Antisense Drug Development
The following table sets forth expenses for our major antisense drug development projects (in thousands):
Year Ended
December 31,
2014
2013
KYNAMRO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,359 $ 7,653
ISIS-TTR
Rx
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,927 4,174
ISIS-SMN
Rx
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,064 6,938
ISIS-APOCIII
Rx
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,337 5,730
Other antisense development products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,913 29,129
Development overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,318 24,171
Total antisense drug development, excluding non-cash compensation
expense related to equity awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,918 77,795
Non-cash compensation expense related to equity awards. . . . . . . . . . . . . . . .
9,640 3,202
Total antisense drug development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $130,558 $80,997
Antisense drug development expenditures were $120.9 million for the year ended December 31, 2014
compared to $77.8 million for 2013. Expenses in 2014 were higher compared to 2013 primarily due to the
progression of numerous drugs in our pipeline into later stage clinical trials, including our three drugs currently
in Phase 3 trials. As drugs move forward to more advanced stages of development, including into larger, longer
clinical studies the costs of development increase. Beginning in the second half of 2013, we initiated Phase 2
studies for several of the drugs in our pipeline, which are ongoing, and we advanced several drugs into clinical
development. In addition, we incurred more costs in 2014 compared to 2013 associated with the clinical studies
of ISIS-TTR
Rx
, ISIS-SMN
Rx
and ISIS-APOCIII
Rx
, as we continued to advance those drugs. We began separately
disclosing ISIS-SMN
Rx
and ISIS-APOCIII
Rx
in the table above in 2014 because we initiated Phase 3 trials for
these drugs during the year. All amounts exclude non-cash compensation expense related to equity awards. In
2014, we began presenting salaries and benefits in the development overhead costs line in our antisense drug
development table. We have adjusted 2013 to conform to the current year presentation.
We may conduct multiple clinical trials on a drug candidate, including multiple clinical trials for the various
indications we may be studying. Furthermore, as we obtain results from trials we may elect to discontinue
clinical trials for certain drug candidates in certain indications in order to focus our resources on more promising
drug candidates or indications. Our Phase 1 and Phase 2 programs are clinical research programs that fuel our
Phase 3 pipeline. When our products are in Phase 1 or Phase 2 clinical trials, they are in a dynamic state in
which we may adjust the development strategy for each product. Although we may characterize a product as ‘‘in
Phase 1’’ or ‘‘in Phase 2,’’ it does not mean that we are conducting a single, well-defined study with dedicated
resources. Instead, we allocate our internal resources on a shared basis across numerous products based on each
product’s particular needs at that time. This means we are constantly shifting resources among products.
Therefore, what we spend on each product during a particular period is usually a function of what is required to
keep the products progressing in clinical development, not what products we think are most important. For
example, the number of people required to start a new study is large, the number of people required to keep a
study going is modest and the number of people required to finish a study is large. However, such fluctuations
are not indicative of a shift in our emphasis from one product to another and cannot be used to accurately predict
future costs for each product. And, because we always have numerous drugs in preclinical and early stage
clinical research, the fluctuations in expenses from drug to drug, in large part, offset one another. If we partner a
drug, it may affect the size of a trial, its timing, its total cost and the timing of the related costs. As part of our
collaboration with Genzyme, we have transitioned development responsibility for KYNAMRO to Genzyme. We
and Genzyme share development costs equally until KYNAMRO is profitable.
Manufacturing and Operations
Expenditures in our manufacturing and operations function consist primarily of personnel costs, specialized
chemicals for oligonucleotide manufacturing, laboratory supplies and outside services. This function is
responsible for providing drug supplies to antisense drug discovery and antisense drug development, including
the analytical testing to satisfy good laboratory and good manufacturing practices requirements.
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