Net Operating Loss Carryforward
At December 31, 2013, we had federal and California tax net operating loss carryforwards of approximately
$685.8 million and $894.9 million, respectively. We also had federal and California research credit carryforwards
of approximately $62.6 million and $22.2 million, respectively.
Liquidity and Capital Resources
We have financed our operations with revenue primarily from research and development collaborative
agreements. Additionally, we have earned revenue from the sale or licensing of our intellectual property. We have
also financed our operations through the sale of our equity securities and the issuance of long-term debt. From
our inception through December 31, 2014, we have earned approximately $1.5 billion in revenue from contract
research and development and the sale and licensing of our intellectual property. From the time we were founded
through December 31, 2014, we have raised net proceeds of approximately $1.1 billion from the sale of our
equity securities and we have borrowed approximately $1.3 billion under long-term debt arrangements to finance
a portion of our operations.
At December 31, 2014, we had cash, cash equivalents and short-term investments of $728.8 million and
stockholders’ equity of $257.8 million. In comparison, we had cash, cash equivalents and short-term investments
of $656.8 million and stockholders’ equity of $378.4 million at December 31, 2013. We received a substantial
amount of cash in 2014, including more than $230 million in payments from our partners, which demonstrates
our robust partnership strategy and advancing pipeline. Additionally, we received cash from the issuance of our
1 percent convertible notes and stock option exercises.
At December 31, 2014, we had consolidated working capital of $721.3 million compared to $637.7 million
at December 31, 2013. Working capital increased significantly in 2014 primarily due to the cash we received in
2014 from our partners and the increase in the carrying value of our investment in Regulus.
As of December 31, 2014, our debt and other obligations totaled $643.5 million compared to $283.5 million
at December 31, 2013. The increase was primarily due to the 1 percent senior convertible notes we issued in
November 2014, somewhat offset by the repurchase of $140 million principal amount of our 2¾ percent notes.
See Note 4
, Long-TermObligations and Commitments,
in the Notes to the Consolidated Financial Statements.
The following table summarizes our contractual obligations as of December 31, 2014. The table provides a
breakdown of when obligations become due. We provide a more detailed description of the major components of
our debt in the paragraphs following the table:
Payments Due by Period (inmillions)
Contractual Obligations
(selected balances described below)
Total
Less than
1 year 1-3 years 3-5 years
After
5 years
1 percent convertible senior notes
(principal and interest payable). . . . . . . . . $535.0 $ 5.0 $10.0 $10.0 $510.0
2¾ percent convertible senior notes
(principal and interest payable). . . . . . . . . $ 69.5 $ 1.5 $ 3.4 $64.6 $ —
Facility rent payments. . . . . . . . . . . . . . . . . . $131.8 $ 6.2 $13.1 $13.9 $ 98.6
Equipment financing arrangements
(principal and interest payable). . . . . . . . . $ 3.3 $ 2.8 $ 0.5 $ — $ —
Other obligations (principal and interest
payable) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.3 $ 0.1 $ 0.1 $ 0.1 $ 1.0
Capital lease. . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.2 $ 0.2 $ — $ — $ —
Operating leases. . . . . . . . . . . . . . . . . . . . . . . $ 25.1 $ 1.6 $ 3.0 $ 3.0 $ 17.5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $766.2 $17.4 $30.1 $91.6 $627.1
86
