THIRD AMENDED AND RESTATED STOCKHOLDERS? AGREEMENT

Exhibit 10.11

THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT

This Third Amended and Restated Stockholders’ Agreement is made as of the 17 ^th day of November, 2005 by and among ACHILLION PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), certain holders of Common Stock (as defined below) listed as Founders on the signature pages hereto (the “Founders”), the individuals listed as Common Stockholders on the signature pages hereto (the “Common Stockholders”), the individuals and entities listed as Investors on the signature pages hereto (collectively, the “Investors”, and, together with the Founders and the Common Stockholders, the “Stockholders”).

RECITALS

A. The Company, the Common Stockholders, the Series A Purchasers, the Series B Purchasers, the Series C Purchasers and the Series C-1 Purchaser are parties to that certain Second Amended and Restated Stockholders’ Agreement dated as of November 20, 2001, as amended by Amendment No. 1 dated February 4, 2002 and Amendment No. 2 dated November 24, 2004 (the “Prior Stockholders’ Agreement”).

B. The parties hereto desire to amend and restate the Prior Stockholders’ Agreement in its entirety as set forth herein to include the Series C-2 Purchasers and to make certain other changes.

In consideration of the mutual covenants set forth herein, the parties agree as follows:

(a) “Advent International” shall mean, collectively, Advent Health Care & Life Sciences II Limited Partnership, Advent Health Care & Life Sciences II Beteilgung GmbH & Co. KG, Advent Partners HLS II Limited Partnership and Advent Partners Limited Partnership.

(b) “Atlas Venture” shall mean Atlas Venture Fund V, LP.

(c) “Bear Stearns” shall mean collectively, Bear Stearns Health Innoventures, L.P., Bear Stearns Health Innoventures Offshore, L.P., BSHI Members, L.L.C., Bear Stearns Health Innoventures Employee Fund, L.P. and BX, L.P.

(d) “Common Stock” shall mean the Company’s common stock, par value $0.001 per share.

(e) “Holder” shall mean any holder of outstanding Shares.

(f) “IPO” shall mean the initial underwritten public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale of Common Stock for the account of the Company.

(g) “Schroder Ventures” shall mean, collectively, Schroder Ventures International Life Sciences Fund II LP1, Schroder Ventures International Life Sciences Fund II LP2, Schroder Ventures International Life Sciences Fund II LP3, Schroder Ventures International Life Sciences Fund II Co-Investment Scheme, Schroder Ventures International Life Sciences Fund II Strategic Partners L.P. and Schroder Ventures Investments Limited.

(h) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, as shall be in effect at the time.

(i) “Series A Preferred Stock” shall mean the Company’s outstanding Series A Convertible Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(j) “Series B Preferred Stock” shall mean the Company’s outstanding Series B Convertible Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(k) “Series B-[x] Preferred Stock” shall mean any outstanding subseries of Series B Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(l) “Series C Preferred Stock” shall mean the Company’s outstanding Series C Convertible Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(m) “Series C-1 Preferred Stock” shall mean the Company’s outstanding Series C-1 Convertible Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(n) “Series C-2 Preferred Stock” shall mean the Company’s outstanding Series C-2 Convertible Preferred Stock, par value $0.01 per share, and any Common Stock acquired upon conversion thereof.

(o) “SGCP” shall mean SGC Partners I LLC.

(p) “Shares” shall mean all shares of capital stock of the Company held by the Stockholders, or any Permitted Transferees thereof, whether now owned or hereafter acquired.

(q) “Stock Purchase Agreement” shall mean that certain Series C-2 Convertible Preferred Stock Purchase Agreement by and between the Company and the Series C-2 Purchasers named in Exhibit A thereto, dated as of November 17, 2005, as such agreement may be amended from time to time.

(a) Restrictions on Transfers . Except as provided in this Agreement, no Holder shall Transfer or otherwise dispose of any Shares owned by such Holder, or any interest therein, and

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any attempt by any Holder to effect a transfer in violation of this Section 2 shall be void and ineffective for all purposes. The words “Transfer” and “dispose” include the making of any sale, exchange, assignment, gift, security interest, pledge or other encumbrance, or any contract therefor, any voting trust or other agreement or arrangement with respect to the transfer of voting rights or any other beneficial interest in Shares, the creation of any other claim thereto or any other transfer or disposition whatsoever, whether voluntary or involuntary, affecting the right, title, interest or possession with respect to the Shares.

(b) Right of First Offer .

