone basis. Piper Jaffray conducted such other analyses, examinations and inquiries and considered such other financial, economic and market criteria as Piper Jaffray deemed necessary and appropriate in arriving at its opinion.

Piper Jaffray also conducted discussions with members of the senior management of Animas and members of the board of directors of Animas concerning the financial condition, historical and current operating results, business and prospects for Animas.

      The following is a summary of the material financial analyses performed by Piper Jaffray in connection with the preparation of its fairness opinion, which was reviewed with our board at a meeting held on December 6, 2005 and was formally delivered to our board at a meeting held on December 15, 2005. The preparation of analyses and a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, this summary does not purport to be a complete description of the analyses performed by Piper Jaffray or of its presentations to our board on December 6 and 15, 2005.

      This summary includes information presented in tabular format, which tables must be read together with the text of each analysis summary, and considered as a whole, in order to fully understand the financial analyses presented by Piper Jaffray. The tables alone do not constitute a complete summary of the financial analyses. The order in which these analyses are presented below, and the results of those analyses, should not be taken as any indication of the relative importance or weight given to these analyses by Piper Jaffray. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before December 13, 2005, and is not necessarily indicative of current market conditions.

      Giving effect to the $24.50 per share cash consideration, the outstanding common stock of Animas and outstanding options and warrants to purchase common stock, Piper Jaffray calculated the aggregate net equity value of Animas in the merger to be approximately $538.0 million and the aggregate enterprise value (equity value plus debt less cash) of Animas to be approximately $518.6 million.

      Piper Jaffray reviewed selected financial data and ratios for Animas’ management’s internal forecasts for 2005, 2006 and 2007 and compared them to corresponding consensus Wall Street analyst forecasts, where applicable, for publicly traded companies that are engaged primarily in the medical technology industry and which Piper Jaffray believed were similar to Animas’ business. Piper Jaffray selected these companies based on information obtained by searching SEC filings, public company disclosures, press releases, industry and popular press reports, databases and other sources and by applying the following criteria:

      Based on these criteria, Piper Jaffray identified and analyzed 8 comparable companies: Angiodynamics, Cepheid, Digene, Given Imaging, I-Flow, LifeCell Corp., OraSure and Tripath Imaging.

      Piper Jaffray compared valuation multiples for Animas derived from the aggregate values based on the market price and the merger consideration and projected revenue and earnings data for Animas, on the one hand, to valuation multiples for the selected comparable companies derived from their market valuation and projected revenue and earnings data, on the other hand.

      This analysis produced valuation multiples as follows:

      Piper Jaffray, among other things, compared the enterprise value of each of the comparable companies to their respective estimated revenues for the calendar years 2005, 2006 and 2007 in order to determine the ratio between enterprise value and revenue for each comparable company. Piper Jaffray also calculated the price-to-earnings ratio for each comparable company for the same periods. The implication of this analysis is that the higher the ratio of enterprise value to revenue or the higher the price-to-earnings ratio, as applicable, for a given company, the greater the implied value of the company. This analysis showed that, based on the estimates and assumptions used in the analysis, (i) when comparing the enterprise value to estimated revenue for the calendar years 2005, 2006 and 2007, the proposed merger consideration implied a value for Animas that was within the range of values of the comparable companies and (ii) when comparing the projected price-to-earnings ratio for calendar years 2006 and 2007, the proposed merger consideration implied a value for Animas that exceeded the multiples for 2006 and was within the range of values of the comparable companies in 2007.

      Piper Jaffray reviewed transactions involving target companies that it deemed comparable to Animas. Piper Jaffray selected these transactions by searching SEC filings, public company disclosures, press releases, industry and press reports, databases and other sources and by applying the following criteria:

      Based on these criteria, the following transactions were deemed similar to the proposed transaction: the acquisitions of Advanced Neromodulation by St. Jude Medical, CTI Molecular Imaging by Siemens AG, Closure Medical by Johnson & Johnson, Endocardial Solutions by St. Jude Medical, ALARIS Medical Systems, Inc. by Cardinal Health, Horizon Medical Products, Inc. by RITA Medical Systems, Interpore International by Biomet, TheraSense by Abbott Laboratories, Invivo Corporation by Intermagnetics General, I-Stat Corporation by Abbott Laboratories, Oratec Interventions by Smith & Nephew, Inverness Medical (Diabetes) by Johnson & Johnson, Biometrix by Genzyme Biosurgery, Implant Innovations Inc. by Biomet and Xomed by Medtronic.

      Piper Jaffray calculated the enterprise value to the revenues for the last twelve months preceding each transaction and to projected revenues for the twelve consecutive months following each transaction, or the forward period, and the equity value to net income for the forward period for each transaction. Piper Jaffray then compared the results of these calculations with similar calculations for the merger. The analysis indicated the following multiples:

      Piper Jaffray also reviewed other transactions involving target companies that it deemed comparable to Animas. Piper Jaffray selected these transactions by searching SEC filings, public company disclosures, press releases, industry and press reports, databases and other sources and by applying the following criteria:

      Based on these criteria, the following transactions were deemed similar to the proposed transaction: the acquisition of TheraSense by Abbott Laboratories, Disetronic Holdings AG by Roche Holdings AG, Minimed by Medtronic, Inverness Medical (Diabetes) by Johnson & Johnson and MediSense by Abbott Laboratories.

      Piper Jaffray calculated the enterprise value to the revenues for the last twelve months preceding each transaction and to projected revenues for the twelve consecutive months following each transaction, or the forward period, and the equity value to net income for the forward period for each transaction. Piper Jaffray then compared the results of these calculations with similar calculations for the merger. The analysis indicated the following multiples:

      The two transactional analyses above showed that, based on the estimates and assumptions used in the analyses, (i) the enterprise value implied by the proposed merger consideration as a multiple of revenues for the last twelve months and projected revenues for the forward period was within the range of similar multiples for the comparable transactions and (ii) the equity value implied by the proposed merger consideration as a multiple of projected net income for the forward period was within the range of similar multiples for the comparable transactions.

      Piper Jaffray reviewed publicly available information for selected completed or pending transactions to determine the premiums payable in the transactions over recent trading prices and over the 52-week high trading price for the target companies. Piper Jaffray selected these transactions by searching SEC filings, public company disclosures, press releases, industry and popular press reports, databases and other sources and by applying the following criteria:

      This group included the acquisition of Advanced Neuromodulation by St. Jude Medical, ALARIS Medical Systems by Cardinal Health, Centerpulse by Zimmer, Closure Medical by Johnson & Johnson, Compex Technologies by Encore Medical, CTI Molecular Imaging by Siemens AG, Disetronic by Roche Holdings, Endocardial Solutions by St. Jude Medical, Fusion Medical Technologies by Baxter International, Getz Brothers & Co. Inc. by St. Jude Medical, Guidant by Johnson & Johnson, I-Stat by Abbott Laboratories, Imatron by GE Medical Systems, Inamed by Medicis, Instrumentarium by General Electric, Interpore International by Biomet, Invivo Corp. by Intermagnetics General Corp., MedSource Technologies by UTI Corp., Ocular Sciences by Cooper Companies, Oratec Interventions by Smith & Nephew, Sola International by Carl Zeiss & EQT, TheraSense by Abbott Laboratories, VidaMed by Medtronic and VISX by Advanced Medical Optics. The table below shows a comparison of premiums paid in these transactions to the premium that would be paid to Animas’ stockholders based on the merger consideration payable in the transaction.

      Piper Jaffray observed that the premium implied by the merger consideration was within the range of premiums paid in the selected transactions based on the market price one week before announcement and four weeks before announcement and based on the 52-week high for the market price.

      Piper Jaffray performed a discounted cash flows analysis for Animas in which it calculated the present value of the projected future cash flows of Animas using internal financial planning data prepared by Animas’ management. Piper Jaffray estimated a range of theoretical values for Animas based on the net present value of Animas’ projected annual cash flows and a terminal value for Animas at December 31, 2009. Piper Jaffray applied a range of discount rates of 17.5% to 22.5%, based on an analysis of the weighted average cost of capital for companies in the comparable companies group described above and Piper Jaffray’s judgment concerning the rates of return investors would expect in similar investments and a range of terminal value multiples of 12x to 14x of forecasted fiscal 2009 earnings before interest, taxes, depreciation and amortization. This analysis resulted in implied per share values of Animas common stock ranging from a low of $21.63 to a high of $28.08. Piper Jaffray observed that the merger consideration was within the range of values derived from this analysis.

      Although the summary set forth above does not purport to be a complete description of the analyses performed by Piper Jaffray, the material analyses performed by Piper Jaffray in rendering its opinion have been summarized above. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Piper Jaffray believes that its analyses and the summary set forth above must be considered as a whole and that selecting portions of its analyses or of the summary, without considering the analyses as a whole or all of the factors included in its analyses, would create an incomplete view of the processes underlying the analyses set forth in the Piper Jaffray opinion. In arriving at its opinion, Piper Jaffray considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Instead Piper Jaffray made its determination as to the fairness on the basis of its experience and financial judgment after considering the results of all of its analyses. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that this analysis was given greater weight than any other analysis. No company or transaction used in the above analyses as a comparison is directly comparable to Animas or the proposed merger.

      The analyses of Piper Jaffray are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by the analyses. Analyses relating to the value of companies do not purport to be appraisals or valuations or necessarily reflect the price at which companies may actually be sold. No company or transaction used in any analysis for purposes of comparison is identical to Animas or the merger. Accordingly, an analysis of the results of the comparisons is not mathematical; rather, it involves complex considerations and judgments about differences in the companies to which Animas was compared and other factors that could affect the public trading or comparable transaction value of the companies. These analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors. Piper Jaffray does not assume responsibility if future results are materially different from those forecasted.

      As described above, Piper Jaffray’s opinion to the board was one of many factors taken into consideration by the board in making its determination to approve the merger agreement. The above summary does not purport to be a complete description of the analyses performed by Piper Jaffray in connection with the opinion and is qualified by reference to the written opinion of Piper Jaffray set forth in Annex C.

      Piper Jaffray relied upon and assumed the accuracy, completeness and fairness of the financial, accounting and other information provided to it by Animas or otherwise made available to it, and did not assume the responsibility to independently verify this information. Animas has advised Piper Jaffray that it does not publicly disclose internal financial information of the type provided to Piper Jaffray, that such information was prepared for planning purposes and not with the expectation of public disclosure, and that there is no assurance that any forward looking financial information or projections contained in such internal financial information will be realized. Piper Jaffray also assumed, in reliance upon the assurances of the

management of Animas, that the information provided to Piper Jaffray by Animas was prepared on a reasonable basis, in accordance with industry practice, and, with respect to financial forecasts, projections and other estimates and other business outlook information, reflected the best currently available estimates and judgments of the management of Animas, was based on reasonable assumptions and that there is not, and the management of Animas was not aware of, any information or facts that would make the information provided to Piper Jaffray incomplete or misleading. Piper Jaffray expresses no opinion as to such financial forecasts, projections and other estimates and other business outlook information or the assumptions on which they are based. Without limiting the generality of the foregoing, Piper Jaffray assumed that Animas was not a party to any material pending transaction, including any external financing, recapitalization, acquisition or merger, divestiture or spin-off other than the proposed merger.

