Genzyme Corporation, a Sanofi company
In January 2008, we entered into a strategic alliance with Genzyme focused on the licensing and
co-development of KYNAMRO. The license and co-development agreement provides Genzyme with exclusive
worldwide rights for all therapeutic purposes to our patents and know-how related to KYNAMRO, including the
key product related patents, and their foreign equivalents pending or granted in various countries outside the
United States, including in the European Union via the European Patent Convention, Japan, Canada, Australia,
SouthAfrica and India. In addition, we agreed that we would not develop or commercialize another
oligonucleotide-based compound designed to modulate apo-B by binding to the messenger RNA, or mRNA,
encoding apo-B, throughout the world.
The transaction included a $175 million licensing fee, a $150 million equity investment in our stock in
which we issued Genzyme five million shares of our common stock, and a share of worldwide profits on
KYNAMRO and follow-on drugs ranging from 30 percent to 50 percent of all commercial sales. There are
monthly limits on the number of shares of our stock that Genzyme can sell. From inception through February
2015, we have earned $50 million in milestone payments for advancing KYNAMRO in development. We may
also receive over $1.5 billion in substantive milestone payments if Genzyme achieves pre-specified events,
including up to $700 million for the achievement of regulatory milestones and up to $825 million for the
achievement of commercialization milestones. The next milestone payment we could earn under our agreement
with Genzyme is $25 million upon the earlier of an NDAapproval for the use of KYNAMRO to treat patients
who have heterozygous FH or annual net revenue equal to or greater than $250 million in a calendar year.
Under our alliance, Genzyme is responsible for the continued development and commercialization of
KYNAMRO. As part of the agreement, we contributed the first $125 million in funding for the development
costs of KYNAMRO. In 2011, we satisfied our development funding obligation. As such, we and Genzyme are
sharing development expenses equally until KYNAMRO is profitable.
The license and co-development agreement for KYNAMROwill continue in perpetuity unless we or
Genzyme terminate it earlier under the following situations:
•
Genzyme may terminate the license and co-development agreement at any time by providing written
notice to Isis;
•
We may terminate the license and co-development agreement on a country-by-country basis or in its
entirety upon Genzyme’s uncured failure to use commercially reasonable efforts to develop and
commercialize KYNAMRO in the United States, France, Germany, Italy, Spain, the United Kingdom,
Japan and Canada; and
•
Either we or Genzyme may terminate the license and co-development agreement upon the other party’s
uncured failure to perform a material obligation under the agreement.
Upon termination of the license and co-development agreement, the license we granted to Genzyme for
KYNAMROwill terminate and Genzyme will stop selling the product. In addition, if Genzyme voluntarily
terminates the agreement or we terminate the agreement in a country or countries for Genzyme’s failure to
develop and commercialize KYNAMRO, then the rights to KYNAMROwill revert back to us and we may
develop and commercialize KYNAMRO in the countries that are the subject of the termination, subject to a
royalty payable to Genzyme.
If we are the subject of an acquisition, then within 180 days following the acquisition, Genzyme may elect
to purchase all of our rights to receive payments under the KYNAMRO license and co-development agreement
for a purchase price to be mutually agreed to by us and Genzyme, or, if we cannot agree, a fair market value
price determined by an independent investment banking firm.
During 2013 and 2012, we earned revenue of $32.5 million, and $67.6 million, respectively, from our
relationship with Genzyme, which represented 22 percent and 66 percent, respectively, of our total revenue for
those years. During 2014, we did not earn any revenue from our relationship with Genzyme.
GSK
InMarch 2010, we entered into a strategic alliance with GSK using our antisense drug discovery platform
to seek out and develop new drugs against targets for rare and serious diseases, including infectious diseases and
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