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Under the agreement, we could receive substantivemilestone payments totalingup to$1.4million for the achievement of
regulatorymilestones formultiple indications. Wewill earn the nextmilestone payment of $600,000 ifAtlantic Pharmaceuticals
submits anNDA for alicaforsenwith theFDA. In2010, AtlanticPharmaceuticals began supplying alicaforsenunder international
NamedPatient Supply regulations for patientswith inflammatorybowel disease, or IBD, forwhichwe receive royalties.
In 2010 and2013, we agreed to sellAtlantic Pharmaceuticals alicaforsendrug substance in return for shares ofAtlantic
Pharmaceuticals’ common stock. Additionally, in 2013we agreed to receive equity for the royalties that wewill earn fromAtlantic
Pharmaceuticals. We recorded a full valuation allowance for all of the equity paymentswe received fromAtlantic Pharmaceuticals,
including the upfront payment, because realizationof the equity payments is uncertain. At December 31, 2013 and2012, we owned
approximately 12 percent and11 percent, respectively, ofAtlantic Pharmaceuticals’ equity. We earned$671,000 related to royalties
and sales of drug substance in2013but because the paymentsweremade in equity, we didnot record any revenue. During2012,we
earned$3,000 related to royalties and during 2011we did not earn any revenue fromour relationshipwithAtlanticPharmaceuticals.
ExcaliardPharmaceuticals, Inc., awholly owned subsidiary of Pfizer Inc.
InNovember 2007, we entered into a collaborationwithExcaliard todiscover anddevelop antisense drugs for the local
treatment of fibrotic diseases, including scarring.We grantedExcaliard an exclusiveworldwide license for the development and
commercializationof certain antisense drugs. Excaliardmade anupfront payment to us in the formof equity and paidus $1million in
cash for the licensingof an antisense oligonucleotide drug targeting expressionof CTGF that is activated during skin scarring
following thewoundhealingprocess.
InDecember 2011, Pfizer Inc. acquiredExcaliard. To date, wehave received $6.5million andwe are eligible to receive up
to an additional $8.4million inpayments upon achievement of variousmilestones associatedwith the clinical and commercial
progress of EXC 001. In addition, assumingPfizer Inc. successfully develops and commercializes EXC001, wemay receive
substantivemilestone payments totalingup to$47.7million for the achievement of keydevelopment and regulatorymilestones,
includingup to$7.7million for the achievement of developmentmilestones andup to$40million for the achievement of regulatory
milestones.Wewill earn the nextmilestone payment of $1.5millionupon initiation of aPhase 3 study for EXC001.We are also
eligible to receive royalties on anyproduct sales of EXC001.
At December 31, 2013, we owned no equity inExcaliard. During 2013, 2012 and2011, we received$844,000, $1.3million
and $4.4million, respectively, fromPfizer Inc. inpayments related to the acquisitionof Excaliard and the advancement of EXC001,
whichwe recorded as investment gains. We didnot earn any revenue during2013, 2012 and2011 fromour relationshipwith
Excaliard.
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.
