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CHDI Foundation, Inc.
Starting inNovember 2007, CHDI provided financial and scientific support toourHuntington’s disease drugdiscovery
program throughour development collaboration. InApril 2013, we formed an alliancewithRoche todevelop treatments for
Huntington’s disease. Under the terms of our agreement withCHDI, wewill reimburseCHDI for a portionof its support of our
Huntington’s disease programout of the paymentswe receive fromRoche. In2013, wemade two payments toCHDI totaling$3
million associatedwith the progressionof ourHuntington’s disease program, whichwe recorded as research anddevelopment
expense. Ifwe achieve pre-specifiedmilestones under our collaborationwithRoche, wewillmake additional payments toCHDI.
During2013, 2012 and2011, we earned revenue of $414,000, $2.0million and$2.4million, respectively, fromour relationshipwith
CHDI.
TheLudwig Institute; Center forNeurological Studies
InOctober 2005, we entered into a collaboration agreementwith theLudwig Institute, theCenter forNeurological Studies
and researchers from these institutions todiscover anddevelop antisense drugs in the areas ofALS andother neurodegenerative
diseases. Under this agreement, we agreed topay theLudwig Institute andCenter forNeurological Studiesmodestmilestone
payments and royalties on any antisense drugs resulting from the collaboration.
Technologyand Intellectual PropertySale andLicensingAgreements
We have a broadpatent portfolio coveringour products and technologies.We believe our patent estate represents the largest
andmost valuable nucleic acid therapeutics-orientedpatent estate in the pharmaceutical industry.While the principal purpose of our
intellectual propertyportfolio is toprotect our products and those of our pharmaceutical and satellite company partners described
above, our intellectual property is a strategic asset thatwe are exploiting togenerate near-term revenues and thatwe expect will also
provide uswith revenue in the future.We have an active intellectual property sales and licensingprogram inwhichwe sell or license
aspects of our intellectual property to companies. Through this program, we also license our non-antisense patents aswe didwith
EyetechPharmaceuticals, Inc. To date, wehave generated $410million fromour intellectual property sale and licensingprogram that
helps support our internal drugdiscovery anddevelopment programs.
Out-LicensingArrangements; Royalty SharingAgreements; Sales of IP
AbbottMolecular Inc.
In January2009, we soldour former subsidiary, IbisBiosciences, toAbbottMolecular Inc., orAMI, pursuant to a stock
purchase agreement for a total acquisitionprice of $215millionplus the earnout payments describedbelow.
Under the stockpurchase agreement, AMIwill payus earnout payments equal to a percentage of Ibis’ revenue related to
sales of Ibis systems, including instruments, assay kits and successor products, from the date of the acquisition closing through
December 31, 2025. The earnout paymentswill equal five percent of Ibis’ cumulative net sales over $140million andup to$2.1
billion, and three percent of Ibis’ cumulative net sales over $2.1billion. AMImay reduce these earnout payments from five percent
to as low as 2.5percent and from three percent to as low as 1.5percent, respectively, upon the occurrence of certain events. During
2013, 2012 and2011, we didnot earn any revenue fromour relationshipwithAMI.
EyetechPharmaceuticals, Inc. (acquiredbyValeant Pharmaceuticals International, Inc.)
InDecember 2001, we licensed toEyetech certainof our patents necessary for Eyetech to develop,make and commercialize
Macugen, a non-antisense drug for use in the treatment of ophthalmic diseases. Pfizer Inc.marketsMacugenoutside of theUnited
States andValeantmarkets the drug in theUnitedStates. InFebruary2012, Eyetechwas acquiredbyValeant Pharmaceuticals
International, Inc. Eyetechpaid us a $2millionupfront fee and agreed topayus for the achievement of pre-specified events and
royaltypayments in exchange for non-exclusive,worldwide rights to the intellectual property licensed fromus. During2004, we
earned$4million inpayments, and this licensemay also generate additional payments aggregatingup to$2.8million for the
achievement of specified regulatory eventswith respect to the use ofMacugen for each additional therapeutic indication. In2013,
2012 and2011, we earned$362,000, $499,000 and$790,000, respectively, of revenue related to royalties forMacugenunder this
license.
