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successfully develops all five programs for one ormore indications and achieves pre-agreed sales targets, we could receive license
fees and substantivemilestone payments of nearly$1.2billion, includingup to$185.5million for the achievement of development
milestones, up to $526.5million for the achievement of regulatorymilestones andup to$445million for the achievement of
commercializationmilestones.Wewill earn the next $1millionmilestone payment ifwe initiate an open-label extension studyof
ISIS-TTR
Rx
. In addition, we are eligible to receive up todouble-digit royalties on sales from any product that GSK successfully
commercializes under this alliance.
During2013, 2012 and2011, we earned revenue of $35.3million, $8.2million and$17.7million, respectively, fromour
relationshipwithGSK, which represented24percent, eight percent and18percent, respectively, of our total revenue for those years.
Roche
InApril 2013, we formed an alliancewithHoffman-LaRoche Inc. andF. Hoffmann-LaRocheLtd., collectivelyRoche, to
develop treatments forHuntington’s disease basedonour antisense technology. Roche has the option to license the drugs fromus
through the completion of the first Phase 1 trial. Prior tooption exercise, we are responsible for the discovery anddevelopment of an
antisense drug targetinghuntingtin, orHTT, protein.We are alsoworking collaborativelywithRoche on the discoveryof an antisense
drugutilizingRoche’s “brain shuttle” program. IfRoche exercises its option, itwill be responsible for global development, regulatory
and commercialization activities for anydrug arisingout of the collaboration. Under the terms of the agreement, we received an
upfront payment of $30million inApril 2013, whichwe are amortizing throughApril 2017. We are eligible to receive up to $362
million in a license fee and substantivemilestone payments includingup to$67million for the achievement of development
milestones, up to $170million for the achievement of regulatorymilestones andup to$80million for the achievement of
commercializationmilestones. In addition, we are eligible to receive up to $136.5million inmilestone payments for each additional
drug successfully developed and up to$50million in commercialmilestones if a drugusingRoche’s proprietarybrain shuttle
technology is successfully commercialized. We are also eligible to receive tiered royalties on anyproduct sales of drugs resulting
from this alliance.Wewill earn the nextmilestone payment of $22million ifwe initiate a Phase 1 trial for a drug targetingHTT
protein. During2013, we earned revenue of $5.1million fromour relationshipwithRoche.
SatelliteCompanyCollaborations
Throughour satellite company collaborations, we expand the reach andpotential of RNA-targeting therapeutics intodisease
areas that are outside of our core focus and advance certainRNA-targeting therapeutic technologies. We refer to these companies as
our satellite companies, and this strategy as our satellite company strategy. These relationships provide uswithpartnerswho are
focused in a particular disease area andwho share the common goal of advancingour drugs. In these partnerships, we typicallyown
equity in the company, often as part of the licensing agreement andwe also retain the potential to earnmilestone payments and
royalties.
In addition toour satellite companypartners that are advancingRNA-targeting therapeutics, we have satellite company
partnerswho take advantage of our dominant RNA-targeting intellectual property estate and leverage our own investments inour core
technologies to advanceRNA-targeting technologies. These partnerships typically involve a cross-license betweenus andour partner
and allowus toparticipate innewly emerging approaches toRNA-targeting technologies and augment our active programs in these
areas. For example, we co-foundedRegulus, a company focusedondevelopingmicroRNA-targeted therapeutics in cancer, fibrosis,
atherosclerosis andviral infections, such asHepatitisCvirus. Regulus has successfully developed strategic allianceswithhigh-
quality partners such as Sanofi,GSK, Biogen Idec andAstraZeneca, fromwhichwe have the potential to receive a portionof future
milestone payments and royaltypayments under our agreementwithRegulus.
The value of this strategy is also evident in the broadpipeline of drugswe andour partners are developing to treat a large
range of diseases. Using their resources and their expertise, our partners are instrumental in developing antisense drugs thatwe
discoveredor co-discoveredbut fall outside ourmain areas of focus. We believe that our satellite company strategy allows us to
realize opportunities outside of our therapeutic focuswhile our committed andknowledgeable drugdevelopment partner incurs the
cost of development and assumes the risk.
Achaogen, Inc.
In2006, we exclusivelyoutlicensed toAchaogen, Inc. specific know-how, patents andpatent applications relating to
aminoglycosides. In exchange, Achaogen agreed to certainpayment obligations related to aminoglycosidesAchaogendeveloped.
Aminoglycosides are a class of smallmolecule antibiotics that inhibit bacterial protein synthesis and that physicians use to treat
serious bacterial infections. Achaogen is developingplazomicin, an aminoglycosideAchaogendiscoveredbasedon the technologywe
licensed toAchaogen. Plazomicin has displayed broad-spectrum activity in animals againstmulti-drug resistant gram-negative
bacteria that cause systemic infections, includingE. coli. The compoundhas alsodemonstrated activity againstMRSA.
