R&D Support
The following table sets forth information on R&D support costs (in thousands):
Year Ended
December 31,
2013
2012
Personnel costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,571 $ 9,231
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,897 6,909
Patent expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,321 3,868
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,464 3,129
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,108 1,143
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,293 3,104
Total R&D support costs, excluding non-cash compensation expense
related to equity awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,654 27,384
Non-cash compensation expense related to equity awards. . . . . . . . . . . . . . . .
2,298 1,657
Total R&D support costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,952 $29,041
R&D support costs for the year ended December 31, 2013 were $33.7 million compared to $27.4 million for
2012. Expenses increased in 2013 compared to the same period in 2012 primarily due to non-cash charges for
patents and patent applications that we wrote off in 2013 due to a careful restructuring of our patent portfolio to
focus our resources on patents and new patent applications that drive value for our company. All amounts
exclude non-cash compensation expense related to equity awards.
General and Administrative Expenses
The following table sets forth information on general and administrative expenses (in thousands):
Year Ended
December 31,
2013
2012
General and administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,173 $11,190
Non-cash compensation expense related to equity awards. . . . . . . . . . . . . . . .
1,745 1,325
Total general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,918 $12,515
General and administrative expenses for the year ended December 31, 2013 were $13.2 million and
increased compared to $11.2 million for 2012 primarily due to higher personnel expenses. All amounts exclude
non-cash compensation expense related to equity awards.
Equity in Net Loss of Regulus Therapeutics Inc.
We recognized $1.4 million for equity in net loss of Regulus for the year ended December 31, 2012. We
used the equity method of accounting to account for our investment in Regulus until Regulus’ IPO in October
2012. We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our
ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’
operating and financial policies. Therefore, we did not recognize any equity in net loss of Regulus in 2013.
Investment Income
Investment income for the year ended December 31, 2013 totaled $2.1 million compared to $1.8 million for
2012. The increase in investment income was primarily due to a higher average cash balance and increases in
yields.
Interest Expense
Interest expense includes non-cash amortization of the debt discount and debt issuance costs on our
convertible notes, non-cash interest expense related to the long-term financing liability for our primary facility,
and interest expense payable in cash for our convertible notes and other miscellaneous debt related items.
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