      Piper Jaffray assumed that the final form of the merger agreement would be in all material respects identical to the last draft reviewed by Piper Jaffray, without modification of material terms or conditions by Animas, Johnson & Johnson or any other party thereto. Piper Jaffray also assumed that the merger would be consummated pursuant to the terms of the merger agreement reviewed by Piper Jaffray without amendments thereto and with full satisfaction of all covenants and conditions without any waiver by any party of any material obligation thereunder. In arriving at its opinion, Piper Jaffray assumed that all necessary regulatory approvals and consents required for the merger would be obtained in a manner that would not adversely affect Animas or alter the terms of the merger. Piper Jaffray expressed no opinion regarding whether the necessary approvals or other conditions to the consummation of the merger would be obtained or satisfied.

      Piper Jaffray did not perform any appraisals or valuations of any specific assets or liabilities (fixed, contingent or other) of Animas, and was not furnished with any appraisals or valuations. The analyses performed by Piper Jaffray were going concern analyses. Piper Jaffray expressed no opinion regarding the liquidation value of Animas. Without limiting the generality of the foregoing, Piper Jaffray did not undertake any independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities to which Animas or any of its affiliates is a party or may be subject, and at the direction of Animas, and with its consent, Piper Jaffray’s opinion made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters.

      Piper Jaffray’s opinion was necessarily based upon the information available to it and facts and circumstances as they existed and were subject to evaluation as of the date of the opinion; events occurring after the date of the opinion could materially affect the assumptions used by Piper Jaffray in preparing its opinion. Piper Jaffray expressed no opinion as to the price at which shares of Animas common stock have traded or may trade following the announcement of the merger or at any time after the date of the opinion. Piper Jaffray has not agreed or undertaken to reaffirm or revise its opinion or otherwise comment on any events occurring after the date it was given and does not have any obligation to update, revise or reaffirm its opinion.

      In connection with its engagement, Piper Jaffray was requested to and did solicit indications of interest from, and hold discussions with, selected third parties regarding the possible acquisition of all or part of Animas. While Piper Jaffray rendered its opinion and provided certain analyses to the Animas board of directors, Piper Jaffray was not requested to, and did not make, any recommendation to the board as to the specific form or amount of the consideration to be received by Animas stockholders in the proposed merger, which was determined through negotiations between Animas and Johnson & Johnson. Piper Jaffray was not requested to opine as to, and its opinion does not address, the basic business decision to proceed with or effect the merger or the structure thereof, or the relative merits of the merger compared to any alternative business strategy or transaction in which Animas might engage.

      Piper Jaffray is regularly engaged as a financial advisor in connection with mergers and acquisitions, underwritings and secondary distributions of securities and private placements. The Animas board of directors selected Piper Jaffray to render its fairness opinion in connection with the proposed merger on the basis of its experience and reputation in acting as a financial advisor in connection with mergers and acquisitions. Piper

Jaffray in the ordinary course of its business may actively trade securities of Animas for its own account or the accounts of its customers and, accordingly, may at any time hold long or short positions in these securities.

      Piper Jaffray acted as financial advisor to Animas in connection with the merger. Under the terms of our engagement letter with Piper Jaffray, Animas has agreed to pay Piper Jaffray a $500,000 fee for providing the opinion that is not contingent upon consummation of the proposed merger. Animas has also agreed to pay Piper Jaffray a fee in the event of the consummation of the proposed merger currently estimated to be approximately $4,600,000. Whether or not the proposed merger is consummated, Animas has also agreed to reimburse Piper Jaffray for its reasonable out-of-pocket expenses and to indemnify it against certain liabilities relating to or arising out of services performed by Piper Jaffray in rendering its opinion to the Animas board of directors. These fees and expenses are customary amounts for transactions of this type.

Interests of Our Directors and Executive Officers in the Merger

      In considering the recommendation of our board of directors with respect to the merger, our stockholders should be aware that all of our directors and executive officers have personal interests in the merger that are, or may be, different from, or in addition to, your interests. Our board of directors was aware of the interests described below and considered them, among other matters, when approving the merger.

      On February 20, 2004, we entered into an amended and restated employment agreement with Katherine D. Crothall, our President and Chief Executive Officer. In connection with the execution of the merger agreement and as an inducement to Johnson & Johnson to enter into the merger agreement, on December 16, 2005, we, Johnson & Johnson and Dr. Crothall entered into a modification to her employment agreement. Under the terms of the revised agreement, following the consummation of the merger, Dr. Crothall will continue to be employed by us as President for a period of six months. If Dr. Crothall’s employment terminates at the expiration of such six-month period, or if her employment is terminated by us without cause following the consummation of the merger but prior to the expiration of such six-month period, the cash severance payments that she would otherwise be entitled to receive in eighteen monthly installments pursuant to the employment agreement shall instead be payable to her in a lump sum amount as soon as practicable following her termination of employment. If Dr. Crothall’s employment terminates following the consummation of the merger but prior to the expiration of such six-month period by reason of a constructive termination without cause (within the meaning of her employment agreement entered into in February 2004) or her voluntary resignation, Dr. Crothall would be entitled to receive the severance compensation and benefits that she would otherwise be entitled to receive upon a termination of her employment by us without cause pursuant to the employment agreement (with any applicable cash severance payments being paid in eighteen monthly installments as provided in her employment agreement). Dr. Crothall has also agreed to waive any pro-rata bonus that would otherwise be payable to her pursuant to the employment agreement upon a termination of employment. Dr. Crothall subjected herself to increased non-compete and non-solicitation/non-hire restrictions which were for five years and three years, respectively, following the consummation of the merger. If the merger agreement is terminated, the modification to her employment agreement described above will be void and have no further force and effect.

      In addition, in connection with the execution of the merger agreement, on December 22, 2005, we entered into another amendment to Dr. Crothall’s employment agreement whereby our severance obligations to Dr. Crothall were modified to be consistent with the amendment to the change in control agreements relating to Section 409A of the Internal Revenue Code, described below.

      On February 20, 2004, we entered into an employment agreement with our Chief Financial Officer, Richard Baron. Under his employment agreement, if we terminate Mr. Baron’s employment for cause or he voluntarily terminates his employment for any reason, Mr. Baron will receive only those benefits required to be provided to him by the terms of any of our applicable benefit plans. If we terminate Mr. Baron’s employment without cause and he executes a release of claims that he may have against Animas, we will continue to pay Mr. Baron his then-current base salary and benefits for the 12-month period following his date of termination

and certain other benefits required by the terms of our applicable benefit plans. Mr. Baron’s severance under his employment agreement will be in addition to the amounts payable under his change in control agreement, described below. Mr. Baron’s employment agreement also contains non-competition provisions prohibiting him from competing against us during his term of employment and for two years after a termination of employment. In connection with the execution of the merger agreement, on December 22, 2005, we entered into an amendment to Mr. Baron’s employment agreement whereby our severance obligations to Mr. Baron were modified to be consistent with the amendment to the change in control agreements relating to Section 409A of the Internal Revenue Code, described below.

      We entered into change in control agreements with Richard Baron, Audrey Finkelstein, James McGee, Douglas Schumer, Eric Schwartz, Daniel Sunday and Doug Woodruff that provide that in the event that we terminate such individual’s employment without cause or such individual resigns with good reason during the period commencing 30 days before or one year after the date of a change of control, such individual is entitled to receive a lump sum payment equal to one year of his or her then-current base salary. In addition, in the event that such individual has remained employed from the consummation of a change of control through the one-year anniversary of such change of control, such individual is entitled to receive a lump sum payment equal to one year of his then-current base salary.

      The following chart sets forth, for each of Animas’ executive officers, the estimated value of the cash severance (or retention) payments and other benefits due the executive officer (based on payments under employment agreements plus bonuses and payments under change of control agreements) as of December 16, 2005 (the date of the merger agreement) excluding the amount of any excise tax gross-up and the value of any stock options subject to accelerated vesting (See “— Outstanding Stock Options and Employee Stock Purchase Plan”).

      In connection with the execution of the merger agreement, on December 22, 2005, we entered into an amendment to the change in control agreements whereby if Section 409A of the Internal Revenue Code is deemed to apply to the severance benefits payable under the agreements, then any such payment payable during the six month period immediately following the termination of such executive officer’s employment will be delayed and paid in a lump sum as soon as practicable following the expiration of such six month period.

      Pursuant to the merger agreement, our board of directors and compensation committee took action to accelerate the vesting and exercisability of outstanding stock options. Each outstanding unexercised option to purchase shares of our common stock will be canceled upon the completion of the merger in exchange for a cash payment equal to the excess of the $24.50 per share merger consideration over the per share option exercise price, multiplied by the number of shares of our common stock subject to the option.

      The directors and executive officers identified in the following table will benefit from the acceleration of the vesting of and exercisability of our stock options:

      Our employee stock purchase plan was suspended on December 31, 2005, and immediately prior to such suspension, each participant’s outstanding right to purchase shares of our common stock terminated and all amounts allocated for each participant’s account (including for our executive officers) under the employee stock purchase plan as of the suspension date were used to purchase shares of our common stock at the applicable price determined pursuant to the plan, using the suspension date as the final purchase date for the then outstanding offering period. The employee stock purchase plan will terminate immediately preceding the closing of the merger.

      The terms of the merger agreement provide for the continued indemnification of our current directors and officers, including the continuation of the equivalent of our current officers’ and directors’ liability insurance

for a period of six years, as more fully described under “The Merger Agreement — Directors’ and Officers’ Indemnification, Advancement of Expenses, Exculpation and Insurance”.

      In addition, William A. Graham, IV, a director of Animas, owns 13,333 warrants to purchase shares of our common stock which will be canceled upon completion of the merger for a cash payment equal to the difference between the exercise price of $10.00 per share and the $24.50 per share merger consideration.

Material U.S. Federal Income Tax Consequences

      The following is a summary of the material U.S. Federal income tax consequences of the merger to U.S. holders (as defined below) whose shares of our common stock are converted into the right to receive cash in the merger. The discussion does not purport to consider all aspects of U.S. Federal income taxation that might be relevant to particular holders. The discussion is based on current law which is subject to change, possibly with retroactive effect. The discussion applies only to U.S. holders who hold shares of our common stock as capital assets. This discussion does not apply to certain types of holders (such as insurance companies, tax-exempt organizations and retirement plans, banks and other financial institutions, traders, broker-dealers, dealers in securities or foreign currencies, S corporations, partnerships, or mutual funds, persons who hold or have held our common stock as part of a straddle or a hedging, integrated constructive sale or conversion transaction for tax purposes, persons subject to alternative minimum tax, persons who acquired their shares of our common stock upon the exercise of stock options or otherwise as compensation (including, without limitation, persons who acquired their shares pursuant to our employee stock purchase plan), or persons with a functional currency other than the U.S. dollar) who may be subject to special rules.

