We are also making progress on developing antisense drugs that are designed to target long, non-coding
RNAs. In 2014, we published a paper in Nature in which we were the first to show that targeted reduction of a
long non-coding RNAwith an antisense compound can ameliorate certain cognitive deficits in a mouse model of
angleman syndrome, or AS. Moreover, these studies demonstrate the potential therapeutic benefits of an antisense
compound for the treatment of AS.
Collaborative Arrangements and Licensing Agreements
Partnership Strategy
Overview
To maximize the value of our drugs and technologies, we have employed a multifaceted business and
partnering strategy, which has included a range of approaches to developing and commercializing products. Our
partnering strategy has allowed us to build a development pipeline of 38 drugs, to create a broad base of
potential license fees, milestone payments, royalties, profit sharing and earn out payments and to control our drug
development expenses. In this way, we remain a focused and efficient research and development organization
that can continue to discover new drugs and expand our and our partners’ pipelines. In 2014, we formedAkcea,
and began the next phase of our business strategy, to develop and commercialize the drugs from our lipid
franchise.
Through the efficiency of our drug discovery platformwe can develop drugs to almost any gene target. We
concentrate on developing antisense drugs in our core therapeutic areas with an emphasis on cardiovascular,
metabolic, severe and rare diseases, including neurological disorders, and cancer. Our partnering strategy
provides us the flexibility to license each of our drugs at what we believe is the optimal time to maximize the
near- and long-term value of our drugs. Using this strategy, we can expand our and our partners’ pipelines with
antisense drugs that we design to address significant medical needs while remaining small and focused. Just as
we have advanced and matured our technology and pipeline, we have evolved our partnering strategy in order to
maximize the value of each of our assets. We have a multifaceted partnering strategy that we employ; partnering
certain research programs or drugs early, partnering drugs after we have completed proof-of-concept, and
partnering drugs that we have advanced into later stages of development.
Preferred Partner Transactions
We form preferred partner transactions for certain therapeutic programs where a partner brings expertise that
we do not have in house and that could provide us with an increased likelihood of successfully bringing the
program to market. Typically these collaborations are focused on drugs in therapeutic areas of high risk, like
severe neurological diseases, or in areas in which Phase 2 results would likely not provide a significant increase
in value, like cancer. For these programs, we partner early, occasionally prior to clinical development. In this
way, we have a vested partner, such as withAstraZeneca, Biogen Idec, GSK, Janssen Pharmaceuticals and
Roche, early in the development of a drug. Typically, these preferred partner transactions allow us to develop
select drugs that could have significant commercial potential with a knowledgeable and committed partner with
the financial resources to fund later-stage clinical studies and expertise to complement our own development
efforts. As in our other partnerships, we benefit financially from upfront payments, milestone payments, licensing
fees and royalties.
Traditional Alliances
We form traditional partnering alliances that enable us to discover and conduct early development for drugs
in our pipeline that we feel could address large patient populations or multiple indications. For these drugs,
late-stage development is often costly and requires complex Phase 3 development programs. In this strategy, we
are responsible for clinical development to proof-of-concept, at which time we outlicense our drugs to partners,
such as when we licensed KYNAMRO to Genzyme, and build a broad base of license fees, milestone payments,
profit share and royalty income. For example, we have a broad portfolio of drugs to treat type 2 diabetes.
Because late-stage clinical development for type 2 diabetes can be large and expensive, we will seek a partner to
license these drugs and to conduct late-stage clinical development and commercialization. With the potentially
competitive benefit of our drugs over existing therapies and clinical proof-of-concept data, we believe that we
could license our type 2 diabetes drugs.
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