F-33
InAugust 2013, we added another collaborationprogramwithAstraZeneca todiscover anddevelop an antisense drug against
anundisclosed target. AstraZeneca has the option to license a drug resulting from this research collaboration, and ifAstraZeneca
exercises its option, itwill be responsible for all further development and commercialization of the drug. We received a $750,000
upfront payment, whichwe are amortizing throughDecember 2015. We are eligible to receive license fees and substantivemilestone
payments of $163.2million, includingup to$45.2million for the achievement of research anddevelopmentmilestones andup to$105
million for regulatorymilestones. Wewill earn the next $3.25millionmilestone payment ifAstraZeneca selects a development
candidate under this collaboration. In addition, we are eligible to receive up todouble-digit royalties on sales from any product that
AstraZeneca successfully commercializes under this collaborationprogram.
During2013 and2012, we earned revenue of $29.1million and$9.3million, respectively, fromour relationshipwith
AstraZeneca, which represented 20percent and nine percent, respectively, of our total revenue for those periods. Our balance sheets
at December 31, 2013 and2012 includeddeferred revenue of $9.3million and$15.7million, respectively, related toour relationship
withAstraZeneca.
Biogen Idec
We have established four strategic collaborationswithBiogen Idec that broaden and expandour severe and rare disease
franchise for neurological disorders.
ISIS-SMN
Rx
In January2012, we entered into a global collaboration agreementwithBiogen Idec todevelop and commercialize ISIS-
SMN
Rx
for the treatment of SMA. We received an upfront payment of $29million, whichwe are amortizing throughAugust 2016.
We are eligible to receive a license fee,milestone payments and up todouble-digit royalties on anyproduct sales of ISIS-SMN
Rx
.
Biogen Idec has the option to license ISIS-SMN
Rx
until completion of the first successful Phase 2/3 study or the completion of two
Phase 2/3 studies. IfBiogen Idec exercises its option, itwill payus a license fee andwill assume global development, regulatory and
commercialization responsibilities.
We are evaluating ISIS-SMN
Rx
in aPhase 2open-label,multiple-dose, dose-escalation study in childrenwithSMA and a
Phase 2open-label,multiple-dose, dose-escalation pilot study in infantswithSMA. In January2014, we andBiogen Idec amended
the original agreement to reflect changesmade to the clinical development plan for ISIS-SMN
Rx.
We andBiogen Idec added a new
open—label extension study, which is beingoffered to those childrenwithSMAwhohave completed dosing inour previous studies,
and expanded the dosing in the Phase 2 study in infantswithSMA. In addition, we increased the number of patients to be included in
the Phase 3 studies. As a result of these changes, we andBiogen Idec agreed to increase the payments that we are eligible to receive
under this collaborationby nearly $35million. Under the terms of the amended agreement,we are eligible to receive up to $303.8
million in a license fee andpayments, including$78.8million inmilestone andother payments associatedwith the clinical
development of ISIS-SMN
Rx
prior to licensing and$150million inmilestone payments if Biogen Idec achieves pre-specified
regulatorymilestones.
As ofDecember 31, 2013, we had earned$7million inmilestone payments for advancing the ISIS-SMN
Rx
Phase 2program.
In addition, basedon the further advancement of ISIS-SMN
Rx
Phase 2program, Biogen Idecwill payus $9.3million in the first
quarter of 2014.Wewill earn the nextmilestone payment of $18million ifwe dose the first patient in thePhase 3 study in infants
withSMA, which is designed to supportmarketing registration for ISIS-SMN
Rx
in theUnitedStates andEurope.
ISIS-DMPK
Rx
In June 2012,we andBiogen Idec entered into a second and separate collaboration and license agreement todevelop and
commercialize a novel antisense drug targetingDMPK for the treatment ofmyotonic dystrophy type 1, orDM1, ISIS-DMPK
Rx
. We
are responsible for global development of the drug through the completion of aPhase 2 clinical trial. Biogen Idec has the option to
license the drug through the completion of the Phase 2 trial. Under the terms of the agreement, we received an upfront payment of
$12million, whichwe are amortizing through June 2017. Over the termof the collaborationwe are eligible to receive up to $259
million in a license fee and substantivemilestone payments. InOctober 2013, we earned a $10millionmilestone paymentwhenwe
initiated an IND-enabling toxicology studyon ISIS-DMPK
Rx
, andwe are eligible to receive up to another $49million inmilestone
payments associatedwith the development of ISIS-DMPK
Rx
prior to licensing. We are also eligible to receive up to$130million in
milestone payments if Biogen Idec achieves pre-specified regulatorymilestones. In addition, we are eligible to receive up to double-
digit royalties on anyproduct sales of the drug.Wewill earn the nextmilestone payment of $14million ifwe initiate a Phase1 study
for ISIS-DMPK
Rx
.