      In addition, this discussion does not address any state, local or foreign tax consequences of the merger.

      For purposes of this discussion, a U.S. holder is any individual, corporation, estate or trust that is a beneficial holder of our common stock and that is, for U.S. Federal income tax purposes:

      If a partnership or other pass-through entity holds shares of our common stock or options or warrants, the tax treatment of a partner or owner of such partnership or other pass-through entity generally will depend upon the status of the partner or owner and the activities of the partnership or pass-through entity. Accordingly, we urge partnerships and other pass-through entities that hold shares of our common stock or options or warrants and partners or owners in such partnerships or pass-through entities to consult their tax advisors.

      The receipt of cash for shares of our common stock pursuant to the merger will be a taxable transaction for U.S. Federal income tax purposes. In general, a U.S. holder who surrenders shares of our common stock for cash in the merger will recognize a capital gain or loss for U.S. Federal income tax purposes equal to the difference, if any, between the amount of cash received and the U.S. holder’s adjusted tax basis in the shares of our common stock surrendered. Gain or loss will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered for cash pursuant to the merger. Such gain or loss will be long-term capital gain or loss provided that a U.S. holder’s holding period for such shares is more than one year at the time of the completion of the merger. Capital gains of individuals derived in respect of capital assets held for more than one year are eligible for reduced rates of taxation. There are limitations on the deductibility of capital losses.

      Federal backup withholding tax generally will be withheld from all cash payments to which a U.S. holder is entitled pursuant to the merger agreement, if (1) the IRS notifies us or our paying agent that the taxpayer identification number (typically, the social security number in the case of individuals, or employer identification number, in the case of other holders) provided by the U.S. holder is incorrect; (2) a U.S. holder does not have a taxpayer identification number and does not provide one to us within 60 days of signing the Substitute Form W-9; (3) the stockholder underreports interest and dividend payments that he or she receives on his or her tax return and the IRS notifies us or our paying agent that withholding is required; or (4) the U.S. holder fails to certify under penalties of perjury that he or she is not subject to backup withholding. Each of our eligible holders should complete and sign the Substitute Form W-9 included as part of the letter of transmittal to be returned to the paying agent, in order to provide the information and certification necessary to avoid backup withholding tax, unless an exemption applies and is established in a manner satisfactory to the paying agent.

      Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. Federal income tax liability provided that you furnish the required information to the IRS.

      U.S. holders considering the exercise of their appraisal rights should consult their own tax advisors concerning the application of Federal income tax laws to their particular situations as well as any consequences of the exercise of such rights arising under the laws of any other taxing jurisdiction.

      THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF THE POTENTIAL TAX CONSIDERATIONS RELATING TO THE MERGER, AND IS NOT TAX ADVICE. THEREFORE, YOU ARE URGED TO CONSULT YOUR TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE MERGER, INCLUDING THE APPLICABILITY OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.

Regulatory Approvals

      Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules promulgated thereunder by the U.S. Federal Trade Commission, certain transactions, including the merger, may not be completed unless certain waiting period requirements have been satisfied. Johnson & Johnson and we filed a notification and report form with the Antitrust Division of the U.S. Department of Justice and the U.S. Federal Trade Commission on December 23, 2005. At any time before or after the effective time of the merger, the Antitrust Division, the Federal Trade Commission or others could take action under the antitrust laws, including seeking to prevent the merger, to rescind the merger or to conditionally approve the merger upon the divestiture by us or Johnson & Johnson of substantial assets. In addition, under certain circumstances, private parties and state attorneys general may also bring actions under U.S. antitrust laws. There can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

      Further, we have made filings in Germany and Austria, and the antitrust authorities in those countries must give us approval prior to the consummation of the merger. The German antitrust authorities have cleared the proposed merger.

Appraisal Rights

      Holders of shares of our common stock who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the General Corporation Law of the State of Delaware, which is referred to in this proxy statement as Section 262.

      The following discussion is not a complete statement of the law pertaining to appraisal rights under Section 262 and is qualified in its entirety by the full text of Section 262 which is included in this proxy statement as Annex D. All references in Section 262 and in this summary to a “stockholder” are to the record holder of the shares of our common stock as to which appraisal rights are asserted. A person having a beneficial interest in shares of our common stock held of record in the name of another person, such as a

broker, fiduciary, depositary or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights.

      Under Section 262, persons who hold shares of our common stock who follow the procedures set forth in Section 262 will be entitled to have their shares of our common stock appraised by the Delaware Court of Chancery and to receive payment of the “fair value” of the shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, as determined by the court.

      Under Section 262, where a merger is to be submitted for approval at a meeting of stockholders, as in the case of the adoption of the merger agreement by our stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement shall constitute the notice, and the applicable statutory provisions are included in this proxy statement as Annex D. Any holder of our common stock who wishes to exercise appraisal rights or who wishes to preserve such holder’s right to do so, should review the following discussion and Annex D carefully because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights.

      A holder of shares of our common stock wishing to exercise the holder’s appraisal rights must deliver to us, before the vote on the adoption of the merger agreement at the special meeting, a written demand for the appraisal of such holder’s shares and must not vote in favor of the adoption of the merger agreement. A holder of shares of our common stock wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time of the merger. A vote against the adoption of the merger agreement will not in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote. The demand must reasonably inform us of the identity of the holder as well as the intention of the holder to demand an appraisal of the “fair value” of the shares held by the holder. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the merger agreement at the special meeting will constitute a waiver of appraisal rights.

      Only a holder of record of shares of our common stock is entitled to assert appraisal rights for the shares of our common stock registered in that holder’s name. A demand for appraisal in respect of shares of our common stock should be executed by or on behalf of the holder of record, fully and correctly, as the holder’s name appears on the holder’s stock certificates, and must state that the person intends thereby to demand appraisal of the holder’s shares of our common stock in connection with the merger. If the shares of our common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand should be made in that capacity, and if the shares of our common stock are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, the agent is acting as agent for the record owner or owners. A record holder such as a broker who holds shares of our common stock as nominee for several beneficial owners may exercise appraisal rights with respect to the shares of our common stock held for one or more beneficial owners while not exercising the rights with respect to the shares of our common stock held for other beneficial owners; in such case, however, the written demand should set forth the number of shares of our common stock as to which appraisal is sought and where no number of shares of our common stock is expressly mentioned the demand will be presumed to cover all shares of our common stock held in the name of the record owner. Stockholders who hold their shares of our common stock in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

      All written demands for appraisal pursuant to Section 262 should be sent or delivered to Animas Corporation, 200 Lawrence Drive, West Chester, PA 19380, Attention: General Counsel.

      Within 10 days after the effective time of the merger, the surviving corporation must notify each holder of our common stock who has complied with Section 262 and who has not voted in favor of the adoption of the

merger agreement that the merger has become effective. Within 120 days after the effective time of the merger, but not thereafter, the surviving corporation or any holder of our common stock who has so complied with Section 262 and is entitled to appraisal rights under Section 262 may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the holder’s shares of our common stock. The surviving corporation is under no obligation to and has no present intention to file a petition. Accordingly, it is the obligation of the holders of our common stock to initiate all necessary action to perfect their appraisal rights in respect of shares of our common stock within the time prescribed in Section 262.

      Within 120 days after the effective time of the merger, any holder of our common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within ten days after a written request therefor has been received by the surviving corporation or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later.

      If a petition for an appraisal is timely filed by a holder of shares of our common stock and a copy thereof is served upon the surviving corporation, the surviving corporation will then be obligated within 20 days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the Court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the holders of shares of our common stock who demanded payment for their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceeding; and if any stockholder fails to comply with the direction, the Court of Chancery may dismiss the proceedings as to the stockholder.

      After determining the holders of our common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of their shares of our common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. Holders of our common stock considering seeking appraisal should be aware that the fair value of their shares of our common stock as so determined could be more than, the same as or less than the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares of our common stock and that investment banking opinions as to the fairness from a financial point of view of the consideration payable in a merger are not necessarily opinions as to fair value under Section 262. We do not anticipate offering more than the merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the “fair value” of a share of our common stock is less than the merger consideration. The Delaware Supreme Court has stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in the appraisal proceedings. In addition, Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenter’s exclusive remedy. The Court will also determine the amount of interest, if any, to be paid upon the amounts to be received by persons whose shares of our common stock have been appraised. The costs of the action may be determined by the Court and taxed upon the parties as the Court deems equitable. The Court may also order that all or a portion of the expenses incurred by any stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, be charged pro rata against the value of all the shares entitled to be appraised.

      Any holder of shares of our common stock who has duly demanded an appraisal in compliance with Section 262 will not, after the effective time of the merger, be entitled to vote the shares of our common stock subject to the demand for any purpose or be entitled to the payment of dividends or other distributions on those shares of our common stock (except dividends or other distributions payable to holders of record of our common stock as of a record date prior to the effective time of the merger).

      If any stockholder who demands appraisal of shares of our common stock under Section 262 fails to perfect, or effectively withdraws or loses, such holder’s right to appraisal, the shares of our common stock of the stockholder will be converted into the right to receive $24.50 in cash per share. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the effective time of the merger, or if the stockholder delivers to the surviving corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the merger, except that any attempt to withdraw made more than 60 days after the effective time of the merger will require the written approval of the surviving corporation and, once a petition for appraisal is filed, the appraisal proceeding may not be dismissed as to any holder absent court approval.

      Failure to follow the steps required by Section 262 for perfecting appraisal rights may result in the loss of such rights (in which event the holder of our common stock will be entitled to receive the consideration specified in the merger agreement).

Delisting and Deregistration of Our Common Stock

      If the merger is completed, our common stock will be delisted from the Nasdaq National Market and will be deregistered under the Securities Exchange Act of 1934, as amended.

Structure of the Merger

      The merger agreement provides that, upon the terms and subject to the conditions of the merger agreement, Emerald Merger Sub, Inc. will be merged with and into us and the separate corporate existence of Emerald Merger Sub, Inc. will thereupon cease, and we will be the surviving corporation and all of our rights, privileges, powers, immunities, purposes and franchises will continue unaffected by the merger, except that all of our then outstanding shares of our common stock will be owned by Johnson & Johnson and all outstanding options and warrants will be canceled.

