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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.
Upon terminationof the license and co-development agreement, the licensewe granted toGenzyme forKYNAMROwill
terminate andGenzymewill stop selling the product. In addition, ifGenzyme voluntarily terminates the agreement orwe terminate
the agreement in a countryor countries forGenzyme’s failure to develop and commercializeKYNAMRO, then the rights to
KYNAMROwill revert back tous andwemaydevelop and commercializeKYNAMRO in the countries that are the subject of the
termination, subject to a royaltypayable toGenzyme.
Ifwe are the subject of an acquisition, thenwithin180days following the acquisition, Genzymemay elect to purchase all of
our rights to receive payments under theKYNAMRO license and co-development agreement for a purchase price tobemutually
agreed tobyus andGenzyme, or, ifwe cannot agree, a fairmarket value price determinedby an independent investment banking firm.
During2013, 2012 and2011, we earned revenue of $32.5million, $67.6million, and$72.3million, respectively, fromour
relationshipwithGenzyme, which represented22percent, 66percent, and73percent, respectively, of our total revenue for those
years.
GlaxoSmithKline
InMarch2010, we entered into a strategic alliancewithGSK, for up to sixprograms, usingour antisense drugdiscovery
platform to seekout anddevelopnewdrugs against targets for rare and serious diseases, including infectious diseases and some
conditions causingblindness. This alliance allows us to control and facilitate development of drugswhile still being eligible to
receivemilestone payments aswe advance these drugs in clinical development. Under the terms of the agreement, we received a $35
million upfront payment and inMay2011we received a $3millionpayment whenGSK expanded the collaboration. We are
amortizing these payments through July2015.
InOctober 2012, we andGSK amended the original agreement to reflect an accelerated clinical development plan for ISIS-
TTR
Rx
. Under the amended terms of the agreement, we received a $2.5million upfront payment inDecember 2012, whichwe are
amortizing through July2015. We also received a $7.5millionmilestone payment inFebruary2013whenwe initiated thePhase 2/3
clinical study for ISIS-TTR
Rx
and a $2millionmilestone payment inDecember 2013 for advancing the ongoingPhase 2/3 studyof
ISIS-TTR
Rx
. We have earned$24.0million primarily inmilestone payments fromGSK related to the development of ISIS-TTR
Rx
and
we are eligible to earn an additional $46million inpre-licensingmilestone payments associatedwith the ISIS-TTR
Rx
Phase 2/3 study.
In addition, under the amended agreement, GSK increased the regulatory and commercialmilestone paymentswe can earn should
ISIS-TTR
Rx
receivemarketing approval andmeet pre-agreed sales targets.
Our strategic alliance currently includes five active programs including the ISIS-TTR
Rx
program. We are eligible to receive
on average up to$20million inmilestone payments throughPhase 2proof-of-concept for each program, except the ISIS-TTR
Rx
program, whichwe describe above. GSKhas the option to license drugs from these programs at Phase 2proof-of-concept for a
license fee. IfGSK exercises its option to a program itwill be responsible for all further development and commercialization of the
program. InSeptember 2013, we designated ISIS-GSK3
Rx
as an additional development candidate under our collaborationwithGSK.
ISIS-GSK3
Rx
is an antisense drugdesigned to inhibit the productionof anundisclosed target to treat a common viral infection. To
date, we have earned$10million inmilestone payments associatedwith advancing the ISIS-GSK3
Rx
program including a $3million
milestone paymentwe earned inNovember 2013whenwe initiated aPhase 1 study for ISIS-GSK3
Rx
. InNovember 2013, we
designated ISIS-GSK4
Rx
as an additional development candidate under our collaborationwithGSK and earned a $5millionmilestone
payment. ISIS-GSK4
Rx
is an antisense drugwe designed to treat anundisclosed ocular disease. Under our agreement, ifGSK
