3. SIGNIFICANT AGREEMENTS

University of Western Australia

In April 2013, the Company and the University of Western Australia (“UWA”) entered into an agreement under which an existing exclusive license agreement between the Company and UWA was amended and restated (“the Amended and Restated UWA License Agreement”). The Amended and Restated UWA License Agreement grants the Company specific rights to the treatment of DMD by inducing the skipping of certain exons. The Company’s lead clinical candidate, eteplirsen, falls under the scope of the license granted under the Amended and Restated UWA License Agreement. Any future drug candidates developed for the treatment of DMD by exon skipping may or may not fall under the scope of the Amended and Restated UWA License Agreement.

Under the Amended and Restated UWA License Agreement, the Company is required to meet certain performance diligence obligations related to development and commercialization of products developed under the license. The Company believes that it is currently in compliance with these obligations. In 2013, the Company made an initial upfront payment to UWA of $1.1 million upon execution of the Amended and Restated UWA License Agreement. The Company may be required to make additional payments to UWA of up to $6 million in aggregate based on successful achievement of certain regulatory and commercial milestones relating to eteplirsen and up to five additional product candidates and may also be required to pay royalties of single-digit percentages on net sales of products covered by issued patents licensed from UWA during the term of the Amended and Restated UWA License Agreement. As of December 31, 2014, the Company is not under any current obligation to make royalty payments to UWA until achievement of the first commercial sale.

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 research grant of approximately $2.5 million 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, 2014, 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. To date, the Company has recognized less than $0.1 million as revenue and did not recognize any revenue for the years ended December 31, 2014, 2013 or 2012. The Company does not expect to receive any incremental funding under the grant and has deferred $3.3 million of previous receipts which are anticipated to be recognized as revenue upon resolution of outstanding performance obligations.

Isis—Ercole Agreement

In May 2003, Ercole Biotechnology, Inc. (“Ercole”) and Isis Pharmaceuticals, Inc. (“Isis”) entered into a collaboration and license agreement related to RNA splicing. Research collaboration activity defined in the agreement expired in 2006. In March 2008, the Company acquired all of the stock of Ercole in exchange for 5,811,721 shares of the Company’s common stock valued at approximately $8.4 million and the assumption of approximately $1.8 million in liabilities of Ercole. The Company also issued warrants to purchase its common stock (also classified as equity), which were valued at $0.4 million, in exchange for certain outstanding warrants issued by Ercole. In connection with the March 2008 acquisition, the Company assumed Ercole’s obligations under the Isis agreement. This agreement contains several cross-licenses between the parties granting each party certain exclusive and nonexclusive rights under a selected set of the other parties’ patents and patent applications for the research, development, and commercialization of antisense therapeutics using RNA splicing with respect to certain gene targets.

Subject to the satisfaction of certain milestones triggering the obligation to make any such payments, the Company may be obligated to make milestone payments to Isis of up to $23.4 million in the aggregate for each product developed under a licensed patent under this agreement. As of December 31, 2014, the Company has not made, and is not under any current obligation to make, any such milestone payments, as the conditions triggering any such milestone payment obligations have not been satisfied. The range of percentage royalty payments required to be made by the Company under the terms of this agreement is from a fraction of a percent to mid-single-digit percentages. The Company believes that its DMD and infectious disease programs will not fall under the scope of this agreement and therefore will not be subject to milestone or royalty obligations under its provisions.

Subject to the satisfaction of certain milestones triggering the obligation to make any such payments, Isis may be obligated to make milestone payments to the Company of up to $21.1 million in the aggregate for each product developed under a licensed patent under this agreement. As of December 31, 2014, Isis has not made, and is not under any current obligation to make, any such milestone payments, as the conditions triggering any such milestone payment obligations have not been satisfied. The percentage royalty payments required to be made by Isis under the terms of this agreement is a fraction of a percent.

As to any product commercialized under the agreement, the agreement will terminate on the expiration date of the last to expire licensed patent covering such product. The last to expire Sarepta-owned patent covered under this agreement expired on September 9, 2014. The last Isis-owned patent covered under this agreement expires on March 27, 2028. In addition, either party may terminate this agreement in the event:

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a material breach by the other party is not cured within a specified period of time; or

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the other party commences bankruptcy, reorganization, liquidation or receivership proceedings or upon the assignment of a substantial portion of the assets for the benefit of creditors by the other party with certain exceptions.