Effective Time of the Merger

      The merger will become effective when a certificate of merger is duly filed with the Secretary of State of the State of Delaware or at such later time as the parties agree to and specify in the certificate of merger. Such filing will be made no later than the second business day after the satisfaction or waiver of the conditions to the completion of the merger described in the merger agreement. See “The Merger Agreement — Conditions to the Completion of the Merger”. The merger agreement also provides that:

The Merger Consideration

      Each share of our common stock issued and outstanding immediately before the merger, other than treasury shares, shares for which appraisal rights have been perfected and shares held by Johnson & Johnson or Emerald Merger Sub, Inc., will automatically be canceled and will cease to exist and will be converted into the right to receive $24.50 in cash, without interest. After the merger is effective, each holder of a certificate representing any of these shares of our common stock will no longer have any rights with respect to the shares, except for the right to receive the $24.50 per share merger consideration or, if a holder exercises appraisal

rights, the right to receive payment of the judicially determined fair value of its shares upon compliance with the requirements of Delaware law. Each share of our common stock held by us as treasury shares or held by Johnson & Johnson or Emerald Merger Sub, Inc. at the time of the merger will be canceled without any payment.

      YOU SHOULD NOT RETURN STOCK CERTIFICATES WITH THE ENCLOSED PROXY. A transmittal form with instructions for the surrender of certificates representing shares of our common stock will be mailed to stockholders shortly after completion of the merger.

Treatment of Our Stock Options and Employee Stock Purchase Plan

      Prior to the completion of the merger, holders of outstanding stock options will have the opportunity to exercise all of their outstanding stock options, including stock options for which the vesting is accelerated in connection with the merger in accordance with the terms and conditions of our 1996 Incentive Stock Plan, our 1998 Equity Compensation Plan and our 2004 Equity Incentive Plan. Upon completion of the merger, each outstanding stock option that has not been exercised will be canceled and the holder of that stock option will be entitled to receive a single lump sum cash payment equal to the product of:

      Subject to any applicable withholding taxes, the payment for options will be made, without interest, through our normal payroll procedures as soon as practicable following the completion of the merger.

      We are required to ensure that there will be no stock options exercisable for our capital stock outstanding as of the effective time.

      Our board of directors has taken actions under the employee stock purchase plan to provide that:

Treatment of Our Warrants

      Pursuant to the merger agreement, we have taken, or will take, any action necessary to cause each warrant to acquire shares of our common stock outstanding immediately prior to the completion of the merger to be canceled in exchange for a lump sum cash payment equal to the product of:

      Payments with respect to warrants shall be made by us as soon as practicable following the effective time of the merger. All amounts payable shall be subject to any required withholding of taxes and shall be paid without interest.

Surrender of Stock Certificates

      At the effective time of the merger, Johnson & Johnson will deposit for the benefit of our stockholders the aggregate merger consideration into an exchange fund with JPMorgan Chase Bank, N.A. or another comparable institution, as paying agent. At the effective time of the merger, shares of our common stock (except for shares for which appraisal rights have been perfected, as described in “Appraisal Rights” above):

      In addition, from and after the effective time of the merger, each certificate formerly representing any such share of our common stock will represent only the right to receive the $24.50 per share merger consideration which the holder of the certificate is entitled to receive pursuant to the merger.

      No interest will accrue or be paid with respect to the merger consideration. Until holders of certificates previously representing shares of our common stock have surrendered those certificates to the paying agent for exchange, holders will not receive the merger consideration due in respect of the shares formerly represented by such certificates.

      As soon as practicable after the effective time of the merger, the paying agent will mail to each holder of record of shares of our common stock a letter of transmittal and instructions for its use in delivering certificates to the paying agent in exchange for the merger consideration due in respect of the shares formerly represented by such certificates. After receipt of its certificates by the paying agent, together with a properly executed letter of transmittal, the paying agent will deliver to each stockholder the $24.50 per share merger consideration multiplied by the number of shares formerly represented by the certificate(s) surrendered by the stockholder. In the event of a transfer of ownership of our common stock which is not registered in the transfer records of our transfer agent, payment of the merger consideration may be made to a person other than the person in whose name the surrendered certificate is registered if:

      With respect to outstanding warrants to acquire shares of our common stock and outstanding stock options that are to be canceled in exchange for a lump sum cash payment in accordance with the terms of the merger agreement, as soon as practicable after the effective time of the merger, we will mail to each holder of such warrant and/or stock option a letter of transmittal and instructions on how to surrender the warrant or option agreement in exchange for the lump sum cash payment that such warrant or option holder is entitled to under the terms of the merger agreement. After the surrender of a warrant and/or option agreement with the completed and signed letter of transmittal, the holder thereof will be paid in cash the amount to which such holder is entitled under the merger agreement, without interest, after any required withholding and similar deductions.

Lost Certificates

      If any certificate representing shares of our common stock is lost, stolen or destroyed, the paying agent will deliver the applicable merger consideration due in respect of the shares formerly represented by that certificate if:

Unclaimed Amounts

      Any portion of the exchange fund which remains undistributed to our stockholders after the six month anniversary of the effective time of the merger will be delivered by the paying agent to Johnson & Johnson, upon demand, and any of our stockholders who have not previously surrendered their stock certificates will only be entitled to look to Johnson & Johnson for payment of the merger consideration due in respect of the shares formerly represented by their certificates. Subject to the other terms of the merger agreement, Johnson & Johnson will remain liable for the payment of the merger consideration to these stockholders.

THE MERGER AGREEMENT

      The following is a summary of the material provisions of the merger agreement, a copy of which is attached hereto as Annex A. This summary is qualified in its entirety by reference to the full text of the merger agreement and you are urged to carefully read the full text of the merger agreement. The merger agreement is incorporated into this proxy statement by this reference.

      The merger agreement has been attached as an annex and the following summary has been included to provide you with information regarding its terms. It is not intended to provide any other factual information about us. Such information can be found elsewhere in this proxy statement and in the other public filings we make with the SEC, which are available without charge at www.sec.gov.

      The merger agreement contains representations and warranties we made to Johnson & Johnson and Emerald Merger Sub, Inc., as well as representations Johnson & Johnson and Emerald Merger Sub, Inc. made to us. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that we have exchanged with Johnson & Johnson and Emerald Merger Sub, Inc. in connection with signing the merger agreement. While we do not believe that they contain information securities laws require us to publicly disclose other than information that has already been so disclosed, the confidential disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached merger agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since they are modified in important part by the underlying confidential disclosure schedules. These confidential disclosure schedules contain information that has been included in our prior public disclosures, as well as potential additional non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in our public disclosures.

Representations and Warranties

      The merger agreement contains customary representations and warranties relating to, among other things:

Covenants

      Under the merger agreement, we have agreed that, prior to the effective time of the merger, subject to certain exceptions, we will carry on our business in the ordinary course, consistent with past practice and as currently proposed (as of the date of the merger agreement) by us to be conducted and in compliance with applicable laws and regulations, and will use all commercially reasonable efforts to preserve intact our current business organizations, to keep available the services of our current officers, employees and consultants and preserve our relationships with those persons having business dealings with us. In addition, we have agreed that, among other things and subject to certain exceptions, we, and our subsidiaries, may not, without Johnson & Johnson’s prior written consent:

      Each party agrees to notify the other party of:

      Each party shall promptly provide the other with copies of all filings made with any governmental entity in connection with the merger agreement.

      Between the date of the merger agreement and the effective date, we will:

Directors’ and Officers’ Indemnification, Advancement of Expenses, Exculpation and Insurance

      Johnson & Johnson has agreed to cause the surviving corporation to assume the obligations with respect to all rights to indemnification, advancement of expenses and all exculpation from liability for acts or omissions occurring at or prior to the effective time of the merger existing in favor of our present and former officers or directors as provided in our restated certificate of incorporation or by-laws or any indemnification agreement between any such person and us, in each case as in effect as of the date of the merger agreement,

and such obligations will survive the merger and will continue in full force and effect in accordance with their terms. The merger agreement also provides that Johnson & Johnson will maintain our current officers’ and directors’ liability insurance for a period of six years after the completion of the merger to cover any acts or omissions occurring at or prior to the effective time of the merger covering those persons who were, as of the date of the merger agreement, covered by that policy, on terms with respect to coverage and amounts no less favorable than those of the policy in effect on the date of the merger agreement (provided that in satisfying this obligation, Johnson & Johnson is not required to pay more than $2,000,000 in the aggregate to obtain such coverage). In the event such coverage cannot be obtained for $2,000,000 or less in the aggregate, Johnson & Johnson will be obligated to provide such coverage as may be obtained for such $2,000,000 aggregate amount.

Employee Benefits Matters

      The merger agreement provides that, for a period of not less than six months from the effective time of the merger, our employees who remain in the employment of the surviving corporation and its subsidiaries (whom we refer to as “continuing employees”) will receive employee benefits that are substantially comparable in the aggregate to the employee benefits provided to our employees immediately prior to the completion of the merger. However, neither Johnson & Johnson nor the surviving corporation nor any of their subsidiaries will have any obligation to issue, or adopt any plans or arrangements providing for the issuance of, shares of capital stock, warrants, options, stock appreciation rights or other rights in respect of any shares of capital stock of any entity or any securities convertible or exchangeable into such shares pursuant to any such plans or arrangements, and none of our plans or arrangements providing for issuance of shares will be taken into account in determining whether employee benefits are substantially comparable in the aggregate.

      Johnson & Johnson will cause the surviving corporation to recognize the service of each continuing employee as if such service had been performed with Johnson & Johnson as follows:

but solely to the extent that Johnson & Johnson makes such plan or program available to employees of the surviving corporation, and not for purposes of any other employee benefit plan of Johnson & Johnson.

      In addition, with respect to any welfare plan maintained by Johnson & Johnson in which continuing employees are eligible to participate after the completion of the merger, Johnson & Johnson will, and will cause the surviving corporation to:

      Nothing in the merger agreement requires Johnson & Johnson or the surviving corporation to continue any specific plans or to continue the employment of any specific person.

Efforts to Consummate the Merger

      Each party agrees to use its commercially reasonable efforts to do all things necessary, proper or advisable, in the most expeditious manner practicable, to complete and make effective the merger and other transactions described in the merger agreement and the stockholder agreement, including using commercially reasonable efforts to accomplish the following:

      In addition, we will take all actions necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to the merger agreement, the stockholder agreement, the merger or any of the transactions described in the merger agreement or the stockholder agreement, and if a state takeover statute or similar statute becomes applicable, we will take all necessary actions to ensure that the merger and the other transactions described in the merger agreement and the stockholder agreement may be completed as promptly as practicable. Nothing in the merger agreement, however, requires Johnson & Johnson to agree to, or proffer to, divest or hold separate any assets or any portion of any business of Johnson & Johnson, any portion of our assets or business or any portion of the assets or business of our or their subsidiaries.

