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RocheMolecular Systems
InOctober 2000, we licensed some of our novel chemistry patents toRocheMolecular Systems, a business unit of Roche
Diagnostics, for use in the productionof RocheMolecular Systems’ diagnostic products. The royalty-bearing license grantsRoche
Molecular Systems non-exclusiveworldwide access to some of our proprietary chemistries in exchange for initial andongoing
payments fromRocheMolecular Systems to us. InApril 2011, we expandedour relationshipwithRocheMolecular Systems by
grantingRocheMolecular Systems a non-exclusive license to additional technology for research anddiagnostic uses. During2013,
2012 and2011, we earned revenue of $618,000, $1.0million and$828,000, respectively, fromour relationshipwithRocheMolecular
Systems.
In-LicensingArrangements
IderaPharmaceuticals, Inc., formerlyHybridon, Inc.
We have an agreement with Idera underwhichwe acquired an exclusive license to all of Idera’s antisense chemistry and
delivery technology related toour secondgeneration antisense drugs and todouble-stranded siRNA therapeutics. Idera retained the
right topractice its licensed antisense patent technologies and to sublicense its technologies to collaborators under certain
circumstances. In addition, Idera received a non-exclusive license to our suite of RNaseHpatents. During2013, 2012 and2011, we
earned revenue of $10,000 for eachperiod fromour relationshipwith Idera.
University ofMassachusetts
We have a license agreementwith theUniversityofMassachusetts underwhichwe acquired an exclusive license to the
University ofMassachusetts’ patent rights related to ISIS-SMN
Rx
. Ifwe successfully develop and commercialize a drug incorporating
the technologywe licensed from theUniversity ofMassachusetts, wewill paymilestone payments to theUniversity ofMassachusetts
totalingup to$500,000 for the achievement of key clinical and regulatorymilestones. In addition, wewill pay theUniversity of
Massachusetts a portionof any sublicense revenuewe receive in consideration for sublicensing its technology, and a royalty on sales
of ISIS-SMN
Rx
in theUnitedStates if our product incorporates the technologywe licensed from theUniversityofMassachusetts.
VervaPharmaceuticals Ltd.
We have a license agreementwithVerva underwhichwe acquired an exclusive license toVerva’s antisense patent rights
related to ISIS-FGFR4
Rx
. Ifwe successfullydevelop and commercialize a drug incorporating the technologyVerva licensed tous, we
will paymilestone payments toVerva totalingup to$6.1million for the achievement of keypatent, clinical, and regulatory
milestones. Ifwe convert our license from an exclusive license to a nonexclusive licensewe could significantly reduce themilestone
payments due toVerva. In addition, wewill alsopay royalties toVerva on sales of ISIS-FGFR4
Rx
if our product incorporates the
technologywe licensed fromVerva.
ColdSpringHarbor Laboratory
We have a collaboration and license agreementwith theColdSpringHarbor Laboratoryunderwhichwe acquired an
exclusive license to theColdSpringHarbor Laboratory’s patent rights related to ISIS-SMN
Rx
. Ifwe successfullydevelop and
commercialize a drug incorporating the technologywe licensed from theColdSpringHarbor Laboratory, wewill paymilestone
payments to theColdSpringHarbor Laboratory totalingup to$600,000 for the achievement of key clinical and regulatory
milestones. In addition, wewill pay theColdSpringHarbor Laboratory a portionof any sublicense revenuewe receive in
consideration for sublicensing theColdSpringHarbor Laboratory’s technology and a royaltyon sales of ISIS-SMN
Rx
if our product
incorporates the technologywe licensed from theColdSpringHarbor Laboratory.
Manufacturing
In the past, except for small quantities, itwas generally expensive anddifficult to produce chemicallymodified
oligonucleotides like the antisense drugswe use inour research anddevelopment programs. As a result, we have dedicated significant
resources todevelopways to improvemanufacturing efficiency and capacity. Sincewe canuse variants of the same nucleotide
buildingblocks and the same type of equipment toproduce our oligonucleotide drugs, we found that the same techniqueswe used to
efficientlymanufacture one oligonucleotide drug couldhelp improve themanufacturingprocesses formanyother oligonucleotide
drugs. Bydeveloping several proprietary chemical processes to scale upourmanufacturing capabilities, we have greatly reduced the
cost of producingoligonucleotide drugs. For example, we have significantly reduced the cost of rawmaterials through improvedyield
efficiency, while at the same time increasingour capacity tomake the drugs. Throughbothour internal research anddevelopment
programs and collaborationswithoutside vendorswemay achieve evengreater efficiency and further cost reductions.