(i) If at any time an Investor (the “Offeror”) proposes to Transfer, whether voluntarily or involuntarily, any Shares to any person, the Offeror shall, before such Transfer, deliver to the other Investors (individually, a “Non-Selling Stockholder” and collectively, the “Non-Selling Stockholders”) an offer (the “First Offer”) to Transfer such Shares upon the terms set forth in this Section 2(c). The First Offer shall state that the Offeror proposes to Transfer Shares and specify the number of Shares (the “Offered Shares”) and the terms (including purchase price) of the proposed Transfer. The First Offer shall remain open and irrevocable for a period of five (5) business days (the “Acceptance Period”) from the date of its delivery.

(ii) Subject to Section 2(c)(iv), each Non-Selling Stockholder may accept the First Offer by delivering to the Offeror a notice within the Acceptance Period, which notice shall state the number (the “Accepted Number”) of Offered Shares such Non-Selling Stockholder desires to purchase. If the sum of all Accepted Numbers exceeds the number of Offered Shares, the Offered Shares shall be allocated among the Non-Selling Stockholders that delivered such notice pro rata in accordance with their Proportionate Percentages (as defined below); provided , however , that each Non-Selling Stockholder shall not be required to purchase more than his or its Accepted Number of Offered Shares and such purchase shall be on the same terms as those available to any proposed purchaser pursuant to this Section 2(c). For the purposes of this Section 2(c), “Proportionate Percentages” shall mean the pro rata percentage, as to each Non-Selling Stockholder, equal to the percentage figure which expresses the ratio between the number of shares of outstanding capital stock of the Company (calculated on an as-converted basis) owned by such Non-Selling Stockholder and the aggregate number of shares of outstanding capital stock of the Company (calculated on an as-converted basis) owned by all Non-Selling Stockholders.

(iii) The Transfer of Offered Shares to a Non-Selling Stockholder, to the extent such Non-Selling Stockholder has exercised its rights under this Section, shall be made on a business day, as designated by the Offeror, not less than 30 nor more than 60 days after expiration of the Acceptance Period on the terms and conditions specified in the First Offer.

(iv) If the number of Offered Shares exceeds the sum of those Offered Shares with respect to which the Non-Selling Stockholders exercised their rights under this Section 2(c), the First Offer shall be deemed to be withdrawn with respect to the Offered Shares for which the Non-Selling Stockholders did not exercise their rights under this Section 2(c) (the “Remaining Offered Shares”) and, subject to the provisions of Section 2(d) hereof, the Offeror may Transfer the Offered Shares on the terms, conditions and purchase price specified in the First Offer (which shall be the same terms, conditions and purchase price available to any Investor exercising rights

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pursuant to this Section) to any third party within 90 days after expiration of the Acceptance Period, so long as such third party agrees in writing to become a party hereto and be bound hereby.

If such Transfer is not made within such 90-day period, the restrictions provided for in Section 2(c) shall again become effective.

(c) Co-Sale Rights .

(i) Prior to making any Transfer of Shares (and subject to Section 2(c) hereof), each Stockholder shall give at least fifteen (15) days’ prior written notice (a “Sale Notice”) to all other Stockholders, which notice shall include the terms and conditions of such proposed Transfer, including the identity of each prospective transferee. Any Stockholder may within fifteen (15) business days of the receipt of the Sale Notice give written notice (each, a “Tag-Along Notice”) to such Stockholder who proposes to make a Transfer (the “Selling Stockholder”) that such Stockholder wishes to participate in such proposed Transfer and specifying the number of Shares that such Stockholder desires to include in such proposed Transfer.

(ii) If none of the Stockholders gives the Selling Stockholder a timely Tag-Along Notice with respect to the Transfer proposed in the Sale Notice, subject to compliance by such Selling Stockholder with the provisions of Section 2(c) hereof, the Selling Stockholder may transfer the Shares specified in the Sale Notice during the period specified in Section 2(c)(iv) above, on the terms and conditions set forth in the Sale Notice. If one or more Stockholders give the Selling Stockholder a timely Tag-Along Notice, then the Selling Stockholder shall use all reasonable efforts to cause each prospective transferee to agree to acquire all Shares identified in all Tag-Along Notices that are timely given to the Selling Stockholder, upon the same terms and conditions (including, without limitation, the ability to receive a ratable share of all consideration being paid, directly or indirectly, to the Selling Stockholder and/or any member of his immediate family) as set forth in the Sale Notice. If such prospective transferee is unwilling or unable to acquire all of such additional shares upon such terms, then the Selling Stockholder may elect either to cancel such proposed Transfer or to allocate the maximum number of Shares that each prospective transferee is willing to purchase among the Selling Stockholder and the Stockholders giving timely Tag-Along Notices in the proportion that each such Stockholder’s (including the Selling Stockholder’s) ownership of capital stock of the Company (calculated on an as-converted basis) bears to the total ownership of capital stock of the Company (on an as-converted basis) by the Selling Stockholder and all Stockholders giving a timely Tag-Along Notice with respect to such Transfer. For purposes of this Section 2(d), such shares will be treated as one class of stock (on an as-converted basis).