Conditions to the Completion of the Merger

      Each party’s obligation to effect the merger is subject to the satisfaction or waiver of various conditions which include, in addition to other customary closing conditions, the following:

      Each party’s obligation to effect the merger is further subject to the satisfaction or waiver of the following additional condition:

      Johnson & Johnson’s obligation to effect the merger is further subject to satisfaction or waiver of the following additional conditions:

      The merger agreement provides that a “material adverse effect” on us means any change, effect, event, occurrence, state of facts or development which individually or in the aggregate would reasonably be expected to result in any change or effect that (1) is materially adverse to our business, financial condition, properties, assets, liabilities (contingent or otherwise), results of operations or prospects or (2) would reasonably be expected to prevent or materially impede, interfere with, hinder or delay our completion of the merger or the other transactions contemplated by the merger agreement, in each case, subject to specified guidelines of interpretation and subject further to the limitation that none of the following will be deemed, either alone or in combination, to constitute, and none of the following will be taken into account in determining whether there has been or will be, a material adverse effect:

      Our obligation to effect the merger is further subject to satisfaction or waiver of the following additional condition:

      We can provide no assurance that all of the conditions precedent to the merger will be satisfied or waived by the party permitted to do so. We cannot at this point determine whether the waiver of any particular condition would materially change the terms of the merger. If we determine that a waiver of a condition would materially change the terms of the merger or otherwise be required by applicable law, we will resolicit proxies.

In making our determination of whether the waiver of a particular condition would materially change the terms of the merger, we would consider, among other factors:

No Solicitation

      The merger agreement provides that we will not, nor will we authorize or permit any of our directors, officers, or employees or any investment banker, financial advisor, attorney, accountant or other advisor or representative retained by us or any of our affiliates to, directly or indirectly:

      The merger agreement provides that, notwithstanding the restrictions described above, if at any time prior to the time that our stockholders approve the adoption of the merger agreement:

we may, if our board of directors determines in good faith, after consultation with outside counsel, that it is required to do so in order to comply with its fiduciary duties to our stockholders under applicable law:

      The merger agreement provides that:

      The merger agreement further provides that neither our board of directors nor any committee of our board of directors will:

      However, at any time prior to the time stockholder approval is obtained, our board of directors may make a Company Adverse Recommendation Change if it determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) that it is required to do so in order to comply with its fiduciary duties to our stockholders under applicable law; provided, however, that before doing so, our board of directors is required to give Johnson & Johnson four business days prior written notice (which notice must state the reasons for the change, including the terms and conditions of any superior proposal that is the basis of the proposed action by our board of directors), and is required to take into account any changes to the financial terms of the merger agreement proposed by Johnson & Johnson in response to such notice or otherwise before making a Company Adverse Recommendation Change.

      If our board of directors, or any committee of our board of directors, makes a Company Adverse Recommendation Change, Johnson & Johnson is entitled to terminate the merger agreement.

      If Johnson & Johnson terminates the merger agreement in this circumstance, we must pay Johnson & Johnson a fee in the amount of $19.7 million. See “— Termination” and “— Fees and Expenses”.

Termination

      The merger agreement may be terminated at any time prior to the effective time of the merger, regardless of whether our stockholders have approved the adoption of the merger agreement:

       

       

Amendment, Extension and Waiver

      Subject to applicable law:

Assignment

      The merger agreement provides that Johnson & Johnson may assign its interests and obligations under the merger agreement to any of its direct or indirect wholly owned subsidiaries and that Emerald Merger Sub, Inc. may assign its interest and obligations under the merger agreement to Johnson & Johnson or any of Johnson & Johnson’s direct or indirect wholly owned subsidiaries. However, no such assignment shall relieve Johnson & Johnson or Emerald Merger Sub, Inc., as applicable, of any of their obligations under the merger agreement and they shall remain secondarily liable with respect to such obligations.

Fees and Expenses

      The merger agreement generally provides that each party will pay its own fees and expenses in connection with the merger agreement and the transactions described in the merger agreement, whether or not the merger is completed. However, we must pay Johnson & Johnson a $19.7 million termination fee if:

STOCKHOLDER AGREEMENT

      The following description summarizes the material provisions of the stockholder agreement and is qualified in its entirety by reference to the complete text of the stockholder agreement. The stockholder agreement included in this proxy statement as Annex B contains the complete terms of that agreement and stockholders should read it carefully and in its entirety.

Voting Arrangements and Related Provisions

      In connection with the execution of the merger agreement, certain of our stockholders (one of which is a director) entered into a stockholder agreement with Johnson & Johnson. The stockholders have agreed to vote shares of our common stock (together representing approximately 29.58% of the outstanding shares of our common stock as of the record date) in favor of the adoption of the merger agreement, the approval of the merger and the approval of the other transactions described in the merger agreement.

      Each of these stockholders also agreed to vote these shares of our common stock held by that stockholder against the following actions:

      In connection with the stockholder agreement, the stockholders further agreed not to:

      Each of the parties to the stockholder agreement has irrevocably granted to, and appointed Johnson & Johnson and Richard S. Dakers, James J. Bergin and Steven M. Rosenberg, in their respective capacities as officers or authorized representatives of Johnson & Johnson and any individual who succeeds any of them, and each of them individually, and any individual designated in writing by any of them, as that party’s proxy and attorney-in-fact to vote, or grant a consent with respect to, that party’s shares of our common stock which are subject to the stockholder agreement in favor of the adoption and approval of the merger agreement and the merger and the other transactions described therein and against certain alternative transactions.

Termination

      The stockholder agreement generally terminates on the earlier of the effective date of the merger, the date of termination of the merger agreement or, at the option of any stockholder, upon any amendment, modification, change or waiver to the merger agreement subsequent to the date of the stockholder agreement that results in any decrease in the price to be paid per share for each share of our common stock.

STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND

PRINCIPAL STOCKHOLDERS

      The following table and notes set forth information with respect to the beneficial ownership of shares of our common stock by each of our directors and executive officers, by such persons as a group, and by any other stockholder that is known to us to be the beneficial owner of 5% or more of our common stock. Unless otherwise indicated, the information is as of January 23, 2006 and is based upon information furnished to us by such persons or entities. For purposes of this table, and as used elsewhere in this proxy statement, the term “beneficial owner” means any person who, directly or indirectly, has or shares the power to vote, or to direct the voting of, a security or the power to dispose, or to direct the disposition of, a security or has the right to acquire shares within sixty (60) days.

OTHER MATTERS

      As of the date of this proxy statement, we know of no matters that will be presented for consideration at the special meeting other than as described in this proxy statement.

FUTURE STOCKHOLDER PROPOSALS

      Our 2006 annual meeting of stockholders is not yet scheduled to take place. We will hold the 2006 annual meeting of our stockholders only if the merger is not completed. The deadline for submission of stockholder proposals for inclusion in our proxy materials for the 2006 annual meeting was December 16, 2005. If the

merger is not completed, under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, our stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the 2006 annual meeting by submitting their proposal in writing to our Secretary.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      The information contained in this proxy statement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include statements about our ability to complete the merger.

      When used in this proxy statement, we intend the words “may”, “believe”, “anticipate”, “plan”, “expect”, “predict”, “estimate”, “require”, “intend” and similar words to identify “forward-looking statements.” These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements, to be far different from that suggested by our forward-looking statements. Such risks and uncertainties include our inability to complete the merger and the other risks and factors identified from time to time in reports we file with the Securities and Exchange Commission or in public statements issued by us. You should not place undue reliance on our forward-looking statements. We disclaim any obligation to update any of these factors or to publicly announce the results of any revisions to any of these forward-looking statements, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

      We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the facilities of the SEC located at 100 F Street, N.E., Washington, D.C. 20549 or at the offices of the National Association of Securities Dealers, Inc. located at 1735 K Street, N.W., Washington, D.C. 20006. Please call the SEC at 1-800-SEC-0330 for further information on its public reference rooms. Our SEC filings also are available to the public at its website at http://www.sec.gov.

      THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN SUCH JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED JANUARY 24, 2006. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

      THE INFORMATION CONTAINED IN THIS DOCUMENT SPEAKS ONLY AS OF THE DATE INDICATED ON THE COVER OF THIS DOCUMENT UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.

ANNEX A — AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

Dated as of December 16, 2005,

Among

JOHNSON & JOHNSON,

EMERALD MERGER SUB, INC.

And

ANIMAS CORPORATION

TABLE OF CONTENTS

      AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of December 16, 2005, among JOHNSON & JOHNSON, a New Jersey corporation (“Parent”), EMERALD MERGER SUB, INC., a Delaware corporation and a wholly owned Subsidiary of Parent (“Sub”), and ANIMAS CORPORATION, a Delaware corporation (the “Company”).

      WHEREAS the Board of Directors of each of the Company and Sub has approved and declared advisable, and the Board of Directors of Parent has approved, this Agreement and the merger of Sub with and into the Company (the “Merger”), upon the terms and subject to the conditions set forth in this Agreement, whereby each issued and outstanding share of common stock, par value $0.01 per share, of the Company (“Company Common Stock”), other than (i) shares of Company Common Stock directly owned by Parent, Sub or the Company and (ii) the Appraisal Shares, will be converted into the right to receive $24.50 in cash;

      WHEREAS simultaneously with the execution and delivery of this Agreement and as a condition to Parent’s willingness to enter into this Agreement, Parent and certain stockholders of the Company (the “Principal Stockholders”) entered into an agreement (the “Stockholder Agreement”) pursuant to which the Principal Stockholders agreed to vote to, approve and adopt this Agreement and to take certain other actions in furtherance of the consummation of the Merger upon the terms and subject to the conditions set forth in the Stockholder Agreement; and

      WHEREAS Parent, Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

      NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and subject to the conditions set forth herein, the parties hereto agree as follows:

ARTICLE I

The Merger

      Section 1.01.     The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), Sub shall be merged with and into the Company at the Effective Time. Following the Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”) and shall succeed to and assume all the rights and obligations of Sub in accordance with the DGCL.

      Section 1.02.     Closing. The closing of the Merger (the “Closing”) will take place at 10:00 a.m. on a date to be specified by the parties, which shall be no later than the second business day after satisfaction or (to the extent permitted by law) waiver of the conditions set forth in Article VI (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or (to the extent permitted by law) waiver of those conditions), at the offices of Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019, unless another time, date or place is agreed to in writing by Parent and the Company; provided, however, that if all the conditions set forth in Article VI shall not have been satisfied or (to the extent permitted by law) waived on such second business day, then the Closing shall take place on the first business day on which all such conditions shall have been satisfied or (to the extent permitted by law) waived. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

      Section 1.03.     Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the parties shall file with the Secretary of State of the State of Delaware a certificate of merger (the “Certificate of Merger”) executed and acknowledged by the parties in accordance with the relevant provisions of the DGCL and, as soon as practicable on or after the Closing Date, shall make all other filings or recordings required under the DGCL. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or at such later time as Parent and the Company shall agree and shall specify in the Certificate of Merger (the time the Merger becomes effective being the “Effective Time”).

