Ionis Pharmaceuticals (IONS) 10-K3 Mar 142013 FY Annual reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2013	Feb. 21, 2014	Jun. 30, 2013
Document and Entity Information	'	'	'
Entity Registrant Name	'ISIS PHARMACEUTICALS INC	'	'
Entity Central Index Key	'0000874015	'	'
Document Type	'10-K	'	'
Document Period End Date	31-Dec-13	'	'
Amendment Flag	'false	'	'
Current Fiscal Year End Date	'--12-31	'	'
Entity Well-known Seasoned Issuer	'Yes	'	'
Entity Voluntary Filers	'No	'	'
Entity Current Reporting Status	'Yes	'	'
Entity Filer Category	'Large Accelerated Filer	'	'
Entity Public Float	'	'	$2,572,530,925
Entity Common Stock, Shares Outstanding	'	117,270,225	'
Document Fiscal Year Focus	'2013	'	'
Document Fiscal Period Focus	'FY	'	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:	'	'
Cash and cash equivalents	$159,973	$124,482
Short-term investments	496,788	249,964
Contracts receivable	11,102	522
Inventories	8,033	6,121
Investment in Regulus Therapeutics Inc.	52,096	33,622
Other current assets	7,518	8,727
Total current assets	735,510	423,438
Property, plant and equipment, net	86,198	91,084
Licenses, net	4,572	6,579
Patents, net	15,517	18,646
Deposits and other assets	5,359	5,939
Total assets	847,156	545,686
Current liabilities:	'	'
Accounts payable	11,009	10,239
Accrued compensation	12,168	7,878
Accrued liabilities	22,092	15,401
Current portion of long-term obligations	4,408	4,879
Current portion of deferred contract revenue	48,135	35,925
Total current liabilities	97,812	74,322
Long-term deferred contract revenue	142,790	66,656
2 3/4 percent convertible senior notes	150,334	143,990
Long-term obligations, less current portion	6,542	7,402
Long-term financing liability for leased facility	71,288	70,550
Total liabilities	468,766	362,920
Stockholders' equity:	'	'
Common stock, $0.001 par value; 200,000,000 shares authorized, 116,471,371 and 101,481,134 shares issued and outstanding at December 31, 2013 and 2012, respectively	116	102
Additional paid-in capital	1,324,804	1,077,150
Accumulated other comprehensive income	21,080	12,480
Accumulated deficit	-967,610	-906,966
Total stockholders' equity	378,390	182,766
Total liabilities and stockholders' equity	$847,156	$545,686

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS	'	'
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	116,471,371	101,481,134
Common stock, shares outstanding	116,471,371	101,481,134

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenue:	'	'	'
Research and development revenue under collaborative agreements	$144,194	$96,415	$96,190
Licensing and royalty revenue	3,091	5,634	2,896
Total revenue	147,285	102,049	99,086
Expenses:	'	'	'
Research, development and patent expenses	184,033	158,458	157,397
General and administrative	14,918	12,515	12,789
Total operating expenses	198,951	170,973	170,186
Loss from operations	-51,666	-68,924	-71,100
Other income (expense):	'	'	'
Equity in net loss of Regulus Therapeutics Inc.	'	-1,406	-3,554
Investment income	2,085	1,844	2,414
Interest expense	-19,355	-21,152	-16,732
Gain on investments, net	2,378	1,465	4,182
Gain on investment in Regulus Therapeutics Inc.	'	18,356	'
Loss on early retirement of debt	'	-4,770	'
Loss before income tax benefit (expense)	-66,558	-74,587	-84,790
Income tax benefit (expense)	5,914	9,109	-11
Net loss	($60,644)	($65,478)	($84,801)
Basic and diluted net loss per share (in dollars per share)	($0.55)	($0.65)	($0.85)
Shares used in computing basic net loss per share (in shares)	110,502	100,576	99,656
Shares used in computing diluted net loss per share (in shares)	110,502	100,576	99,656

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	'	'	'
Net loss	($60,644)	($65,478)	($84,801)
Unrealized gains (losses) on investments, net of tax	10,253	13,250	-1,719
Reclassification adjustment for realized gains included in net loss	-1,653	'	'
Comprehensive loss	($52,044)	($52,228)	($86,520)

CONSOLIDATED_STATEMENTS_OF_STO

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Total	Common stock	Additional paid in capital	Accumulated other comprehensive income (loss)	Accumulated deficit
In Thousands, except Share data, unless otherwise specified	Total	Common stock	Additional paid in capital	Accumulated other comprehensive income (loss)	Accumulated deficit
Balance at Dec. 31, 2010	$244,542	$99	$1,000,181	$949	($756,687)
Balance (in shares) at Dec. 31, 2010	'	99,394,000	'	'	'
Increase (Decrease) in Stockholders' Equity	'	'	'	'	'
Net loss	-84,801	'	'	'	-84,801
Change in unrealized gains (losses), net of tax	-1,719	'	'	-1,719	'
Issuance of common stock in connection with employee stock plans	3,567	1	3,566	'	'
Issuance of common stock in connection with employee stock plans (in shares)	'	646,000	'	'	'
Warrants exercised (in shares)	'	3,000	'	'	'
Share-based compensation expense	9,845	'	9,845	'	'
Balance at Dec. 31, 2011	171,434	100	1,013,592	-770	-841,488
Balance (in shares) at Dec. 31, 2011	'	100,043,000	'	'	'
Increase (Decrease) in Stockholders' Equity	'	'	'	'	'
Net loss	-65,478	'	'	'	-65,478
Change in unrealized gains (losses), net of tax	13,250	'	'	13,250	'
Issuance of common stock in connection with employee stock plans	9,470	2	9,468	'	'
Issuance of common stock in connection with employee stock plans (in shares)	'	1,438,000	'	'	'
2 5/8 percent convertible subordinated notes redemption, equity portion	-12,041	'	-12,041	'	'
2 3/4 percent convertible senior notes, equity portion, net of issuance costs	57,560	'	57,560	'	'
Share-based compensation expense	8,571	'	8,571	'	'
Balance at Dec. 31, 2012	182,766	102	1,077,150	12,480	-906,966
Balance (in shares) at Dec. 31, 2012	'	101,481,000	'	'	'
Increase (Decrease) in Stockholders' Equity	'	'	'	'	'
Net loss	-60,644	'	'	'	-60,644
Change in unrealized gains (losses), net of tax	8,600	'	'	8,600	'
Issuance of common stock in connection with employee stock plans	62,958	5	62,953	'	'
Issuance of common stock in connection with employee stock plans (in shares)	'	5,372,000	'	'	'
Issuance of public common stock	173,292	9	173,283	'	'
Issuance of public common stock (in shares)	'	9,618,000	'	'	'
Share-based compensation expense	11,418	'	11,418	'	'
Balance at Dec. 31, 2013	$378,390	$116	$1,324,804	$21,080	($967,610)
Balance (in shares) at Dec. 31, 2013	'	116,471,000	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities:	'	'	'
Net loss	($60,644)	($65,478)	($84,801)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'	'
Depreciation	6,591	7,074	6,594
Amortization of patents	1,184	1,224	1,938
Amortization of licenses	2,007	2,457	3,252
Amortization of premium on investments, net	5,572	4,193	5,410
Amortization of debt issuance costs	415	619	507
Amortization of 2 5/8 percent convertible subordinated notes discount	'	6,169	8,553
Amortization of 2 3/4 percent convertible senior notes discount	6,344	2,268	'
Amortization of long-term financing liability for leased facility	6,567	6,503	2,872
Share-based compensation expense	11,418	8,571	9,845
Equity in net loss of Regulus Therapeutics Inc.	'	1,406	3,554
Gain on investment in Regulus Therapeutics Inc.	'	-18,356	'
Loss on early retirement of debt	'	4,770	'
Gain on investments, net	-2,378	-1,465	-4,182
Non-cash losses related to patents, licensing and property, plant and equipment	6,306	825	1,924
Tax benefit from other unrealized gains on securities	-5,914	-9,111	'
Changes in operating assets and liabilities:	'	'	'
Contracts receivable	-10,580	6,399	-5,679
Inventories	-1,912	-1,982	-1,655
Other current and long-term assets	-1,091	279	914
Accounts payable	66	1,292	875
Accrued compensation	4,290	-1,305	2,352
Deferred rent	217	255	382
Accrued liabilities	6,691	-3,254	6,273
Deferred contract revenue	88,344	48,523	-70,857
Net cash provided by (used in) operating activities	63,493	1,876	-111,929
Investing activities:	'	'	'
Purchases of short-term investments	-425,554	-217,877	-371,108
Proceeds from the sale of short-term investments	172,762	242,659	488,918
Purchases of property, plant and equipment	-1,552	-1,479	-10,203
Acquisition of licenses and other assets, net	-3,810	-3,691	-3,667
Investment in Regulus Therapeutics Inc.	'	-3,000	'
Purchases of strategic investments	'	-790	-359
Proceeds from the sale of strategic investments	2,428	2,177	4,445
Net cash (used in) provided by investing activities	-255,726	17,999	108,026
Financing activities:	'	'	'
Proceeds from equity awards	62,958	9,470	3,567
Proceeds from issuance of 2 3/4 percent convertible senior notes, net of issuance costs	'	194,697	'
Principal and premium payment on redemption of the 2 5/8 percent convertible subordinated notes	'	-163,718	'
Proceeds from public common stock offering	173,292	'	'
Proceeds from equipment financing arrangement	2,513	9,100	1,625
Principal payments on debt and capital lease obligations	-11,039	-10,419	-5,864
Net cash provided by (used in) financing activities	227,724	39,130	-672
Net increase (decrease) in cash and cash equivalents	35,491	59,005	-4,575
Cash and cash equivalents at beginning of year	124,482	65,477	70,052
Cash and cash equivalents at end of year	159,973	124,482	65,477
Supplemental disclosures of cash flow information:	'	'	'
Interest paid	6,000	5,770	4,804
Income taxes paid, net of refund received	2	2	2
Supplemental disclosures of non-cash investing and financing activities:	'	'	'
Amounts accrued for capital and patent expenditures	704	647	902
Capitalized costs and financing liability associated with leased facility	'	'	$59,730

Organization_and_Significant_A

Organization and Significant Accounting Policies	12 Months Ended
	Dec. 31, 2013
Organization and Significant Accounting Policies	'
Organization and Significant Accounting Policies	'
	1. Organization and Significant Accounting Policies

	Basis of Presentation

	The consolidated financial statements include the accounts of Isis Pharmaceuticals, Inc. (“we”, “us” or “our”) and our wholly owned subsidiary, Symphony GenIsis, Inc., which is currently inactive. In addition to our wholly owned subsidiary, our consolidated financial statements include our equity investment in Regulus Therapeutics Inc. In October 2012, Regulus completed an initial public offering (IPO). We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies.

	Organization and business activity

	We incorporated in California on January 10, 1989. In conjunction with our initial public offering, we reorganized as a Delaware corporation in April 1991. We were organized principally to develop human therapeutic drugs using antisense technology.

	Basic and diluted net loss per share

	We compute basic net loss per share by dividing the net loss by the weighted-average number of common shares outstanding during the period. As we incurred a net loss for the years ended December 31, 2013, 2012 and 2011, we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Common stock from the following would have had an anti-dilutive effect on net loss per share:

	· 23¤4 percent convertible senior notes;
	· 25/8 percent convertible subordinated notes;
	· GlaxoSmithKline, or GSK, convertible promissory notes issued by Regulus;
	· Dilutive stock options;
	· Unvested restricted stock units; and
	· Warrants issued to Symphony GenIsis Holdings LLC.

	In April 2011, Symphony GenIsis Holdings LLC exercised its warrants. As a result, the Symphony GenIsis warrants were not common equivalent shares for the years ended December 31, 2013 and 2012. We redeemed all of our 25¤8 percent notes in September 2012 and in October 2012 Regulus completed an IPO, after which we were no longer guarantors of the two convertible notes that Regulus issued to GSK. As a result, the 25¤8 percent notes and GSK convertible promissory notes were not common equivalent shares for the year ended December 31, 2013.

	Revenue Recognition

	We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred revenue on our consolidated balance sheet.

	Research and development revenue under collaborative agreements

	Our collaboration agreements typically contain multiple elements, or deliverables, including technology licenses or options to obtain technology licenses, research and development services, and in certain cases manufacturing services. Our collaborations may provide for various types of payments to us including upfront payments, funding of research and development, milestone payments, licensing fees, profit sharing and royalties on product sales. We evaluate the deliverables in our collaboration agreements to determine whether they meet the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. When the delivered items in an arrangement have “stand-alone value” to our customer, we account for the deliverables as separate units of accounting and we allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Delivered items have stand-alone value if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis. We use the following hierarchy of values to estimate the selling price of each deliverable: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price, or BESP. The BESP reflects our best estimate of what the selling price would be if we regularly sold the deliverable on a stand-alone basis. We recognize the revenue allocated to each unit of accounting as we deliver the related goods or services. If we determine that we should treat certain deliverables as a single unit of accounting, then we recognize the revenue ratably over our estimated period of performance.

	In December 2012, we entered into a collaboration agreement with AstraZeneca to discover and develop antisense therapeutics against five cancer targets. As part of the collaboration, we received a $25 million upfront payment in December 2012 and a $6 million payment in June 2013 when AstraZeneca elected to continue the research collaboration. We are also eligible to receive milestone payments, license fees for the research program targets and royalties on any product sales of drugs resulting from this collaboration. In exchange, we granted AstraZeneca an exclusive license to develop and commercialize ISIS-STAT3Rx and ISIS-ARRx. We also granted AstraZeneca options to license up to three cancer drugs under the separate research program. We are responsible for completing an ongoing clinical study of ISIS-STAT3Rx and IND-enabling studies for ISIS-ARRx. AstraZeneca is responsible for all other global development, regulatory and commercialization activities for ISIS-STAT3Rx and ISIS-ARRx. In addition, if AstraZeneca exercises its option for any drugs resulting from the research program, AstraZeneca will assume global development, regulatory and commercialization responsibilities for such drug. Since this agreement has multiple elements, we evaluated the deliverables in this arrangement and determined that certain deliverables, either individually or in combination, have stand-alone value. Below is a list of the four separate units of accounting under our agreement:

	· The exclusive license we granted to AstraZeneca to develop and commercialize ISIS-STAT3Rx for the treatment of cancer;
	· The development services we are performing for ISIS-STAT3Rx;
	· The exclusive license we granted to AstraZeneca to develop and commercialize ISIS-ARRx and the research services we are performing for ISIS-ARRx; and
	· The option to license up to three drugs under a research program and the research services we will perform for this program.

	We determined that the ISIS-STAT3Rx license had stand-alone value because it is an exclusive license that gives AstraZeneca the right to develop ISIS-STAT3Rx or to sublicense its rights. In addition, ISIS-STAT3Rx is currently in development and it is possible that AstraZeneca or another third party could conduct clinical trials without assistance from us. As a result, we consider the ISIS-STAT3Rx license and the development services for ISIS-STAT3Rx to be separate units of accounting. We recognized the portion of the consideration allocated to the ISIS-STAT3Rx license immediately because we delivered the license and earned the revenue. We are recognizing as revenue the amount allocated to the development services for ISIS-STAT3Rx over the period of time we perform services. The ISIS-ARRx license is also an exclusive license. Because of the early stage of research for ISIS-ARRx, we believe that our knowledge and expertise with antisense technology is essential for AstraZeneca or another third party to successfully develop ISIS-ARRx. As a result, we concluded that the ISIS-ARRx license does not have stand-alone value and we combined the ISIS-ARRx license and related research services into one unit of accounting. We are recognizing revenue for the combined unit of accounting over the period of time we perform services. We determined that the options under the research program did not have stand-alone value because AstraZeneca cannot develop or commercialize drugs resulting from the research program until AstraZeneca exercises the respective option or options. As a result, we considered the research options and the related research services as a combined unit of accounting. We are recognizing revenue for the combined unit of accounting over the period of our performance.

	We determined that the initial allocable arrangement consideration was the $25 million upfront payment because it was the only payment that was fixed and determinable when we entered into the agreement. In June 2013, we increased the allocable consideration to $31 million when we received the $6 million payment. There was considerable uncertainty at the date of the agreement as to whether we would earn the milestone payments, royalty payments, payments for manufacturing clinical trial materials or payments for finished drug product. As such, we did not include those payments in the allocable consideration.

	We allocated the allocable consideration based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation expert to assist us with determining BESP. We estimated the selling price of the licenses granted for ISIS-STAT3Rx and ISIS-ARRx by using the relief from royalty method. Under this method, we estimated the amount of income, net of taxes, for each drug. We then discounted the projected income for each license to present value. The significant inputs we used to determine the projected income of the licenses included:

	· Estimated future product sales;
	· Estimated royalties on future product sales;
	· Contractual milestone payments;
	· Expenses we expect to incur;
	· Income taxes; and
	· An appropriate discount rate.

	We estimated the selling price of the research and development services by using our internal estimates of the cost to perform the specific services, marked up to include a reasonable profit margin, and estimates of expected cash outflows to third parties for services and supplies over the expected period that we will perform research and development. The significant inputs we used to determine the selling price of the research and development services included:

	· The number of internal hours we will spend performing these services;
	· The estimated number and cost of studies we will perform;
	· The estimated number and cost of studies that we will contract with third parties to perform; and
	· The estimated cost of drug product we will use in the studies.

	As a result of the allocation, we recognized $9.3 million of the $25 million upfront payment for the ISIS-STAT3Rx license in December 2012 and we recognized $2.2 million of the $6 million payment for the ISIS-STAT3Rx license in June 2013. We are recognizing the remaining $19.5 million of the $31 million over the estimated period of our performance. Assuming a constant selling price for the other elements in the arrangement, if there was an assumed ten percent increase or decrease in the estimated selling price of the ISIS-STAT3Rx license, we determined that the revenue we would have allocated to the ISIS-STAT3Rx license would change by approximately seven percent, or $750,000, from the amount we recorded.

	Typically, we must estimate our period of performance when the agreements we enter into do not clearly define such information. Our collaborative agreements typically include a research and/or development project plan outlining the activities the agreement requires each party to perform during the collaboration. We estimate the period of time over which we will complete the activities for which we are responsible and use that period of time as our period of performance for purposes of revenue recognition and amortize revenue over such period. We have made estimates of our continuing obligations under numerous agreements and in certain instances the timing of satisfying these obligations is difficult to estimate. Accordingly, our estimates may change in the future. If our estimates and judgments change over the course of these agreements, it may affect the timing and amount of revenue that we recognize in future periods. For example, in 2013 we adjusted the period of performance on our GSK collaboration and our ISIS-SMNRx collaboration with Biogen Idec. As a result of adding two new development candidates, ISIS-GSK3Rx and ISIS-GSK4Rx, to our collaboration with GSK, our period of performance was extended beyond our initial estimate. Therefore, we extended the amortization period to correspond to the new extended period of performance. Similarly, with our ISIS-SMNRx collaboration, we extended the amortization period to correspond to the expansion of the Phase 3 study in infants with SMA. Since we extended the amortization period for our GSK collaboration and our ISIS-SMNRx collaboration, the amortization from the upfront payments for these collaborations will be $2.6 million less in 2014 compared to 2013.

	From time to time, we may enter into separate agreements at or near the same time with the same customer. We evaluate such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. We evaluate whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. For example, since early 2012 we have entered into four collaboration agreements with Biogen Idec:

· In January 2012, we entered into a collaboration agreement with Biogen Idec to develop and commercialize ISIS-SMNRx for Spinal Muscular Atrophy, or SMA. As part of the collaboration, we received a $29 million upfront payment and we are responsible for global development of ISIS-SMNRx through completion of Phase 2/3 clinical trials.

· In June 2012, we entered into a second and separate collaboration agreement with Biogen Idec to develop and commercialize a novel antisense drug targeting DMPK, or dystrophia myotonica-protein kinase. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial.

· In December 2012, we entered into a third and separate collaboration agreement with Biogen Idec to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets.

· In September 2013, we entered into a fourth and separate collaboration agreement with Biogen Idec to leverage antisense technology to advance the treatment of neurological diseases. We granted Biogen Idec exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six year term of this collaboration, while Biogen Idec is responsible for the creation and development of small molecule treatments and biologics.

All four of these collaboration agreements give Biogen Idec the option or options to license one or more drugs resulting from the specific collaboration. If Biogen Idec exercises an option, it will pay us a license fee and will assume future development, regulatory and commercialization responsibilities for the licensed drug. We are also eligible to receive milestone payments associated with the research and/or development of the drugs prior to licensing, milestone payments if Biogen Idec achieves pre-specified regulatory milestones, and royalties on any product sales of drugs resulting from these collaborations.

We evaluated all four of the Biogen Idec agreements to determine whether we should account for them as separate agreements. We determined that we should account for the agreements separately because we conducted the negotiations independently of one another, each agreement focuses on different drugs, there are no interrelated or interdependent deliverables, there are no provisions in any of these agreements that are essential to the other agreement, and the payment terms and fees under each agreement are independent of each other. We also evaluated the deliverables in each of these agreements to determine whether they met the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. For all four of these agreements, we determined that the options did not have stand-alone value because Biogen Idec cannot pursue the development or commercialization of the drugs resulting from these collaborations until it exercises the respective option or options. As such, for each agreement we considered the deliverables to be a single unit of accounting and we are recognizing the upfront payment for each of the agreements over the respective estimated period of our performance.

Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and commercialization events. These three categories of milestone events reflect the three stages of the life-cycle of our drugs, which we describe in more detail in the following paragraph.

Prior to the first stage in the life-cycle of our drugs, we perform a significant amount of work using our proprietary antisense technology to design chemical compounds that interact with specific genes that are good targets for drug discovery. From these research efforts, we hope to identify a development candidate. The designation of a development candidate is the first stage in the life-cycle of our drugs. A development candidate is a chemical compound that has demonstrated the necessary safety and efficacy in preclinical animal studies to warrant further study in humans. During the first step of the development stage, we or our partners study our drugs in IND-enabling studies, which are animal studies intended to support an Investigational New Drug, or IND, application and/or the foreign equivalent. An approved IND allows us or our partners to study our development candidate in humans. If the regulatory agency approves the IND, we or our partners initiate Phase 1 clinical trials in which we typically enroll a small number of healthy volunteers to ensure the development candidate is safe for use in patients. If we or our partners determine that a development candidate is safe based on the Phase 1 data, we or our partners initiate Phase 2 studies that are generally larger scale studies in patients with the primary intent of determining the efficacy of the development candidate. The final step in the development stage is Phase 3 studies to gather the necessary safety and efficacy data to request marketing approval from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve large numbers of patients and can take up to several years to complete. If the data gathered during the trials demonstrates acceptable safety and efficacy results, we or our partner will submit an application to the FDA and/or its foreign equivalents for marketing approval. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing approval, it moves into the commercialization stage, during which our partner will market and sell the drug to patients. Although our partner will ultimately be responsible for marketing and selling the partnered drug, our efforts to discover and develop a drug that is safe, effective and reliable contributes significantly to our partner’s ability to successfully sell the drug. The FDA and its foreign equivalents have the authority to impose significant restrictions on an approved drug through the product label and on advertising, promotional and distribution activities. Therefore, our efforts designing and executing the necessary animal and human studies are critical to obtaining claims in the product label from the regulatory agencies that would allow our partner to successfully commercialize our drug. Further, the patent protection afforded our drugs as a result of our initial patent applications and related prosecution activities in the United States and foreign jurisdictions are critical to our partner’s ability to sell our drugs without competition from generic drugs. The potential sales volume of an approved drug is dependent on several factors including the size of the patient population, market penetration of the drug, and the price charged for the drug.

