Harbor Laboratory, we will pay a milestone payment of $0.5 million to the Cold Spring Harbor Laboratory for
the achievement of a key regulatory milestone. In addition, we will pay the Cold Spring Harbor Laboratory a
portion of any sublicense revenue and post licensing milestone payments up to $11.3 million we receive in
consideration for sublicensing the Cold Spring Harbor Laboratory’s technology and a royalty on sales of
ISIS-SMN
Rx
if our product incorporates the technology we licensed from the Cold Spring Harbor Laboratory.
8. Concentration of Business Risk
We have historically funded our operations from collaborations with corporate partners and a relatively
small number of partners have accounted for a significant percentage of our revenue. Revenue from significant
partners, which is defined as 10 percent or more of our total revenue, was as follows:
2014
2013
2012
Partner A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58% 25% 8%
Partner B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17% 24% 8%
Partner C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13% 20% 9%
Partner D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0% 22% 66%
Contract receivables from three significant partners comprised approximately 99 percent of our contract
receivables at December 31, 2014 and contract receivables from three significant partners comprised
approximately 91 percent of our contract receivables at December 31, 2013.
9. Employment Benefits
We have an employee 401(k) salary deferral plan, covering all employees. Employees may make
contributions by withholding a percentage of their salary up to the IRS annual limit ($17,500 and $23,000 in
2014 for employees under 50 years old and employees 50 years old or over, respectively). We made
approximately $1.0 million, $0.6 million and $0.5 million in matching contributions for the years ended
December 31, 2014, 2013 and 2012, respectively.
10. Legal Proceedings
From time to time, we are involved in legal proceedings arising in the ordinary course of our business.
Periodically, we evaluate the status of each legal matter and assess our potential financial exposure. If the
potential loss from any legal proceeding is considered probable and the amount can be reasonably estimated, we
accrue a liability for the estimated loss. Significant judgment is required to determine the probability of a loss
and whether the amount of the loss is reasonably estimable. The outcome of any proceeding is not determinable
in advance. As a result, the assessment of a potential liability and the amount of accruals recorded are based only
on the information available to us at the time. As additional information becomes available, we reassess the
potential liability related to the legal proceeding, and may revise our estimates. We do not believe, relative to our
current legal proceedings, that a loss is both probable and estimable. As such, as of December 31, 2014, we do
not have a liability related to any of our current legal proceedings, including the following matters.
Santaris Litigation
In September 2011, we filed a patent infringement lawsuit against Santaris PharmaA/S and Santaris Pharma
A/S Corp. in the United States District Court of the Southern District of California. Our infringement lawsuit
alleges that Santaris’ activities providing antisense drugs and antisense drug discovery services to several
pharmaceutical companies infringes U.S. Patent No. 6,326,199, entitled ‘‘Gapped 2’ Modified Oligonucleotides’’
and U.S. Patent No. 6,066,500, entitled ‘‘AntisenseModulation of Beta Catenin Expression.’’ In the lawsuit we
are seeking monetary damages and an injunction enjoining Santaris from conducting or participating in the
infringing activities. In December 2011, Santaris filed an answer to our complaint, denying our allegations, and
seeking a declaration from the court that Santaris has not, and does not, infringe the patents we asserted against
Santaris in the suit. In January 2012, Santaris filed a motion for summary judgment asking the court to decide as
a matter of law that Santaris’ activities do not infringe the patents we assert in the suit. In September 2012, the
court denied Santaris’ motion for summary judgment and opened limited discovery related to whether Santaris’
alleged infringing activities are permitted by the safe harbor under 35 U.S.C. Section 271(e)(1). InApril 2013,
we amended our complaint related to the lawsuit to include additional claims alleging that Santaris’ activities
providing antisense drugs and antisense drug discovery services to a pharmaceutical company infringes U.S.
Patent No. 6,440,739 entitled ‘‘AntisenseModulation of Glioma-Associated Oncogene-2 Expression’’; and that
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