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ResearchandDevelopment RevenueUnderCollaborativeAgreements
Research anddevelopment revenue under collaborative agreements for the year endedDecember 31, 2012was $96.4million
compared to$96.2million for 2011. In2012, we recognized revenue fromnew sources in connectionwithour collaborationwith
AstraZeneca, our three new collaborationswithBiogen Idec and theKYNAMROFDA acceptancemilestone fromGenzyme. At the
same time, in 2012, revenue from amortizationof the upfront payments associatedwith theGenzyme collaboration ended as planned
inmid-2012.
LicensingandRoyaltyRevenue
Our revenue from licensing activities and royalties for the year endedDecember 31, 2012was $5.6million compared to$2.9
million for 2011. The increasewas primarilydue to$2.7million in sublicensing revenue thatwe earned fromAlnylam in 2012.
OperatingExpenses
Operating expenses for the year endedDecember 31, 2012were $171.0million compared to$170.2million for 2011. In
2012, our operating expenseswere essentially flat compared to2011. Inorder to analyze and compare our results of operations to
other similar companies, we believe that it is important to exclude non-cash compensation expense related to equity awards fromour
operating expenses.We believe non-cash compensation expense is not indicative of our operating results or cash flows fromour
operations. Further, we internally evaluate the performance of our operations excluding it.
Research, Development andPatent Expenses
Our research, development andpatent expenses consist of costs for antisense drugdiscovery, antisense drugdevelopment,
manufacturing andoperations andR&D support costs.
The following table sets forth information on research, development andpatent expenses (in thousands):
YearEnded
December 31,
2012
2011
Research, development andpatent expenses ................................ $
151,212 $
148,870
Non-cash compensation expense related to equity awards ...........
7,246
8,527
Total research, development and patent ................................... $
158,458 $
157,397
For the year endedDecember 31, 2012, we incurred total research, development andpatent expenses of $151.2million
compared to$148.9million for 2011. Research, development andpatent expenses in2012were slightly higher primarily due to
higher development costs associatedwithourmaturingpipeline of drugs offset, inpart, by lower development expenses related to
KYNAMRO.All amounts exclude non-cash compensation expense related to equity awards.
AntisenseDrugDiscovery
Our antisense drugdiscovery expenseswere as follows (in thousands):
YearEnded
December 31,
2012
2011
Antisense drug discovery expenses .............................................. $
34,035 $
32,618
Non-cash compensation expense related to equity awards ...........
2,108
2,433
Total antisense drugdiscovery ................................................. $
36,143 $
35,051
Antisense drugdiscovery costswere $34.0million for the year endedDecember 31, 2012, and increased slightly compared to
$32.6million for 2011. The higher expenses in2012 compared to2011were primarilydue to an increase inpersonnel expenses and
an increase in research services providedby thirdparties to support our partnered researchprograms. All amounts exclude non-cash
compensation expense related to equity awards.
