SIGNIFICANT AGREEMENTS

6 Months Ended

Jun. 30, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

SIGNIFICANT AGREEMENTS

3. SIGNIFICANT AGREEMENT

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 and eteplirsen falls under the scope of the license agreement. Under the Amended and Restated UWA License Agreement, the Company may be required to pay a low-single-digit percentage royalty on net sales of products covered by issued patents licensed from UWA during the term of the Amended and Restated UWA License Agreement. However, the Company has the option to purchase future royalties up-front. Under this option, the Company may be required to make a one-time royalty payment of $30.0 million to UWA.

In June 2016, the Company and UWA entered into the first amendment to the Amended and Restated UWA License Agreement (the “First Amendment”). Under the First Amendment, the Company was obligated to make an up-front payment of $7.0 million to UWA upon execution of the amendment. Under the terms of the First Amendment, UWA has waived certain rights and amended the timing of certain payments under the Amended and Restated UWA License Agreement. The Company is still obligated to make $20.0 million payments to UWA upon successful achievement of certain commercial milestones.

For the three and six months ended June 30, 2016, the Company recorded $7.0 million relating to the up-front payment to UWA as research and development expense in the unaudited condensed consolidated statement of operations and comprehensive loss.