      Section 1.04.     Effects of the Merger. The Merger shall have the effects set forth in Section 259 of the DGCL.

      Section 1.05.     Certificate of Incorporation and By-laws. (a) The Amended and Restated Certificate of Incorporation of the Company (as amended, the “Company Certificate”) shall be amended at the Effective Time to be in the form of Exhibit A and, as so amended, such Company Certificate shall be the Restated Certificate of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

      (b) The By-laws of Sub, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

      Section 1.06.     Directors. The directors of Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

      Section 1.07.     Officers. The officers of Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

ARTICLE II

Effect of the Merger on the Capital Stock of the

Constituent Corporations; Exchange of Certificates

      Section 2.01.     Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Company Common Stock or any shares of capital stock of Parent or Sub:

      Section 2.02.     Exchange of Certificates. (a) Paying Agent. Prior to the Effective Time, Parent shall appoint JPMorgan Chase or another comparable bank or trust company to act as paying agent (the “Paying Agent”) for the payment of the Merger Consideration. At the Effective Time, Parent shall deposit, or cause the Surviving Corporation to deposit, with the Paying Agent, for the benefit of the holders of Certificates, cash in an amount sufficient to pay the aggregate Merger Consideration required to be paid pursuant to Section 2.01(c) (such cash being hereinafter referred to as the “Exchange Fund”).

      (b) Exchange Procedures. As soon as reasonably practicable after the Effective Time, Parent shall cause the Paying Agent to mail to each holder of record of a Certificate (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent and which shall be in customary form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Each holder of record of a Certificate shall, upon surrender to the Paying Agent of such Certificate, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, be entitled to receive in exchange therefor the amount of cash which the number of shares of Company Common Stock previously represented by such Certificate shall have been converted into the right to receive pursuant to Section 2.01(c), and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, payment of the Merger Consideration may be made to a person other than the person in whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of such Certificate or establish to the reasonable satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 2.02(b), each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration which the holder thereof has the right to receive in respect of such Certificate pursuant to this Article II. No interest shall be paid or will accrue on any cash payable to holders of Certificates pursuant to the provisions of this Article II.

      (c) No Further Ownership Rights in Company Common Stock. All cash paid upon the surrender of Certificates in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by such Certificates. At the close of business on the day on which the Effective Time occurs, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any Certificate is presented to the Surviving Corporation for transfer, it shall be canceled against delivery of cash to the holder thereof as provided in this Article II.

      (d) Termination of the Exchange Fund. Any portion of the Exchange Fund which remains undistributed to the holders of the Certificates for six months after the Effective Time shall be delivered to Parent, upon demand, and any holders of the Certificates who have not theretofore complied with this Article II shall

thereafter look only to Parent for, and Parent shall remain liable for, payment of their claim for the Merger Consideration.

      (e) No Liability. None of Parent, Sub, the Company, the Surviving Corporation or the Paying Agent shall be liable to any person in respect of any cash from the Exchange Fund properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any Certificate shall not have been surrendered prior to two years after the Effective Time (or immediately prior to such earlier date on which any Merger Consideration would otherwise escheat to or become the property of any Governmental Entity), any such Merger Consideration shall, to the extent permitted by applicable law, become the property of Parent, free and clear of all claims or interest of any person previously entitled thereto.

      (f) Investment of Exchange Fund. The Paying Agent shall invest the cash in the Exchange Fund as directed by Parent. Any interest and other income resulting from such investments shall be paid to Parent.

      (g) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond in such reasonable amount as Parent may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent shall deliver in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration with respect thereto.

      (h) Withholding Rights. Parent, the Surviving Corporation or the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock such amounts as Parent, the Surviving Corporation or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any provision of state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate taxing authority by Parent, the Surviving Corporation or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by Parent, the Surviving Corporation or the Paying Agent.

ARTICLE III

Representations and Warranties

      Section 3.01.     Representations and Warranties of the Company. Except as set forth in the disclosure schedule (with specific reference to the particular Section or subsection of this Agreement to which the information set forth in such disclosure schedule relates; provided, however, that any information set forth in one section of the Company Disclosure Schedule shall be deemed to apply to each other Section or subsection thereof or hereof to which its relevance is readily apparent on its face) delivered by the Company to Parent prior to the execution of this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to Parent and Sub as follows:

      Section 3.02.     Representations and Warranties of Parent and Sub. Parent and Sub represent and warrant to the Company as follows:

ARTICLE IV

Covenants Relating to Conduct of Business; No Solicitation

      Section 4.01.     Conduct of Business. (a) Conduct of Business by the Company. During the period from the date of this Agreement to the Effective Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule or as consented to in writing in advance by Parent or as otherwise permitted pursuant to Section 4.01(a)(i) through (xvi) of this Agreement, the Company shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary course consistent with past practice and as currently proposed by the Company to be conducted prior to the Closing (including in respect of research, development and clinical trial activities and programs) and in compliance in all material respects with all applicable laws, rules, regulations and treaties and, to the extent consistent therewith, use all commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it with the intention that its goodwill and ongoing business shall be unimpaired at the Effective Time. In addition to and without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time, except as otherwise set forth in Section 4.01(a) of the Company Disclosure Schedule or as otherwise permitted by or required

pursuant to this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, without Parent’s prior written consent:

      (b) Other Actions. The Company, Parent and Sub shall not, and shall not permit any of their respective Subsidiaries to, take any action that would, or that would reasonably be expected to, result in any of the conditions to the Merger set forth in Article VI not being satisfied.

      (c) Advice of Changes; Filings. The Company and Parent shall promptly advise the other party orally and in writing of (i) any representation or warranty made by it (and, in the case of Parent, made by Sub) contained in this Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect or (ii) the failure of it (and, in the case of Parent, of Sub) to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it (and, in the case of Parent, of Sub) under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties (or remedies with respect thereto) or the conditions to the obligations of the parties under this Agreement. The Company and Parent shall, to the extent permitted by law, promptly provide the other with copies of all filings made by such party with any Governmental Entity in connection with this Agreement and the transactions contemplated hereby, other than the portions of such filings that include confidential information not directly related to the transactions contemplated by this Agreement.

      (d) Certain Tax Matters. (i) During the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, (A) timely file all tax returns (“Post-Signing Returns”) required to be filed by or on behalf of each such entity; (B) timely pay all taxes due and payable; (C) accrue a reserve in the books and records and financial statements of any such entity in accordance with past practice for all taxes payable but not yet due; (D) promptly notify Parent of any suit, claim, action, investigation, proceeding or audit (collectively, “Actions”) that is or becomes pending against or with respect to the Company or any of its Subsidiaries in respect of any material amount of tax and not settle or compromise any such Action without Parent’s consent; (E) not make any material tax election or settle or compromise any material tax liability, other than with Parent’s consent or other than in the ordinary course of business; and (F) cause all existing tax sharing agreements, tax indemnity obligations and similar agreements, arrangements or practices with respect to taxes to which the Company or any of its Subsidiaries is or may be a party or by which the Company or any of its Subsidiaries is or may otherwise be bound to be terminated as of the Closing Date so that after such date neither the Company nor any of its Subsidiaries shall have any further rights or liabilities thereunder. Any tax returns described in this Section 4.01(d) shall be complete and correct in all material respects and shall be prepared on a basis consistent with the past practice of the Company and in a manner that does not distort taxable income (e.g., by deferring income or accelerating deductions); provided that no Post-Signing Returns shall be filed with any taxing authority without Parent’s prior written consent.

      Section 4.02.     No Solicitation. (a) The Company shall not, nor shall it authorize or permit any of its Subsidiaries or any of their respective directors, officers or employees or any investment banker, financial advisor, attorney, accountant or other advisor, agent or representative (collectively, “Representatives”) retained by it or any of its Affiliates to, directly or indirectly through another person, (i) solicit, initiate or knowingly encourage, or take any other action designed to, or which would reasonably be expected to, facilitate, any Takeover Proposal or (ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any information, or otherwise cooperate in any way with, any Takeover Proposal. Without limiting the foregoing, it is agreed that any violation of the restrictions set forth in the preceding sentence by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section 4.02(a) by the Company. The Company shall, and shall cause its Subsidiaries to, immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted heretofore with respect to any Takeover Proposal and request the prompt return or destruction of all confidential information previously furnished. Notwithstanding the foregoing, at any time prior to obtaining the Stockholder Approval, in response to a bona fide written Takeover Proposal that the Board of Directors of the Company determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) constitutes or would reasonably be expected to lead to a Superior Proposal, and which Takeover Proposal was not solicited after the date hereof and was made after the date hereof and did not otherwise result from a breach of this Section 4.02(a), the Company may, if its Board of Directors determines in good faith (after consultation with outside counsel) that it is required to do so in order to comply with its fiduciary duties to the stockholders of the Company under applicable law, and subject to compliance with Section 4.02(c), (x) furnish information with respect to the Company and its Subsidiaries to the person making such Takeover Proposal (and its Representatives) pursuant to a customary confidentiality agreement (which need not restrict such person from making an unsolicited Takeover Proposal) not less restrictive of such person than the Confidentiality Agreement; provided that all such information has previously been provided to Parent or is provided to Parent prior to or substantially concurrent with the time it is provided to such person, and (y) participate in discussions or negotiations with the person making such Takeover Proposal (and its Representatives) regarding such Takeover Proposal.

      The term “Takeover Proposal” means any inquiry, proposal or offer from any person relating to, or that would reasonably be expected to lead to, any direct or indirect acquisition or purchase, in one transaction or a series of transactions, of assets or businesses that constitute 15% or more of the revenues, net income or the assets of the Company and its Subsidiaries, taken as a whole, or 15% or more of any class of equity securities of the Company or any of its Subsidiaries, any tender offer or exchange offer that if consummated would result in any person beneficially owning 15% or more of any class of equity securities of the Company or any of its Subsidiaries, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution, joint venture, binding share exchange or similar transaction involving the Company or any of its Subsidiaries pursuant to which any person or the stockholders of any person would own 15% or more of any class of equity securities of the Company or any of its Subsidiaries or of any resulting parent company of the Company, other than the transactions contemplated by this Agreement and the Stockholder Agreement.

      The term “Superior Proposal” means any bona fide offer made by a third party that if consummated would result in such person (or its stockholders) owning, directly or indirectly, all or substantially all of the shares of Company Common Stock then outstanding (or of the surviving entity in a merger or the direct or indirect parent of the surviving entity in a merger) or all or substantially all the assets of the Company, which the Board of Directors of the Company determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) to be (i) more favorable to the stockholders of the Company from a financial point of view than the Merger (taking into account all the terms and conditions of such proposal and this Agreement (including any changes to the financial terms of this Agreement proposed

by Parent in response to such offer or otherwise)) and (ii) reasonably capable of being completed, taking into account all financial, legal, regulatory and other aspects of such proposal.

