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Manufacturing andOperations
Expenditures inourmanufacturing andoperations function consist primarily of personnel costs, specialized chemicals for
oligonucleotidemanufacturing, laboratory supplies andoutside services. This function is responsible for providingdrug supplies to
antisense drugdiscovery and antisense drug development, including the analytical testing to satisfygood laboratory andgood
manufacturingpractices requirements.
Ourmanufacturing andoperations expenseswere as follows (in thousands):
YearEnded
December 31,
2013
2012
Manufacturing andoperations ...................................................... $
20,509 $
19,232
Non-cash compensation expense related to equity awards ...........
1,295
999
Totalmanufacturing andoperations ......................................... $
21,804 $
20,231
Manufacturing andoperations expenses for the year endedDecember 31, 2013were $20.5million, and increased slightly
compared to$19.2million for 2012, primarily becausewemanufacturedmore drug product due to thematuration and expansion of
our pipeline. All amounts exclude non-cash compensation expense related to equity awards.
R&DSupport
Inour research, development andpatent expenses, we include support costs such as rent, repair andmaintenance for
buildings and equipment, utilities, depreciationof laboratory equipment and facilities, amortizationof our intellectual property,
information technology costs, procurement costs andwaste disposal costs.We call these costsR&D support costs.
The following table sets forth information onR&D support costs (in thousands):
YearEnded
December 31,
2013
2012
Personnel costs ............................................................................. $
9,571 $
9,231
Occupancy ....................................................................................
6,897
6,909
Patent expenses .............................................................................
10,321
3,868
Depreciation and amortization ......................................................
2,464
3,129
Insurance ......................................................................................
1,108
1,143
Other .............................................................................................
3,293
3,104
Non-cash compensation expense related to equity awards ...........
2,298
1,657
Total R&D support costs .......................................................... $
35,952 $
29,041
R&D support costs for the year endedDecember 31, 2013were $33.7million compared to$27.4million for 2012. Expenses
increased in2013 compared to the same period in2012primarilydue tonon-cash charges for patents andpatent applications thatwe
wrote off in2013due to a careful restructuringof our patent portfolio to focus our resources onpatents andnewpatent applications
that drive value for our company. All amounts exclude non-cash compensation expense related to equity awards.
General andAdministrativeExpenses
General and administrative expenses include corporate costs required to support our company, our employees andour
stockholders. These costs include personnel andoutside costs in the areas of legal, human resources, investor relations, and finance.
Additionally, we include ingeneral and administrative expenses such costs as rent, repair andmaintenance of buildings and
equipment, depreciation, utilities, information technology andprocurement costs thatwe need to support the corporate functions listed
above.
