some conditions causing blindness. Our strategic alliance currently includes five drugs in development. GSK has
the exclusive option to license drugs resulting from this alliance at Phase 2 proof-of-concept for a license fee. If
GSK exercises its exclusive option for any drugs resulting from this alliance, it will be responsible for all further
global development, regulatory and commercialization activities for such drug. Under the terms of the agreement,
we received a $35 million upfront payment and inMay 2011 we received a $3 million payment when we and
GSK expanded the collaboration.
In October 2012, we and GSK amended the original agreement to reflect an accelerated clinical
development plan for ISIS-TTR
Rx
. From inception through February 2015, we have received $45 million,
primarily in milestone payments, fromGSK related to the development of ISIS-TTR
Rx
. We are also eligible to
earn an additional $25 million in pre-licensing milestone payments associated with the ISIS-TTR
Rx
Phase 2/3
study. In addition, under the amended agreement, we and GSK increased the regulatory and commercial
milestone payments we can earn should ISIS-TTR
Rx
receive marketing approval and meet pre-agreed sales
targets.
In addition to ISIS-TTR
Rx
, we have four drugs in development. We are developing ISIS-HBV
Rx
, an
antisense drug designed to reduce the production of viral proteins associated with hepatitis B virus, or HBV,
infection. We are also developing ISIS-GSK4-L
Rx
and ISIS-RHO-2.5
Rx
, formerly ISIS-GSK5
Rx
, which are
antisense drugs we designed to treat ocular diseases. In addition, we recently advanced a drug to treat an
undisclosed target, ISIS-GSK6-L
Rx
, into development.
Under our agreement, if GSK successfully develops all five drugs for one or more indications and achieves
pre-agreed sales targets, we could receive license fees and substantive milestone payments of more than
$1.2 billion, including up to $146.5 million for the achievement of development milestones, up to $483.5 million
for the achievement of regulatory milestones and up to $428 million for the achievement of commercialization
milestones. We will earn the next $15 million milestone payment if we further advance ISIS-TTR
Rx
. In addition,
we are eligible to receive royalties up to the mid-teens on sales from any product that GSK successfully
commercializes under this alliance.
Our alliance with GSKwill continue until the earlier of the date that all of GSK’s options to obtain the
exclusive licenses under the agreement expire unexercised or, if GSK exercises its option, until the expiration of
all payment obligations under the agreement. In addition, the agreement, or any program under the agreement,
may terminate early under the following situations:
•
GSKmay terminate any program, other than the ISIS-TTR
Rx
program, at any time by providing written
notice to us;
•
GSKmay terminate the ISIS-TTR
Rx
program by providing written notice to us after reviewing specific
data from the Phase 3 study for the program; and
•
Either we or GSKmay terminate any program by providing written notice to the other party upon the
other party’s uncured failure to perform a material obligation under the agreement with respect to the
affected program, or the entire agreement if the other party becomes insolvent.
During 2014, 2013 and 2012, we earned revenue of $37.3 million, $35.3 million and $8.2 million,
respectively, from our relationship with GSK, which represented 17 percent, 24 percent and eight percent,
respectively, of our total revenue for those years. Our balance sheets at December 31, 2014 and 2013 included
deferred revenue of $10.0 million and $11.5 million, respectively, related to our relationship with GSK.
Janssen Biotech, Inc., a pharmaceutical company of Johnson & Johnson
In December 2014, we entered into a collaboration agreement with Janssen Biotech, Inc. to discover and
develop antisense drugs that can be locally administered, including oral delivery, to treat autoimmune disorders
of the gastrointestinal, or GI, tract. Janssen has the option to license drugs from us through the designation of a
development candidate for up to three programs. Prior to option exercise we are responsible for the discovery
activities to identify a development candidate. If Janssen exercises an option for one of the programs, it will be
responsible for the global development, regulatory and commercial activities under that program. Under the terms
of the agreement, we received $35 million in payments, made up of a $30 million payment we received in
December 2014 and a $5 million payment we received in February 2015. We are amortizing these payments
through December 2018. We are eligible to receive nearly $800 million in substantive milestone payments and
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