development and regulatory milestones, including up to $1.3 million for the achievement of development
milestones and up to $4.5 million for the achievement of regulatory milestones. In addition, we are eligible to
receive royalties on future product sales of the drug. We will earn the next milestone payment of $1.3 million if
OncoGenex initiates a Phase 3 study for apatorsen.
During 2014, 2013 and 2012, we did not earn any revenue from our relationship with OncoGenex.
Regulus Therapeutics Inc.
In September 2007, we andAlnylam established Regulus as a company focused on the discovery,
development and commercialization of microRNA-targeting therapeutics. Regulus combines our andAlnylam’s
technologies, know-how, and intellectual property relating to microRNA-targeting therapeutics. In addition,
Regulus has assembled a strong leadership teamwith corporate management, business and scientific expertise, a
board of directors that includes industry leaders in drug discovery and development, and a scientific advisory
board that consists of world-class scientists including some of the foremost authorities in the field of microRNA
research. We andAlnylam retain rights to develop and commercialize, on pre-negotiated terms, microRNA
therapeutic products that Regulus decides not to develop either by itself or with a partner.
Regulus is addressing therapeutic opportunities that arise from alterations in microRNAexpression. Since
microRNAs may act as master regulators of the genome, affecting the expression of multiple genes in a disease
pathway, microRNA therapeutics define a new platform for drug discovery and development and microRNAs
may also prove to be an attractive new biomarker tool for characterizing diseases. Regulus focuses its drug
discovery and development efforts in numerous therapeutic areas, including cancer, fibrosis, atherosclerosis and
viral infections, such as HCV, and currently has two drugs in development. Regulus is developing RG-101, an
anti-miR that targets microRNA-122, for the treatment of HCV infection. Regulus is also developing RG-012, an
anti-miR that targets microRNA-21, for the treatment of Alport Syndrome. We are eligible to receive royalties on
any future product sales of both of these drugs.
Regulus has strategic partnerships with Sanofi, Biogen Idec andAstraZeneca. We benefit fromRegulus’
strategic partnerships because we have the potential to receive a portion of upfront payments, future milestone
payments, and/or royalty payments. For example, under Regulus’ strategic partnership with Sanofi, and as a
result of our agreement with Regulus, we received 7.5 percent, or $1.9 million, of the $25 million upfront
payment.
During 2014, 2013 and 2012, we did not earn any revenue from our relationship with Regulus. During
2014, we sold a portion of our Regulus stock, resulting in a $19.9 million gain and proceeds of $22.9 million. As
of December 31, 2014, we remain a significant shareholder with approximately 5.5 million shares, approximately
11 percent of Regulus’ equity, with a net carrying value of $81.9 million.
External Project Funding
We are pursuing discovery and development projects that provide us with new therapeutic applications for
antisense drugs. These programs represent opportunities for us and our technology. In some cases, we have
funded these studies through support from our partners or disease advocacy groups and foundations. For
example, we received external funding support for our ALS and Huntington’s disease programs.
CHDI Foundation, Inc.
Starting in November 2007, CHDI provided financial and scientific support to our Huntington’s disease drug
discovery program through our development collaboration. InApril 2013, we formed an alliance with Roche to
develop treatments for Huntington’s disease. Under the terms of our agreement with CHDI, we will reimburse
CHDI for a portion of its support of our Huntington’s disease program out of the payments we receive from
Roche. In 2013, we made two payments to CHDI totaling $3 million associated with the progression of our
Huntington’s disease program, which we recorded as research and development expense. If we achieve
pre-specified milestones under our collaboration with Roche, we will make additional payments to CHDI. During
2013 and 2012, we earned revenue of $0.4 million and $2.0 million, respectively, from our relationship with
CHDI. During 2014, we did not earn any revenue from our relationship with CHDI.
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