56
As ofDecember 31,
2013
2012
2011
2010
2009
ConsolidatedBalanceSheet:
Cash, cash equivalents and short-term investments(1) ........... $ 656,761 $ 374,446 $ 343,664 $ 472,353 $ 574,312
Working capital(1) .................................................................. $ 637,698 $ 349,116 $ 284,027 $ 377,247 $ 484,682
Investment inRegulus Therapeutics Inc.(1) ........................... $ 52,096 $ 33,622 $
— $
— $
—
Total assets(1) ......................................................................... $ 847,156 $ 545,686 $ 484,894 $ 550,477 $ 657,184
Long-termdebt andother obligations, less current portion(1) $ 370,954 $ 288,598 $ 232,924 $ 199,175 $ 243,675
Accumulateddeficit(1) ........................................................... $ (967,610) $ (906,966) $ (841,488) $ (756,687) $ (696,150)
Noncontrolling interest inRegulusTherapeutics Inc.(1) ........ $
— $
— $
— $
— $ 10,343
Investment inRegulus Therapeutics Inc.(1) ........................... $
— $
— $ 4,424 $
870 $
—
Stockholders’ equity ............................................................... $ 378,390 $ 182,766 $ 171,434 $ 244,542 $ 302,065
(1)
Beginning in the first quarter of 2010, we adopted a new accounting standard and changedourmethodof accounting for our
variable interest inRegulus. We adopted the new standardon a prospective basis; therefore, beginning in the first quarter of
2010, we deconsolidatedRegulus fromour consolidated financial statements andbegan to account for our ownership interest
inRegulus using the equitymethodof accounting. Under the equitymethodof accounting, we stopped includingRegulus’
revenue andoperating expenses inour operating results. Insteadwe includedour share of Regulus’ operating results on a
separate line inour consolidated statement of operations called “Equity in net loss ofRegulus Therapeutics Inc.”Onour
consolidatedbalance sheet, we presentedour investment inRegulus on a separate line in the non-current liabilities section
called “Investment inRegulus Therapeutics Inc.” InOctober 2012, Regulus completed an IPO andwe began accounting for
our investment inRegulus at fair value because our ownership inRegulus droppedbelow20percent andwe no longer had
significant influence over Regulus’ operating and financial policies.We have not reclassified amounts in the prior period
financial statements to conform to the current periodpresentation. For additional information, seeNote 2,
Investment in
Regulus Therapeutics Inc.
in the notes to theConsolidatedFinancial Statements.
Item7. Management’sDiscussion andAnalysis of Financial Condition andResults ofOperations
Overview
We are the leading company in antisense drugdiscovery anddevelopment, exploiting a proven novel drugdiscoveryplatform
we created togenerate a broadpipeline of first-in-class drugs. Our strategy is todowhatwe dobest—todiscover anddevelopunique
antisense drugs. The efficiency andbroad applicabilityof our drugdiscoveryplatform allows us todiscover anddevelop antisense
drugs to treat awide range of diseases, including severe and rare, cardiovascular, neurologic andmetabolic diseases and cancer. The
efficiencyof our drugdiscovery technology allows us to employ a unique business strategydesigned tomaximize the value of our
drugs and technologywhilemaintaining an effective cost structure that limits our cashneeds.
Our flagship product, KYNAMRO (mipomersen sodium) injection, is on themarket in theUnitedStates for patientswith
homozygous familial hypercholesterolemia, orHoFH. PatientswithHoFH are at high cardiovascular risk and cannot reduce their
low-density lipoprotein cholesterol, or LDL-C, sufficientlywith currently available lipid-lowering therapies. In January2013, the
U.S. Food andDrugAdministration, or FDA, approved themarketing application forKYNAMRO for patientswithHoFH.
Genzyme, a Sanofi Company, has alsoobtainedmarketing approval inother countries, includingMexico, Argentina andSouthKorea,
and is pursuingmarketing approval inother countries. Genzyme has substantial expertise in successfullymarketingdrugs in the
UnitedStates and internationally for severe and rare diseases and is leveraging this expertise to reachpatientswithHoFH, who are in
desperate needof new treatment options. Genzyme is concentratingmarketing and sales efforts on lipid specialists, and physicians
who referHoFHpatients to these specialists, to reachpatientswithHoFH in theUnitedStates andother countries.
Tomaximize the value of our drugs and technologies, we have amultifaceted partnering strategy. Our partnering strategy
provides us the flexibility to license eachof our drugs at anoptimal time tomaximize the near- and long-termvalue for eachdrug. In
thisway, we can expandour andour partners’ pipelineswith antisense drugs thatwe design to address significantmedical needswhile
remaining small and focused. We form traditional partnering alliances that enable us todiscover and conduct earlydevelopment of
newdrugs, outlicense our drugs topartners, such asGenzyme, andbuild a base of license fees,milestone payments, profit share and
royalty income. We also formpreferredpartner transactions that provide uswith a vestedpartner, such asAstraZeneca, Biogen Idec,
GSK andRoche, early in the development of a drug. Typically, the drugswe partner early in development are in therapeutic areas of
high risk, like severe neurological diseases, or in areaswhere Phase 2 resultswould likelynot provide a significant increase in value,
like cancer. These preferredpartner transactions allowus todevelop select drugs that couldhave significant commercial potential
with a knowledgeable and committed partnerwith the financial resources to fund later-stage clinical studies and expertise to
