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If a thirdparty claims that our drugs or technology infringe its patents or other intellectual property rights, wemay have to
discontinue an important product or product line, alter our products andprocesses, pay license fees or cease certain activities.Wemay
not be able toobtain a license toneeded intellectual propertyon favorable terms, if at all. There aremanypatents issuedor applied for
in the biotechnology industry, andwemaynot be aware of patents or patent applications heldbyothers that relate toour business.
This is especially true since patent applications in theUnitedStates are filed confidentially for the first 18months.Moreover, the
validity andbreadthof biotechnologypatents involve complex legal and factual questions forwhich important legal issues remain
unresolved.
Ifwe fail toobtain timely funding, wemayneed to curtail or abandon some of ourprograms.
Manyof our drugs are undergoing clinical studies or are in the early stages of research anddevelopment. All of our drug
programswill require significant additional research, development, preclinical and/or clinical testing, regulatory approval and/or
commitment of significant additional resources prior to their successful commercialization. As ofDecember 31, 2013, we had cash,
cash equivalents and short-term investments equal to$656.8million. Ifwe donotmeet our goals to successfully commercialize
KYNAMROor our other drugs, including ISIS-APOCIII
Rx
, ISIS-SMN
Rx
and ISIS-TTR
Rx
, or to license our drugs andproprietary
technologies, wewill need additional funding in the future. Our future capital requirementswill dependonmany factors, such as the
following:
additionalmarketing approvals and successful commercial launchofKYNAMRO;
changes in existing collaborative relationships andour ability to establish andmaintain additional collaborative
arrangements;
continued scientific progress in our research, drugdiscovery anddevelopment programs;
the size of our programs andprogresswithpreclinical and clinical studies;
the time and costs involved inobtaining regulatory approvals;
competing technological andmarket developments, including the introductionbyothers of new therapies that
address ourmarkets; and
the profile and launch timing of our drugs, including ISIS-APOCIII
Rx
, ISIS-SMN
Rx
and ISIS-TTR
Rx
.
Ifwe need additional funds,wemayneed to raise them throughpublic or private financing. Additional financingmay not be
available at all or on acceptable terms. Ifwe raise additional funds by issuing equity securities, the shares of existing stockholderswill
be diluted and the price, aswell as the price of our other securities,maydecline. If adequate funds are not available or not available on
acceptable terms, wemay have to cut backon one ormore of our research, drugdiscovery or development programs. For example, in
January2005we terminated the development of two lower prioritydrugs, ISIS14803 and ISIS104838. Alternatively, wemayobtain
funds through arrangementswith collaborative partners or others, which could require us togive up rights to certainof our
technologies or drugs.
The loss of keypersonnel, or the inability to attract and retainhighly skilledpersonnel, couldmake itmoredifficult to runour
business and reduce our likelihood of success.
We are dependent on the principalmembers of ourmanagement and scientific staff.We donot have employment agreements
with anyof our executive officers thatwouldprevent them from leavingus. The loss of ourmanagement andkey scientific employees
might slow the achievement of important research anddevelopment goals. It is also critical to our success that we recruit and retain
qualified scientific personnel toperform research anddevelopmentwork.Wemaynot be able to attract and retain skilled and
experienced scientific personnel on acceptable terms becauseof intense competition for experienced scientists amongmany
pharmaceutical andhealth care companies, universities andnon-profit research institutions. In addition, failure to succeed in clinical
studiesmaymake itmore challenging to recruit and retainqualified scientific personnel.
