been recognized as one of the top ten most innovative companies in the Biotechnology industry, based on
number of granted patents, scientific strength, industry impact, technology strength and research intensity. Our
nearly 1,900 issued patents and applications are all the more remarkable given that Isis has fewer than 400
employees. This means Isis has produced nearly five issued patents and applications per employee.
Akey component of our business and organizational strategy is to maintain an optimal size to foster
innovation. We believe the optimal size is approximately 400 employees. To maintain this optimal size we
license our medicines at key value inflection points during development, thus avoiding the need to build the
large, complex, inefficient organizations associated with fully integrated pharmaceutical companies. We also
demand more of every employee at Isis and do not tolerate mediocrity. We have been remarkably successful in
achieving these goals. Today we have 38 newmedicines in development; one medicine in development per 12
employees. And we believe this productivity is sustainable. We plan to add three to five newmedicines to the
pipeline every year without significant increases in the number of employees.
By design, Isis demands more of every employee, particularly the middle and senior level leaders. This
requires us to design our compensation system to recruit, motivate and retain outstanding individuals. Here too,
we have been successful. Our average employee turnover rate over the last five years (reflected as of 3
rd
quarter
each year) has averaged 7%per year, while the average turnover in the San Diego/La Jolla area for
biotech/pharmaceutical companies over this period was 12.8% according to a survey published by Radford – an
Aon Hewitt Company. Given the uniqueness and complexity of our technology, it is critical to retain the
knowledge and experience of outstanding long service employees. The experience and seniority of our employees
is as critical to our future success as it has been to the success we have enjoyed to date.
In summary, at Isis, our vision is clear and designed to promote long-term creation of value through
innovation, and bring benefit to generations of patients with many diseases. Our vision is to:
•
create and constantly advance a new, more efficient drug discovery platform, antisense technology;
•
create a unique business model and culture committed to creating long-term value through innovation;
•
broaden, deepen and advance our pipeline of antisense drugs;
•
demand more of every employee - more commitment, more knowledge, more intensity, more
innovation and more productivity;
•
aggressively manage average and below average performance so every employee produces more; and
•
demand great performance and pay for that performance.
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