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Neurology
InDecember 2012, we andBiogen Idec entered into a third and separate collaboration todevelop and commercialize novel
antisense drugs to three targets to treat neurological or neuromuscular diseases. We are responsible for the development of the drugs
through the completion of the initial Phase 2 clinical study. Biogen Idec has the option to license a drug from each of the three
programs through the completionof Phase 2 studies. Under the terms of the agreement, we received anupfront payment of $30
million, whichwe are amortizing throughDecember 2020. Over the termof the collaborationwe are eligible to receive up to $259
million in a license fee and substantivemilestone payments per program. We could receive up to$59million indevelopment
milestone payments to support research anddevelopment of eachprogram, including amounts related to the cost of clinical trials, and
up to$130million inmilestone payments ifBiogen Idec achieves pre-specified regulatorymilestones. In addition, we are eligible to
receive double-digit royalties on anyproduct sales of drugs resulting from eachof the three programs. Wewill earn the next
milestone payment of $10million ifwe initiate an IND-enabling toxicology study for a development candidate identifiedunder this
collaboration.
StrategicNeurology
InSeptember 2013, we andBiogen Idec entered into a fourth and separate collaboration, which is a long-term strategic
relationship focusedon applying antisense technology to advance the treatment of neurological diseases. As part of the collaboration,
Biogen Idec gained exclusive rights to the use of our antisense technology todevelop therapies for neurological diseases andhas the
option to license drugs resulting from this collaboration. The exclusivity for neurological diseaseswill last six years, andmay be
extended for any drug development programs being pursuedunder the collaboration. Under the terms of the agreement, we received
anupfront payment of $100million and are eligible to receivemilestone payments, license fees and royalty payments for all drugs
developed through this collaboration, with the specific amounts dependent upon themodality of themolecule advancedbyBiogen
Idec. Ifwe have a change of control during the first six years of the collaboration, wemaybe required to refundBiogen Idec a portion
of the $100millionupfront payment, with the amount of the potential refunddecreasing ratably aswe progress through the initial six
year termof the collaboration. We are amortizing the $100millionupfront payment throughSeptember 2019. Because the
amortizationperiod for the upfront payment will never be less than the initial six year termof the collaboration, the amount of revenue
we recognize from the upfront payment will never exceed the amount that Biogen Idec couldpotentially require us to refund.
If an antisensemolecule is chosen for drugdiscovery anddevelopment of a neurological disease, we are eligible to receive up
to approximately$260million in a license fee and substantivemilestone payments for each antisense drugdevelopedunder the
collaboration.We are eligible to receive up to approximately$60million for the achievement of research and developmentmilestones,
including amounts related to the cost of clinical trials, andup to$130million for the achievement of regulatorymilestones.Wewill
usuallybe responsible for drugdiscovery and earlydevelopment of antisense drugs andBiogen Idecwill have the option to license
antisense drugs after Phase 2proof of concept. Biogen Idecwill thenbe responsible for later phase development and
commercializationof the licenseddrug. In addition, we are eligible to receive double-digit royalties on anyproduct sales of antisense
drugs developedunder this collaboration. If othermodalities, such as smallmolecules ormonoclonal antibodies are chosen, we are
eligible to receive up to$90million in substantivemilestone payments, includingup to$35million for the achievement of research
anddevelopmentmilestones andup to$55million for the achievement of regulatorymilestones. Biogen Idecwill be responsible for
all of the drugdiscovery anddevelopment activities for drugs usingothermodalities. In addition, we are eligible to receive single-
digit royalties on anyproduct sales of anydrugs usingothermodalities developedunder this collaboration. We could earn the next
milestone payment of up to$10million ifwe choose a target to advance under this collaboration.
During2013 and2012, we earned revenue of $37.0million and$8.5million, respectively, fromour relationshipswith
Biogen Idec, which represented25percent and eight percent, respectively, of our total revenue for those periods. Our balance sheets
at December 31, 2013 and2012 includeddeferred revenue of $145.1million and$62.6million, respectively, related toour
relationshipwithBiogen Idec.
Bristol-Myers Squibb
InMay2007, we entered into a collaboration agreementwithBristol-Myers Squibb todiscover, develop and commercialize
novel antisense drugs targetingproprotein convertase subtilisin/kexin type 9, or PCSK9. In addition to a $15million upfront fee, we
earned$8million inmilestone payments related to the development ofBMS-PCSK9
Rx
. The collaboration ended inDecember 2011,
andwe regained the rights todiscover anddevelop antisense drugs to target PCSK9. During2013, 2012 and2011, we earned revenue
of $188,000, $290,000 and$2.4million, respectively, fromBristol-Myers Squibb. Our balance sheet atDecember 31, 2012 included
deferred revenue of $126,000 related toour relationshipwithBristol-Myers Squibb.