(d) Drag Along . In the event that 66-2/3% of the outstanding shares of Series B Preferred Stock, Series C Preferred Stock, Series C-1 Preferred Stock and Series C-2 Preferred Stock, voting together as a single class and not as separate series (on an as-converted basis), approve a transaction pursuant to which any person or entity not affiliated with any Series B Purchaser, Series C Purchaser, Series C-1 Purchaser or Series C-2 Purchaser will acquire 50% or more of the Common Stock (by stock purchase, merger or otherwise) or all or substantially all of the assets of the Company, each Stockholder agrees to offer to sell his or its Shares, and to sell

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all of his or its Shares, to such person or entity or to vote all of his or its Shares in favor of the sale of assets, as the case may be, in either case upon the terms and conditions of the transaction approved by the Board of Directors (the “Board”).

(a) Notwithstanding the foregoing, the provisions of Sections 2(a) through 2(d) shall not apply to any Transfer or gift to the Stockholder’s ancestors, descendants or spouse, the ancestors or descendants of such Stockholder’s spouse, or to trusts for the benefit of such persons, and, for any Stockholder that is not a natural person, to any Transfer to the employees, officers and directors of such Stockholder (“Permitted Transferees”); provided that the transferee or donee shall furnish the other Stockholders and the Company with a written agreement to be bound by and comply with all provisions of Section 2. Such transferred Shares shall remain “Shares” hereunder, and such transferee or donee shall be treated as a “Holder” for purposes of this Agreement.

(b) Notwithstanding the foregoing, the provisions of Section 2(a) through 2(d) shall not apply to the sale or Transfer of any Shares by an Investor (i) to an affiliate of an Investor; or (ii) to any constituent partner or retired partner and member or retired member of an Investor, the estate of such a partner or member or a liquidating trust for the benefit of the partners or members of an Investor; provided that (A) the transferring Investor shall inform the other Stockholders and the Company of such sale or Transfer prior to effecting it and (B) the transferee or donee shall furnish the other Stockholders and the Company with a written agreement to be bound by and comply with all provisions of Section 2.

(c) Notwithstanding the foregoing, the provisions of Section 2(a) through 2(d) shall not apply to the sale of any Shares (i) to the public pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act or thereafter under Rule 144 or otherwise; (ii) pursuant to a merger, consolidation, recapitalization or similar event; or (iii) to the Company.

(a) Election of Directors . At each annual meeting of the stockholders of the Company, or at each meeting of the stockholders of the Company involving the election of directors of the Company, and at any other time at which stockholders of the Company will have the right to or will vote for or consent in writing regarding the election of directors of the Company, then and in each event, the Holders, or their respective assignees and transferees, as the case may be, shall vote all Shares in favor of the following actions:

(i) to fix and maintain the number of directors constituting the entire Board at nine (9) directors; and

(ii) to cause and maintain the election to the Board of the following:

(A) one designated representative of Schroder Ventures (who shall initially be James M. Garvey) so long as Schroder Ventures owns at least forty percent (40%) of

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the shares of Series B Preferred Stock and Series C Preferred Stock issued to Schroder Ventures (subject to adjustment for stock splits, stock dividends and the like);

(B) one designated representative of Advent International (who shall initially be Jason S. Fisherman, M.D.) so long as Advent International owns at least forty percent (40%) of the shares of Series B Preferred Stock and Series C Preferred Stock issued to Advent International (subject to adjustment for stock splits, stock dividends and the like);

(C) the then current Chief Executive Officer of the Company, Michael D. Kishbauch;

(D) one designated representative of Scheer Investment Holdings III, L.L.C. (“Scheer”) (who shall initially be David I. Scheer), so long as Scheer owns at least forty percent (40%) of the shares of Series B Preferred Stock issued to Scheer (subject to ad