Commitments And Contingencies

12 Months Ended

Dec. 31, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

12. COMMITMENTS AND CONTINGENCIES

Lease Obligations

The Company leases office and laboratory facilities under various noncancelable operating leases through December 2020. In addition, the Company leases the land in Corvallis, Oregon upon which the industrial building owned by the Company is built—See "Note 2—Summary of Significant Accounting Polices." Rent expense under these leases was $2,498,000, $1,821,000 and $1,467,000 for 2011, 2010 and 2009, respectively.

The Company's corporate headquarters are located in Bothell, Washington. The Bothell facilities consist of office and laboratory space.

The Company has a one-time option to terminate the lease for its Bothell, Washington combined office and laboratory space effective as of June 2013. To exercise this option, the Company must pay the landlord a one-time termination fee of $207,000 and provide notice to the landlord by June 2012. The base rent for this facility is approximately $46,000 per month and the base rent on the Company's second Bothell facility is approximately $12,000 per month. The amount of base rent is subject to an annual increase of approximately 3% at each Bothell facility. The Company also has temporary office space with varying termination dates through July 2012 in Cambridge, Massachusetts. The space is governed by the terms of service agreements that do not create a tenancy interest, leasehold estate or other real property interest in the Company's favor. The monthly service fee is approximately $6,600 per month. The Company also leases additional laboratory and office space in Corvallis, Oregon. Monthly rent at the Corvallis, Oregon facility is approximately $72,000 per month and is subject to an annual increase of 3%. The Corvallis, Oregon land lease is approximately $700 per month and is subject to an annual increase of 1.5%.

The following table lists the locations, expiration dates and the square footage of the Company's principal leased properties as of December 31, 2011:

Location of Property	Square Footage		Lease Expiration Date
Cambridge, Massachusetts		1,058	July 2012
Bothell, Washington		8,398	December 2012
Bothell, Washington		19,108	November 2014
Corvallis, Oregon		53,000	December 2020
Corvallis, Oregon land lease		N/A	February 2042

At December 31, 2011, the aggregate non-cancelable future minimum payments under leases were as follows:

	Year ending December 31,
	(in thousands)
2012	$	2,536
2013		2,036
2014		2,034
2015		1,413
2016		1,456
Thereafter		6,496
Total minimum lease payments	$	15,971

Royalty Obligations

The Company has license agreements for which it is obligated to pay minimum royalties if the Company does not terminate the relevant agreement. The notice period to terminate these agreements is six months or less. Royalty payments under these agreements were $94,000, $100,000 and $75,000 for 2011, 2010 and 2009, respectively.

The Company is also obligated to pay royalties upon the net sales of DMD products. The royalty rates are in the low single-digit percentages for both inside and outside the United States. In addition, the Company is obligated to pay Charley's Fund a mid single-digit percentage royalty on the net sales of any exon 50 skipping product developed pursuant to the agreement with Charley's Fund up to a maximum of $3.4 million (see "Note 10 Significant Agreements").

The commercialization of other products in early stage development may require the payment of milestones or royalties upon commercialization.

Milestone Obligations

The Company has license agreements for which it is obligated to pay development milestones as a product candidate proceeds from the filing of an Investigational New Drug application through approval for commercial sale. During 2011, 2010 and 2009, the Company milestone payments were inconsequential.

Litigation

As of December 31, 2011, the Company was not a party to any material legal proceedings with respect to itself, its subsidiaries, or any of its material properties. In the normal course of business, the Company may from time to time be named as a party to various legal claims, actions and complaints, including matters involving employment, intellectual property, effects from the use of therapeutics utilizing its technology, or others. It is impossible to predict with certainty whether any resulting liability would have a material adverse effect on the Company's financial position, results of operations or cash flows.

Purchase Commitments

In the Company's continuing operations, it has entered into long-term contractual arrangements from time to time for the provision of goods and services. The following table presents noncancelable contractual obligations arising from these arrangements as of December 31, 2011:

	Year ending December 31,
	(in thousands)
2012	$	2,925
2013		—
2014		—
2015		—
2016		—
Thereafter		—
Total purchase commitments	$	2,925