      (b) Except as set forth below, neither the Board of Directors of the Company nor any committee thereof shall (i) (A) withdraw (or modify in a manner adverse to Parent), or publicly propose to withdraw (or modify in a manner adverse to Parent), the approval, recommendation or declaration of advisability by such Board of Directors or any such committee thereof of this Agreement, the Merger or the other transactions contemplated by this Agreement or (B) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Takeover Proposal (any action described in this clause (i) being referred to as a “Company Adverse Recommendation Change”) or (ii) approve or recommend, or propose to approve or recommend, or allow the Company or any of its Affiliates to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to, or that is intended to or would reasonably be expected to lead to, any Takeover Proposal (other than a confidentiality agreement referred to in Section 4.02(a)) (an “Acquisition Agreement”). Notwithstanding the foregoing, at any time prior to obtaining the Stockholder Approval, the Board of Directors of the Company may make a Company Adverse Recommendation Change if the Board of Directors of the Company determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) that it is required to do so in order to comply with its fiduciary duties to the stockholders of the Company under applicable law; provided, however, that no Company Adverse Recommendation Change may be made until after the fourth business day following Parent’s receipt of written notice (a “Notice of Adverse Recommendation”) from the Company advising Parent that the Board of Directors of the Company intends to take such action and specifying the reasons therefor, including the terms and conditions of any Superior Proposal that is the basis of the proposed action by the Board of Directors (it being understood and agreed that any amendment to the financial terms or any other material term of such Superior Proposal shall require a new Notice of Adverse Recommendation and a new four business day period). In determining whether to make a Company Adverse Recommendation Change, the Board of Directors of the Company shall take into account any changes to the financial terms of this Agreement proposed by Parent in response to a Notice of Adverse Recommendation or otherwise.

      (c) In addition to the obligations of the Company set forth in paragraphs (a) and (b) of this Section 4.02, the Company shall promptly advise Parent orally and in writing of any Takeover Proposal, the material terms and conditions of any such Takeover Proposal or inquiry (including any changes thereto) and the identity of the person making any such Takeover Proposal or inquiry. The Company shall (i) keep Parent fully informed of the status and details (including any change to the terms thereof) of any such Takeover Proposal or inquiry and (ii) provide to Parent as soon as practicable after receipt or delivery thereof with copies of all correspondence and other written material sent or provided to the Company or any of its Subsidiaries from any person that describes any of the terms or conditions of any Takeover Proposal.

      (d) Nothing contained in this Section 4.02 shall prohibit the Company from (x) taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or (y) making any disclosure to the stockholders of the Company if, in the good faith judgment of the Board of Directors of the Company (after consultation with outside counsel) failure to so disclose would be inconsistent with its obligations under applicable law, including the Board of Directors’ duty of candor to the stockholders of the Company; provided, however, that in no event shall the Company or its Board of Directors or any committee thereof take, or agree or resolve to take, any action prohibited by Section 4.02(b).

ARTICLE V

Additional Agreements

      Section 5.01.     Preparation of the Proxy Statement; Stockholders’ Meeting. (a) As promptly as practicable following the date of this Agreement, the Company and Parent shall prepare and the Company shall file with the SEC the Proxy Statement and the Company shall use its commercially reasonable efforts to respond as promptly as practicable to any comments of the SEC with respect thereto and to cause the Proxy

Statement to be mailed to the stockholders of the Company as promptly as practicable following the date of this Agreement. The Company shall promptly notify Parent upon the receipt of any comments from the SEC or the staff of the SEC or any request from the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement and shall provide Parent with copies of all correspondence between the Company and its Representatives, on the one hand, and the SEC and the staff of the SEC, on the other hand. Notwithstanding the foregoing, prior to filing or mailing the Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC or the staff of the SEC with respect thereto, the Company (i) shall provide Parent an opportunity to review and comment on such document or response and (ii) shall include in such document or response all comments reasonably proposed by Parent; provided that Parent shall use commercially reasonable efforts to provide or cause to be provided its comments to the Company as promptly as reasonably practicable after such document or response is transmitted to Parent for its review.

      (b) The Company shall, as soon as practicable following the date of this Agreement, establish a record date for, duly call, give notice of, convene and hold a meeting of its stockholders (the “Stockholders’ Meeting”) for the initial purpose of obtaining the Stockholder Approval. Subject to Sections 4.02(b) and 4.02(d), the Company shall, through its Board of Directors, recommend to its stockholders adoption of this Agreement and shall include such recommendation in the Proxy Statement. Without limiting the generality of the foregoing, the Company’s obligations pursuant to the first sentence of this Section 5.01(b) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to the Company of any Takeover Proposal or (ii) the withdrawal or modification by the Board of Directors of the Company or any committee thereof of such Board of Directors’ or such committee’s approval or recommendation of this Agreement, the Merger or the other transactions contemplated by this Agreement; provided that no breach of this Section 5.01(b) shall be deemed to have occurred if the Company adjourns or postpones the Stockholders’ Meeting for a reasonable period of time, each such period of time not to exceed 10 business days, if (x) at the time of such adjournment or postponement the Board of Directors of the Company shall be prohibited by the terms of this Agreement from making a Company Adverse Recommendation Change, and the Stockholders’ Meeting is then scheduled to occur within five business days of the time of such adjournment or postponement or (y) at the time the Board of Directors announces a Company Adverse Recommendation Change, the Stockholders’ Meeting is then scheduled to occur no later than 10 business days from the date of such Company Adverse Recommendation Change; provided further that the Company may not adjourn or postpone the Stockholders’ Meeting pursuant to this clause (ii) more than two times or for more than 15 business days in the aggregate.

      Section 5.02.     Access to Information; Confidentiality. The Company shall afford to Parent, and to Parent’s officers, employees, accountants, counsel, financial advisors and other Representatives, reasonable access (including for the purpose of coordinating integration activities and transition planning with the employees of the Company and its Subsidiaries) during normal business hours and upon reasonable prior notice to the Company during the period prior to the Effective Time or the termination of this Agreement to all its and its Subsidiaries’ properties, books, Contracts, personnel and records and, during such period, the Company shall furnish promptly to Parent (a) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of Federal or state securities laws, (b) a copy of each correspondence or written communication with any United States Federal or state governmental agency and (c) all other information concerning its and its Subsidiaries’ business, properties and personnel as Parent may reasonably request. Except for disclosures expressly permitted by the terms of the Secrecy Agreement dated as of July 12, 2005, as amended from time to time, between LifeScan, Inc., a wholly owned Subsidiary of Parent, and the Company (as it may be amended from time to time, the “Confidentiality Agreement”), Parent shall hold, and shall cause its officers, employees, accountants, counsel, financial advisors and other Representatives to hold, all information received from the Company, directly or indirectly, in confidence in accordance with the Confidentiality Agreement. No investigation pursuant to this Section 5.02 or information provided or received by any party hereto pursuant to this Agreement will affect any of the representations or warranties of the parties hereto contained in this Agreement or the conditions hereunder to the obligations of the parties hereto.

      Section 5.03.     Commercially Reasonable Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by this Agreement and the Stockholder Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all acts necessary to cause the conditions to Closing to be satisfied as promptly as practicable, (ii) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities) and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity and (iii) the obtaining of all necessary consents, approvals or waivers from third parties; provided that none of the Company, Parent or Sub shall be required to make any payment to any such third parties or concede anything of value to obtain such consents. In connection with and without limiting the foregoing, the Company and Parent shall duly file with the U.S. Federal Trade Commission and the Antitrust Division of the Department of Justice the notification and report form (the “HSR Filing”) required under the HSR Act with respect to the transactions contemplated by this Agreement as promptly as practicable. The HSR Filing shall be in substantial compliance with the requirements of the HSR Act. Each party shall cooperate with the other party to the extent necessary to assist the other party in the preparation of its HSR Filing, to request early termination of the waiting period required by the HSR Act and, if requested, to promptly amend or furnish additional information thereunder. The Company and its Board of Directors shall (1) take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to this Agreement, the Stockholder Agreement, the Merger or any of the other transactions contemplated by this Agreement or the Stockholder Agreement and (2) if any state takeover statute or similar statute becomes applicable to this Agreement, the Stockholder Agreement, the Merger or any of the other transactions contemplated by this Agreement or the Stockholder Agreement, take all action necessary to ensure that the Merger and the other transactions contemplated by this Agreement and the Stockholder Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and the Stockholder Agreement and otherwise to minimize the effect of such statute or regulation on this Agreement, the Stockholder Agreement, the Merger and the other transactions contemplated by this Agreement and the Stockholder Agreement. Nothing in this Agreement shall be deemed to require Parent to agree to, or proffer to, divest or hold separate any assets or any portion of any business of Parent, the Company or any of their respective Subsidiaries.

      Section 5.04.     Company Stock Options; ESPP; Warrants. (a) As soon as practicable following the date of this Agreement, the Board of Directors of the Company (or, if appropriate, any committee thereof administering the Company Stock Plans) shall adopt such resolutions or take such other actions as may be required to effect the following:

      (b) As soon as practicable following the date of this Agreement, the Board of Directors of the Company (or, if appropriate, any committee of the Board of Directors of the Company administering the ESPP), shall adopt such resolutions or take such other actions as may be required to provide that with respect to the ESPP (i) participants may not increase their payroll deductions or purchase elections from those in effect on the

date of this Agreement, (ii) no offering period shall be commenced after the date of this Agreement, (iii) each participant’s outstanding right to purchase shares of Company Common Stock under the ESPP shall terminate on the day immediately prior to the day on which the Effective Time occurs; provided that all amounts allocated to each participant’s account under the ESPP as of such date shall thereupon be used to purchase from the Company whole shares of Company Common Stock at the applicable price determined under the terms of the ESPP for the then outstanding offering periods using such date as the final purchase date for each such offering period, and (iv) the ESPP shall terminate immediately following such purchases of Company Common Stock.

      (c) As soon as practicable following the date of this Agreement, except as set forth below, the Board of Directors of the Company shall adopt such resolutions or take such other actions (if any) as may be required to provide that each Warrant outstanding immediately prior to the Effective Time shall be canceled in exchange for a lump sum cash payment equal to (i) the product of (A) the number of shares of Company Common Stock subject to such Warrant and (B) the Merger Consideration, minus (ii) the product of (A) the number of shares of Company Common Stock subject to such Warrant and (B) the per share exercise price of such Warrant (provided that if such calculation results in a negative number, the lump sum cash payment shall be deemed to be $0). Such payment shall be made promptly following the Effective Time. Notwithstanding the foregoing, with respect to the Warrants listed on Section 5.04(c) of the Company Disclosure Schedule, the Company shall only be required to use its reasonable efforts to obtain an acknowledgment from the holders of such Warrants that each such Warrant entitles the holder of such Warrant to receive the amount calculated as set forth above with respect to such Warrants. All amounts payable pursuant to this Section 5.04(c) shall be subject to any required withholding of taxes and shall be paid without interest. The Company has obtained all consents of the holders of the Warrants necessary to effectuate the foregoing except as identified on Section 5.04(c) of the Company Disclosure Schedule.

