Significant Agreements

12 Months Ended

Dec. 31, 2011

Significant Agreements [Abstract]

Significant Agreements

10. SIGNIFICANT AGREEMENTS

Eleos Agreement

In January 2007, the Company entered into a cross-license agreement with Eleos Inc. ("Eleos") for the development of antisense drugs targeting p53, a well-studied human protein that controls cellular response to genetic damage. Under the terms of the agreement, the Company granted Eleos an exclusive license to certain of the Company's intellectual property related to treatment of cancer with p53-related drugs. In return, Eleos granted an exclusive license to its intellectual property to the Company for treatment of most viral diseases with drugs that target p53. The companies are sharing rights under their respective intellectual property licensed under the agreement in other medical fields where targeting p53 may be therapeutically useful. Each company will pay to the other milestone payments and royalty payments ranging from low single digit percentages to low double digit percentages on net sales of products that utilize technology licensed under the agreement. In addition, Eleos made an upfront payment of $500,000 to the Company. The Company recognized license fees of $125,000 in each of 2010 and 2009 and all of the upfront payment has been recognized as revenue.

Charley's Fund Agreement

In October 2007, Charley's Fund, Inc. ("Charley's Fund"), a nonprofit organization that funds drug development and discovery initiatives specific to DMD, awarded the Company a $2.45 million research grant and, in May 2009, the grant authorization was increased to a total of $5.0 million. Pursuant to the related sponsored research agreement, the grant was provided to support the development of product candidates related to exon 50 skipping which utilize the Company's proprietary technologies. The grant requires the Company to make mid single-digit percentage royalty payments on net sales of any such products that are successfully commercialized up to the total amount received under the grant.

As of December 31, 2011, Charley's Fund has made payments of approximately $3.4 million to the Company. Revenue associated with this research and development arrangement is recognized based on the proportional performance method, using the payment received method. To date, the Company has recognized $60,000 as revenue, but did not recognize any revenue for the years ended December 31, 2011, 2010 and 2009. The Company does not expect to receive any incremental funding under the grant and has deferred $3.3 million of previous receipts which is anticipated to be recognized as revenue once the Company completes the remaining milestones and they are agreed to by Charley's Fund.