Generally, the milestone events contained in our partnership agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a drug progresses through the stages of its life-cycle, the value of the drug generally increases.

Development milestones in our partnerships may include the following types of events:

· Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete;
· Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete;
· Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete;
· Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete.

Regulatory milestones in our partnerships may include the following types of events:

· Filing of regulatory applications for marketing approval such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings.
· Marketing approval in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain approval from the applicable regulatory agency.

Commercialization milestones in our partnerships may include the following types of events:

· First commercial sale in a particular market, such as in the United States or Europe.
· Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.

We assess whether a substantive milestone exists at the inception of our agreements. When a substantive milestone is achieved, we recognize revenue related to the milestone payment. For our existing licensing and collaboration agreements in which we are involved in the discovery and/or development of the related drug or provide the partner with access to new technologies we discover, we have determined that all future development, regulatory and commercialization milestones are substantive. For example, for our strategic alliance with Biogen Idec, we are using our antisense drug discovery platform to discover and develop new drugs against targets for neurological diseases. Alternatively, we provide access to our technology to Alnylam Pharmaceuticals, Inc. to develop and commercialize RNA interference, or RNAi, therapeutics. We consider milestones for both of these collaborations to be substantive. In evaluating if a milestone is substantive we consider whether:

· Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;
· The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;
· The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items;
· There is no future performance required to earn the milestone; and
· The consideration is reasonable relative to all deliverables and payment terms in the arrangement.

If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over the estimated period of performance, if any. We consider milestone payments related to progression of a drug through the development and regulatory stages of its life cycle to be substantive milestones because the level of effort and inherent risk associated with these events is high. All of the milestone payments we earned in 2013 were substantive. Therefore, we recognized the entire amount of those milestone payments in 2013, including a $25 million milestone payment from Genzyme we recognized in the first quarter of 2013 when the FDA approved the KYNAMRO NDA. Further information about our collaborative arrangements can be found in Note 7, Collaborative Arrangements and Licensing Agreements.

Licensing and royalty revenue

We often enter into agreements to license our proprietary patent rights on an exclusive or non-exclusive basis in exchange for license fees and/or royalties. We generally recognize as revenue immediately those licensing fees and royalties for which we have no significant future performance obligations and are reasonably assured of collecting the resulting receivable.

Research, development and patent expenses

Our research and development expenses include wages, benefits, facilities, supplies, external services, clinical trial and manufacturing costs and other expenses that are directly related to our research and development operations. We expense research and development costs as we incur them. When we make payments for research and development services prior to the services being rendered, we record those amounts as prepaid assets on our consolidated balance sheet and we expense them as the services are provided. For the years ended December 31, 2013, 2012 and 2011, research and development expenses were $173.7 million, $154.6 million and $153.1 million, respectively. A portion of the costs included in research and development expenses are costs associated with our collaboration agreements. For the years ended December 31, 2013, 2012 and 2011, research and development costs of approximately $51.9 million, $39.0 million, and $26.3 million, respectively, were related to our collaborative research and development arrangements.

We capitalize costs consisting principally of outside legal costs and filing fees related to obtaining patents and amortize these costs over the useful life of the patent, beginning with the date the United States Patent and Trademark Office, or foreign equivalent, issues the patent. The weighted average remaining amortizable life of our issued patents was 9.8 years at December 31, 2013.

The cost of our patents capitalized on our consolidated balance sheet at December 31, 2013 and 2012 was $24.9 million and $31.4 million, respectively. Accumulated amortization related to patents was $9.4 million and $12.8 million at December 31, 2013 and 2012, respectively. Based on existing patents, estimated amortization expense related to patents in each of the next five years is as follows:

Years Ending December 31,		Amortization
		(in millions)

2014		$	1
2015		$	0.9
2016		$	0.9
2017		$	0.8
2018		$	0.7

We review our capitalized patent costs regularly to ensure that they include costs for patents and patent applications that have future value. We evaluate patents and patent applications that we are not actively pursuing and write off any associated costs. In 2013, 2012 and 2011, patent expenses were $10.3 million, $3.9 million and $4.3 million, respectively, and included non-cash charges related to the write-down of our patent costs to their estimated net realizable values of $6.4 million, $817,000 and $1.9 million, respectively.

Concentration of credit risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments and receivables. We place our cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in commercial paper and debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, Standard & Poor’s (S&P) or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

Cash, cash equivalents and short-term investments

We consider all liquid investments with maturities of 90 days or less when we purchase them to be cash equivalents. Our short-term investments have initial maturities of greater than 90 days from date of purchase. We classify our short-term investments as “available-for-sale” and carry them at fair market value based upon prices for identical or similar items on the last day of the fiscal period. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. We use the specific identification method to determine the cost of securities sold.

We have equity investments in privately- and publicly-held biotechnology companies that we have received as part of a technology license or collaboration agreement. At December 31, 2013 we held ownership interests of less than 20 percent in each of the respective companies.

We account for our equity investments in publicly-held companies at fair value and record unrealized gains and losses related to temporary increases and decreases in the stock of these publicly-held companies as a separate component of comprehensive income (loss). We account for equity investments in privately-held companies under the cost method of accounting because we own less than 20 percent and do not have significant influence over their operations. The cost method investments we hold are in smaller satellite companies and realization of our equity position in those companies is uncertain. In those circumstances we record a full valuation allowance. In determining if and when a decrease in market value below our cost in our equity positions is temporary or other-than-temporary, we examine historical trends in the stock price, the financial condition of the company, near term prospects of the company and our current need for cash. If we determine that a decline in value in either a public or private investment is other-than-temporary, we recognize an impairment loss in the period in which the other-than-temporary decline occurs.

Inventory valuation

We capitalize the costs of raw materials that we purchase for use in producing our drugs because until we use these raw materials they have alternative future uses. We include in inventory raw material costs for drugs that we manufacture for our partners under contractual terms and that we use primarily in our clinical development activities and drug products. We can use each of our raw materials in multiple products and, as a result, each raw material has future economic value independent of the development status of any single drug. For example, if one of our drugs failed, we could use the raw materials for that drug to manufacture our other drugs. We expense these costs when we deliver the drugs to our partners, or as we provide these drugs for our own clinical trials. We reflect our inventory on the balance sheet at the lower of cost or market value under the first-in, first-out method. We review inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value. We consider several factors in estimating the net realizable value, including shelf life of raw materials, alternative uses for our drugs and clinical trial materials, and historical write-offs. We did not record any inventory write-offs for the years ended December 31, 2013, 2012 or 2011. Total inventory, which consisted of raw materials, was $8.0 million and $6.1 million as of December 31, 2013 and 2012, respectively.

Property, plant and equipment

We carry our property, plant and equipment at cost, which consists of the following (in thousands):

		December 31,
		2013			2012
Equipment and computer software		$	44,698		$	44,109
Building and building systems		48,132			48,120
Land improvements		2,846			2,849
Leasehold improvements		35,282			34,931
Furniture and fixtures		5,473			5,342
		136,431			135,351
Less accumulated depreciation		(60,431		)	(54,465		)
		76,000			80,886
Land		10,198			10,198

		$	86,198		$	91,084

We depreciate our property, plant and equipment on the straight-line method over estimated useful lives as follows:

Computer software and hardware		3 years
Manufacturing equipment		10 years
Other equipment		5-7 years
Furniture and fixtures		5-10 years
Building		40 years
Building systems and improvements		10-25 years
Land improvements		20 years

We depreciate our leasehold improvements using the shorter of the estimated useful life or remaining lease term.

Licenses

We obtain licenses from third parties and capitalize the costs related to exclusive licenses. We amortize capitalized licenses over their estimated useful life or term of the agreement, which for current licenses is between approximately five years and 15 years. The cost of our licenses at December 31, 2013 and 2012 was $36.2 million. Accumulated amortization related to licenses was $31.6 million and $29.6 million at December 31, 2013 and 2012, respectively. Based on existing licenses, estimated amortization expense related to licenses is as follows:

Years Ending December 31,		Amortization
		(in millions)

2014		$	1.9
2015		$	1.9
2016		$	0.8

Fair value of financial instruments

We have estimated the fair value of our financial instruments. The amounts reported for cash, accounts receivable, accounts payable and accrued expenses approximate the fair value because of their short maturities. We report our investment securities at their estimated fair value based on quoted market prices for identical or similar instruments.

Long-lived assets

We evaluate long-lived assets, which include property, plant and equipment, patent costs, and exclusive licenses acquired from third parties, for impairment on at least a quarterly basis and whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of such assets. We recorded a charge of $6.4 million, $825,000 and $1.9 million for the years ended December 31, 2013, 2012 and 2011, respectively, related primarily to the write-down of intangible assets.

Equity method of accounting

We accounted for our ownership interest in Regulus using the equity method of accounting until Regulus’ IPO in October 2012. We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. See Note 3, Investments, for additional information regarding our fair value accounting for our investment in Regulus. Under the equity method of accounting, we included our share of Regulus’ operating results on a separate line in our consolidated statement of operations called “Equity in net loss of Regulus Therapeutics Inc.”

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

We have reclassified certain prior period amounts to conform to the current period presentation. Certain amounts previously reported as research and development revenue have been reclassified to licensing and royalty revenue to conform to the current period presentation.

Consolidation of variable interest entities

We identify entities as variable interest entities either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. We perform ongoing qualitative assessments of our variable interest entities to determine whether we have a controlling financial interest in the variable interest entity and therefore are the primary beneficiary. As of December 31, 2013 and 2012, we had collaborative arrangements with five and six entities, respectively, that we considered to be variable interest entities. We are not the primary beneficiary for any of these entities as we do not have the power to direct the activities that most significantly impact the economic performance of our variable interest entities, the obligation to absorb losses, or the right to receive benefits from our variable interest entities that could potentially be significant to the variable interest entities. As of December 31, 2013, the total carrying value of our investments in variable interest entities was $53.4 million, and was primarily related to our investment in Regulus. Our maximum exposure to loss related to these variable interest entities is limited to the carrying value of our investments.

Stock-based compensation

We measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our Employee Stock Purchase Plan, or ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates.

We use the Black-Scholes model as our method of valuing option awards and stock purchase rights under the ESPP. On the grant date, we use our stock price and assumptions regarding a number of highly complex and subjective variables to determine the estimated fair value of stock-based payment awards. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, in management’s opinion, the existing valuation models may not provide an accurate measure of the fair value of our employee stock options. Although we determine the estimated fair value of employee stock options using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

We recognize compensation expense for option awards using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), an entity recognizes compensation expense over the requisite service period for each separately vesting tranche of the award as though the award were in substance multiple awards, which results in the expense being front-loaded over the vesting period.

In 2012, we began granting RSUs to our employees and our board of directors. The fair value of RSUs is based on the market price of our common stock on the date of grant. RSUs vest annually over a four year period.

See Note 5, Stockholders’ Equity, for additional information regarding our share-based compensation plans.

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) is comprised of unrealized gains and losses on investments, net of taxes, and adjustments we made to reclassify realized gains and losses on investments from other accumulated comprehensive income (loss) to our consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income (loss) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
Beginning balance accumulated other comprehensive income (loss)		$	12,480		$	(770	)	$	949
Other comprehensive income (loss) before reclassifications, net of tax (1)		10,253			13,250			(1,719		)
Amounts reclassified from accumulated other comprehensive income (2)		(1,653		)	—			—
Net current period other comprehensive income (loss)		8,600			13,250			(1,719		)
Ending balance accumulated other comprehensive income (loss)		$	21,080		$	12,480		$	(770	)


(1) Other comprehensive income includes income tax expense of $5.9 million and $9.1 million for the years ended December 31, 2013 and 2012, respectively.

(2) Included in gain on investments, net on our consolidated statement of operations.

Convertible debt

In August 2012, we completed a $201.3 million offering of convertible senior notes, which mature in 2019 and bear interest at 2¾ percent. In September 2012, we used a substantial portion of the net proceeds from the issuance of the 2¾ percent notes to redeem our 25/8 percent convertible subordinated notes. Consistent with how we accounted for our 25/8 percent notes, we account for our 2¾ percent notes by separating the liability and equity components of the instrument in a manner that reflects our nonconvertible debt borrowing rate. As a result, we assigned a value to the debt component of our 2¾ percent notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in us recording the debt instrument at a discount. We are amortizing the debt discount over the life of these 2¾ percent notes as additional non-cash interest expense utilizing the effective interest method. For additional information, see Note 4, Long-Term Obligations and Commitments.

Segment information

We operate in a single segment, Drug Discovery and Development operations, because our chief decision maker reviews operating results on an aggregate basis and manages our operations as a single operating segment.

Fair Value Measurements

We use a three-tier fair value hierarchy to prioritize the inputs used in our fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets, which includes our money market funds and treasury securities classified as available-for-sale securities and our investment in equity securities in publicly-held biotechnology companies; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, which includes our fixed income securities and commercial paper classified as available-for-sale securities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our Level 3 investments include investments in the equity securities of publicly-held biotechnology companies for which we calculated a lack of marketability discount because there were restrictions on when we could trade the securities. The majority of our securities have been classified as Level 2. We obtain the fair value of our Level 2 investments from our custodian bank or from a professional pricing service. We validate the fair value of our Level 2 investments by understanding the pricing model used by the custodian banks or professional pricing service provider and comparing that fair value to the fair value based on observable market prices. During the years ended December 31, 2013 and 2012 there were no transfers between our Level 1 and Level 2 investments. We use the end of reporting period method for determining transfers between levels.

We measure the following major security types at fair value on a recurring basis. We break down the inputs used to measure fair value for these assets at December 31, 2013 and 2012 as follows (in thousands):

		At December 31,			Quoted Prices in			Significant Other			Significant
		2013			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
Cash equivalents (1)		$	146,357		$	133,233		$	13,124		$	—
Corporate debt securities (2)		394,773			—			394,773			—
Debt securities issued by U.S. government agencies (2)		64,432			—			64,432			—
Debt securities issued by the U.S. Treasury (2)		15,328			15,328			—			—
Debt securities issued by states of the United States and political subdivisions of the states (2)		22,255			—			22,255			—
Investment in Regulus Therapeutics Inc.		52,096			52,096			—			—
Equity securities (3)		1,276			1,276			—			—
Total		$	696,517		$	201,933		$	494,584		$	—


		At December 31,			Quoted Prices in			Significant Other			Significant
		2012			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
Cash equivalents (1)		$	105,496		$	101,496		$	4,000		$	—
Corporate debt securities (2)		193,507			—			193,507			—
Debt securities issued by U.S. government agencies (2)		18,108			—			18,108			—
Debt securities issued by the U.S. Treasury (2)		13,452			13,452			—			—
Debt securities issued by states of the United States and political subdivisions of the states (2)		24,897			—			24,897			—
Investment in Regulus Therapeutics Inc.		33,622			—			—			33,622
Equity securities (3)		4,874			4,146			—			728
Total		$	393,956		$	119,094		$	240,512		$	34,350


(1) Included in cash and cash equivalents on our consolidated balance sheet.

(2) Included in short-term investments on our consolidated balance sheet.

(3) Included in other current assets on our consolidated balance sheet.

As of December 31, 2012, we classified the fair value measurements of our investments in the equity securities of Regulus and Sarepta Therapeutics, Inc., or Sarepta, as Level 3. We calculated a lack of marketability discount on the fair value of these investments because of trading restrictions on the securities. We consider the inputs we used to calculate the lack of marketability discount Level 3 inputs and, as a result, we categorized these investments as Level 3. We determined the lack of marketability discount by using a Black-Scholes model to value a hypothetical put option to approximate the cost of hedging the stock until the restriction ended. As of December 31, 2012, our Level 3 investments in Regulus and Sarepta had a gross fair value of $44.4 million and $1.0 million, respectively, less a lack of marketability discount of $10.8 million and $296,000, respectively, for a net carrying value of $33.6 million and $728,000, respectively. In the first quarter of 2013, we sold all of the common stock of Sarepta that we owned resulting in a realized gain of $1.1 million. In the fourth quarter of 2013, we re-classified our investment in Regulus to a Level 1 investment because we are no longer subject to contractual trading restrictions on the Regulus shares we own. We recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer.

The following is a summary of our investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
Beginning balance of Level 3 investments		$	34,350		$	—		$	—
Purchases		—			3,040			—
Transfers into Level 3 investments		—			25,198			—
Total gains and losses:
Included in gain on investments		(1,163		)	—			—
Included in accumulated other comprehensive income		32,272			6,112			—
Transfers out of Level 3 investments		(65,419		)	—			—
Cost basis of shares sold		(40		)	—			—
Ending balance of Level 3 investments		$	—		$	34,350		$	—

Income Taxes

We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. We record a valuation allowance to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that we will not recognize some or all of the deferred tax assets.

In our financial statements, we recognize the impact of an uncertain income tax position on our income tax returns at the largest amount that the relevant taxing authority is more-likely-than-not to sustain upon audit. If we feel that the likelihood of sustaining an uncertain income tax position is less than 50 percent, we do not recognize it.

Impact of recently issued accounting standards

In July 2013, the FASB issued accounting guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We will adopt this guidance in our fiscal year beginning January 1, 2014. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

Investment_in_Regulus_Therapeu

Investment in Regulus Therapeutics Inc.	12 Months Ended
Investment in Regulus Therapeutics Inc.	Dec. 31, 2013
Investment in Regulus Therapeutics Inc.	'
Investment in Regulus Therapeutics Inc.	'
	2. Investment in Regulus Therapeutics Inc.

	In September 2007, we and Alnylam established Regulus as a company focused on the discovery, development and commercialization of microRNA-targeting therapeutics. Regulus combines our and Alnylam’s technologies, know-how, and intellectual property relating to microRNA-targeting therapeutics. We and Alnylam each granted Regulus exclusive licenses to our respective intellectual property for microRNA therapeutic applications, and certain early fundamental patents in the microRNA field.

	In October 2012, Regulus completed an IPO of approximately 12.7 million shares of its common stock at $4.00 per share. As part of the offering, we purchased $3.0 million of Regulus’ common stock at the offering price. We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. We also recorded an $18.4 million gain in the fourth quarter of 2012 because of the increase in Regulus’ valuation resulting from its IPO. We have reflected this gain in a separate line on our consolidated statement of operations called “Gain on investment in Regulus Therapeutics Inc.”

Investments

Investments	12 Months Ended
Investments	Dec. 31, 2013
Investments	'
Investments	'
	3. Investments

	As of December 31, 2013, we have primarily invested our excess cash in debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, Standard & Poor’s (S&P) or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

	The following table summarizes the contract maturity of the available-for-sale securities we held as of December 31, 2013:

	One year or less		34	%
	After one year but within two years		44	%
	After two years but within three years		22	%
	Total		100	%

	As illustrated above, we primarily invest our excess cash in short-term instruments with 78 percent of our available-for-sale securities having a maturity of less than two years.

	At December 31, 2013, we had an ownership interest of less than 20 percent in each of three private companies and three public companies with which we conduct business. The privately-held companies are Santaris Pharma A/S (formerly Pantheco A/S), Achaogen Inc., and Atlantic Pharmaceuticals Limited. The publicly-traded companies are Antisense Therapeutics Limited, or ATL, iCo Therapeutics Inc., and Regulus. We account for equity investments in the privately-held companies under the cost method of accounting and we account for equity investments in the publicly-traded companies at fair value. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. In October 2012, Regulus completed an IPO and our ownership of Regulus’ common stock dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. In the fourth quarter of 2012, we stopped using the equity method to account for our investment in Regulus and instead we began accounting for it at fair value.

	During 2013, we recognized a $2.4 million net gain on investments primarily consisting of the $1.1 million gain we realized when we sold all of the common stock that we held in Sarepta Therapeutics, Inc., the $490,000 gain we realized when we sold a portion of the stock we hold in iCo Therapeutics Inc., and the $844,000 payment we received from Pfizer, Inc. related to its acquisition of Excaliard Pharmaceuticals, Inc. During 2012 we recognized a $1.5 million net gain on investments primarily consisting of the $1.3 million payment we received from Pfizer, Inc. related to its acquisition of Excaliard. See further discussion about our investments in these satellite companies in Note 7, Collaborative Arrangements and Licensing Agreements.

	The following is a summary of our investments (in thousands):

												Other-Than-
												Temporary
			Amortized			Unrealized						Impairment			Estimated
	December 31, 2013		Cost			Gains			Losses			Loss			Fair Value
	Available-for-sale securities:
	Corporate debt securities(1)		$	142,096		$	75		$	(27	)	$	—		$	142,144
	Debt securities issued by U.S. government agencies (1)		23,242			22			(16		)	—			23,248
	Debt securities issued by the U.S. Treasury		6,239			6			—			—			6,245
	Debt securities issued by states of the United States and political subdivisions of the states		8,082			6			(28		)	—			8,060
	Total securities with a maturity of one year or less		179,659			109			(71		)	—			179,697
	Corporate debt securities		265,969			177			(393		)	—			265,753
	Debt securities issued by U.S. government agencies		41,308			3			(127		)	—			41,184
	Debt securities issued by the U.S. Treasury		9,062			21			—			—			9,083
	Debt securities issued by states of the United States and political subdivisions of the states		14,186			37			(28		)	—			14,195
	Total securities with a maturity of more than one year		330,525			238			(548		)	—			330,215
	Total available-for-sale securities		$	510,184		$	347		$	(619	)	$	—		$	509,912

												Other-Than-
												Temporary
			Cost			Unrealized						Impairment			Estimated
	December 31, 2013		Basis			Gains			Losses			Loss			Fair Value
	Equity securities:
	Regulus Therapeutics Inc.		$	15,526		$	36,570		$	—		$	—		$	52,096
	Securities included in other current assets		1,538			618			—			(880		)	1,276
	Securities included in deposits and other assets		625			—			—			—			625
	Total equity securities		$	17,689		$	37,188		$	—		$	(880	)	$	53,997
	Total available-for-sale and equity securities		$	527,873		$	37,535		$	(619	)	$	(880	)	$	563,909

												Other-Than-
												Temporary
			Amortized			Unrealized						Impairment			Estimated
	December 31, 2012		Cost			Gains			Losses			Loss			Fair Value
	Available-for-sale securities:
	Corporate debt securities(1)		$	115,249		$	81		$	(9	)	$	—		$	115,321
	Debt securities issued by U.S. government agencies(1)		12,100			2			(66		)	—			12,036
	Debt securities issued by the U.S. Treasury		1,000			1			—			—			1,001
	Debt securities issued by states of the United States and political subdivisions of the states		16,560			18			(2		)	—			16,576
	Total securities with a maturity of one year or less		144,909			102			(77		)	—			144,934
	Corporate debt securities		80,166			112			(92		)	—			80,186
	Debt securities issued by U.S. government agencies		8,034			38			—			—			8,072
	Debt securities issued by the U.S. Treasury		12,424			27			—			—			12,451
	Debt securities issued by states of the United States and political subdivisions of the states		8,306			31			(16		)	—			8,321
	Total securities with a maturity of more than one year		108,930			208			(108		)	—			109,030
	Total available-for-sale securities		$	253,839		$	310		$	(185	)	$	—		$	253,964

											Other-Than-
											Temporary
		Cost			Unrealized						Impairment			Estimated
December 31, 2012		Basis			Gains			Losses			Loss			Fair Value
Equity securities:
Regulus Therapeutics Inc.		$	15,526		$	18,096		$	—		$	—		$	33,622
Securities included in other current assets		1,579			4,175			—			(880		)	4,874
Securities included deposits and other assets		625			—			—			—			625
Total equity securities		$	17,730		$	22,271		$	—		$	(880	)	$	39,121
Total available-for-sale and equity securities		$	271,569		$	22,581		$	(185	)	$	(880	)	$	293,085


(1) Includes investments classified as cash equivalents on our consolidated balance sheet.

Investments we consider to be temporarily impaired at December 31, 2013 are as follows (in thousands):

				Less than 12 months of						More than 12 months of						Total temporary
				temporary impairment						temporary impairment						impairment
		Number of		Estimated			Unrealized			Estimated			Unrealized			Estimated		Unrealized
		Investments		Fair Value			Losses			Fair Value			Losses			Fair Value		Losses
Corporate debt securities		148		$	213,469		$	(412	)	$	8,228		$	(8	)	$	221,697	$	(420	)
Debt securities issued by U.S. government agencies		8		49,437			(143		)	—			—			49,437		(143		)
Debt securities issued by states of the United States and political subdivisions of the states		7		6,964			(52		)	4,130			(4		)	11,094		(56		)
Total temporarily impaired securities		163		$	269,870		$	(607	)	$	12,358		$	(12	)	$	282,228	$	(619	)

We believe that the decline in value of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore we anticipate full recovery of their amortized cost basis at maturity.

LongTerm_Obligations_and_Commi

Long-Term Obligations and Commitments	12 Months Ended
Long-Term Obligations and Commitments	Dec. 31, 2013
Long-Term Obligations and Commitments	'
Long-Term Obligations and Commitments	'
	4. Long-Term Obligations and Commitments

	The carrying value of our long-term obligations was as follows (in thousands):

			December 31,
			2013			2012
	2¾ percent convertible senior notes		$	150,334		$	143,990
	Long-term financing liability for leased facility		71,288			70,550
	Equipment financing arrangement		7,461			9,993
	Leases and other obligations		3,489			2,288
	Total		$	232,572		$	226,821
	Less: current portion		(4,408		)	(4,879		)
	Total Long-Term Obligations		$	228,164		$	221,942

	Convertible Notes

	In August 2012, we completed a $201.3 million convertible debt offering, which raised net proceeds of $194.7 million, after deducting $6.6 million in issuance costs. The $201.3 million convertible senior notes mature in 2019 and bear interest at 2¾ percent, which is payable semi-annually in arrears on April 1 and October 1 of each year. In September 2012, we used a substantial portion of the net proceeds from the issuance of the 2¾ percent notes to redeem the entire $162.5 million in principal of our 25/8 percent notes at a price of $164.0 million including accrued interest. The $162.5 million convertible subordinated notes had a maturity date of 2027 and bore interest at 25/8 percent, which was payable in cash semi-annually. We recognized a $4.8 million loss as a result of the redemption of the 25/8 percent notes. A significant portion of the loss, or $3.6 million, was non-cash and related to the unamortized debt discount and debt issuance costs and the remainder was related to a $1.2 million early redemption premium we paid to the holders of the 25/8 percent notes.

	The 2¾ percent notes are convertible at the option of the note holders prior to July 1, 2019 only under certain conditions. On or after July 1, 2019, the notes are initially convertible into approximately 12.1 million shares of common stock at a conversion price of approximately $16.63 per share. We will settle conversions of the notes, at our election, in cash, shares of our common stock or a combination of both. We can redeem the 2¾ percent notes at our option, in whole or in part, on or after October 5, 2016 if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the trading day immediately preceding the date we provide the redemption notice exceeds 130 percent of the applicable conversion price for the 2¾ percent notes on each such day. The redemption price for the 2¾ percent notes will equal 100 percent of the principal amount being redeemed, plus accrued and unpaid interest, plus $90 per each $1,000 principal amount being redeemed. Holders of the 2¾ percent notes may require us to purchase some or all of their notes upon the occurrence of certain fundamental changes, as set forth in the indenture governing these notes, at a purchase price equal to 100 percent of the principal amount of the notes to be purchased, plus accrued and unpaid interest.

	The price of our common stock exceeded the conversion threshold price during the quarter ended December 31, 2013. As a result, the 2¾ percent notes are convertible at the option of the holders during the quarter ending March 31, 2014. We have not received a notice of conversion and we do not believe we will receive a conversion request. As of December 31, 2013, the if-converted value of the 2¾ percent notes, which assumes that the notes will be converted into shares of our common stock, exceeded the principal amount by $281.0 million. We did not include the potential effect of the conversion of our convertible notes into our common stock in the computation of diluted net loss per share because the effect would have been anti-dilutive.

	We account for our convertible notes using an accounting standard that requires us to assign a value to our convertible debt equal to the estimated fair value of similar debt instruments without the conversion feature and to record the remaining portion in equity. As a result, we recorded our convertible debt at a discount, which we are amortizing as additional non-cash interest expense over the expected life of the debt. We are amortizing the debt discount for our 2¾ percent notes over seven years. We were amortizing the debt discount for our 25/8 percent notes over seven years until we redeemed the notes in September 2012. Using a combination of the present value of the debt’s cash flows and a Black-Scholes valuation model, we determined that our nonconvertible debt borrowing rate was eight percent and 9.3 percent for the 2¾ percent notes and 25/8 percent notes, respectively. At December 31, 2013 the principal and accrued interest payable on the 2¾ percent notes was $202.6 million and the fair value based on quoted market prices was $505.1 million. Interest expense for the year ended December 31, 2013, 2012 and 2011 included $6.3 million, $8.4 million and $8.6 million, respectively, of non-cash interest expense related to the amortization of the debt discount for our convertible notes.

	The following table summarizes information about the equity and liability components of our 2¾ percent notes, (in thousands):

			December 31,
			2013			2012
	Principal amount of convertible notes outstanding		$	201,250		$	201,250
	Unamortized portion of liability component		(50,916		)	(57,260		)
	Long-term debt		$	150,334		$	143,990

	Carrying value of equity component		$	59,528		$	59,528

	Equipment Financing Arrangement

	In October 2008, we entered into an equipment financing loan agreement, and in September 2009 and June 2012 we amended the loan agreement to increase the aggregate maximum amount of principal we could draw under the agreement. Each draw down under the loan agreement has a term of three years, with principal and interest payable monthly. Interest on amounts we borrow under the loan agreement is based upon the three year interest rate swap at the time we make each draw down plus 3.5 or four percent, depending on the date of the draw. We are using the equipment purchased under the loan agreement as collateral. In June 2012, we drew down $9.1 million in principal under the loan agreement at an interest rate of 4.12 percent and in June 2013 we drew down $2.5 million in principal at an interest rate of 4.39 percent. As of December 31, 2013, our outstanding borrowings under this loan agreement were at a weighted average interest rate of 4.28 percent and we can borrow up to an additional $3.4 million in principal until April 2014 to finance the purchase of equipment. The carrying balance under this loan agreement at December 31, 2013 and 2012 was $7.5 million and $10.0 million, respectively.

	Maturity Schedules

	Annual debt and other obligation maturities, including fixed and determinable interest, at December 31, 2013 are as follows (in thousands):

	2014		$	10,246
	2015		8,544
	2016		6,117
	2017		5,594
	2018		5,594
	Thereafter		207,805
	Subtotal		$	243,900
	Less: current portion		(4,408		)
	Less: fixed and determinable interest		(34,498		)
	Less: debt discount		(50,916		)
	Plus: Deferred rent		1,647
	Total		$	155,725

	Operating Leases

	We lease office and laboratory space under non-cancelable operating leases with terms through December 2031. We are located in three buildings in Carlsbad, California and occupy approximately 231,000 square feet of laboratory and office space. Our facilities include a 176,000 square foot facility that we use for our primary research and development activities, a 28,704 square foot manufacturing facility and a 25,792 square foot building adjacent to our manufacturing facility. Our 28,704 square foot facility houses manufacturing suites for our drug development business built to meet current Good Manufacturing Practices and our 25,792 square foot facility has laboratory and office space that we use to support our manufacturing activities. The lease for our 28,704 square foot manufacturing facility expires in 2031 and has four five-year options to extend. Under the lease agreement, we have the option to purchase the facility at the end of each year from 2016 through 2020, and at the end of 2026 and 2031. The lease for the 25,792 square foot facility has an initial term ending in June 2021 with an option to extend the lease for up to two five-year periods. We account for the lease of our 176,000 square foot facility as a financing obligation as discussed below. We also lease office equipment under non-cancelable operating leases with terms through June 2017.

	-Annual future minimum payments under operating leases as of December 31, 2013 are as follows (in thousands):

			Operating
			Leases
2014		$	1,470
2015		1,395
2016		1,538
2017		1,481
2018		1,451
Thereafter		19,126
Total minimum payments		$	26,461

Rent expense for the years ended December 31, 2013, 2012 and 2011 was $1.8 million, $1.9 million and $4.6 million, respectively. We recognize rent expense on a straight line basis over the lease term for the lease on our manufacturing facility and the lease on our building adjacent to our manufacturing facility, which resulted in a deferred rent balance of $1.6 million and $1.4 million at December 31, 2013 and 2012, respectively.

Research and Development Facility Lease Obligation

In March 2010, we entered into a lease agreement with an affiliate of BioMed Realty, L.P., or BioMed. Under the lease, BioMed constructed our primary research and development facility in Carlsbad, California. The lease expires in 2031 and has four five-year options to extend. Under the lease agreement, we have the option to purchase the facility and land at the end of each year from 2016 through 2020, and at the end of 2026 and 2031. To gain early access to the facility, we agreed to modify our lease with BioMed to accept additional responsibility. As a result, we recorded the costs for the facility as a fixed asset and we also recorded a corresponding liability in our non-current liabilities as a long-term financing obligation. In July 2011, we took possession of the facility and began depreciating the cost of the facility over its economic useful life. At December 31, 2013 and 2012, the facility and associated parcel of land had a net book value of $66.7 million and $68.9 million, respectively, which included $5.5 million and $3.2 million, respectively, of accumulated depreciation. We are applying our rent payments, which began on January 1, 2012, against the liability over the term of the lease.

In conjunction with the lease agreement with BioMed, we purchased a parcel of land for $10.1 million and subsequently sold it to BioMed. Since we have the option to purchase the facility, including the land, we have continuing involvement in the land, which requires us to account for the purchase and sale of the land as a financing transaction. As such, our property, plant and equipment at December 31, 2013 and 2012 included the value of the land. Additionally, we have recorded a corresponding amount in our non-current liabilities as a long-term financing obligation. Since land is not a depreciable asset, the value of the land and financing obligation we recorded will not change until we exercise our purchase option or the lease terminates.

Annual future rent payments as of December 31, 2013 for our primary research and development facility are as follows (in thousands):

		Future Rent
		Payments
2014		$	6,179
2015		6,179
2016		6,550
2017		6,550
2018		6,943
Thereafter		105,508
Total minimum payments		$	137,909

Stockholders_Equity

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2013
Stockholders' Equity	'
Stockholders' Equity	'
	5. Stockholders’ Equity

	Preferred Stock

	We are authorized to issue up to 15,000,000 shares of “blank check” Preferred Stock. As of December 31, 2013, there were no shares of Preferred Stock outstanding. We have designated Series C Junior Participating Preferred Stock but have no issued or outstanding shares as of December 31, 2013.

	Common Stock

	At December 31, 2013 and 2012, we had 200,000,000 shares of common stock authorized, of which 116,471,371 and 101,481,134 were issued and outstanding, respectively. As of December 31, 2013, total common shares reserved for future issuance were 19,810,897.

	In June 2013, we completed the sale of 9,617,869 shares of our common stock through a public offering at a price of $19.00 per share, which included 617,869 additional shares sold pursuant to an option we granted to the underwriters. We received net proceeds of approximately $173.3 million from the sale of these shares net of underwriting discounts and commissions and other estimated offering expenses of $9.5 million.

	During the years ending December 31, 2013, 2012 and 2011, we issued 5,372,000, 1,438,000 and 646,000 shares of common stock, respectively, for stock option exercises, vesting of restricted stock units, and Employee Stock Purchase Plan, or ESPP, purchases. We received net proceeds from these transactions of $63.0 million, $9.5 million and $3.6 million in 2013, 2012 and 2011, respectively.

	Stock Plans

	1989 Stock Option Plan

	In June 1989, our Board of Directors adopted, and the stockholders subsequently approved, a stock option plan that, as amended, provides for the issuance of non-qualified and incentive stock options for the purchase of up to 20,000,000 shares of common stock to our employees, directors, and consultants. The plan expires in January 2024. The 1989 Plan does not allow us to grant stock bonuses or restricted stock awards and prohibits us from repricing any options outstanding under the plan unless our stockholders approve the repricing. Options vest over a four-year period, with 25 percent exercisable at the end of one year from the date of the grant and the balance vesting ratably, on a monthly basis, thereafter. Options we granted after May 26, 2004 have a term of seven years while options we granted before May 26, 2004 have a term of ten years. At December 31, 2013, a total of 6,211,169 options were outstanding, of which options to purchase 3,033,298 shares were exercisable, and 93,378 shares were available for future grant under the 1989 Plan.

	2000 Broad Based Equity Incentive Plan

	In January 2000, we adopted the 2000 Broad-Based Equity Incentive Plan (the 2000 Plan), which, as amended, provided for the issuance of non-qualified stock options for the purchase of up to 5,990,000 shares of common stock to our employees, directors, and consultants. Typically options expire seven or ten years from the date of grant. Options granted under this plan generally vest over a four-year period, with 25 percent exercisable at the end of one year from the date of the grant and the balance vesting ratably thereafter. At December 31, 2013, a total of 630,086 options were outstanding, of which 630,086 shares were exercisable, and no shares were available for future grant under the 2000 Plan. The 2000 Plan expired on January 5, 2010, so we may no longer grant new options under the 2000 Plan.

	Change of Control Under 1989 Plan and 2000 Plan

	With respect to both the 1989 Plan and 2000 Plan, in the event of:

	· a sale, lease or other disposition of all or substantially all of our assets;

	· a merger or consolidation in which we are not the surviving corporation; or

	· reverse merger in which we are the surviving corporation but the shares of common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise,

	then any surviving corporation or acquiring corporation will assume any stock awards outstanding under the 2000 Plan and the 1989 Plan or will substitute similar stock awards (including an award to acquire the same consideration paid to the shareholders in the transaction for those outstanding under the 2000 Plan and the 1989 Plan). In the event any surviving corporation or acquiring corporation refuses to assume such stock awards or to substitute similar stock awards for those outstanding under the 2000 Plan and the 1989 Plan, then with respect to stock awards held by participants whose continuous service has not terminated, such stock awards automatically vest in full and the stock awards will terminate if not exercised (if applicable) at or prior to such event.

	2011 Equity Incentive Plan

	In March 2011, our Board of Directors adopted, and the stockholders subsequently approved, a stock option plan that provides for the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and performance cash awards. The plan provides for the purchase of up to 5,500,000 shares of our common stock for issuance to our employees, directors, and consultants. The plan expires in June 2021. The 2011 Plan does not allow us to reduce the exercise price of any outstanding stock options or stock appreciation rights or cancel any outstanding stock options or stock appreciation rights that have an exercise price or strike price greater than the current fair market value of the common stock in exchange for cash or other stock awards unless our stockholders approve such action. Currently we anticipate awarding only options and restricted stock units awards to our employees, directors and consultants. Under the 2011 Plan, stock options cannot vest in a period of less than two years and restricted stock unit awards cannot vest in a period of less than three years. We have granted restricted stock unit awards to our employees under the 2011 Plan which vest annually over a four year period. At December 31, 2013, a total of 407,738 options were outstanding, no shares were exercisable, and 5,046,148 shares were available for future grant under the 2011 Plan.

	Under the 2011 Plan, we may issue a stock award with additional acceleration of vesting and exercisability upon or after a change in control. In the absence of such provisions, no such acceleration will occur. The stock options and restricted stock unit awards we issue to our chief executive officer and chief operating officer will accelerate upon a change of control, as defined in the 2011 Plan.

	Corporate Transactions and Change in Control under 2011 Plan

	In the event of certain significant corporate transactions, our Board of Directors has the discretion to take one or more of the following actions with respect to outstanding stock awards under the 2011 Plan:

	· arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring entity (or its parent company);
	· arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent company);
	· accelerate the vesting and exercisability of a stock award followed by the termination of the stock award;
	· arrange for the lapse of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award;
	· cancel or arrange for the cancellation of a stock award, to the extent not vested or not exercised prior to the effective date of the corporate transaction, in exchange for cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
	· arrange for the surrender of a stock award in exchange for a payment equal to the excess of (a) the value of the property the holder of the stock award would have received upon the exercise of the stock award, over (b) any exercise price payable by such holder in connection with such exercise.

	2002 Non-Employee Directors’ Stock Option Plan

	In September 2001, our Board of Directors adopted, and the stockholders subsequently approved, an amendment and restatement of the 1992 Non-Employee Directors’ Stock Option Plan, which provides for the issuance of non-qualified stock options and restricted stock units to our non-employee directors. The name of the resulting plan is the 2002 Non-Employee Directors’ Stock Option Plan (the 2002 Plan). The 2002 Plan provides for the purchase of up to 1,200,000 shares of our common stock to our non-employee directors. Options under this plan expire ten years from the date of grant. Options granted become exercisable in four equal annual installments beginning one year after the date of grant. At December 31, 2013, a total of 459,373 options were outstanding, 285,002 of the shares issued were exercisable and 311,375 shares were available for future grant under the 2002 Plan.

	Employee Stock Purchase Plan

	In June 2009, our Board of Directors adopted, and the stockholders subsequently approved, the amendment and restatement of the ESPP and we reserved an additional 150,000 shares of common stock for issuance thereunder. In each of the subsequent years, we reserved an additional 150,000 shares of common stock for the ESPP resulting in a total of 2,424,596 million shares authorized under the plan as of December 31, 2013. The ESPP permits full-time employees to purchase common stock through payroll deductions (which cannot exceed 10 percent of each employee’s compensation) at the lower of 85 percent of fair market value at the beginning of the purchase period or the end of each six-month purchase period. Under the amended and restated ESPP, employees must hold the stock they purchase for a minimum of six months from the date of purchase beginning with the offering ended on January 1, 2010. During 2013, employees purchased and we issued to employees 102,812 shares under the ESPP at $9.04 per share. At December 31, 2013, 264,275 shares were available for purchase under the ESPP.

	Stock Option Activity

The following table summarizes the stock option activity for the year ended December 31, 2013 (in thousands, except per share and contractual life data):

		Number of		Weighted			Average		Aggregate
		Shares		Average Exercise			Remaining		Intrinsic
				Price			Contractual Term		Value
				Per Share
							(Years)
Outstanding at December 31, 2012		10,823		$	11.3
Granted		1,911		$	15.88
Exercised		(5,216	)	$	11.89
Cancelled/forfeited/expired		(239	)	$	11.19

Outstanding at December 31, 2013		7,279		$	12.08		4.28		$	202,078

Exercisable at December 31, 2013		3,948		$	11.52		3.13		$	111,685

The weighted-average estimated fair values of options granted were $7.10, $3.55 and $4.85 for the years ended December 31, 2013, 2012 and 2011, respectively. The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011 were $69.6 million, $7.6 million and $686,000, respectively, which we determined as of the date of exercise. The amount of cash received from the exercise of stock options was $62.0 million, $8.7 million and $2.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. For the year ended December 31, 2013, the weighted-average fair value of options exercised was $25.24. As of December 31, 2013, total unrecognized compensation cost related to non-vested stock-based compensation plans was $9.6 million. We will adjust the total unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize this cost over a weighted average period of 1.1 years.

Restricted Stock Unit Activity

The following table summarizes the restricted stock unit, or RSU, activity for the year ended December 31, 2013 (in thousands, except per share data):

		Number of		Weighted
		Shares		Average
				Grant Date
				Fair Value
				Per Share

Non-vested at December 31, 2012		188		$	8.37
Granted		297		$	17.42
Vested		(47	)	$	16.64
Cancelled/forfeited		(13	)	$	11.78

Non-vested at December 31, 2013		425		$	13.67

For the years ended December 31, 2013 and 2012, the weighted-average grant date fair value of RSUs granted to employees was $16.94 and $8.22 per RSU, respectively, and the weighted-average grant date fair value of RSUs granted to our Board of Directors was $27.95 and $12.94 per RSU, respectively. As of December 31, 2013, total unrecognized compensation cost related to RSUs was $3.5 million. We will adjust the total unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize this cost over a weighted average period of 1.5 years.

Stock-based Valuation and Compensation Expense Information

The following table summarizes stock-based compensation expense for the years ended December 31, 2013, 2012 and 2011 (in thousands), which was allocated as follows:

		Year Ended December 31,
		2013			2012			2011
Research, development and patents		$	9,673		$	7,246		$	8,527
General and administrative		1,745			1,325			1,318
Total		$	11,418		$	8,571		$	9,845

Determining Fair Value

Valuation. We measure stock-based compensation expense for equity-classified awards, principally related to stock options, RSUs, and stock purchase rights under the ESPP at the grant date, based on the estimated fair value of the award and we recognize the expense over the employee’s requisite service period. We value RSUs based on the market price of our common stock on the date of grant.

We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under the ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. We recognize compensation expense for stock options granted, RSUs, and stock purchase rights under the ESPP using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), an entity recognizes compensation expense over the requisite service period for each separately vesting tranche of the award as though the award were in substance multiple awards, which results in the expense being front-loaded over the vesting period.

For the years ended December 31, 2013, 2012 and 2011, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

		December 31,
		2013		2012		2011
Risk-free interest rate		1.1	%	1.1	%	2.3	%
Dividend yield		0	%	0	%	0	%
Volatility		51.1	%	50.7	%	52.4	%
Expected life		5.1 years		5.1 years		5.3 years

Board of Director Stock Options:

		December 31,
		2013		2012		2011
Risk-free interest rate		2.2	%	1.3	%	2.9	%
Dividend yield		0	%	0	%	0	%
Volatility		52.7	%	51.3	%	52.8	%
Expected life		7.2 years		7.6 years		7.8 years

ESPP:

		December 31,
		2013		2012		2011
Risk-free interest rate		0.1	%	0.1	%	0.1	%
Dividend yield		0	%	0	%	0	%
Volatility		62.9	%	44.5	%	34.9	%
Expected life		6 months		6 months		6 months

Risk-Free Interest Rate. We base the risk-free interest rate assumption on observed interest rates appropriate for the term of our stock option plans or ESPP.

Dividend Yield. We base the dividend yield assumption on our history and expectation of dividend payouts. We have not paid dividends in the past and do not expect to in the future.

Volatility. We use an average of the historical stock price volatility of our stock for the Black-Scholes model. We computed the historical stock volatility based on the expected term of the awards.

Expected Life. The expected term of stock options we have granted represents the period of time that we expect them to be outstanding. We estimated the expected term of options we have granted based on historical exercise patterns.

Forfeitures. We reduce stock-based compensation expense for estimated forfeitures. We estimate forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We estimate forfeitures based on historical experience. Our historical forfeiture estimates have not been materially different from our actual forfeitures.

Warrants

In April 2006, we granted the members of Symphony GenIsis Holdings LLC warrants to purchase 4.25 million shares of common stock at an exercise price of $8.93 per share. In April 2011, Symphony GenIsis Holdings LLC exercised the remaining warrants and none remain outstanding.

Income_Taxes

Income Taxes	12 Months Ended
Income Taxes	Dec. 31, 2013
Income Taxes	'
Income Taxes	'
	6. Income Taxes

	We have net deferred tax assets relating primarily to net operating loss carryforwards, or NOL’s, and research and development tax credit carryfowards. Subject to certain limitations, we may use these deferred tax assets to offset taxable income in future periods. Since we have a history of losses and the likelihood of future profitability is not assured, we have provided a full valuation allowance for the deferred tax assets in our balance sheet as of December 31, 2013. If we determine that we are able to realize a portion or all of these deferred tax assets in the future, we will record an adjustment to increase their recorded value and a corresponding adjustment to increase income or additional paid in capital, as appropriate, in that same period.

	Intraperiod tax allocation rules require us to allocate our provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income. In periods in which we have a year-to-date pre-tax loss from continuing operations and pre-tax income in other categories of earnings, such as other comprehensive income, we must allocate the tax provision to the other categories of earnings. We then record a related tax benefit in continuing operations. During 2013 and 2012, we recorded unrealized gains on our investments in available-for-sale securities in other comprehensive income net of taxes. As a result, for the years ended December 31, 2013 and 2012, we recorded a $5.9 million and $9.1 million tax benefit, respectively, in continuing operations and a $5.9 million and $9.1 million tax expense, respectively, in other comprehensive income.

	We are subject to taxation in the United States and various state jurisdictions. Our tax years for 1998 and forward are subject to examination by the U.S. tax authorities and our tax years for 1991 and forward are subject to examination by the California tax authorities due to the carryforward of unutilized net operating losses and research and development credits. Our tax years for 2006 and 2007 are currently being audited by California’s Franchise Tax Board, or FTB. We do not expect that the results of these examinations will have a material effect on our financial condition or results of operations.

	The provision for income taxes on income from continuing operations were as follows (in thousands):

			Year Ended December 31,
			2013			2012			2011
	Current:

	Federal		$	—		$	—		$	—
	State		2			2			11
	Total current		2			2			11
	Deferred:

	Federal		(5,082		)	(7,827		)	—
	State		(834		)	(1,284		)	—
	Foreign		—			—			—
	Total deferred		(5,916		)	(9,111		)	—

	Income Tax Expense (Benefit)		$	(5,914	)	$	(9,109	)	$	11

	The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory U.S. tax rate is as follows (in thousands):

			Year Ended December 31,
			2013					2012					2011

	Pre tax loss		$	(66,558	)			$	(74,587	)			$	(84,790	)

	Statutory rate		(23,295		)	35	%	(26,105		)	35	%	(29,677		)	35	%
	State income tax net of federal benefit		(3,823		)	5.7	%	(4,284		)	5.7	%	(4,870		)	5.7	%
	Net change in valuation allowance		28,850			(43.3	)%	25,269			(33.9	)%	41,136			(48.5	)%
	Gain on Investment in Regulus Therapeutics Inc.		—			—		(6,353		)	8.5	%	—			—
	Tax credits		(15,839		)	23.8	%	806			(1.1	)%	(4,202		)	5	%
	Noncontrolling interest		—			—		—			—		1,448			(1.7	)%
	Deferred tax true-up		8,023			(12.1	)%	839			(1.1	)%	(4,236		)	5	%
	Other		170			(0.2	)%	719			(0.9	)%	412			(0.5	)%
	Effective rate		$	(5,914	)	8.9	%	$	(9,109	)	12.2	%	$	11		(0.0	)%

	Significant components of our deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows (in thousands):

			Year Ended December 31,
			2013			2012
	Deferred Tax Assets:
	Net operating loss carryovers		$	260,462		$	244,539
	R&D credits		65,600			46,928
	Capitalized R&D		2,736			22,223
	Deferred revenue		28,555			7,285
	Accrued restructuring		3,304			3,605
	Other		7,107			18,931
	Total deferred tax assets		$	367,764		$	343,511

	Deferred Tax Liabilities:
	Convertible debt		$	(20,895	)	$	(23,322	)
	Intangible and capital assets		(4,614		)	(6,784		)
	Net deferred tax asset		$	342,255		$	313,405
	Valuation allowance		(342,255		)	(313,405		)

	Net deferreds		$	—		$	—

The deferred tax assets and liabilities shown above do not include certain deferred tax assets at December 31, 2013 and 2012 that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation in excess of compensation recognized for financial reporting. Those deferred tax assets include non-qualified stock options and incentive stock options we issued. We will increase stockholders’ equity by approximately $27.8 million if and when we ultimately realize such deferred tax assets. We use tax return ordering for purposes of determining when excess tax benefits have been realized.

At December 31, 2013, we had federal and California tax net operating loss carryforwards of approximately $685.8 million and $894.9 million, respectively. Our Federal and California tax loss carryforwards will expire at various dates starting in 2014, unless we use them before then. At December 31, 2013, we also had federal and California research and development tax credit carryforwards of approximately $62.6 million and $22.2 million, respectively. Our Federal research and development tax credit carryforwards began expiring in 2004 and will continue to expire unless we use them prior to expiration. Our California research and development tax credit carryforwards are available indefinitely. In 2009, we had a substantial amount of taxable income and we used a portion of our Federal NOL carryforwards to reduce our federal income taxes. We did not use any of our California NOL carryforwards to offset our state taxes in 2009 because California suspended the use of NOL carryforwards for 2009. As a result, our Federal NOL carryforwards are lower than our California NOL carryforwards.

We analyze filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, and all open tax years in these jurisdictions to determine if we have any uncertain tax positions on any of our income tax returns. We recognize the impact of an uncertain tax position on an income tax return at the largest amount that the relevant taxing authority is more-likely-than not to sustain upon audit. We do not recognize uncertain income tax positions if they have less than 50 percent likelihood of being sustained.

The following table summarizes our gross unrecognized tax benefits (in thousands):

		Year Ended December 31,
		2013			2012			2011
Beginning balance of unrecognized tax benefits		$	10,872		$	9,834		$	8,968
Decrease for prior period tax positions		—			(174		)	(97		)
Increase for prior period tax positions		9,821			791			—
Increase for current period tax positions		3,271			421			963
Ending balance of unrecognized tax benefits		$	23,964		$	10,872		$	9,834

Our unrecognized gross tax benefits presented above would not reduce our annual effective tax rate if recognized because we have recorded a full valuation allowance on our deferred tax assets. We do not foresee any material changes to our gross unrecognized tax benefits within the next twelve months. We recognize interest and/or penalties related to income tax matters in income tax expense. We did not recognize any accrued interest and penalties related to gross unrecognized tax benefits during the year ended December 31, 2013.

The American Taxpayer Relief Act of 2012, which reinstated the United States federal research and development tax credit retroactively from January 1, 2012 through December 31, 2013, was not enacted into law until the first quarter of 2013. Therefore, the expected tax benefit resulting from such reinstatement for 2012 is reflected in the Company’s estimated annual effective tax rate for 2013.

Collaborative_Arrangements_and

Collaborative Arrangements and Licensing Agreements	12 Months Ended
Collaborative Arrangements and Licensing Agreements	Dec. 31, 2013
Collaborative Arrangements and Licensing Agreements	'
Collaborative Arrangements and Licensing Agreements	'
	7. Collaborative Arrangements and Licensing Agreements

	Pharmaceutical Alliances and Licensing

	AstraZeneca

	In December 2012, we entered into a global collaboration agreement with AstraZeneca to discover and develop antisense drugs against five cancer targets. As part of the agreement, we granted AstraZeneca an exclusive license to develop and commercialize ISIS-STAT3Rx and ISIS-ARRx for the treatment of cancer and an option to license up to three cancer drugs under a separate research program. We are eligible to receive milestone payments and license fees from AstraZeneca as programs advance in development. In addition, we are eligible to receive double-digit royalties on any product sales of drugs resulting from this collaboration. Under the terms of the agreement, we received $31 million in upfront and near-term payments comprised of a $25 million upfront payment we received in December 2012 and a $6 million payment we received in June 2013, of which we recognized $11.5 million upon receipt of the payments. We are recognizing the remaining $19.5 million as follows:

	· $11.2 million related to the ISIS-ARRx program, which we are amortizing through March 2014;
	· $7.6 million related to the option to license three drugs under a separate research program, which we are amortizing through December 2016; and
	· $0.7 million related to the ISIS-STAT3Rx program, which we are amortizing through October 2014.

	Together with AstraZeneca, we are evaluating ISIS-STAT3Rx in patients with advanced cancer. AstraZeneca is conducting a Phase 1b/2a clinical study of ISIS-STAT3Rx in patients with advanced metastatic hepatocellular carcinoma, or HCC. We are concurrently completing a clinical study evaluating ISIS-STAT3Rx in patients with advanced lymphomas, including patients with diffuse large b-cell lymphoma. We are responsible for completing our clinical study in patients with advanced lymphomas and AstraZeneca is responsible for all other development activities for ISIS-STAT3Rx. In June 2013, we earned a $10 million milestone payment when AstraZeneca added a second development candidate, ISIS-ARRx, to our collaboration. ISIS-ARRx is an antisense drug we designed to treat patients with prostate cancer by inhibiting the production of the androgen receptor, or AR. If AstraZeneca successfully develops ISIS-STAT3Rx, ISIS-ARRx, and three drugs under the research program, we could receive substantive milestone payments of more than $970 million, including up to $315.5 million for the achievement of development milestones and up to $655 million for the achievement of regulatory milestones. We will earn the next milestone payment of $15 million if AstraZeneca initiates a Phase 1 study for ISIS-ARRx.

	In August 2013, we added another collaboration program with AstraZeneca to discover and develop an antisense drug against an undisclosed target. AstraZeneca has the option to license a drug resulting from this research collaboration, and if AstraZeneca exercises its option, it will be responsible for all further development and commercialization of the drug. We received a $750,000 upfront payment, which we are amortizing through December 2015. We are eligible to receive license fees and substantive milestone payments of $163.2 million, including up to $45.2 million for the achievement of research and development milestones and up to $105 million for regulatory milestones. We will earn the next $3.25 million milestone payment if AstraZeneca selects a development candidate under this collaboration. In addition, we are eligible to receive up to double-digit royalties on sales from any product that AstraZeneca successfully commercializes under this collaboration program.

	During 2013 and 2012, we earned revenue of $29.1 million and $9.3 million, respectively, from our relationship with AstraZeneca, which represented 20 percent and nine percent, respectively, of our total revenue for those periods. Our balance sheets at December 31, 2013 and 2012 included deferred revenue of $9.3 million and $15.7 million, respectively, related to our relationship with AstraZeneca.

	Biogen Idec

	We have established four strategic collaborations with Biogen Idec that broaden and expand our severe and rare disease franchise for neurological disorders.

	ISIS-SMNRx

	In January 2012, we entered into a global collaboration agreement with Biogen Idec to develop and commercialize ISIS-SMNRx for the treatment of SMA. We received an upfront payment of $29 million, which we are amortizing through August 2016. We are eligible to receive a license fee, milestone payments and up to double-digit royalties on any product sales of ISIS-SMNRx. Biogen Idec has the option to license ISIS-SMNRx until completion of the first successful Phase 2/3 study or the completion of two Phase 2/3 studies. If Biogen Idec exercises its option, it will pay us a license fee and will assume global development, regulatory and commercialization responsibilities.

	We are evaluating ISIS-SMNRx in a Phase 2 open-label, multiple-dose, dose-escalation study in children with SMA and a Phase 2 open-label, multiple-dose, dose-escalation pilot study in infants with SMA. In January 2014, we and Biogen Idec amended the original agreement to reflect changes made to the clinical development plan for ISIS-SMNRx. We and Biogen Idec added a new open—label extension study, which is being offered to those children with SMA who have completed dosing in our previous studies, and expanded the dosing in the Phase 2 study in infants with SMA. In addition, we increased the number of patients to be included in the Phase 3 studies. As a result of these changes, we and Biogen Idec agreed to increase the payments that we are eligible to receive under this collaboration by nearly $35 million. Under the terms of the amended agreement, we are eligible to receive up to $303.8 million in a license fee and payments, including $78.8 million in milestone and other payments associated with the clinical development of ISIS-SMNRx prior to licensing and $150 million in milestone payments if Biogen Idec achieves pre-specified regulatory milestones.

	As of December 31, 2013, we had earned $7 million in milestone payments for advancing the ISIS-SMNRx Phase 2 program. In addition, based on the further advancement of ISIS-SMNRx Phase 2 program, Biogen Idec will pay us $9.3 million in the first quarter of 2014. We will earn the next milestone payment of $18 million if we dose the first patient in the Phase 3 study in infants with SMA, which is designed to support marketing registration for ISIS-SMNRx in the United States and Europe.

	ISIS-DMPKRx

	In June 2012, we and Biogen Idec entered into a second and separate collaboration and license agreement to develop and commercialize a novel antisense drug targeting DMPK for the treatment of myotonic dystrophy type 1, or DM1, ISIS-DMPKRx. We are responsible for global development of the drug through the completion of a Phase 2 clinical trial. Biogen Idec has the option to license the drug through the completion of the Phase 2 trial. Under the terms of the agreement, we received an upfront payment of $12 million, which we are amortizing through June 2017. Over the term of the collaboration we are eligible to receive up to $259 million in a license fee and substantive milestone payments. In October 2013, we earned a $10 million milestone payment when we initiated an IND-enabling toxicology study on ISIS-DMPKRx, and we are eligible to receive up to another $49 million in milestone payments associated with the development of ISIS-DMPKRx prior to licensing. We are also eligible to receive up to $130 million in milestone payments if Biogen Idec achieves pre-specified regulatory milestones. In addition, we are eligible to receive up to double-digit royalties on any product sales of the drug. We will earn the next milestone payment of $14 million if we initiate a Phase 1 study for ISIS-DMPKRx.

	Neurology

	In December 2012, we and Biogen Idec entered into a third and separate collaboration to develop and commercialize novel antisense drugs to three targets to treat neurological or neuromuscular diseases. We are responsible for the development of the drugs through the completion of the initial Phase 2 clinical study. Biogen Idec has the option to license a drug from each of the three programs through the completion of Phase 2 studies. Under the terms of the agreement, we received an upfront payment of $30 million, which we are amortizing through December 2020. Over the term of the collaboration we are eligible to receive up to $259 million in a license fee and substantive milestone payments per program. We could receive up to $59 million in development milestone payments to support research and development of each program, including amounts related to the cost of clinical trials, and up to $130 million in milestone payments if Biogen Idec achieves pre-specified regulatory milestones. In addition, we are eligible to receive double-digit royalties on any product sales of drugs resulting from each of the three programs. We will earn the next milestone payment of $10 million if we initiate an IND-enabling toxicology study for a development candidate identified under this collaboration.

	Strategic Neurology

	In September 2013, we and Biogen Idec entered into a fourth and separate collaboration, which is a long-term strategic relationship focused on applying antisense technology to advance the treatment of neurological diseases. As part of the collaboration, Biogen Idec gained exclusive rights to the use of our antisense technology to develop therapies for neurological diseases and has the option to license drugs resulting from this collaboration. The exclusivity for neurological diseases will last six years, and may be extended for any drug development programs being pursued under the collaboration. Under the terms of the agreement, we received an upfront payment of $100 million and are eligible to receive milestone payments, license fees and royalty payments for all drugs developed through this collaboration, with the specific amounts dependent upon the modality of the molecule advanced by Biogen Idec. If we have a change of control during the first six years of the collaboration, we may be required to refund Biogen Idec a portion of the $100 million upfront payment, with the amount of the potential refund decreasing ratably as we progress through the initial six year term of the collaboration. We are amortizing the $100 million upfront payment through September 2019. Because the amortization period for the upfront payment will never be less than the initial six year term of the collaboration, the amount of revenue we recognize from the upfront payment will never exceed the amount that Biogen Idec could potentially require us to refund.

	If an antisense molecule is chosen for drug discovery and development of a neurological disease, we are eligible to receive up to approximately $260 million in a license fee and substantive milestone payments for each antisense drug developed under the collaboration. We are eligible to receive up to approximately $60 million for the achievement of research and development milestones, including amounts related to the cost of clinical trials, and up to $130 million for the achievement of regulatory milestones. We will usually be responsible for drug discovery and early development of antisense drugs and Biogen Idec will have the option to license antisense drugs after Phase 2 proof of concept. Biogen Idec will then be responsible for later phase development and commercialization of the licensed drug. In addition, we are eligible to receive double-digit royalties on any product sales of antisense drugs developed under this collaboration. If other modalities, such as small molecules or monoclonal antibodies are chosen, we are eligible to receive up to $90 million in substantive milestone payments, including up to $35 million for the achievement of research and development milestones and up to $55 million for the achievement of regulatory milestones. Biogen Idec will be responsible for all of the drug discovery and development activities for drugs using other modalities. In addition, we are eligible to receive single-digit royalties on any product sales of any drugs using other modalities developed under this collaboration. We could earn the next milestone payment of up to $10 million if we choose a target to advance under this collaboration.

	During 2013 and 2012, we earned revenue of $37.0 million and $8.5 million, respectively, from our relationships with Biogen Idec, which represented 25 percent and eight percent, respectively, of our total revenue for those periods. Our balance sheets at December 31, 2013 and 2012 included deferred revenue of $145.1 million and $62.6 million, respectively, related to our relationship with Biogen Idec.

	Bristol-Myers Squibb

	In May 2007, we entered into a collaboration agreement with Bristol-Myers Squibb to discover, develop and commercialize novel antisense drugs targeting proprotein convertase subtilisin/kexin type 9, or PCSK9. In addition to a $15 million upfront fee, we earned $8 million in milestone payments related to the development of BMS-PCSK9Rx. The collaboration ended in December 2011, and we regained the rights to discover and develop antisense drugs to target PCSK9. During 2013, 2012 and 2011, we earned revenue of $188,000, $290,000 and $2.4 million, respectively, from Bristol-Myers Squibb. Our balance sheet at December 31, 2012 included deferred revenue of $126,000 related to our relationship with Bristol-Myers Squibb.

	Eli Lilly and Company

	In August 2001, we formed a broad strategic relationship with Eli Lilly and Company, which included a joint research collaboration. As part of the collaboration, Eli Lilly and Company licensed LY2181308, an antisense inhibitor of survivin, and LY2275796, an antisense inhibitor of eIF-4E, or eukaryotic initiation factor-4E. In 2012, Eli Lilly and Company decided not to continue the development of LY2181308. Therefore, we will not earn future milestone payments from Eli Lilly and Company associated with LY2181308.

	In December 2009, we reacquired LY2275796, which we renamed ISIS-EIF4ERx, and we are continuing to develop the drug. Eli Lilly and Company has the right to reacquire ISIS-EIF4ERx on predefined terms prior to the initiation of Phase 3 development. However, if we publicly disclose the results from a Phase 2 clinical study of ISIS-EIF4ERx:

	· Eli Lilly and Company may license ISIS-EIF4ERx on the predefined terms;
	· Eli Lilly and Company may tell us it is not interested in licensing ISIS-EIF4ERx, in which case we may license ISIS-EIF4ERx to another partner; or
	· Eli Lilly and Company may offer to license ISIS-EIF4ERx on terms that are lower than the predefined terms, in which case we may license ISIS-EIF4ERx to another partner so long as the licensing terms we reach with the new partner are better than terms offered by Eli Lilly and Company and we have not publicly disclosed any results from a new clinical study of ISIS-EIF4ERx prior to reaching the agreement with the new partner.

	During 2013, 2012 and 2011, we did not earn any revenue from our relationship with Eli Lilly and Company.

	Genzyme Corporation, a Sanofi company

In January 2008, we entered into a strategic alliance with Genzyme focused on the licensing and co-development of KYNAMRO. The license and co-development agreement provides Genzyme with exclusive worldwide rights for all therapeutic purposes to our patents and know-how related to KYNAMRO, including the key product related patents, and their foreign equivalents pending or granted in various countries outside the United States, including in the European Union via the European Patent Convention, Japan, Canada, Australia, South Africa and India. In addition, we agreed that we would not develop or commercialize another oligonucleotide-based compound designed to modulate apo-B by binding to the messenger RNA, or mRNA, encoding apo-B, throughout the world.

The transaction included a $175 million licensing fee, a $150 million equity investment in our stock in which we issued Genzyme five million shares of our common stock, and a share of worldwide profits on KYNAMRO and follow-on drugs ranging from 30 percent to 50 percent of all commercial sales. There are monthly limits on the number of shares of our stock that Genzyme can sell. In January 2013 we earned a $25 million milestone payment when the FDA approved the NDA for KYNAMRO. We may also receive over $1.5 billion in substantive milestone payments if Genzyme achieves pre-specified events, including up to $700 million for the achievement of regulatory milestones and up to $825 million for the achievement of commercialization milestones. The next milestone payment we could earn under our agreement with Genzyme is $25 million upon the earlier of an NDA approval for the use of KYNAMRO to treat patients who have heterozygous FH or annual net revenue equal to or greater than $250 million in a calendar year.

Under our alliance, Genzyme is responsible for the continued development and commercialization of KYNAMRO. We agreed to supply the drug substance for KYNAMRO for the Phase 3 clinical trials and initial commercial launch. Genzyme is responsible for manufacturing the finished drug product for KYNAMRO, and Genzyme will be responsible for the long term supply of KYNAMRO drug substance. As part of the agreement, we contributed the first $125 million in funding for the development costs of KYNAMRO. In 2011, we satisfied our development funding obligation. As such, we and Genzyme are sharing development expenses equally until KYNAMRO is profitable.

The license and co-development agreement for KYNAMRO will continue in perpetuity unless we or Genzyme terminate it earlier under the following situations:

· Genzyme may terminate the license and co-development agreement at any time by providing written notice to Isis;
· We may terminate the license and co-development agreement on a country-by-country basis or in its entirety upon Genzyme’s uncured failure to use commercially reasonable efforts to develop and commercialize KYNAMRO in the United States, France, Germany, Italy, Spain, the United Kingdom, Japan and Canada; and
· Either we or Genzyme may terminate the license and co-development agreement upon the other party’s uncured failure to perform a material obligation under the agreement.

Upon termination of the license and co-development agreement, the license we granted to Genzyme for KYNAMRO will terminate and Genzyme will stop selling the product. In addition, if Genzyme voluntarily terminates the agreement or we terminate the agreement in a country or countries for Genzyme’s failure to develop and commercialize KYNAMRO, then the rights to KYNAMRO will revert back to us and we may develop and commercialize KYNAMRO in the countries that are the subject of the termination, subject to a royalty payable to Genzyme.

If we are the subject of an acquisition, then within 180 days following the acquisition, Genzyme may elect to purchase all of our rights to receive payments under the KYNAMRO license and co-development agreement for a purchase price to be mutually agreed to by us and Genzyme, or, if we cannot agree, a fair market value price determined by an independent investment banking firm.

During 2013, 2012 and 2011, we earned revenue of $32.5 million, $67.6 million, and $72.3 million, respectively, from our relationship with Genzyme, which represented 22 percent, 66 percent, and 73 percent, respectively, of our total revenue for those years. Our balance sheet at December 31, 2012 included deferred revenue of $3.8 million for KYNAMRO drug substance that we shipped to Genzyme in 2013.

GlaxoSmithKline

In March 2010, we entered into a strategic alliance with GSK, for up to six programs, using our antisense drug discovery platform to seek out and develop new drugs against targets for rare and serious diseases, including infectious diseases and some conditions causing blindness. This alliance allows us to control and facilitate development of drugs while still being eligible to receive milestone payments as we advance these drugs in clinical development. Under the terms of the agreement, we received a $35 million upfront payment and in May 2011 we received a $3 million payment when GSK expanded the collaboration. We are amortizing these payments through July 2015.

In October 2012, we and GSK amended the original agreement to reflect an accelerated clinical development plan for ISIS-TTRRx. Under the amended terms of the agreement, we received a $2.5 million upfront payment in December 2012, which we are amortizing through July 2015. We also received a $7.5 million milestone payment in February 2013 when we initiated the Phase 2/3 clinical study for ISIS-TTRRx and a $2 million milestone payment in December 2013 for advancing the ongoing Phase 2/3 study of ISIS-TTRRx. We have earned $24.0 million primarily in milestone payments from GSK related to the development of ISIS-TTRRx and we are eligible to earn an additional $46 million in pre-licensing milestone payments associated with the ISIS-TTRRx Phase 2/3 study. In addition, under the amended agreement, GSK increased the regulatory and commercial milestone payments we can earn should ISIS-TTRRx receive marketing approval and meet pre-agreed sales targets.

Our strategic alliance currently includes five active programs including the ISIS-TTRRx program. We are eligible to receive on average up to $20 million in milestone payments through Phase 2 proof-of-concept for each program, except the ISIS-TTRRx program, which we describe above. GSK has the option to license drugs from these programs at Phase 2 proof-of-concept for a license fee. If GSK exercises its option to a program it will be responsible for all further development and commercialization of the program. In September 2013, we designated ISIS-GSK3Rx as an additional development candidate under our collaboration with GSK. ISIS-GSK3Rx is an antisense drug designed to inhibit the production of an undisclosed target to treat a common viral infection. To date, we have earned $10 million in milestone payments associated with advancing the ISIS-GSK3Rx program including a $3 million milestone payment we earned in November 2013 when we initiated a Phase 1 study for ISIS-GSK3Rx. In November 2013, we designated ISIS-GSK4Rx as an additional development candidate under our collaboration with GSK and earned a $5 million milestone payment. ISIS-GSK4Rx is an antisense drug we designed to treat an undisclosed ocular disease. Under our agreement, if GSK successfully develops all five programs for one or more indications and achieves pre-agreed sales targets, we could receive license fees and substantive milestone payments of nearly $1.2 billion, including up to $185.5 million for the achievement of development milestones, up to $526.5 million for the achievement of regulatory milestones and up to $445 million for the achievement of commercialization milestones. We will earn the next $1 million milestone payment if we initiate an open-label extension study of ISIS-TTRRx. In addition, we are eligible to receive up to double-digit royalties on sales from any product that GSK successfully commercializes under this alliance.

During 2013, 2012 and 2011, we earned revenue of $35.3 million, $8.2 million and $17.7 million, respectively, from our relationship with GSK, which represented 24 percent, eight percent and 18 percent, respectively, of our total revenue for those years. Our balance sheets at December 31, 2013 and 2012 included deferred revenue of $11.5 million and $19.9 million, respectively, related to our relationship with GSK.

Roche

In April 2013, we formed an alliance with Hoffman-La Roche Inc. and F. Hoffmann-La Roche Ltd., collectively Roche, to develop treatments for Huntington’s disease based on our antisense technology. Roche has the option to license the drugs from us through the completion of the first Phase 1 trial. Prior to option exercise, we are responsible for the discovery and development of an antisense drug targeting huntingtin, or HTT, protein. We are also working collaboratively with Roche on the discovery of an antisense drug utilizing Roche’s “brain shuttle” program. If Roche exercises its option, it will be responsible for global development, regulatory and commercialization activities for any drug arising out of the collaboration. Under the terms of the agreement, we received an upfront payment of $30 million in April 2013, which we are amortizing through April 2017. We are eligible to receive up to $362 million in a license fee and substantive milestone payments including up to $67 million for the achievement of development milestones, up to $170 million for the achievement of regulatory milestones and up to $80 million for the achievement of commercialization milestones. In addition, we are eligible to receive up to $136.5 million in milestone payments for each additional drug successfully developed and up to $50 million in commercial milestones if a drug using Roche’s proprietary brain shuttle technology is successfully commercialized. We are also eligible to receive tiered royalties on any product sales of drugs resulting from this alliance. We will earn the next milestone payment of $22 million if we initiate a Phase 1 trial for a drug targeting HTT protein. During 2013, we earned revenue of $5.1 million from our relationship with Roche. Our balance sheet at December 31, 2013 included deferred revenue of $25 million related to our relationship with Roche.

Satellite Company Collaborations

Achaogen, Inc.

In 2006, we exclusively outlicensed to Achaogen, Inc. specific know-how, patents and patent applications relating to aminoglycosides. In exchange, Achaogen agreed to certain payment obligations related to aminoglycosides Achaogen developed. Aminoglycosides are a class of small molecule antibiotics that inhibit bacterial protein synthesis and that physicians use to treat serious bacterial infections. Achaogen is developing plazomicin, an aminoglycoside Achaogen discovered based on the technology we licensed to Achaogen. Plazomicin has displayed broad-spectrum activity in animals against multi-drug resistant gram-negative bacteria that cause systemic infections, including E. coli. The compound has also demonstrated activity against methicillin-resistant staphylococcus aureus, or MRSA.

In connection with the license, Achaogen issued to us $1.5 million of Achaogen Series A Preferred Stock. Since early 2009, we have received $3 million from Achaogen, $500,000 of which was in Achaogen securities, as Achaogen has advanced plazomicin in development. In addition, assuming Achaogen successfully develops and commercializes the first two drugs under our agreement, we may receive payments totaling up to $46.3 million for the achievement of key clinical, regulatory and sales events. We will earn the next payment of $4 million if Achaogen initiates a Phase 3 study for plazomicin. We are also eligible to receive royalties on sales of drugs resulting from the program. Achaogen is solely responsible for the continued development of plazomicin.

During 2013, 2012 and 2011, we did not earn any revenue from our relationship with Achaogen. At December 31, 2013 and 2012, we owned less than 10 percent of Achaogen’s equity.

Alnylam Pharmaceuticals, Inc.

In March 2004, we entered into a strategic alliance with Alnylam to develop and commercialize RNA interference therapeutics. Under the terms of the agreement, we exclusively licensed to Alnylam our patent estate relating to antisense motifs and mechanisms and oligonucleotide chemistry for double-stranded RNAi therapeutics in exchange for a $5 million technology access fee, participation in fees from Alnylam’s partnering programs, as well as future milestone and royalty payments from Alnylam. In August 2012, we expanded the license to include using the double-stranded RNAi technology for agricultural products. For each drug Alnylam develops under this alliance, we may receive up to $3.4 million in substantive milestone payments, including up to $1.1 million for the achievement of development milestones and $2.3 million for regulatory milestones. In 2013, we earned a $750,000 milestone payment when Alnylam initiated a Phase 3 study for a drug targeting TTR. We will earn the next milestone payment of $375,000 if Alnylam initiates a Phase 1 study for a drug in Alnylam’s pipeline. We retained rights to a limited number of double-stranded RNAi therapeutic targets and all rights to single-stranded RNAi, or ssRNAi, therapeutics.

In turn, Alnylam nonexclusively licensed to us its patent estate relating to antisense motifs and mechanisms and oligonucleotide chemistry to research, develop and commercialize ssRNAi therapeutics and to research double-stranded RNAi compounds. We also received a license to develop and commercialize double-stranded RNAi drugs targeting a limited number of therapeutic targets on a nonexclusive basis. If we develop or commercialize an RNAi-based drug using Alnylam’s technology, we will pay Alnylam milestone payments and royalties. For each drug, the potential milestone payments to Alnylam total $3.4 million, which we will pay if we achieve specified development and regulatory events. To date, we do not have an RNAi-based drug in clinical development. Our Alnylam alliance provides us with an opportunity to realize substantial value from our pioneering work in antisense mechanisms and oligonucleotide chemistry and is an example of our strategy to participate in all areas of RNA-targeting drug discovery.

We have the potential to earn sublicense revenue and a portion of milestone payments and royalty payments that Alnylam receives from licenses of our technology it grants to its partners. To date, we have earned a total of $40.5 million from Alnylam resulting from licenses of our technology for the development of RNAi therapeutics and technology that we granted to Alnylam and Alnylam has granted to its partners. We are also eligible to receive $7.5 million related to Alnylam’s recently announced collaboration with Genzyme upon the closing of Alnylam’s sale of stock to Genzyme.

During 2013, 2012 and 2011, we earned revenue from our relationship with Alnylam totaling $1.5 million, $2.7 million and $375,000, respectively.

Antisense Therapeutics Limited

In December 2001, we licensed ATL1102 to ATL, an Australian company publicly traded on the Australian Stock Exchange. ATL is developing ATL1102 for the treatment of multiple sclerosis. In addition, ATL is currently developing ATL1103 for growth and sight disorders. We are eligible to receive royalties on sales of ATL1102 and ATL1103. We may also receive a portion of the fees ATL receives if it licenses ATL1102 or ATL1103. At December 31, 2013 and 2012, we owned less than 10 percent of ATL’s equity. During 2013 and 2012, we did not earn any revenue from our relationship with ATL. During 2011, we earned revenue of $210,000 from our relationship with ATL for manufacturing services we provided.

Atlantic Pharmaceuticals Limited, formerly Atlantic Healthcare (UK) Limited

In March 2007, we licensed alicaforsen to Atlantic Pharmaceuticals, a UK-based specialty pharmaceutical company founded in 2006, which is developing alicaforsen for the treatment of ulcerative colitis, or UC, and other inflammatory diseases. Atlantic Pharmaceuticals is initially developing alicaforsen for pouchitis, a UC indication, followed by UC and other inflammatory diseases. In exchange for the exclusive, worldwide license to alicaforsen, we received a $2 million upfront payment from Atlantic Pharmaceuticals in the form of equity.

Under the agreement, we could receive substantive milestone payments totaling up to $1.4 million for the achievement of regulatory milestones for multiple indications. We will earn the next milestone payment of $600,000 if Atlantic Pharmaceuticals submits an NDA for alicaforsen with the FDA. In 2010, Atlantic Pharmaceuticals began supplying alicaforsen under international Named Patient Supply regulations for patients with inflammatory bowel disease, or IBD, for which we receive royalties.

In 2010 and 2013, we agreed to sell Atlantic Pharmaceuticals alicaforsen drug substance in return for shares of Atlantic Pharmaceuticals’ common stock. Additionally, in 2013 we agreed to receive equity for the royalties that we will earn from Atlantic Pharmaceuticals. We recorded a full valuation allowance for all of the equity payments we received from Atlantic Pharmaceuticals, including the upfront payment, because realization of the equity payments is uncertain. At December 31, 2013 and 2012, we owned approximately 12 percent and 11 percent, respectively, of Atlantic Pharmaceuticals’ equity. We earned $671,000 related to royalties and sales of drug substance in 2013 but because the payments were made in equity, we did not record any revenue. During 2012, we earned $3,000 related to royalties and during 2011 we did not earn any revenue from our relationship with Atlantic Pharmaceuticals.

Excaliard Pharmaceuticals, Inc., a wholly owned subsidiary of Pfizer Inc.

In November 2007, we entered into a collaboration with Excaliard to discover and develop antisense drugs for the local treatment of fibrotic diseases, including scarring. We granted Excaliard an exclusive worldwide license for the development and commercialization of certain antisense drugs. Excaliard made an upfront payment to us in the form of equity and paid us $1 million in cash for the licensing of an antisense oligonucleotide drug targeting expression of connective tissue growth factor, or CTGF, that is activated during skin scarring following the wound healing process.

In December 2011, Pfizer Inc. acquired Excaliard. To date, we have received $6.5 million and we are eligible to receive up to an additional $8.4 million in payments upon achievement of various milestones associated with the clinical and commercial progress of EXC 001. In addition, assuming Pfizer Inc. successfully develops and commercializes EXC 001, we may receive substantive milestone payments totaling up to $47.7 million for the achievement of key development and regulatory milestones, including up to $7.7 million for the achievement of development milestones and up to $40 million for the achievement of regulatory milestones. We will earn the next milestone payment of $1.5 million upon initiation of a Phase 3 study for EXC 001. We are also eligible to receive royalties on any product sales of EXC 001.

At December 31, 2013, we owned no equity in Excaliard. During 2013, 2012 and 2011, we received $844,000, $1.3 million and $4.4 million, respectively, from Pfizer Inc. in payments related to the acquisition of Excaliard and the advancement of EXC 001, which we recorded as investment gains. We did not earn any revenue during 2013, 2012 and 2011 from our relationship with Excaliard.

iCo Therapeutics Inc.

In August 2005, we granted a license to iCo for the development and commercialization of iCo-007. iCo is developing iCo-007 for the treatment of various eye diseases caused by the formation and leakage of new blood vessels such as diabetic macular edema and diabetic retinopathy and is currently evaluating it in a Phase 2 study in patients with diabetic retinopathy. We received a $500,000 upfront fee from iCo and may receive substantive milestone payments totaling up to $48.4 million for the achievement of development and regulatory milestones for multiple indications, including up to $7.9 million for the achievement of development milestones and up to $40.5 million for the achievement of regulatory milestones. We will receive the next milestone payment of $4 million if iCo initiates a Phase 3 study for iCo-007. In addition, we are eligible to receive royalties on any product sales of iCo-007. Under the terms of the agreement, iCo is solely responsible for the development and commercialization of the drug. Over the course of our relationship, iCo has paid us in a combination of cash, common stock and convertible notes. During 2013, we sold a portion of the iCo stock we own resulting in aggregate net cash proceeds of $490,000. As a result, our ownership in iCo at December 31, 2013 and 2012 was approximately six percent and nine percent, respectively. During 2013 and 2012 we did not earn any revenue from our relationship with iCo and during 2011 we earned $7,000 from our relationship with iCo.

OncoGenex Technologies Inc., a subsidiary of OncoGenex Pharmaceuticals Inc.

In November 2001, we established a drug development collaboration with OncoGenex, a biotechnology company committed to the development of cancer therapeutics for patients with drug resistant and metastatic cancers, to co-develop and commercialize custirsen, formerly OGX-011, an anti-cancer antisense drug that targets clusterin. In July 2008, we and OncoGenex amended the co-development agreement pursuant to which OncoGenex became solely responsible for the costs, development and commercialization of custirsen. In exchange, OncoGenex agreed to pay us royalties on sales of custirsen and to share consideration it receives from licensing custirsen to a third party, except for consideration OncoGenex receives for the fair market value of equity and reimbursement of research and development expenses.

Under the amended agreement, we assigned to OncoGenex our rights in the patents claiming the composition and therapeutic methods of using custirsen and granted OncoGenex a worldwide, nonexclusive license to our know-how and patents covering our core antisense technology and manufacturing technology solely for use with custirsen. The key product-related patent that we assigned to OncoGenex was U.S. Patent number 6,900,187 having an expiration date of at least 2020; and the core antisense technology patents we licensed OncoGenex are U.S. Patent number 7,919,472 having an expiration date of 2026, its foreign equivalents granted in Australia and Canada, and its foreign equivalent pending under the European Patent Convention. In addition, we agreed that so long as OncoGenex or its commercialization partner is using commercially reasonable efforts to develop and commercialize custirsen, we will not research, develop or commercialize an antisense compound designed to modulate clusterin. The amended agreement will continue until OncoGenex or its commercialization partner is no longer developing or commercializing custirsen or until we terminate the agreement for OncoGenex’s uncured failure to make a payment required under the agreement.

In December 2009, OncoGenex granted Teva the exclusive worldwide right and license to develop and commercialize any products containing custirsen and related compounds, with OncoGenex having an option to co-promote custirsen in the United States and Canada, for which we received $10 million of the upfront payment OncoGenex received from Teva. We are also eligible to receive 30 percent of up to $370 million in payments OncoGenex may receive from Teva in addition to royalties on any product sales of custirsen ranging between 3.88 percent and seven percent. Under the agreement, this royalty is due on a country-by-country basis until the later of ten years following the first commercial sale of custirsen in the relevant country, and the expiration of the last patent we assigned or licensed to OncoGenex that covers the making, using or selling of custirsen in such country.

To facilitate the execution and performance of OncoGenex’s agreement with Teva, we and OncoGenex amended our license agreement primarily to give Teva the ability to cure any future potential breach by OncoGenex under our agreement. As part of this amendment, OncoGenex agreed that if OncoGenex is the subject of a change of control with a third party, where the surviving entity immediately following such change of control has the right to develop and sell custirsen, then a payment of $20 million will be due and payable to us 21 days following the first commercial sale of the product in the United States. Any non-royalty payments OncoGenex previously paid to us are creditable towards the $20 million payment, so as a result of the $10 million payment we received from OncoGenex related to its license to Teva, the remaining amount owing in the event of a change of control as discussed above is a maximum of $10 million.

In August 2003, we and OncoGenex entered into a separate collaboration and license agreement for the development of a second-generation antisense anti-cancer drug, OGX-225. OncoGenex is responsible for all development costs and activities, and we have no further performance obligations. OncoGenex issued to us $750,000 of OncoGenex securities as payment for an upfront fee. In addition, OncoGenex will pay us substantive milestone payments totaling up to $3.5 million for the achievement of development and regulatory milestones, including up to $1.5 million for the achievement of development milestones and up to $2 million for the achievement of regulatory milestones. In addition, we are eligible to receive royalties on future product sales of OGX-225. As of December 31, 2013, OncoGenex had not achieved any milestone events related to OGX-225. We will earn the next milestone payment of $500,000 if OncoGenex initiates a Phase 2 study for OGX-225.

In January 2005, we entered into a further agreement with OncoGenex to allow for the development of an additional second-generation antisense anti-cancer drug, apatorsen, formerly OGX-427. Under the terms of the agreement, OncoGenex is responsible for all development costs and activities, and we have no further performance obligations. OncoGenex will pay us substantive milestone payments totaling up to $5.8 million for the achievement of key development and regulatory milestones, including up to $1.3 million for the achievement of development milestones and up to $4.5 million for the achievement of regulatory milestones. In addition, we are eligible to receive royalties on future product sales of the drug. In January 2011, we earned a $750,000 milestone payment related to OncoGenex’s Phase 2 trial in men with metastatic prostate cancer. We will earn the next milestone payment of $1.3 million if OncoGenex initiates a Phase 3 study for apatorsen.

During 2011, we earned $750,000 in revenue from our relationship with OncoGenex. During 2013 and 2012, we did not earn any revenue from our relationship with OncoGenex.

Regulus Therapeutics Inc.

In September 2007, we and Alnylam established Regulus as a company focused on the discovery, development and commercialization of microRNA-targeting therapeutics. Regulus combines our and Alnylam’s technologies, know-how, and intellectual property relating to microRNA-targeting therapeutics. We and Alnylam retain rights to develop and commercialize, on pre-negotiated terms, microRNA therapeutic products that Regulus decides not to develop either by itself or with a partner.

Regulus is addressing therapeutic opportunities that arise from alterations in microRNA expression. Since microRNAs may act as master regulators of the genome, affecting the expression of multiple genes in a disease pathway, microRNA therapeutics define a new platform for drug discovery and development and microRNAs may also prove to be an attractive new biomarker tool for characterizing diseases. Regulus focuses its drug discovery and development efforts in numerous therapeutic areas, including cancer, fibrosis, atherosclerosis and viral infections, such as Hepatitis C virus, and currently has two drugs in clinical development. Regulus is developing RG-101, an anti-miR that targets microRNA-122 for the treatment of HCV infection, and plans to initiate a Phase 1 study for RG-101 in 2014. Regulus is also developing RG-012, an anti-miR that targets microRNA-21 for the treatment of Alport Syndrome. Regulus currently plans to develop RG-012 to proof-of-concept. At that stage of development, Regulus’ partner Sanofi has an exclusive option to license. We are eligible to receive a portion of all milestone payments Regulus receives from Sanofi if Sanofi chooses to exercise its option to license RG-012 from Regulus and RG-012 advances in development. We are also eligible to receive royalties on any future product sales of both of these drugs.

In October 2012, Regulus completed an IPO, in which we participated by purchasing $3 million of Regulus’ common stock at the offering price. We remain a significant shareholder with approximately seven million shares. We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. In the fourth quarter of 2012, we recorded an $18.4 million gain because of the increase in Regulus’ valuation resulting from its IPO.

Regulus has successfully developed strategic partnerships with partners such as Sanofi, GSK, Biogen Idec and AstraZeneca. We benefit from Regulus’ strategic partnerships because we have the potential to receive a portion of upfront payments, future milestone payments, and royalty payments. For example, under Regulus’ strategic partnership with Sanofi, and as a result of our agreement with Regulus, we and Alnylam each received 7.5 percent, or $1.9 million, of the $25 million upfront payment and are eligible to receive 7.5 percent of all future milestone payments, in addition to royalties on any product sales. During 2013, 2012 and 2011, we did not earn any revenue from our relationship with Regulus.

Xenon Pharmaceuticals Inc.

In November 2010, we established a collaboration with Xenon to discover and develop antisense drugs as novel treatments for anemia of chronic disorders, or ACD. We received an upfront payment in the form of a convertible promissory note from Xenon to discover and develop antisense drugs to the targets hemojuvelin and hepcidin. Because repayment of the promissory note was uncertain, we did not record any revenue from the upfront payment when we entered into the agreement. In May 2012, Xenon selected XEN701, a drug designed to inhibit the production of hepcidin, as a development candidate. In June 2013, we earned a $2 million license fee when Xenon exercised its option to an exclusive worldwide license to XEN701. In addition, in June 2013 Xenon repaid the $1.5 million convertible promissory note. We recognized the $2 million license fee and the $1.5 million upfront payment as revenue in the second quarter of 2013. In the first quarter of 2014, Xenon decided to discontinue development of XEN701. As a result, we will regain the rights to discover and develop antisense drugs to target hemojuvelin and hepcidin. During 2013, 2012 and 2011, we earned revenue of $3.5 million, $84,000 and $80,000, respectively, from our relationship with Xenon.

External Project Funding

CHDI Foundation, Inc.

Starting in November 2007, CHDI provided financial and scientific support to our Huntington’s disease drug discovery program through our development collaboration. In April 2013, we formed an alliance with Roche to develop treatments for Huntington’s disease. Under the terms of our agreement with CHDI, we will reimburse CHDI for a portion of its support of our Huntington’s disease program out of the payments we receive from Roche. In 2013, we made two payments to CHDI totaling $3 million associated with the progression of our Huntington’s disease program, which we recorded as research and development expense. If we achieve pre-specified milestones under our collaboration with Roche, we will make additional payments to CHDI. During 2013, 2012 and 2011, we earned revenue of $414,000, $2.0 million and $2.4 million, respectively, from our relationship with CHDI. Our balance sheet at December 31, 2012 included deferred revenue of $229,000 related to our relationship with CHDI.

The Ludwig Institute; Center for Neurological Studies

In October 2005, we entered into a collaboration agreement with the Ludwig Institute, the Center for Neurological Studies and researchers from these institutions to discover and develop antisense drugs in the areas of amyotrophic lateral sclerosis, or ALS, and other neurodegenerative diseases. Under this agreement, we agreed to pay the Ludwig Institute and Center for Neurological Studies modest milestone payments and royalties on any antisense drugs resulting from the collaboration.

Technology and Intellectual Property Sale and Licensing Agreements

Out-Licensing Arrangements; Royalty Sharing Agreements; Sales of IP

Abbott Molecular Inc.

In January 2009, we sold our former subsidiary, Ibis Biosciences, to Abbott Molecular Inc., or AMI, pursuant to a stock purchase agreement for a total acquisition price of $215 million plus the earn out payments described below.

Under the stock purchase agreement, AMI will pay us earn out payments equal to a percentage of Ibis’ revenue related to sales of Ibis systems, including instruments, assay kits and successor products, from the date of the acquisition closing through December 31, 2025. The earn out payments will equal five percent of Ibis’ cumulative net sales over $140 million and up to $2.1 billion, and three percent of Ibis’ cumulative net sales over $2.1 billion. AMI may reduce these earn out payments from five percent to as low as 2.5 percent and from three percent to as low as 1.5 percent, respectively, upon the occurrence of certain events. During 2013, 2012 and 2011, we did not earn any revenue from our relationship with AMI.

Eyetech Pharmaceuticals, Inc. (acquired by Valeant Pharmaceuticals International, Inc.)

In December 2001, we licensed to Eyetech certain of our patents necessary for Eyetech to develop, make and commercialize Macugen, a non-antisense drug for use in the treatment of ophthalmic diseases. Pfizer Inc. markets Macugen outside of the United States and Valeant markets the drug in the United States. In February 2012, Eyetech was acquired by Valeant Pharmaceuticals International, Inc. Eyetech paid us a $2 million upfront fee and agreed to pay us for the achievement of pre-specified events and royalty payments in exchange for non-exclusive, worldwide rights to the intellectual property licensed from us. During 2004, we earned $4 million in payments, and this license may also generate additional payments aggregating up to $2.8 million for the achievement of specified regulatory events with respect to the use of Macugen for each additional therapeutic indication. In 2013, 2012 and 2011, we earned $362,000, $499,000 and $790,000, respectively, of revenue related to royalties for Macugen under this license.

Roche Molecular Systems

In October 2000, we licensed some of our novel chemistry patents to Roche Molecular Systems, a business unit of Roche Diagnostics, for use in the production of Roche Molecular Systems’ diagnostic products. The royalty-bearing license grants Roche Molecular Systems non-exclusive worldwide access to some of our proprietary chemistries in exchange for initial and ongoing payments from Roche Molecular Systems to us. In April 2011, we expanded our relationship with Roche Molecular Systems by granting Roche Molecular Systems a non-exclusive license to additional technology for research and diagnostic uses. During 2013, 2012 and 2011, we earned revenue of $618,000, $1.0 million and $828,000, respectively, from our relationship with Roche Molecular Systems. Our balance sheet at December 31, 2012 included deferred revenue of $400,000 related to our agreements with Roche Molecular Systems.

In-Licensing Arrangements

Idera Pharmaceuticals, Inc., formerly Hybridon, Inc.

We have an agreement with Idera under which we acquired an exclusive license to all of Idera’s antisense chemistry and delivery technology related to our second generation antisense drugs and to double-stranded small interfering RNA, or siRNA, therapeutics. Idera retained the right to practice its licensed antisense patent technologies and to sublicense its technologies to collaborators under certain circumstances. In addition, Idera received a non-exclusive license to our suite of ribonuclease H, or RNase H, patents. During 2013, 2012 and 2011, we earned revenue of $10,000 for each period from our relationship with Idera.

University of Massachusetts

We have a license agreement with the University of Massachusetts under which we acquired an exclusive license to the University of Massachusetts’ patent rights related to ISIS-SMNRx. If we successfully develop and commercialize a drug incorporating the technology we licensed from the University of Massachusetts, we will pay milestone payments to the University of Massachusetts totaling up to $500,000 for the achievement of key clinical and regulatory milestones. In addition, we will pay the University of Massachusetts a portion of any sublicense revenue we receive in consideration for sublicensing its technology, and a royalty on sales of ISIS-SMNRx in the United States if our product incorporates the technology we licensed from the University of Massachusetts.

Verva Pharmaceuticals Ltd.

We have a license agreement with Verva under which we acquired an exclusive license to Verva’s antisense patent rights related to ISIS-FGFR4Rx. If we successfully develop and commercialize a drug incorporating the technology Verva licensed to us, we will pay milestone payments to Verva totaling up to $6.1 million for the achievement of key patent, clinical, and regulatory milestones. If we convert our license from an exclusive license to a nonexclusive license we could significantly reduce the milestone payments due to Verva. In addition, we will also pay royalties to Verva on sales of ISIS-FGFR4Rx if our product incorporates the technology we licensed from Verva.

Cold Spring Harbor Laboratory

We have a collaboration and license agreement with the Cold Spring Harbor Laboratory under which we acquired an exclusive license to the Cold Spring Harbor Laboratory’s patent rights related to ISIS-SMNRx. If we successfully develop and commercialize a drug incorporating the technology we licensed from the Cold Spring Harbor Laboratory, we will pay milestone payments to the Cold Spring Harbor Laboratory totaling up to $600,000 for the achievement of key clinical and regulatory milestones. In addition, we will pay the Cold Spring Harbor Laboratory a portion of any sublicense revenue we receive in consideration for sublicensing the Cold Spring Harbor Laboratory’s technology and a royalty on sales of ISIS-SMNRx if our product incorporates the technology we licensed from the Cold Spring Harbor Laboratory.

Concentration_of_Business_Risk

Concentration of Business Risk	12 Months Ended
Concentration of Business Risk	Dec. 31, 2013
Concentration of Business Risk	'
Concentration of Business Risk	'
	8. Concentration of Business Risk

	We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as 10 percent or more of our total revenue, was as follows:

		2013		2012		2011
	Partner A	25	%	8	%	0	%
	Partner B	24	%	8	%	18	%
	Partner C	22	%	66	%	73	%
	Partner D	20	%	9	%	0	%

	Contract receivables from three significant partners comprised approximately 91 percent of our contract receivables at December 31, 2013 and contract receivables from four significant partners comprised approximately 83 percent of our contract receivables at December 31, 2012.

Employment_Benefits

Employment Benefits	12 Months Ended
Employment Benefits	Dec. 31, 2013
Employment Benefits	'
Employment Benefits	'
	9. Employment Benefits

	We have an employee 401(k) salary deferral plan, covering all employees. Employees may make contributions by withholding a percentage of their salary up to the IRS annual limit ($17,500 and $23,000 in 2013 for employees under 50 years old and employees 50 years old or over, respectively). We made approximately $574,000, $529,000 and $487,000 in matching contributions for the years ended December 31, 2013, 2012 and 2011, respectively.

Legal_Proceedings

Legal Proceedings	12 Months Ended
Legal Proceedings	Dec. 31, 2013
Legal Proceedings	'
Legal Proceedings	'
	10. Legal Proceedings

	From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Periodically, we evaluate the status of each legal matter and assess our potential financial exposure. If the potential loss from any legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimable. The outcome of any proceeding is not determinable in advance. As a result, the assessment of a potential liability and the amount of accruals recorded are based only on the information available to us at the time. As additional information becomes available, we reassess the potential liability related to the legal proceeding, and may revise our estimates. We do not believe, relative to our current legal proceedings, that a loss is both probable and estimable. As such, as of December 31, 2013, we do not have a liability related to any of our current legal proceedings, including the following matters.

	Santaris Litigation

	In September 2011, we filed a patent infringement lawsuit against Santaris Pharma A/S and Santaris Pharma A/S Corp. in the United States District Court of the Southern District of California. Our infringement lawsuit alleges that Santaris’ activities providing antisense drugs and antisense drug discovery services to several pharmaceutical companies infringes U.S. Patent No. 6,326,199, entitled “Gapped 2’ Modified Oligonucleotides” and U.S. Patent No. 6,066,500, entitled “Antisense Modulation of Beta Catenin Expression.” In the lawsuit we are seeking monetary damages and an injunction enjoining Santaris from conducting or participating in the infringing activities. In December 2011, Santaris filed an answer to our complaint, denying our allegations, and seeking a declaration from the court that Santaris has not, and does not, infringe the patents we asserted against Santaris in the suit. In January 2012, Santaris filed a motion for summary judgment asking the court to decide as a matter of law that Santaris’ activities do not infringe the patents we assert in the suit. In September 2012, the court denied Santaris’ motion for summary judgment and opened limited discovery related to whether Santaris’ alleged infringing activities are permitted by the safe harbor under 35 U.S.C. Section 271(e)(1). In April 2013, we amended our complaint related to the lawsuit to include additional claims alleging that Santaris’ activities providing antisense drugs and antisense drug discovery services to a pharmaceutical company infringes U.S. Patent No. 6,440,739 entitled “Antisense Modulation of Glioma-Associated Oncogene-2 Expression”; and that Santaris induced its actual and prospective pharmaceutical partners to infringe U.S. Patent No. 6,326,199. In December 2013, Santaris filed a new motion for summary judgment asking the court to decide as a matter of law that Santaris’ alleged infringing activities are permitted by the safe harbor under 35 U.S.C. Section 271(e)(1). On February 27, 2014, the court denied this motion, and the case is proceeding.

	Gilead Litigation

	In August 2013, Gilead Sciences Inc. filed a suit in the United States District Court of the Northern District of California related to United States Patent Nos. 7,105,499 and 8,481,712 that are jointly owned by Merck Sharp & Dohme Corp. and Isis Pharmaceuticals, Inc. In the suit Gilead is asking the court to determine that Gilead’s activities do not infringe any valid claim of the named patents and that the patents are not valid. Isis and Merck Sharp & Dohme Corp. filed their answer denying Gilead’s noninfringement and invalidity contentions, contending that Gilead’s commercial sale and offer for sale of sofosbuvir prior to the expiration of the ‘499 and ‘712 patents will infringe those patents, and requesting monetary damages to compensate for such infringement. Under Isis’agreement with Merck, Merck is responsible for the costs of this suit.

Quarterly_Financial_Data_Unaud

Quarterly Financial Data (Unaudited)	12 Months Ended
	Dec. 31, 2013
Quarterly Financial Data (Unaudited)	'
Quarterly Financial Data (Unaudited)	'
	11. Quarterly Financial Data (Unaudited)

	The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for the years ended December 31, 2013 and 2012 are as follows (in thousands, except per share data).

		First			Second			Third			Fourth
		Quarter			Quarter			Quarter			Quarter
	2013 Quarters
	Revenue	$	43,360		$	38,092		$	23,585		$	42,248
	Operating expenses	41,735			46,020			49,090			62,106
	Income (loss) from operations	1,625			(7,928		)	(25,505		)	(19,858		)
	Net loss	$	(1,672	)	$	(10,126	)	$	(24,570	)	$	(24,276	)
	Basic and diluted net loss per share (1)	$	(0.02	)	$	(0.09	)	$	(0.21	)	$	(0.21	)

		First			Second			Third			Fourth
		Quarter			Quarter			Quarter			Quarter
	2012 Quarters
	Revenue	$	23,235		$	47,340		$	11,601		$	19,873
	Operating expenses	41,690			43,644			39,647			45,992
	Income (loss) from operations	(18,455		)	3,696			(28,046		)	(26,119		)
	Net loss	$	(23,995	)	$	(1,207	)	$	(37,639	)	$	(2,637	)
	Basic and diluted net loss per share (1)	$	(0.24	)	$	(0.01	)	$	(0.37	)	$	(0.03	)


	(1) We computed net loss per share independently for each of the quarters presented. Therefore, the sum of the quarterly net loss per share will not necessarily equal the total for the year.

Organization_and_Significant_A1

Organization and Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2013
Organization and Significant Accounting Policies	'
Basis of Presentation	'
	Basis of Presentation

	The consolidated financial statements include the accounts of Isis Pharmaceuticals, Inc. (“we”, “us” or “our”) and our wholly owned subsidiary, Symphony GenIsis, Inc., which is currently inactive. In addition to our wholly owned subsidiary, our consolidated financial statements include our equity investment in Regulus Therapeutics Inc. In October 2012, Regulus completed an initial public offering (IPO). We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies.
Basic and diluted net loss per share	'
	Basic and diluted net loss per share

	We compute basic net loss per share by dividing the net loss by the weighted-average number of common shares outstanding during the period. As we incurred a net loss for the years ended December 31, 2013, 2012 and 2011, we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Common stock from the following would have had an anti-dilutive effect on net loss per share:

	· 23¤4 percent convertible senior notes;
	· 25/8 percent convertible subordinated notes;
	· GlaxoSmithKline, or GSK, convertible promissory notes issued by Regulus;
	· Dilutive stock options;
	· Unvested restricted stock units; and
	· Warrants issued to Symphony GenIsis Holdings LLC.

	In April 2011, Symphony GenIsis Holdings LLC exercised its warrants. As a result, the Symphony GenIsis warrants were not common equivalent shares for the years ended December 31, 2013 and 2012. We redeemed all of our 25¤8 percent notes in September 2012 and in October 2012 Regulus completed an IPO, after which we were no longer guarantors of the two convertible notes that Regulus issued to GSK. As a result, the 25¤8 percent notes and GSK convertible promissory notes were not common equivalent shares for the year ended December 31, 2013.
Revenue Recognition	'
	Revenue Recognition

	We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred revenue on our consolidated balance sheet.

	Research and development revenue under collaborative agreements

	Our collaboration agreements typically contain multiple elements, or deliverables, including technology licenses or options to obtain technology licenses, research and development services, and in certain cases manufacturing services. Our collaborations may provide for various types of payments to us including upfront payments, funding of research and development, milestone payments, licensing fees, profit sharing and royalties on product sales. We evaluate the deliverables in our collaboration agreements to determine whether they meet the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. When the delivered items in an arrangement have “stand-alone value” to our customer, we account for the deliverables as separate units of accounting and we allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Delivered items have stand-alone value if they are sold separately by any vendor or the customer could resell the delivered items on a standalone basis. We use the following hierarchy of values to estimate the selling price of each deliverable: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price, or BESP. The BESP reflects our best estimate of what the selling price would be if we regularly sold the deliverable on a stand-alone basis. We recognize the revenue allocated to each unit of accounting as we deliver the related goods or services. If we determine that we should treat certain deliverables as a single unit of accounting, then we recognize the revenue ratably over our estimated period of performance.

	In December 2012, we entered into a collaboration agreement with AstraZeneca to discover and develop antisense therapeutics against five cancer targets. As part of the collaboration, we received a $25 million upfront payment in December 2012 and a $6 million payment in June 2013 when AstraZeneca elected to continue the research collaboration. We are also eligible to receive milestone payments, license fees for the research program targets and royalties on any product sales of drugs resulting from this collaboration. In exchange, we granted AstraZeneca an exclusive license to develop and commercialize ISIS-STAT3Rx and ISIS-ARRx. We also granted AstraZeneca options to license up to three cancer drugs under the separate research program. We are responsible for completing an ongoing clinical study of ISIS-STAT3Rx and IND-enabling studies for ISIS-ARRx. AstraZeneca is responsible for all other global development, regulatory and commercialization activities for ISIS-STAT3Rx and ISIS-ARRx. In addition, if AstraZeneca exercises its option for any drugs resulting from the research program, AstraZeneca will assume global development, regulatory and commercialization responsibilities for such drug. Since this agreement has multiple elements, we evaluated the deliverables in this arrangement and determined that certain deliverables, either individually or in combination, have stand-alone value. Below is a list of the four separate units of accounting under our agreement:

	· The exclusive license we granted to AstraZeneca to develop and commercialize ISIS-STAT3Rx for the treatment of cancer;
	· The development services we are performing for ISIS-STAT3Rx;
	· The exclusive license we granted to AstraZeneca to develop and commercialize ISIS-ARRx and the research services we are performing for ISIS-ARRx; and
	· The option to license up to three drugs under a research program and the research services we will perform for this program.

	We determined that the ISIS-STAT3Rx license had stand-alone value because it is an exclusive license that gives AstraZeneca the right to develop ISIS-STAT3Rx or to sublicense its rights. In addition, ISIS-STAT3Rx is currently in development and it is possible that AstraZeneca or another third party could conduct clinical trials without assistance from us. As a result, we consider the ISIS-STAT3Rx license and the development services for ISIS-STAT3Rx to be separate units of accounting. We recognized the portion of the consideration allocated to the ISIS-STAT3Rx license immediately because we delivered the license and earned the revenue. We are recognizing as revenue the amount allocated to the development services for ISIS-STAT3Rx over the period of time we perform services. The ISIS-ARRx license is also an exclusive license. Because of the early stage of research for ISIS-ARRx, we believe that our knowledge and expertise with antisense technology is essential for AstraZeneca or another third party to successfully develop ISIS-ARRx. As a result, we concluded that the ISIS-ARRx license does not have stand-alone value and we combined the ISIS-ARRx license and related research services into one unit of accounting. We are recognizing revenue for the combined unit of accounting over the period of time we perform services. We determined that the options under the research program did not have stand-alone value because AstraZeneca cannot develop or commercialize drugs resulting from the research program until AstraZeneca exercises the respective option or options. As a result, we considered the research options and the related research services as a combined unit of accounting. We are recognizing revenue for the combined unit of accounting over the period of our performance.

	We determined that the initial allocable arrangement consideration was the $25 million upfront payment because it was the only payment that was fixed and determinable when we entered into the agreement. In June 2013, we increased the allocable consideration to $31 million when we received the $6 million payment. There was considerable uncertainty at the date of the agreement as to whether we would earn the milestone payments, royalty payments, payments for manufacturing clinical trial materials or payments for finished drug product. As such, we did not include those payments in the allocable consideration.

	We allocated the allocable consideration based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation expert to assist us with determining BESP. We estimated the selling price of the licenses granted for ISIS-STAT3Rx and ISIS-ARRx by using the relief from royalty method. Under this method, we estimated the amount of income, net of taxes, for each drug. We then discounted the projected income for each license to present value. The significant inputs we used to determine the projected income of the licenses included:

	· Estimated future product sales;
	· Estimated royalties on future product sales;
	· Contractual milestone payments;
	· Expenses we expect to incur;
	· Income taxes; and
	· An appropriate discount rate.

	We estimated the selling price of the research and development services by using our internal estimates of the cost to perform the specific services, marked up to include a reasonable profit margin, and estimates of expected cash outflows to third parties for services and supplies over the expected period that we will perform research and development. The significant inputs we used to determine the selling price of the research and development services included:

	· The number of internal hours we will spend performing these services;
	· The estimated number and cost of studies we will perform;
	· The estimated number and cost of studies that we will contract with third parties to perform; and
	· The estimated cost of drug product we will use in the studies.

	As a result of the allocation, we recognized $9.3 million of the $25 million upfront payment for the ISIS-STAT3Rx license in December 2012 and we recognized $2.2 million of the $6 million payment for the ISIS-STAT3Rx license in June 2013. We are recognizing the remaining $19.5 million of the $31 million over the estimated period of our performance. Assuming a constant selling price for the other elements in the arrangement, if there was an assumed ten percent increase or decrease in the estimated selling price of the ISIS-STAT3Rx license, we determined that the revenue we would have allocated to the ISIS-STAT3Rx license would change by approximately seven percent, or $750,000, from the amount we recorded.

	Typically, we must estimate our period of performance when the agreements we enter into do not clearly define such information. Our collaborative agreements typically include a research and/or development project plan outlining the activities the agreement requires each party to perform during the collaboration. We estimate the period of time over which we will complete the activities for which we are responsible and use that period of time as our period of performance for purposes of revenue recognition and amortize revenue over such period. We have made estimates of our continuing obligations under numerous agreements and in certain instances the timing of satisfying these obligations is difficult to estimate. Accordingly, our estimates may change in the future. If our estimates and judgments change over the course of these agreements, it may affect the timing and amount of revenue that we recognize in future periods. For example, in 2013 we adjusted the period of performance on our GSK collaboration and our ISIS-SMNRx collaboration with Biogen Idec. As a result of adding two new development candidates, ISIS-GSK3Rx and ISIS-GSK4Rx, to our collaboration with GSK, our period of performance was extended beyond our initial estimate. Therefore, we extended the amortization period to correspond to the new extended period of performance. Similarly, with our ISIS-SMNRx collaboration, we extended the amortization period to correspond to the expansion of the Phase 3 study in infants with SMA. Since we extended the amortization period for our GSK collaboration and our ISIS-SMNRx collaboration, the amortization from the upfront payments for these collaborations will be $2.6 million less in 2014 compared to 2013.

	From time to time, we may enter into separate agreements at or near the same time with the same customer. We evaluate such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. We evaluate whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. For example, since early 2012 we have entered into four collaboration agreements with Biogen Idec:

	· In January 2012, we entered into a collaboration agreement with Biogen Idec to develop and commercialize ISIS-SMNRx for Spinal Muscular Atrophy, or SMA. As part of the collaboration, we received a $29 million upfront payment and we are responsible for global development of ISIS-SMNRx through completion of Phase 2/3 clinical trials.

	· In June 2012, we entered into a second and separate collaboration agreement with Biogen Idec to develop and commercialize a novel antisense drug targeting DMPK, or dystrophia myotonica-protein kinase. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial.

	· In December 2012, we entered into a third and separate collaboration agreement with Biogen Idec to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets.

	· In September 2013, we entered into a fourth and separate collaboration agreement with Biogen Idec to leverage antisense technology to advance the treatment of neurological diseases. We granted Biogen Idec exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six year term of this collaboration, while Biogen Idec is responsible for the creation and development of small molecule treatments and biologics.

	All four of these collaboration agreements give Biogen Idec the option or options to license one or more drugs resulting from the specific collaboration. If Biogen Idec exercises an option, it will pay us a license fee and will assume future development, regulatory and commercialization responsibilities for the licensed drug. We are also eligible to receive milestone payments associated with the research and/or development of the drugs prior to licensing, milestone payments if Biogen Idec achieves pre-specified regulatory milestones, and royalties on any product sales of drugs resulting from these collaborations.

	We evaluated all four of the Biogen Idec agreements to determine whether we should account for them as separate agreements. We determined that we should account for the agreements separately because we conducted the negotiations independently of one another, each agreement focuses on different drugs, there are no interrelated or interdependent deliverables, there are no provisions in any of these agreements that are essential to the other agreement, and the payment terms and fees under each agreement are independent of each other. We also evaluated the deliverables in each of these agreements to determine whether they met the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. For all four of these agreements, we determined that the options did not have stand-alone value because Biogen Idec cannot pursue the development or commercialization of the drugs resulting from these collaborations until it exercises the respective option or options. As such, for each agreement we considered the deliverables to be a single unit of accounting and we are recognizing the upfront payment for each of the agreements over the respective estimated period of our performance.

	Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and commercialization events. These three categories of milestone events reflect the three stages of the life-cycle of our drugs, which we describe in more detail in the following paragraph.

	Prior to the first stage in the life-cycle of our drugs, we perform a significant amount of work using our proprietary antisense technology to design chemical compounds that interact with specific genes that are good targets for drug discovery. From these research efforts, we hope to identify a development candidate. The designation of a development candidate is the first stage in the life-cycle of our drugs. A development candidate is a chemical compound that has demonstrated the necessary safety and efficacy in preclinical animal studies to warrant further study in humans. During the first step of the development stage, we or our partners study our drugs in IND-enabling studies, which are animal studies intended to support an Investigational New Drug, or IND, application and/or the foreign equivalent. An approved IND allows us or our partners to study our development candidate in humans. If the regulatory agency approves the IND, we or our partners initiate Phase 1 clinical trials in which we typically enroll a small number of healthy volunteers to ensure the development candidate is safe for use in patients. If we or our partners determine that a development candidate is safe based on the Phase 1 data, we or our partners initiate Phase 2 studies that are generally larger scale studies in patients with the primary intent of determining the efficacy of the development candidate. The final step in the development stage is Phase 3 studies to gather the necessary safety and efficacy data to request marketing approval from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve large numbers of patients and can take up to several years to complete. If the data gathered during the trials demonstrates acceptable safety and efficacy results, we or our partner will submit an application to the FDA and/or its foreign equivalents for marketing approval. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing approval, it moves into the commercialization stage, during which our partner will market and sell the drug to patients. Although our partner will ultimately be responsible for marketing and selling the partnered drug, our efforts to discover and develop a drug that is safe, effective and reliable contributes significantly to our partner’s ability to successfully sell the drug. The FDA and its foreign equivalents have the authority to impose significant restrictions on an approved drug through the product label and on advertising, promotional and distribution activities. Therefore, our efforts designing and executing the necessary animal and human studies are critical to obtaining claims in the product label from the regulatory agencies that would allow our partner to successfully commercialize our drug. Further, the patent protection afforded our drugs as a result of our initial patent applications and related prosecution activities in the United States and foreign jurisdictions are critical to our partner’s ability to sell our drugs without competition from generic drugs. The potential sales volume of an approved drug is dependent on several factors including the size of the patient population, market penetration of the drug, and the price charged for the drug.

	Generally, the milestone events contained in our partnership agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a drug progresses through the stages of its life-cycle, the value of the drug generally increases.

	Development milestones in our partnerships may include the following types of events:

	· Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete;
	· Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete;
· Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete;
· Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete.

Regulatory milestones in our partnerships may include the following types of events:

· Filing of regulatory applications for marketing approval such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings.
· Marketing approval in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain approval from the applicable regulatory agency.

Commercialization milestones in our partnerships may include the following types of events:

· First commercial sale in a particular market, such as in the United States or Europe.
· Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.

We assess whether a substantive milestone exists at the inception of our agreements. When a substantive milestone is achieved, we recognize revenue related to the milestone payment. For our existing licensing and collaboration agreements in which we are involved in the discovery and/or development of the related drug or provide the partner with access to new technologies we discover, we have determined that all future development, regulatory and commercialization milestones are substantive. For example, for our strategic alliance with Biogen Idec, we are using our antisense drug discovery platform to discover and develop new drugs against targets for neurological diseases. Alternatively, we provide access to our technology to Alnylam Pharmaceuticals, Inc. to develop and commercialize RNA interference, or RNAi, therapeutics. We consider milestones for both of these collaborations to be substantive. In evaluating if a milestone is substantive we consider whether:

· Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;
· The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;
· The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items;
· There is no future performance required to earn the milestone; and
· The consideration is reasonable relative to all deliverables and payment terms in the arrangement.

If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over the estimated period of performance, if any. We consider milestone payments related to progression of a drug through the development and regulatory stages of its life cycle to be substantive milestones because the level of effort and inherent risk associated with these events is high. All of the milestone payments we earned in 2013 were substantive. Therefore, we recognized the entire amount of those milestone payments in 2013, including a $25 million milestone payment from Genzyme we recognized in the first quarter of 2013 when the FDA approved the KYNAMRO NDA. Further information about our collaborative arrangements can be found in Note 7, Collaborative Arrangements and Licensing Agreements.

Licensing and royalty revenue

We often enter into agreements to license our proprietary patent rights on an exclusive or non-exclusive basis in exchange for license fees and/or royalties. We generally recognize as revenue immediately those licensing fees and royalties for which we have no significant future performance obligations and are reasonably assured of collecting the resulting receivable.
Research, development and patent expenses	'
	Research, development and patent expenses

	Our research and development expenses include wages, benefits, facilities, supplies, external services, clinical trial and manufacturing costs and other expenses that are directly related to our research and development operations. We expense research and development costs as we incur them. When we make payments for research and development services prior to the services being rendered, we record those amounts as prepaid assets on our consolidated balance sheet and we expense them as the services are provided. For the years ended December 31, 2013, 2012 and 2011, research and development expenses were $173.7 million, $154.6 million and $153.1 million, respectively. A portion of the costs included in research and development expenses are costs associated with our collaboration agreements. For the years ended December 31, 2013, 2012 and 2011, research and development costs of approximately $51.9 million, $39.0 million, and $26.3 million, respectively, were related to our collaborative research and development arrangements.

	We capitalize costs consisting principally of outside legal costs and filing fees related to obtaining patents and amortize these costs over the useful life of the patent, beginning with the date the United States Patent and Trademark Office, or foreign equivalent, issues the patent. The weighted average remaining amortizable life of our issued patents was 9.8 years at December 31, 2013.

	The cost of our patents capitalized on our consolidated balance sheet at December 31, 2013 and 2012 was $24.9 million and $31.4 million, respectively. Accumulated amortization related to patents was $9.4 million and $12.8 million at December 31, 2013 and 2012, respectively. Based on existing patents, estimated amortization expense related to patents in each of the next five years is as follows:

	Years Ending December 31,	Amortization
		(in millions)

	2014	$	1
	2015	$	0.9
	2016	$	0.9
	2017	$	0.8
	2018	$	0.7

	We review our capitalized patent costs regularly to ensure that they include costs for patents and patent applications that have future value. We evaluate patents and patent applications that we are not actively pursuing and write off any associated costs. In 2013, 2012 and 2011, patent expenses were $10.3 million, $3.9 million and $4.3 million, respectively, and included non-cash charges related to the write-down of our patent costs to their estimated net realizable values of $6.4 million, $817,000 and $1.9 million, respectively.
Concentration of credit risk	'
	Concentration of credit risk

	Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments and receivables. We place our cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in commercial paper and debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, Standard & Poor’s (S&P) or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.
Cash, cash equivalents and short-term investments	'
	Cash, cash equivalents and short-term investments

	We consider all liquid investments with maturities of 90 days or less when we purchase them to be cash equivalents. Our short-term investments have initial maturities of greater than 90 days from date of purchase. We classify our short-term investments as “available-for-sale” and carry them at fair market value based upon prices for identical or similar items on the last day of the fiscal period. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. We use the specific identification method to determine the cost of securities sold.

	We have equity investments in privately- and publicly-held biotechnology companies that we have received as part of a technology license or collaboration agreement. At December 31, 2013 we held ownership interests of less than 20 percent in each of the respective companies.

	We account for our equity investments in publicly-held companies at fair value and record unrealized gains and losses related to temporary increases and decreases in the stock of these publicly-held companies as a separate component of comprehensive income (loss). We account for equity investments in privately-held companies under the cost method of accounting because we own less than 20 percent and do not have significant influence over their operations. The cost method investments we hold are in smaller satellite companies and realization of our equity position in those companies is uncertain. In those circumstances we record a full valuation allowance. In determining if and when a decrease in market value below our cost in our equity positions is temporary or other-than-temporary, we examine historical trends in the stock price, the financial condition of the company, near term prospects of the company and our current need for cash. If we determine that a decline in value in either a public or private investment is other-than-temporary, we recognize an impairment loss in the period in which the other-than-temporary decline occurs.
Inventory valuation	'
	Inventory valuation

	We capitalize the costs of raw materials that we purchase for use in producing our drugs because until we use these raw materials they have alternative future uses. We include in inventory raw material costs for drugs that we manufacture for our partners under contractual terms and that we use primarily in our clinical development activities and drug products. We can use each of our raw materials in multiple products and, as a result, each raw material has future economic value independent of the development status of any single drug. For example, if one of our drugs failed, we could use the raw materials for that drug to manufacture our other drugs. We expense these costs when we deliver the drugs to our partners, or as we provide these drugs for our own clinical trials. We reflect our inventory on the balance sheet at the lower of cost or market value under the first-in, first-out method. We review inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value. We consider several factors in estimating the net realizable value, including shelf life of raw materials, alternative uses for our drugs and clinical trial materials, and historical write-offs. We did not record any inventory write-offs for the years ended December 31, 2013, 2012 or 2011. Total inventory, which consisted of raw materials, was $8.0 million and $6.1 million as of December 31, 2013 and 2012, respectively.
Property, plant and equipment	'
	Property, plant and equipment

	We carry our property, plant and equipment at cost, which consists of the following (in thousands):

		December 31,
		2013			2012
	Equipment and computer software	$	44,698		$	44,109
	Building and building systems	48,132			48,120
	Land improvements	2,846			2,849
	Leasehold improvements	35,282			34,931
	Furniture and fixtures	5,473			5,342
		136,431			135,351
	Less accumulated depreciation	(60,431		)	(54,465		)
		76,000			80,886
	Land	10,198			10,198

		$	86,198		$	91,084

	We depreciate our property, plant and equipment on the straight-line method over estimated useful lives as follows:

	Computer software and hardware	3 years
	Manufacturing equipment	10 years
	Other equipment	5-7 years
	Furniture and fixtures	5-10 years
	Building	40 years
	Building systems and improvements	10-25 years
	Land improvements	20 years

	We depreciate our leasehold improvements using the shorter of the estimated useful life or remaining lease term.
Licenses	'
	Licenses

	We obtain licenses from third parties and capitalize the costs related to exclusive licenses. We amortize capitalized licenses over their estimated useful life or term of the agreement, which for current licenses is between approximately five years and 15 years. The cost of our licenses at December 31, 2013 and 2012 was $36.2 million. Accumulated amortization related to licenses was $31.6 million and $29.6 million at December 31, 2013 and 2012, respectively. Based on existing licenses, estimated amortization expense related to licenses is as follows:

	Years Ending December 31,	Amortization
		(in millions)

	2014	$	1.9
	2015	$	1.9
	2016	$	0.8

Fair value of financial instruments	'
	Fair value of financial instruments

	We have estimated the fair value of our financial instruments. The amounts reported for cash, accounts receivable, accounts payable and accrued expenses approximate the fair value because of their short maturities. We report our investment securities at their estimated fair value based on quoted market prices for identical or similar instruments.
Long-lived assets	'
	Long-lived assets

	We evaluate long-lived assets, which include property, plant and equipment, patent costs, and exclusive licenses acquired from third parties, for impairment on at least a quarterly basis and whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of such assets. We recorded a charge of $6.4 million, $825,000 and $1.9 million for the years ended December 31, 2013, 2012 and 2011, respectively, related primarily to the write-down of intangible assets.
Equity method of accounting	'
	Equity method of accounting

	We accounted for our ownership interest in Regulus using the equity method of accounting until Regulus’ IPO in October 2012. We began accounting for our investment in Regulus at fair value in the fourth quarter of 2012 when our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. See Note 3, Investments, for additional information regarding our fair value accounting for our investment in Regulus. Under the equity method of accounting, we included our share of Regulus’ operating results on a separate line in our consolidated statement of operations called “Equity in net loss of Regulus Therapeutics Inc.”
Use of estimates	'
	Use of estimates

	The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications	'
	Reclassifications

	We have reclassified certain prior period amounts to conform to the current period presentation. Certain amounts previously reported as research and development revenue have been reclassified to licensing and royalty revenue to conform to the current period presentation.
Consolidation of variable interest entities	'
	Consolidation of variable interest entities

	We identify entities as variable interest entities either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. We perform ongoing qualitative assessments of our variable interest entities to determine whether we have a controlling financial interest in the variable interest entity and therefore are the primary beneficiary. As of December 31, 2013 and 2012, we had collaborative arrangements with five and six entities, respectively, that we considered to be variable interest entities. We are not the primary beneficiary for any of these entities as we do not have the power to direct the activities that most significantly impact the economic performance of our variable interest entities, the obligation to absorb losses, or the right to receive benefits from our variable interest entities that could potentially be significant to the variable interest entities. As of December 31, 2013, the total carrying value of our investments in variable interest entities was $53.4 million, and was primarily related to our investment in Regulus. Our maximum exposure to loss related to these variable interest entities is limited to the carrying value of our investments.
Stock-based compensation	'
	Stock-based compensation

	We measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our Employee Stock Purchase Plan, or ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates.

	We use the Black-Scholes model as our method of valuing option awards and stock purchase rights under the ESPP. On the grant date, we use our stock price and assumptions regarding a number of highly complex and subjective variables to determine the estimated fair value of stock-based payment awards. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, in management’s opinion, the existing valuation models may not provide an accurate measure of the fair value of our employee stock options. Although we determine the estimated fair value of employee stock options using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

	We recognize compensation expense for option awards using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), an entity recognizes compensation expense over the requisite service period for each separately vesting tranche of the award as though the award were in substance multiple awards, which results in the expense being front-loaded over the vesting period.

	In 2012, we began granting RSUs to our employees and our board of directors. The fair value of RSUs is based on the market price of our common stock on the date of grant. RSUs vest annually over a four year period.

	See Note 5, Stockholders’ Equity, for additional information regarding our share-based compensation plans.
Accumulated other comprehensive income (loss)	'
	Accumulated other comprehensive income (loss)

	Accumulated other comprehensive income (loss) is comprised of unrealized gains and losses on investments, net of taxes, and adjustments we made to reclassify realized gains and losses on investments from other accumulated comprehensive income (loss) to our consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income (loss) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Beginning balance accumulated other comprehensive income (loss)	$	12,480		$	(770	)	$	949
	Other comprehensive income (loss) before reclassifications, net of tax (1)	10,253			13,250			(1,719		)
	Amounts reclassified from accumulated other comprehensive income (2)	(1,653		)	—			—
	Net current period other comprehensive income (loss)	8,600			13,250			(1,719		)
	Ending balance accumulated other comprehensive income (loss)	$	21,080		$	12,480		$	(770	)


	(1) Other comprehensive income includes income tax expense of $5.9 million and $9.1 million for the years ended December 31, 2013 and 2012, respectively.

	(2) Included in gain on investments, net on our consolidated statement of operations.
Convertible debt	'
	Convertible debt

	In August 2012, we completed a $201.3 million offering of convertible senior notes, which mature in 2019 and bear interest at 2¾ percent. In September 2012, we used a substantial portion of the net proceeds from the issuance of the 2¾ percent notes to redeem our 25/8 percent convertible subordinated notes. Consistent with how we accounted for our 25/8 percent notes, we account for our 2¾ percent notes by separating the liability and equity components of the instrument in a manner that reflects our nonconvertible debt borrowing rate. As a result, we assigned a value to the debt component of our 2¾ percent notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in us recording the debt instrument at a discount. We are amortizing the debt discount over the life of these 2¾ percent notes as additional non-cash interest expense utilizing the effective interest method. For additional information, see Note 4, Long-Term Obligations and Commitments.
Segment information	'
	Segment information

	We operate in a single segment, Drug Discovery and Development operations, because our chief decision maker reviews operating results on an aggregate basis and manages our operations as a single operating segment.
Fair Value Measurements	'
	Fair Value Measurements

	We use a three-tier fair value hierarchy to prioritize the inputs used in our fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets, which includes our money market funds and treasury securities classified as available-for-sale securities and our investment in equity securities in publicly-held biotechnology companies; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, which includes our fixed income securities and commercial paper classified as available-for-sale securities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our Level 3 investments include investments in the equity securities of publicly-held biotechnology companies for which we calculated a lack of marketability discount because there were restrictions on when we could trade the securities. The majority of our securities have been classified as Level 2. We obtain the fair value of our Level 2 investments from our custodian bank or from a professional pricing service. We validate the fair value of our Level 2 investments by understanding the pricing model used by the custodian banks or professional pricing service provider and comparing that fair value to the fair value based on observable market prices. During the years ended December 31, 2013 and 2012 there were no transfers between our Level 1 and Level 2 investments. We use the end of reporting period method for determining transfers between levels.

	We measure the following major security types at fair value on a recurring basis. We break down the inputs used to measure fair value for these assets at December 31, 2013 and 2012 as follows (in thousands):

		At December 31,			Quoted Prices in			Significant Other			Significant
		2013			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
	Cash equivalents (1)	$	146,357		$	133,233		$	13,124		$	—
	Corporate debt securities (2)	394,773			—			394,773			—
	Debt securities issued by U.S. government agencies (2)	64,432			—			64,432			—
	Debt securities issued by the U.S. Treasury (2)	15,328			15,328			—			—
	Debt securities issued by states of the United States and political subdivisions of the states (2)	22,255			—			22,255			—
	Investment in Regulus Therapeutics Inc.	52,096			52,096			—			—
	Equity securities (3)	1,276			1,276			—			—
	Total	$	696,517		$	201,933		$	494,584		$	—


		At December 31,			Quoted Prices in			Significant Other			Significant
		2012			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
	Cash equivalents (1)	$	105,496		$	101,496		$	4,000		$	—
	Corporate debt securities (2)	193,507			—			193,507			—
	Debt securities issued by U.S. government agencies (2)	18,108			—			18,108			—
	Debt securities issued by the U.S. Treasury (2)	13,452			13,452			—			—
	Debt securities issued by states of the United States and political subdivisions of the states (2)	24,897			—			24,897			—
	Investment in Regulus Therapeutics Inc.	33,622			—			—			33,622
	Equity securities (3)	4,874			4,146			—			728
	Total	$	393,956		$	119,094		$	240,512		$	34,350


	(1) Included in cash and cash equivalents on our consolidated balance sheet.

	(2) Included in short-term investments on our consolidated balance sheet.

	(3) Included in other current assets on our consolidated balance sheet.

	As of December 31, 2012, we classified the fair value measurements of our investments in the equity securities of Regulus and Sarepta Therapeutics, Inc., or Sarepta, as Level 3. We calculated a lack of marketability discount on the fair value of these investments because of trading restrictions on the securities. We consider the inputs we used to calculate the lack of marketability discount Level 3 inputs and, as a result, we categorized these investments as Level 3. We determined the lack of marketability discount by using a Black-Scholes model to value a hypothetical put option to approximate the cost of hedging the stock until the restriction ended. As of December 31, 2012, our Level 3 investments in Regulus and Sarepta had a gross fair value of $44.4 million and $1.0 million, respectively, less a lack of marketability discount of $10.8 million and $296,000, respectively, for a net carrying value of $33.6 million and $728,000, respectively. In the first quarter of 2013, we sold all of the common stock of Sarepta that we owned resulting in a realized gain of $1.1 million. In the fourth quarter of 2013, we re-classified our investment in Regulus to a Level 1 investment because we are no longer subject to contractual trading restrictions on the Regulus shares we own. We recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer.

	The following is a summary of our investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Beginning balance of Level 3 investments	$	34,350		$	—		$	—
	Purchases	—			3,040			—
	Transfers into Level 3 investments	—			25,198			—
	Total gains and losses:
	Included in gain on investments	(1,163		)	—			—
	Included in accumulated other comprehensive income	32,272			6,112			—
	Transfers out of Level 3 investments	(65,419		)	—			—
	Cost basis of shares sold	(40		)	—			—
	Ending balance of Level 3 investments	$	—		$	34,350		$	—

Income Taxes	'
	Income Taxes

	We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. We record a valuation allowance to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that we will not recognize some or all of the deferred tax assets.

	In our financial statements, we recognize the impact of an uncertain income tax position on our income tax returns at the largest amount that the relevant taxing authority is more-likely-than-not to sustain upon audit. If we feel that the likelihood of sustaining an uncertain income tax position is less than 50 percent, we do not recognize it.
Impact of recently issued accounting standards	'
	Impact of recently issued accounting standards

	In July 2013, the FASB issued accounting guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We will adopt this guidance in our fiscal year beginning January 1, 2014. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

Organization_and_Significant_A2

Organization and Significant Accounting Policies (Tables)	12 Months Ended
Organization and Significant Accounting Policies (Tables)	Dec. 31, 2013
Licenses	'
Schedule of property, plant and equipment at cost	'
	We carry our property, plant and equipment at cost, which consists of the following (in thousands):

		December 31,
		2013			2012
	Equipment and computer software	$	44,698		$	44,109
	Building and building systems	48,132			48,120
	Land improvements	2,846			2,849
	Leasehold improvements	35,282			34,931
	Furniture and fixtures	5,473			5,342
		136,431			135,351
	Less accumulated depreciation	(60,431		)	(54,465		)
		76,000			80,886
	Land	10,198			10,198

		$	86,198		$	91,084
Schedule of property, plant and equipment estimated useful life	'

	Computer software and hardware	3 years
	Manufacturing equipment	10 years
	Other equipment	5-7 years
	Furniture and fixtures	5-10 years
	Building	40 years
	Building systems and improvements	10-25 years
	Land improvements	20 years
Summarizes changes in accumulated other comprehensive income (loss) related to unrealized gains and losses on securities	'
	The following table summarizes changes in accumulated other comprehensive income (loss) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Beginning balance accumulated other comprehensive income (loss)	$	12,480		$	(770	)	$	949
	Other comprehensive income (loss) before reclassifications, net of tax (1)	10,253			13,250			(1,719		)
	Amounts reclassified from accumulated other comprehensive income (2)	(1,653		)	—			—
	Net current period other comprehensive income (loss)	8,600			13,250			(1,719		)
	Ending balance accumulated other comprehensive income (loss)	$	21,080		$	12,480		$	(770	)


	(1) Other comprehensive income includes income tax expense of $5.9 million and $9.1 million for the years ended December 31, 2013 and 2012, respectively.

