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iCoTherapeutics Inc.
InAugust 2005, we granted a license to iCo for the development and commercializationof iCo-007. iCo is developing iCo-
007 for the treatment of various eye diseases causedby the formation and leakage of newbloodvessels such as diabeticmacular
edema anddiabetic retinopathy and is currently evaluating it in aPhase 2 study inpatientswithdiabetic retinopathy. We received a
$500,000upfront fee from iCo andmay receive substantivemilestone payments totalingup to$48.4million for the achievement of
development and regulatorymilestones formultiple indications, includingup to$7.9million for the achievement of development
milestones and up to $40.5million for the achievement of regulatorymilestones. Wewill receive the nextmilestone payment of $4
million if iCo initiates aPhase 3 study for iCo-007. In addition, we are eligible to receive royalties on anyproduct sales of iCo-007.
Under the terms of the agreement, iCo is solely responsible for the development and commercializationof the drug. Over the course
of our relationship, iCohas paid us in a combinationof cash, common stock and convertible notes. During2013, we sold a portionof
the iCo stockwe own resulting in aggregate net cashproceeds of $490,000. As a result, our ownership in iCo at December 31, 2013
and2012was approximately sixpercent andnine percent, respectively. During2013 and2012we didnot earn any revenue fromour
relationshipwith iCo andduring2011we earned$7,000 fromour relationshipwith iCo.
OncoGenexTechnologies Inc., a subsidiary ofOncoGenexPharmaceuticals Inc.
InNovember 2001, we established a drugdevelopment collaborationwithOncoGenex, a biotechnology company committed
to the development of cancer therapeutics for patientswithdrug resistant andmetastatic cancers, to co-develop and commercialize
custirsen, formerlyOGX-011, an anti-cancer antisense drug that targets clusterin. In July2008, we andOncoGenex amended the co-
development agreement pursuant towhichOncoGenexbecame solely responsible for the costs, development and commercialization
of custirsen. In exchange, OncoGenex agreed topayus royalties on sales of custirsen and to share consideration it receives from
licensing custirsen to a third party, except for considerationOncoGenex receives for the fairmarket value of equity and
reimbursement of research anddevelopment expenses.
Under the amended agreement, we assigned toOncoGenexour rights in the patents claiming the composition and therapeutic
methods of using custirsen andgrantedOncoGenex aworldwide, nonexclusive license toour know-how andpatents coveringour core
antisense technology andmanufacturing technology solely for usewith custirsen. The keyproduct-relatedpatent thatwe assigned to
OncoGenexwasU.S. Patent number 6,900,187having an expirationdate of at least 2020; and the core antisense technologypatents
we licensedOncoGenex areU.S. Patent number 7,919,472having an expirationdate of 2026, its foreign equivalents granted in
Australia andCanada, and its foreign equivalent pendingunder theEuropeanPatent Convention. In addition, we agreed that so long
asOncoGenexor its commercialization partner is using commercially reasonable efforts todevelop and commercialize custirsen, we
will not research, developor commercialize an antisense compounddesigned tomodulate clusterin. The amended agreement will
continue until OncoGenexor its commercialization partner is no longer developingor commercializing custirsenor untilwe terminate
the agreement forOncoGenex’s uncured failure tomake a payment requiredunder the agreement.
InDecember 2009, OncoGenexgrantedTeva the exclusiveworldwide right and license todevelop and commercialize any
products containing custirsen and related compounds, withOncoGenexhaving anoption to co-promote custirsen in theUnitedStates
andCanada, forwhichwe received$10million of the upfront payment OncoGenex received fromTeva. We are also eligible to
receive 30percent of up to $370million inpaymentsOncoGenexmay receive fromTeva in addition to royalties on any product sales
of custirsen rangingbetween3.88percent and sevenpercent. Under the agreement, this royalty is due on a country-by-countrybasis
until the later of ten years following the first commercial sale of custirsen in the relevant country, and the expirationof the last patent
we assignedor licensed toOncoGenex that covers themaking, usingor sellingof custirsen in such country.
To facilitate the execution andperformance ofOncoGenex’s agreementwithTeva, we andOncoGenex amendedour license
agreement primarily to giveTeva the ability to cure any future potential breachbyOncoGenexunder our agreement. As part of this
amendment, OncoGenex agreed that ifOncoGenex is the subject of a change of controlwith a thirdparty, where the surviving entity
immediately following such change of control has the right todevelop and sell custirsen, then a payment of $20millionwill be due
and payable tous 21days following the first commercial sale of the product in theUnitedStates. Anynon-royaltypayments
OncoGenexpreviouslypaid tous are creditable towards the $20million payment, so as a result of the $10millionpaymentwe
received fromOncoGenex related to its license toTeva, the remaining amount owing in the event of a change of control as discussed
above is amaximumof $10million.
InAugust 2003, we andOncoGenex entered into a separate collaboration and license agreement for the development of a
second-generation antisense anti-cancer drug, OGX-225. OncoGenex is responsible for all development costs and activities, andwe
have no further performance obligations. OncoGenex issued to us $750,000ofOncoGenex securities as payment for anupfront fee. In
addition, OncoGenexwill payus substantivemilestone payments totalingup to$3.5million for the achievement of development and
regulatorymilestones, includingup to$1.5million for the achievement of developmentmilestones andup to$2million for the
achievement of regulatorymilestones. In addition, we are eligible to receive royalties on future product sales ofOGX-225. As of
December 31, 2013, OncoGenex hadnot achieved anymilestone events related toOGX-225.Wewill earn the nextmilestone payment
of $500,000 ifOncoGenex initiates aPhase 2 study forOGX-225.
