F-35
Eli Lilly andCompany
InAugust 2001, we formed a broad strategic relationshipwithEli Lilly andCompany, which included a joint research
collaboration. As part of the collaboration, Eli Lilly andCompany licensedLY2181308, an antisense inhibitor of survivin, and
LY2275796, an antisense inhibitor of eIF-4E, or eukaryotic initiation factor-4E. In2012, Eli Lilly andCompanydecidednot to
continue the development of LY2181308. Therefore, wewill not earn futuremilestone payments fromEli Lilly andCompany
associatedwithLY2181308.
InDecember 2009, we reacquiredLY2275796, whichwe renamed ISIS-EIF4E
Rx
, andwe are continuing to develop the drug.
Eli Lilly andCompanyhas the right to reacquire ISIS-EIF4E
Rx
onpredefined terms prior to the initiationof Phase 3development.
However, ifwe publicly disclose the results from a Phase 2 clinical studyof ISIS-EIF4E
Rx
:
Eli Lilly andCompanymay license ISIS-EIF4E
Rx
on the predefined terms;
Eli Lilly andCompanymay tell us it is not interested in licensing ISIS-EIF4E
Rx
, inwhich casewemay license ISIS-
EIF4E
Rx
to another partner; or
Eli Lilly andCompanymay offer to license ISIS-EIF4E
Rx
on terms that are lower than the predefined terms, inwhich
casewemay license ISIS-EIF4E
Rx
to another partner so long as the licensing termswe reachwith the newpartner are
better than terms offeredbyEli Lilly andCompany andwe have not publiclydisclosed any results from a new clinical
studyof ISIS-EIF4E
Rx
prior to reaching the agreement with the newpartner.
During2013, 2012 and2011, we didnot earn any revenue fromour relationshipwithEli Lilly andCompany.
GenzymeCorporation, aSanofi company
In January2008, we entered into a strategic alliancewithGenzyme focusedon the licensing and co-development of
KYNAMRO. The license and co-development agreement providesGenzymewith exclusiveworldwide rights for all therapeutic
purposes toour patents andknow-how related toKYNAMRO, including the keyproduct relatedpatents, and their foreign equivalents
pendingor granted invarious countries outside theUnitedStates, including in theEuropeanUnionvia theEuropeanPatent
Convention, Japan, Canada, Australia, SouthAfrica and India. In addition, we agreed thatwewouldnot developor commercialize
another oligonucleotide-based compounddesigned tomodulate apo-Bbybinding to themessenger RNA, ormRNA, encoding apo-B,
throughout theworld.
The transaction included a $175million licensing fee, a $150million equity investment inour stock inwhichwe issued
Genzyme fivemillion shares of our common stock, and a share ofworldwide profits onKYNAMRO and follow-ondrugs ranging
from30percent to 50percent of all commercial sales. There aremonthly limits on the number of shares of our stock thatGenzyme
can sell. In January2013we earned a $25millionmilestone paymentwhen theFDA approved theNDA forKYNAMRO.Wemay
also receive over $1.5 billion in substantivemilestone payments ifGenzyme achieves pre-specified events, includingup to$700
million for the achievement of regulatorymilestones andup to $825million for the achievement of commercializationmilestones.
The nextmilestone paymentwe could earnunder our agreementwithGenzyme is $25million upon the earlier of anNDA approval
for the use ofKYNAMRO to treat patientswhohave heterozygous FHor annual net revenue equal toor greater than$250million in a
calendar year.
Under our alliance, Genzyme is responsible for the continueddevelopment and commercialization ofKYNAMRO. We
agreed to supply the drug substance forKYNAMRO for thePhase 3 clinical trials and initial commercial launch. Genzyme is
responsible formanufacturing the finisheddrug product forKYNAMRO, andGenzymewill be responsible for the long term supply
ofKYNAMROdrug substance. As part of the agreement, we contributed the first $125million in funding for the development costs
ofKYNAMRO. In2011, we satisfiedour development fundingobligation. As such,we andGenzyme are sharingdevelopment
expenses equallyuntilKYNAMRO is profitable.
The license and co-development agreement forKYNAMROwill continue inperpetuityunlesswe orGenzyme terminate it
earlier under the following situations:
Genzymemay terminate the license and co-development agreement at any time byprovidingwritten notice to Isis;
Wemay terminate the license and co-development agreement on a country-by-countrybasis or in its entiretyupon
Genzyme’s uncured failure touse commercially reasonable efforts todevelop and commercializeKYNAMRO in theUnited
States, France, Germany, Italy, Spain, theUnitedKingdom, Japan andCanada; and
Eitherwe orGenzymemay terminate the license and co-development agreement upon the other party’s uncured failure to
perform amaterial obligationunder the agreement.
