Santaris induced its actual and prospective pharmaceutical partners to infringe U.S. Patent No. 6,326,199. In
December 2013, Santaris filed a newmotion for summary judgment asking the court to decide as a matter of law
that Santaris’ alleged infringing activities are permitted by the safe harbor under 35 U.S.C. Section 271(e)(1). On
February 27, 2014, the court denied this motion.
InMarch 2014, Santaris filed a motion asking the court to decide that Santaris’ alleged infringing sales of
Isis’ patented methods are not actionable as a matter of law. In June 2014, the court granted Santaris’ motion and
dismissed our allegations to the extent the allegations are based on Santaris’ sale or offer for sale of such method
claims; and that we did not plead sufficient facts to establish that Santaris entering into its agreement with Enzon
constituted the sale or offer for sale of the compounds claimed in U.S. Patent No. 6,066,500 and U.S. Patent No.
6,440,739. The rest of the case is proceeding, and on October 17, 2014, we filed an amended complaint to plead
additional facts and assert Santaris infringed U.S. Patent No. 6,066,500 and U.S. Patent No. 6,440,739 through
Santaris’ agreement with Enzon.
Gilead Litigation
InAugust 2013, Gilead Sciences Inc. filed a suit in the United States District Court of the Northern District
of California related to United States Patent Nos. 7,105,499 and 8,481,712 that are jointly owned byMerck
Sharp &Dohme Corp. and Isis Pharmaceuticals, Inc. In the suit Gilead is asking the court to determine that
Gilead’s activities do not infringe any valid claim of the named patents and that the patents are not valid. we and
Merck Sharp &Dohme Corp. filed our answer denying Gilead’s noninfringement and invalidity contentions,
contending that Gilead’s commercial sale and offer for sale of sofosbuvir prior to the expiration of the ’499 and
’712 patents will infringe those patents, and requesting monetary damages to compensate for such infringement.
Under our agreement withMerck, Merck is responsible for the costs of this suit.
11. Quarterly Financial Data (Unaudited)
The following financial information reflects all normal recurring adjustments, which are, in the opinion of
management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for
the years ended December 31, 2014 and 2013 are as follows (in thousands, except per share data).
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2014 Quarters
Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,161 $ 57,076 $ 44,063 $84,861
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .
57,828 63,726 65,556 74,781
Income (loss) from operations . . . . . . . . . . . . . . . .
(29,667)
(6,650) (21,493) 10,080
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $(31,280) $(12,081) $(26,676) $31,053
Basic net income (loss) per share (1) . . . . . . . . . . $ (0.27) $ (0.10) $ (0.23) $ 0.26
Diluted net income (loss) per share (1) (2) . . . . . . $ (0.27) $ (0.10) $ (0.23) $ 0.25
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2013 Quarters
Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $43,360 $ 38,092 $ 23,585 $ 42,248
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .
41,735 46,020 49,090 62,106
Income (loss) from operations . . . . . . . . . . . . . . . .
1,625 (7,928) (25,505) (19,858)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,672) $(10,126) $(24,570) $(24,276)
Basic and diluted net loss per share (1). . . . . . . . . $ (0.02) $ (0.09) $ (0.21) $ (0.21)
(1) We computed net income (loss) per share independently for each of the quarters presented. Therefore, the sum of the quarterly net
income (loss) per share will not necessarily equal the total for the year.
(2) For the fourth quarter of 2014, we had net income and as a result we computed diluted net income per share using the
weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common
equivalent shares for the three months ended December 31, 2014 consisted of:
•
4.2 million shares issuable upon exercise of stock options
•
0.4 million shares issuable upon restricted stock award issuance; and
•
0.009 million shares issuable related to our ESPP.
The calculation excludes the 1 percent and 2¾ percent convertible senior notes because the effect on diluted earnings per share would
be anti-dilutive.
F-47
