licensed KYNAMRO to Genzyme, and build a base of license fees, milestone payments, profit share and royalty
income. We also form preferred partner transactions that provide us with a vested partner, such as AstraZeneca,
Biogen Idec, GSK, Janssen Biotech, Inc. and Roche, early in the development of a drug. Typically, the drugs we
partner early in development are in therapeutic areas of high risk, like severe neurological diseases, or in areas
where Phase 2 results would likely not provide a significant increase in value, like cancer. These preferred
partner transactions allow us to develop select drugs that could have significant commercial potential with a
knowledgeable and committed partner with the financial resources to fund later-stage clinical studies and
expertise to complement our own development efforts. We benefit from this strategy because it allows us to
expand and broaden our drug discovery efforts to new disease targets. For example, through our broad strategic
partnership with Biogen Idec, we are capitalizing on Biogen Idec’s extensive resources and expertise in
neurological diseases to create a franchise of novel treatments for neurological disorders. Additionally, with
Janssen we have a global collaboration to discover and develop antisense drugs to treat autoimmune disorders of
the gastrointestinal tract, or GI tract, which brings together our RNA-targeted technology platform and Janssen’s
expertise in autoimmune disorders and therapeutic formulation to discover and develop antisense drugs to treat
autoimmune disorders in the GI tract. Similar to our other partnerships, with our preferred partner transactions
we benefit financially from upfront payments, milestone payments, licensing fees and royalties.
We also work with a consortium of companies that can exploit our drugs and technology. We call these
companies satellite companies. We benefit from the disease-specific expertise of our satellite company partners,
who are advancing drugs in our pipeline in areas that are outside of our core focus. For example, Regulus
Therapeutics, Inc. is a satellite company partner that we co-founded to discover and develop antisense drugs
targeting microRNAs. Regulus reported positive clinical data on its anti-miR drug to treat patients with hepatitis
C virus. Regulus’ stock price increased significantly, which also increased the value of our ownership in Regulus.
In response, we sold a small portion of our Regulus stock for more than $20 million of cash. We also maintain
our broad ribonucleic acid, or RNA, technology leadership through collaborations with satellite companies. All of
these different types of relationships are part of our partnering strategy, which we designed to maximize the
value of our assets, minimize the development risks of a broad pipeline of novel new drugs, and provide us with
significant reliable near-term revenue.
The broad applicability of our drug discovery technology and the clinical successes of the drugs in our
pipeline continue to create new partnering opportunities. Since January 2012, we have initiated seven new
partnerships that involve antisense drugs for the treatment of various disorders, including neurological diseases,
autoimmune disorders of the GI tract and cancer. We formed a broad alliance with Janssen to discover and
develop antisense drugs to treat autoimmune disorders in the GI tract, four strategic alliances with Biogen Idec to
discover and develop antisense drugs to treat neurologic diseases, a strategic alliance withAstraZeneca to
discover and develop antisense drugs to treat cancer and a strategic alliance with Roche to discover and develop
antisense drugs to treat Huntington’s disease. Additionally, we and our partner, GSK, are developing five drugs,
including ISIS-TTR
Rx
, which is in Phase 3 development. We have the potential to earn significant revenue from
these partnerships and our other partnered programs. Since 2007 we have received more than $1.4 billion in cash
from upfront and licensing fees, equity purchase payments, milestone payments and research and development
funding from our partnerships. We have the potential to earn over $9 billion in future milestone payments and
licensing fees from all of our partnerships. We also have the potential to share in the future commercial success
of our inventions and drugs resulting from our partnerships through earn out, profit sharing, or royalty
arrangements.
As an innovator in RNA-targeting drug discovery and development, we design and execute our patent
strategy to provide us with extensive protection for our drugs and our technology. With our ongoing research and
development, we continue to add to our substantial patent estate. Our patents not only protect our key
assets—our technology and our drugs—they also form the basis for lucrative licensing and partnering
arrangements. Through December 2014, we have generated nearly $420 million from our intellectual property
sale and licensing program that helps support our internal drug discovery and development programs.
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