During 2014, 2013 and 2012 we did not earn any revenue from our relationship with Janssen.
Roche
InApril 2013, we formed an alliance with Hoffman-La Roche Inc. and F. Hoffmann-La Roche Ltd.,
collectively Roche, to develop treatments for Huntington’s disease based on our antisense technology. Roche has
the option to license the drugs from us through the completion of the first Phase 1 trial. Prior to option exercise,
we are responsible for the discovery and development of an antisense drug targeting HTT protein. If Roche
exercises its option, it will be responsible for global development, regulatory and commercialization activities for
any drug arising out of the collaboration. We are also working collaboratively with Roche on the discovery of an
antisense drug utilizing Roche’s ‘‘brain shuttle’’ program. Under the terms of the agreement, we received an
upfront payment of $30 million inApril 2013, which we are amortizing throughApril 2017. We are eligible to
receive up to $362 million in a license fee and milestone payments including up to $67 million for the
achievement of development milestones, up to $170 million for the achievement of regulatory milestones and up
to $80 million for the achievement of commercialization milestone payments. In addition, we are eligible to
receive up to $136.5 million in milestone payments for each additional drug successfully developed and up to
$50 million in commercial milestones if a drug using Roche’s proprietary brain shuttle technology is successfully
commercialized. We are also eligible to receive tiered royalties up to the mid-teens on any product sales of drugs
resulting from this alliance. We will earn the next milestone payment of $22 million if we initiate a Phase 1 trial
for a drug targeting HTT protein.
Our alliance with Roche will continue until the earlier of the date Roche’s option to obtain the exclusive
license under the agreement expires unexercised or, if Roche exercises its option, until the expiration of all
payment obligations under the agreement. In addition, the agreement may terminate early under the following
situations:
•
Roche may terminate the agreement at any time by providing written notice to us;
•
Either we or Roche may terminate the agreement by providing written notice to the other party upon
the other party’s uncured failure to perform a material obligation under the agreement or if the other
party becomes insolvent; and
•
Either we or Roche may terminate the brain shuttle program if at least one development candidate is
not designated under such program by a mutually agreed deadline.
During 2014 and 2013, we earned revenue of $8.7 million and $5.1 million, respectively from our
relationship with Roche.
Satellite Company Collaborations
Through our satellite company collaborations, we expand the reach and potential of RNA-targeting
therapeutics into disease areas that are outside of our core focus and advance certain RNA-targeting therapeutic
technologies. We refer to these companies as satellite companies, and this strategy as our satellite company
strategy. These relationships provide us with partners who are focused in a particular disease area and who share
the common goal of advancing our drugs. In these partnerships, we typically own equity in the company, often
as part of the licensing agreement, and we also retain the potential to earn milestone payments and royalties. For
example, we co-founded Regulus, a company focused on developing microRNA-targeted therapeutics in cancer,
fibrosis, atherosclerosis and viral infections, such as HCV. Regulus has developed strategic alliances with
high-quality partners such as Sanofi, Biogen Idec andAstraZeneca, fromwhich we have the potential to receive
a portion of future milestone payments and/or royalty payments under our agreement with Regulus. In 2014 and
2015, Regulus reported positive results on RG-101, Regulus’ first anti-miR drug in clinical development.
The value of our satellite company strategy is evident in the broad pipeline of drugs we and our partners are
developing to treat a wide range of diseases. Using their resources and their expertise, our partners are
instrumental in developing antisense drugs that we discovered or co-discovered but fall outside our main areas of
focus. We believe that our satellite company strategy allows us to realize opportunities outside of our therapeutic
focus while our committed and knowledgeable satellite company partner incurs the cost of development and
assumes the risk.
In addition to our satellite company partners that are advancing RNA-targeting therapeutics, we have
satellite company partners who take advantage of our dominant RNA-targeting intellectual property estate and
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