      (d) All amounts payable to holders of the Company Stock Options pursuant to Section 5.04(a) shall be subject to any required withholding of Taxes and shall be paid without interest as soon as practicable following the Effective Time.

      (e) The Company shall ensure that following the Effective Time, no holder of a Company Stock Option (or former holder of a Company Stock Option) or any participant in any Company Stock Plan, Company Benefit Plan or Company Benefit Agreement shall have any right thereunder to acquire any capital stock of the Company or the Surviving Corporation or any other equity interest therein (including “phantom” stock or stock appreciation rights).

      Section 5.05.     Indemnification; Advancement of Expenses; Exculpation and Insurance. (a) Parent shall cause the Surviving Corporation to assume the obligations with respect to all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time now existing in favor of the current or former directors or officers of the Company as provided in the Company Certificate, the Company By-laws or any indemnification Contract between such directors or officers and the Company (in each case, as in effect on the date hereof), without further action, as of the Effective Time and such obligations shall survive the Merger and shall continue in full force and effect in accordance with their terms.

      (b) In the event that the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and other assets to any person, then, and in each such case, Parent shall cause proper provision to be made so that the successors and assigns of the Surviving Corporation shall expressly assume the obligations set forth in this Section 5.05.

      (c) For six years after the Effective Time, Parent shall maintain (directly or indirectly through the Company’s existing insurance programs) in effect the Company’s current directors’ and officers’ liability insurance in respect of acts or omissions occurring at or prior to the Effective Time, covering each person currently covered by the Company’s directors’ and officers’ liability insurance policy (a complete and accurate copy of which has been heretofore delivered to Parent), on terms with respect to such coverage and amounts no less favorable than those of such policy in effect on the date hereof; provided, however, that Parent may

(i) substitute therefor policies of Parent containing terms with respect to coverage (including as coverage relates to deductibles and exclusions) and amounts no less favorable to such directors and officers or (ii) request that the Company obtain such extended reporting period coverage under its existing insurance programs (to be effective as of the Effective Time); provided further, however, that in satisfying its obligation under this Section 5.05(c), neither the Company nor Parent shall be obligated to pay more than $2,000,000 in the aggregate to obtain such coverage. It is understood and agreed that in the event such coverage cannot be obtained for $2,000,000 or less in the aggregate, Parent shall be obligated to provide such coverage as may be obtained for such $2,000,000 aggregate amount.

      (d) The provisions of this Section 5.05 (i) are intended to be for the benefit of, and will be enforceable by, each indemnified party, his or her heirs and his or her representatives and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have by contract or otherwise.

      Section 5.06.     Fees and Expenses. (a) Except as provided in paragraph (b) of this Section 5.06, all fees and expenses incurred in connection with this Agreement, the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated.

      (b) In the event that (i) this Agreement is terminated by Parent pursuant to Section 7.01(e) or (ii) (A) prior to the obtaining of the Stockholder Approval, a Takeover Proposal shall have been made to the Company or shall have been made directly to the stockholders of the Company generally or shall have otherwise become publicly known or any person shall have publicly announced an intention (whether or not conditional) to make a Takeover Proposal, (B) thereafter this Agreement is terminated by either Parent or the Company pursuant to Section 7.01(b)(i) (but only if a vote to obtain the Stockholder Approval or the Stockholders’ Meeting has not been held) or Section 7.01(b)(iii) and (C) within 12 months after such termination, the Company enters into a definitive Contract to consummate, or consummates, the transactions contemplated by any Takeover Proposal, then the Company shall pay Parent a fee equal to $19,700,000 (the “Termination Fee”) by wire transfer of same-day funds on the first business day following (x) in the case of a payment required by clause (i) above, the date of termination of this Agreement and (y) in the case of a payment required by clause (ii) above, the date of the first to occur of the events referred to in clause (ii)(C).

      (c) The Company and Parent acknowledge and agree that the agreements contained in Section 5.06(b) are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not enter into this Agreement; accordingly, if the Company fails promptly to pay the amount due pursuant to Section 5.06(b), and, in order to obtain such payment, Parent commences a suit that results in a judgment against the Company for the Termination Fee, the Company shall pay to Parent its costs and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of the Termination Fee from the date such payment was required to be made until the date of payment at the prime rate of Citibank, N.A. in effect on the date such payment was required to be made.

      Section 5.07.     Public Announcements. Except with respect to any Company Adverse Recommendation Change made in accordance with the terms of this Agreement, Parent and the Company shall consult with each other before issuing, and give each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, including the Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as such party may reasonably conclude may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system. The parties agree that all formal Company employee communication programs or announcements with respect to the transactions contemplated by this Agreement shall be in the forms mutually agreed to by the parties (such agreement not to be unreasonably withheld or delayed). The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in the form heretofore agreed to by the parties.

      Section 5.08.     Stockholder Litigation. The Company shall give Parent the opportunity to participate in the defense or settlement of any stockholder litigation against the Company and/or its directors relating to

the transactions contemplated by this Agreement or the Stockholder Agreement, and no such settlement shall be agreed to without Parent’s prior written consent.

      Section 5.09.     Employee Matters. (a) For a period of not less than six months following the Effective Time, the employees of the Company who remain in the employment of the Surviving Corporation and its Subsidiaries (the “Continuing Employees”) shall receive employee benefits that are substantially comparable in the aggregate to the employee benefits provided to the employees of the Company immediately prior to the Effective Time; provided that neither Parent nor the Surviving Corporation nor any of their Subsidiaries shall have any obligation to issue, or adopt any plans or arrangements providing for the issuance of shares of capital stock, warrants, options, stock appreciation rights or other rights in respect of any shares of capital stock of any entity or any securities convertible or exchangeable into such shares pursuant to any such plans or arrangements; provided further, that no plans or arrangements of the Company or any of its Subsidiaries providing for such issuance shall be taken into account in determining whether employee benefits are substantially comparable in the aggregate.

      (b) Parent shall cause the Surviving Corporation to recognize the service of each Continuing Employee as if such service had been performed with Parent (i) for purposes of vesting (but not benefit accrual) under Parent’s defined benefit pension plan, (ii) for purposes of eligibility for vacation under Parent’s vacation program, (iii) for purposes of eligibility and participation under any health or welfare plan maintained by Parent (other than any post-employment health or post-employment welfare plan) and (iv) unless covered under another arrangement with or of the Company, for benefit accrual purposes under Parent’s severance plan (in the case of each of clauses (i), (ii), (iii) and (iv), solely to the extent that Parent makes such plan or program available to employees of the Surviving Corporation), but not for purposes of any other employee benefit plan of Parent.

      (c) Nothing contained herein shall be construed as requiring Parent or the Surviving Corporation to continue any specific plans or to continue the employment of any specific person.

      (d) With respect to any welfare plan maintained by Parent in which Continuing Employees are eligible to participate after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, (i) waive all limitations as to preexisting conditions and exclusions with respect to participation and coverage requirements applicable to such employees to the extent such conditions and exclusions were satisfied or did not apply to such employees under the welfare plans of the Company and its Subsidiaries prior to the Effective Time and (ii) provide each Continuing Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any analogous deductible or out-of-pocket requirements to the extent applicable under any such plan.

      Section 5.10.     Stockholder Agreement Legend. The Company will inscribe upon any Certificate representing Subject Shares that may be tendered by a Stockholder (as such terms are defined in the Stockholder Agreement) to the Company for such purpose the following legend: “THE SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF ANIMAS CORPORATION REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 16, 2005, AND ARE SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF ANIMAS CORPORATION”.

      Section 5.11.     Certain Other Actions. The Company shall take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to accomplish the items set forth in Section 5.11 of the Company Disclosure Schedule.

ARTICLE VI

Conditions Precedent

      Section 6.01.     Conditions to Each Party’s Obligation to Effect the Merger. The respective obligation of each party to effect the Merger is subject to the satisfaction or (to the extent permitted by law) waiver on or prior to the Closing Date of the following conditions:

      Section 6.02.     Conditions to Obligations of Parent and Sub. The obligations of Parent and Sub to effect the Merger are further subject to the satisfaction or (to the extent permitted by law) waiver by Parent on or prior to the Closing Date of the following conditions:

      Section 6.03.     Conditions to Obligation of the Company. The obligation of the Company to effect the Merger is further subject to the satisfaction or (to the extent permitted by law) waiver by the Company on or prior to the Closing Date of the following conditions:

      Section 6.04.     Frustration of Closing Conditions. None of the Company, Parent or Sub may rely on the failure of any condition set forth in Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was caused by such party’s failure to act in good faith or to use its commercially reasonable efforts to consummate the Merger and the other transactions contemplated by this Agreement, as required by and subject to Section 5.03.

ARTICLE VII

Termination, Amendment and Waiver

      Section 7.01.     Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after receipt of the Stockholder Approval:

      Section 7.02.     Effect of Termination. In the event of termination of this Agreement by either the Company or Parent as provided in Section 7.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Sub or the Company under this Agreement, other than the provisions of Section 3.01(s), the penultimate sentence of Section 5.02, Section 5.06, this Section 7.02 and Article VIII, which provisions shall survive such termination, and except to the extent that such termination results from the willful and material breach by a party of any of its representations, warranties, covenants or agreements set forth in this Agreement.

      Section 7.03.     Amendment. This Agreement may be amended by the parties hereto at any time before or after receipt of the Stockholder Approval; provided, however, that after such approval has been obtained, there shall be made no amendment that by law requires further approval by the stockholders of the Company without such approval having been obtained. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

      Section 7.04.     Extension; Waiver. At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) to the extent permitted by law, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (c) subject to the proviso to the first sentence of Section 7.03 and to the extent permitted by law, waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

      Section 7.05.     Procedure for Termination or Amendment. A termination of this Agreement pursuant to Section 7.01 or an amendment of this Agreement pursuant to Section 7.03 shall, in order to be effective, require, in the case of the Company, action by its Board of Directors or, with respect to any amendment of this Agreement pursuant to Section 7.03, the duly authorized committee of its Board of Directors to the extent permitted by law.

ARTICLE VIII

General Provisions

      Section 8.01.     Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 8.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.

      Section 8.02.     Notices. Except for notices that are specifically required by the terms of this Agreement to be delivered orally, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent

by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

      if to Parent or Sub, to:

      if to the Company, to:

      Section 8.03.     Definitions. For purposes of this Agreement: