including up to $7.7 million for the achievement of development milestones and up to $40 million for the
achievement of regulatory milestones. We will earn the next milestone payment of $1.5 million upon initiation of
a Phase 3 study for EXC 001. We are also eligible to receive royalties on any product sales of EXC 001.
At December 31, 2014, we owned no equity in Excaliard. During 2013 and 2012, we received $0.8 million
and $1.3 million, respectively, fromPfizer Inc. in payments related to the acquisition of Excaliard and for
advancing of EXC 001, which we recorded as investment gains. We did not earn any revenue during 2014, 2013
and 2012 from our relationship with Excaliard.
OncoGenex Technologies Inc., a subsidiary of OncoGenex Pharmaceuticals Inc.
Custirsen, formerly OGX-011
In November 2001, we established a drug development collaboration with OncoGenex, a biotechnology
company committed to the development of cancer therapeutics for patients with drug resistant and metastatic
cancers, to co-develop and commercialize custirsen, an anti-cancer antisense drug that targets clusterin. In July
2008, we and OncoGenex amended the co-development agreement pursuant to which OncoGenex became solely
responsible for the costs, development and commercialization of custirsen. In exchange, OncoGenex agreed to
pay us royalties on sales of custirsen and to share consideration it receives from licensing custirsen to a third
party, except for consideration OncoGenex receives for the fair market value of equity and reimbursement of
research and development expenses.
Under the amended agreement, we assigned to OncoGenex our rights in the patents claiming the
composition and therapeutic methods of using custirsen and granted OncoGenex a worldwide, nonexclusive
license to our know-how and patents covering our core antisense technology and manufacturing technology
solely for use with custirsen. The key product-related patent that we assigned to OncoGenex was U.S. Patent
number 6,900,187 having an expiration date of at least 2020; and the core antisense technology patents we
licensed to OncoGenex are U.S. Patent number 7,919,472 having an expiration date of 2026, its foreign
equivalents granted inAustralia and Canada, and its foreign equivalent pending under the European Patent
Convention. In addition, we agreed that so long as OncoGenex or its commercialization partner is using
commercially reasonable efforts to develop and commercialize custirsen, we will not research, develop or
commercialize an antisense compound designed to modulate clusterin. The amended agreement will continue
until OncoGenex or its commercialization partner is no longer developing or commercializing custirsen or until
we terminate the agreement for OncoGenex’s uncured failure to make a payment required under the agreement.
In December 2009, OncoGenex granted Teva the exclusive worldwide right and license to develop and
commercialize any products containing custirsen and related compounds, with OncoGenex having an option to
co-promote custirsen in the United States and Canada, for which we received $10 million of the upfront payment
OncoGenex received fromTeva. We are also eligible to receive 30 percent of up to $370 million in payments
OncoGenex may receive fromTeva in addition to royalties on any product sales of custirsen ranging between
3.88 percent and seven percent. Under the agreement, this royalty is due on a country-by-country basis until the
later of ten years following the first commercial sale of custirsen in the relevant country, and the expiration of
the last patent we assigned or licensed to OncoGenex that covers the making, using or selling of custirsen in
such country. OncoGenex recently announced that it executed an initial agreement with Teva to regain rights to
custirsen.
OGX-225
InAugust 2003, we and OncoGenex entered into a second and separate agreement for the development of
an antisense anti-cancer drug, OGX-225. OncoGenex is responsible for all development costs and activities, and
we have no further performance obligations. OncoGenex issued to us $0.8 million of OncoGenex securities as
payment for an upfront fee. In addition, OncoGenex will pay us substantive milestone payments totaling up to
$3.5 million for the achievement of development and regulatory milestones, including up to $1.5 million for the
achievement of development milestones and up to $2 million for the achievement of regulatory milestones. In
addition, we are eligible to receive royalties on future product sales of OGX-225. As of December 31, 2014,
OncoGenex had not achieved any milestone events related to OGX-225. We will earn the next milestone
payment of $0.5 million if OncoGenex initiates a Phase 2 study for OGX-225.
F-43