	(2) Included in gain on investments, net on our consolidated statement of operations.
Schedule of assets measured at fair value on a recurring basis	'
	We break down the inputs used to measure fair value for these assets at December 31, 2013 and 2012 as follows (in thousands):

		At December 31,			Quoted Prices in			Significant Other			Significant
		2013			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
	Cash equivalents (1)	$	146,357		$	133,233		$	13,124		$	—
	Corporate debt securities (2)	394,773			—			394,773			—
	Debt securities issued by U.S. government agencies (2)	64,432			—			64,432			—
	Debt securities issued by the U.S. Treasury (2)	15,328			15,328			—			—
	Debt securities issued by states of the United States and political subdivisions of the states (2)	22,255			—			22,255			—
	Investment in Regulus Therapeutics Inc.	52,096			52,096			—			—
	Equity securities (3)	1,276			1,276			—			—
	Total	$	696,517		$	201,933		$	494,584		$	—


		At December 31,			Quoted Prices in			Significant Other			Significant
		2012			Active Markets			Observable			Unobservable
					(Level 1)			Inputs			Inputs
								(Level 2)			(Level 3)
	Cash equivalents (1)	$	105,496		$	101,496		$	4,000		$	—
	Corporate debt securities (2)	193,507			—			193,507			—
	Debt securities issued by U.S. government agencies (2)	18,108			—			18,108			—
	Debt securities issued by the U.S. Treasury (2)	13,452			13,452			—			—
	Debt securities issued by states of the United States and political subdivisions of the states (2)	24,897			—			24,897			—
	Investment in Regulus Therapeutics Inc.	33,622			—			—			33,622
	Equity securities (3)	4,874			4,146			—			728
	Total	$	393,956		$	119,094		$	240,512		$	34,350


	(1) Included in cash and cash equivalents on our consolidated balance sheet.

	(2) Included in short-term investments on our consolidated balance sheet.

	(3) Included in other current assets on our consolidated balance sheet.
Summary of investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	'
	The following is a summary of our investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013, 2012 and 2011 (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Beginning balance of Level 3 investments	$	34,350		$	—		$	—
	Purchases	—			3,040			—
	Transfers into Level 3 investments	—			25,198			—
	Total gains and losses:
	Included in gain on investments	(1,163		)	—			—
	Included in accumulated other comprehensive income	32,272			6,112			—
	Transfers out of Level 3 investments	(65,419		)	—			—
	Cost basis of shares sold	(40		)	—			—
	Ending balance of Level 3 investments	$	—		$	34,350		$	—
Patents	'
Licenses	'
Schedule of estimated amortization expense related to intangible assets	'

	Years Ending December 31,	Amortization
		(in millions)

	2014	$	1
	2015	$	0.9
	2016	$	0.9
	2017	$	0.8
	2018	$	0.7
Licenses	'
Licenses	'
Schedule of estimated amortization expense related to intangible assets	'

	Years Ending December 31,	Amortization
		(in millions)

	2014	$	1.9
	2015	$	1.9
	2016	$	0.8

Investments_Tables

Investments (Tables)	12 Months Ended
Investments (Tables)	Dec. 31, 2013
Investments	'
Summary of contract maturity of available-for-sale securities	'
	The following table summarizes the contract maturity of the available-for-sale securities we held as of December 31, 2013:

	One year or less	34	%
	After one year but within two years	44	%
	After two years but within three years	22	%
	Total	100	%
Summary of investments	'
	The following is a summary of our investments (in thousands):

											Other-Than-
											Temporary
		Amortized			Unrealized						Impairment			Estimated
	December 31, 2013	Cost			Gains			Losses			Loss			Fair Value
	Available-for-sale securities:
	Corporate debt securities(1)	$	142,096		$	75		$	(27	)	$	—		$	142,144
	Debt securities issued by U.S. government agencies (1)	23,242			22			(16		)	—			23,248
	Debt securities issued by the U.S. Treasury	6,239			6			—			—			6,245
	Debt securities issued by states of the United States and political subdivisions of the states	8,082			6			(28		)	—			8,060
	Total securities with a maturity of one year or less	179,659			109			(71		)	—			179,697
	Corporate debt securities	265,969			177			(393		)	—			265,753
	Debt securities issued by U.S. government agencies	41,308			3			(127		)	—			41,184
	Debt securities issued by the U.S. Treasury	9,062			21			—			—			9,083
	Debt securities issued by states of the United States and political subdivisions of the states	14,186			37			(28		)	—			14,195
	Total securities with a maturity of more than one year	330,525			238			(548		)	—			330,215
	Total available-for-sale securities	$	510,184		$	347		$	(619	)	$	—		$	509,912

											Other-Than-
											Temporary
		Cost			Unrealized						Impairment			Estimated
	December 31, 2013	Basis			Gains			Losses			Loss			Fair Value
	Equity securities:
	Regulus Therapeutics Inc.	$	15,526		$	36,570		$	—		$	—		$	52,096
	Securities included in other current assets	1,538			618			—			(880		)	1,276
	Securities included in deposits and other assets	625			—			—			—			625
	Total equity securities	$	17,689		$	37,188		$	—		$	(880	)	$	53,997
	Total available-for-sale and equity securities	$	527,873		$	37,535		$	(619	)	$	(880	)	$	563,909

											Other-Than-
											Temporary
		Amortized			Unrealized						Impairment			Estimated
	December 31, 2012	Cost			Gains			Losses			Loss			Fair Value
	Available-for-sale securities:
	Corporate debt securities(1)	$	115,249		$	81		$	(9	)	$	—		$	115,321
	Debt securities issued by U.S. government agencies(1)	12,100			2			(66		)	—			12,036
	Debt securities issued by the U.S. Treasury	1,000			1			—			—			1,001
	Debt securities issued by states of the United States and political subdivisions of the states	16,560			18			(2		)	—			16,576
	Total securities with a maturity of one year or less	144,909			102			(77		)	—			144,934
	Corporate debt securities	80,166			112			(92		)	—			80,186
	Debt securities issued by U.S. government agencies	8,034			38			—			—			8,072
	Debt securities issued by the U.S. Treasury	12,424			27			—			—			12,451
	Debt securities issued by states of the United States and political subdivisions of the states	8,306			31			(16		)	—			8,321
	Total securities with a maturity of more than one year	108,930			208			(108		)	—			109,030
	Total available-for-sale securities	$	253,839		$	310		$	(185	)	$	—		$	253,964

											Other-Than-
											Temporary
		Cost			Unrealized						Impairment			Estimated
	December 31, 2012	Basis			Gains			Losses			Loss			Fair Value
	Equity securities:
	Regulus Therapeutics Inc.	$	15,526		$	18,096		$	—		$	—		$	33,622
	Securities included in other current assets	1,579			4,175			—			(880		)	4,874
	Securities included deposits and other assets	625			—			—			—			625
	Total equity securities	$	17,730		$	22,271		$	—		$	(880	)	$	39,121
	Total available-for-sale and equity securities	$	271,569		$	22,581		$	(185	)	$	(880	)	$	293,085


	(1) Includes investments classified as cash equivalents on our consolidated balance sheet.
Schedule of investments temporarily impaired	'
	Investments we consider to be temporarily impaired at December 31, 2013 are as follows (in thousands):

				Less than 12 months of						More than 12 months of						Total temporary
				temporary impairment						temporary impairment						impairment
		Number of		Estimated			Unrealized			Estimated			Unrealized			Estimated		Unrealized
		Investments		Fair Value			Losses			Fair Value			Losses			Fair Value		Losses
	Corporate debt securities	148		$	213,469		$	(412	)	$	8,228		$	(8	)	$	221,697	$	(420	)
	Debt securities issued by U.S. government agencies	8		49,437			(143		)	—			—			49,437		(143		)
	Debt securities issued by states of the United States and political subdivisions of the states	7		6,964			(52		)	4,130			(4		)	11,094		(56		)
	Total temporarily impaired securities	163		$	269,870		$	(607	)	$	12,358		$	(12	)	$	282,228	$	(619	)

LongTerm_Obligations_and_Commi1

Long-Term Obligations and Commitments (Tables)	12 Months Ended
Long-Term Obligations and Commitments (Tables)	Dec. 31, 2013
Long-Term Obligations and Commitments	'
Schedule of carrying value of long-term obligations	'
	The carrying value of our long-term obligations was as follows (in thousands):

		December 31,
		2013			2012
	2¾ percent convertible senior notes	$	150,334		$	143,990
	Long-term financing liability for leased facility	71,288			70,550
	Equipment financing arrangement	7,461			9,993
	Leases and other obligations	3,489			2,288
	Total	$	232,572		$	226,821
	Less: current portion	(4,408		)	(4,879		)
	Total Long-Term Obligations	$	228,164		$	221,942
Summary of equity and liability components of debt instruments	'
	The following table summarizes information about the equity and liability components of our 2¾ percent notes, (in thousands):

		December 31,
		2013			2012
	Principal amount of convertible notes outstanding	$	201,250		$	201,250
	Unamortized portion of liability component	(50,916		)	(57,260		)
	Long-term debt	$	150,334		$	143,990

	Carrying value of equity component	$	59,528		$	59,528
Schedule of annual debt and other obligation maturities, including fixed and determinable interest	'
	Annual debt and other obligation maturities, including fixed and determinable interest, at December 31, 2013 are as follows (in thousands):

	2014	$	10,246
	2015	8,544
	2016	6,117
	2017	5,594
	2018	5,594
	Thereafter	207,805
	Subtotal	$	243,900
	Less: current portion	(4,408		)
	Less: fixed and determinable interest	(34,498		)
	Less: debt discount	(50,916		)
	Plus: Deferred rent	1,647
	Total	$	155,725
Schedule of future minimum payments under operating leases	'
	Annual future minimum payments under operating leases as of December 31, 2013 are as follows (in thousands):

		Operating
		Leases
	2014	$	1,470
	2015	1,395
	2016	1,538
	2017	1,481
	2018	1,451
	Thereafter	19,126
	Total minimum payments	$	26,461
Schedule of annual future minimum payments under leases and new facility	'
	Annual future rent payments as of December 31, 2013 for our primary research and development facility are as follows (in thousands):

		Future Rent
		Payments
	2014	$	6,179
	2015	6,179
	2016	6,550
	2017	6,550
	2018	6,943
	Thereafter	105,508
	Total minimum payments	$	137,909

Stockholders_Equity_Tables

Stockholders' Equity (Tables)	12 Months Ended
Stockholders' Equity (Tables)	Dec. 31, 2013
Stock Plans	'
Schedule of stock option activity	'
	The following table summarizes the stock option activity for the year ended December 31, 2013 (in thousands, except per share and contractual life data):

		Number of		Weighted			Average		Aggregate
		Shares		Average Exercise			Remaining		Intrinsic
				Price			Contractual Term		Value
				Per Share
							(Years)
	Outstanding at December 31, 2012	10,823		$	11.3
	Granted	1,911		$	15.88
	Exercised	(5,216	)	$	11.89
	Cancelled/forfeited/expired	(239	)	$	11.19

	Outstanding at December 31, 2013	7,279		$	12.08		4.28		$	202,078

	Exercisable at December 31, 2013	3,948		$	11.52		3.13		$	111,685
Summary of the restricted stock unit, or RSU activity	'
	The following table summarizes the restricted stock unit, or RSU, activity for the year ended December 31, 2013 (in thousands, except per share data):

		Number of		Weighted
		Shares		Average
				Grant Date
				Fair Value
				Per Share

	Non-vested at December 31, 2012	188		$	8.37
	Granted	297		$	17.42
	Vested	(47	)	$	16.64
	Cancelled/forfeited	(13	)	$	11.78

	Non-vested at December 31, 2013	425		$	13.67
Schedule of stock-based compensation expense	'
	The following table summarizes stock-based compensation expense for the years ended December 31, 2013, 2012 and 2011 (in thousands), which was allocated as follows:

		Year Ended December 31,
		2013			2012			2011
	Research, development and patents	$	9,673		$	7,246		$	8,527
	General and administrative	1,745			1,325			1,318
	Total	$	11,418		$	8,571		$	9,845
Schedule of weighted-average assumptions used for valuation of ESPP	'

		December 31,
		2013		2012		2011
	Risk-free interest rate	0.1	%	0.1	%	0.1	%
	Dividend yield	0	%	0	%	0	%
	Volatility	62.9	%	44.5	%	34.9	%
	Expected life	6 months		6 months		6 months
Employee Stock Options:	'
Stock Plans	'
Schedule of weighted-average assumptions used for valuation of stock options	'
		December 31,
		2013		2012		2011
	Risk-free interest rate	1.1	%	1.1	%	2.3	%
	Dividend yield	0	%	0	%	0	%
	Volatility	51.1	%	50.7	%	52.4	%
	Expected life	5.1 years		5.1 years		5.3 years
Board of Director Stock Options:	'
Stock Plans	'
Schedule of weighted-average assumptions used for valuation of stock options	'
		December 31,
		2013		2012		2011
	Risk-free interest rate	2.2	%	1.3	%	2.9	%
	Dividend yield	0	%	0	%	0	%
	Volatility	52.7	%	51.3	%	52.8	%
	Expected life	7.2 years		7.6 years		7.8 years

Income_Taxes_Tables

Income Taxes (Tables)	12 Months Ended
Income Taxes (Tables)	Dec. 31, 2013
Income Taxes	'
Schedule of provision for income taxes on income from continuing operations	'
	The provision for income taxes on income from continuing operations were as follows (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Current:

	Federal	$	—		$	—		$	—
	State	2			2			11
	Total current	2			2			11
	Deferred:

	Federal	(5,082		)	(7,827		)	—
	State	(834		)	(1,284		)	—
	Foreign	—			—			—
	Total deferred	(5,916		)	(9,111		)	—

	Income Tax Expense (Benefit)	$	(5,914	)	$	(9,109	)	$	11
Schedule of reconciliation between effective tax rate on income from continuing operations and the statutory tax rate	'
	The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory U.S. tax rate is as follows (in thousands):

		Year Ended December 31,
		2013					2012					2011

	Pre tax loss	$	(66,558	)			$	(74,587	)			$	(84,790	)

	Statutory rate	(23,295		)	35	%	(26,105		)	35	%	(29,677		)	35	%
	State income tax net of federal benefit	(3,823		)	5.7	%	(4,284		)	5.7	%	(4,870		)	5.7	%
	Net change in valuation allowance	28,850			(43.3	)%	25,269			(33.9	)%	41,136			(48.5	)%
	Gain on Investment in Regulus Therapeutics Inc.	—			—		(6,353		)	8.5	%	—			—
	Tax credits	(15,839		)	23.8	%	806			(1.1	)%	(4,202		)	5	%
	Noncontrolling interest	—			—		—			—		1,448			(1.7	)%
	Deferred tax true-up	8,023			(12.1	)%	839			(1.1	)%	(4,236		)	5	%
	Other	170			(0.2	)%	719			(0.9	)%	412			(0.5	)%
	Effective rate	$	(5,914	)	8.9	%	$	(9,109	)	12.2	%	$	11		(0.0	)%
Schedule of significant components of deferred tax assets and liabilities	'
	Significant components of our deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows (in thousands):

		Year Ended December 31,
		2013			2012
	Deferred Tax Assets:
	Net operating loss carryovers	$	260,462		$	244,539
	R&D credits	65,600			46,928
	Capitalized R&D	2,736			22,223
	Deferred revenue	28,555			7,285
	Accrued restructuring	3,304			3,605
	Other	7,107			18,931
	Total deferred tax assets	$	367,764		$	343,511

	Deferred Tax Liabilities:
	Convertible debt	$	(20,895	)	$	(23,322	)
	Intangible and capital assets	(4,614		)	(6,784		)
	Net deferred tax asset	$	342,255		$	313,405
	Valuation allowance	(342,255		)	(313,405		)

	Net deferreds	$	—		$	—
Summary of the gross unrecognized tax benefits	'
	The following table summarizes our gross unrecognized tax benefits (in thousands):

		Year Ended December 31,
		2013			2012			2011
	Beginning balance of unrecognized tax benefits	$	10,872		$	9,834		$	8,968
	Decrease for prior period tax positions	—			(174		)	(97		)
	Increase for prior period tax positions	9,821			791			—
	Increase for current period tax positions	3,271			421			963
	Ending balance of unrecognized tax benefits	$	23,964		$	10,872		$	9,834

Concentration_of_Business_Risk1

Concentration of Business Risk (Tables)	12 Months Ended
Concentration of Business Risk (Tables)	Dec. 31, 2013
Concentration of Business Risk	'
Schedule of revenue from significant partners	'

		2013		2012		2011
	Partner A	25	%	8	%	0	%
	Partner B	24	%	8	%	18	%
	Partner C	22	%	66	%	73	%
	Partner D	20	%	9	%	0	%

Quarterly_Financial_Data_Unaud1

Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2013
Quarterly Financial Data (Unaudited)	'
Schedule of quarterly data	'
	Summarized quarterly data for the years ended December 31, 2013 and 2012 are as follows (in thousands, except per share data).

		First			Second			Third			Fourth
		Quarter			Quarter			Quarter			Quarter
	2013 Quarters
	Revenue	$	43,360		$	38,092		$	23,585		$	42,248
	Operating expenses	41,735			46,020			49,090			62,106
	Income (loss) from operations	1,625			(7,928		)	(25,505		)	(19,858		)
	Net loss	$	(1,672	)	$	(10,126	)	$	(24,570	)	$	(24,276	)
	Basic and diluted net loss per share (1)	$	(0.02	)	$	(0.09	)	$	(0.21	)	$	(0.21	)

		First			Second			Third			Fourth
		Quarter			Quarter			Quarter			Quarter
	2012 Quarters
	Revenue	$	23,235		$	47,340		$	11,601		$	19,873
	Operating expenses	41,690			43,644			39,647			45,992
	Income (loss) from operations	(18,455		)	3,696			(28,046		)	(26,119		)
	Net loss	$	(23,995	)	$	(1,207	)	$	(37,639	)	$	(2,637	)
	Basic and diluted net loss per share (1)	$	(0.24	)	$	(0.01	)	$	(0.37	)	$	(0.03	)


	(1) We computed net loss per share independently for each of the quarters presented. Therefore, the sum of the quarterly net loss per share will not necessarily equal the total for the year.

Organization_and_Significant_A3

Organization and Significant Accounting Policies (Details) (USD $)

12 Months Ended

1 Months Ended

7 Months Ended

12 Months Ended

7 Months Ended

12 Months Ended

1 Months Ended

7 Months Ended

12 Months Ended

1 Months Ended

0 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

3 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2013

Jan. 31, 2012

Oct. 31, 2013

Jun. 30, 2012

Dec. 31, 2012

Sep. 30, 2013

Oct. 31, 2012

31-May-11

Mar. 31, 2010

Dec. 31, 2013

Jan. 31, 2013

Jan. 31, 2008

Mar. 31, 2013

Collaborations and Licensing Agreements

AstraZeneca

Biogen Idec

GSK

Genzyme Corporation

item

Development milestones - new development candidate

Development milestones - Phase 1

Development milestones - Phase 2

Development milestones - Phase 3

Regulatory milestones

Commercialization milestones

Agreement entered into in December 2012

Collaborations and Licensing Agreements

Agreement entered into in January 2012

Agreement entered into in June 2012

Agreement entered into in December 2012

Agreement entered into in September 2013

Convertible notes guarantee obligation

Collaborations and Licensing Agreements

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

Minimum

Maximum

target

item

ISIS-AR

ISIS-STAT3 License

agreement

target

Regulus

drug

item

security

Research and development revenue under collaborative agreements

Number of convertible notes no longer guaranteed

Number of targets

Upfront fee received

$6,000,000

$25,000,000

$31,000,000

$29,000,000

$12,000,000

$30,000,000

$100,000,000

$3,000,000

$35,000,000

$175,000,000

Number of drugs collaborative partner may license under the separate research program

Number of units of accounting

Upfront fee recognized

2,200,000

9,300,000

Upfront fee deferred

19,500,000

11,200,000

700,000

100,000,000

Assumed change in estimated selling price (as a percent)

10.00%

Percentage by which earned revenue would change based on assumed change in estimated selling price

7.00%

Amount by which earned revenue would change based on assumed change in estimated selling price

750,000

Number of collaborative agreements

Number of new development candidates added to collaboration

Decrease in amortization of upfront payments for 2014

2,600,000

Term of agreement

'6 years

Number of categories of milestone events

Number of stages of life-cycle of drugs

Completion period

'12 months

'18 months

'1 year

'2 years

'1 year

'3 years

'2 years

'4 years

Time to prepare and submit regulatory filings

'6 months

'12 months

Time to obtain approval

'1 year

'2 years

Example of sales threshold as milestone event

1,000,000,000

Milestone payment recognized

10,000,000

11,500,000

10,000,000

25,000,000

Research and development expenses

$173,700,000

$154,600,000

$153,100,000

$51,900,000

$39,000,000

$26,300,000

Organization_and_Significant_A4

Organization and Significant Accounting Policies (Details 2) (Patents, USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Patents	'	'	'
Patents	'	'	'
Estimated useful life	'9 years 9 months 18 days	'	'
Intangible assets cost	$24,900,000	$31,400,000	'
Accumulated amortization	9,400,000	12,800,000	'
2014	1,000,000	'	'
2015	900,000	'	'
2016	900,000	'	'
2017	800,000	'	'
2018	700,000	'	'
Patent expenses	10,300,000	3,900,000	4,300,000
Non cash charges related to write-down of patent costs	$6,400,000	$817,000	$1,900,000

Organization_and_Significant_A5

Organization and Significant Accounting Policies (Details 3) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Maximum
Cash, cash equivalents and short-term investments	'	'	'
Ownership percentage in equity investments	'	'	20.00%
Inventory valuation	'	'	'
Raw materials	$8,033	$6,121	'

Organization_and_Significant_A6

Organization and Significant Accounting Policies (Details 4) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property, plant and equipment	'	'
Property, plant and equipment, gross	$136,431	$135,351
Less accumulated depreciation	-60,431	-54,465
Property plant and equipment excluding land, net	76,000	80,886
Land	10,198	10,198
Property, plant and equipment, net	86,198	91,084
Equipment and computer software	'	'
Property, plant and equipment	'	'
Property, plant and equipment, gross	44,698	44,109
Building and building systems	'	'
Property, plant and equipment	'	'
Property, plant and equipment, gross	48,132	48,120
Land improvements	'	'
Property, plant and equipment	'	'
Property, plant and equipment, gross	2,846	2,849
Estimated useful life	'20 years	'
Leasehold improvements	'	'
Property, plant and equipment	'	'
Property, plant and equipment, gross	35,282	34,931
Furniture and fixtures	'	'
Property, plant and equipment	'	'
Property, plant and equipment, gross	$5,473	$5,342
Furniture and fixtures \| Minimum	'	'
Property, plant and equipment	'	'
Estimated useful life	'5 years	'
Furniture and fixtures \| Maximum	'	'
Property, plant and equipment	'	'
Estimated useful life	'10 years	'
Computer software and hardware	'	'
Property, plant and equipment	'	'
Estimated useful life	'3 years	'
Manufacturing equipment	'	'
Property, plant and equipment	'	'
Estimated useful life	'10 years	'
Other equipment \| Minimum	'	'
Property, plant and equipment	'	'
Estimated useful life	'5 years	'
Other equipment \| Maximum	'	'
Property, plant and equipment	'	'
Estimated useful life	'7 years	'
Building	'	'
Property, plant and equipment	'	'
Estimated useful life	'40 years	'
Building systems and improvements \| Minimum	'	'
Property, plant and equipment	'	'
Estimated useful life	'10 years	'
Building systems and improvements \| Maximum	'	'
Property, plant and equipment	'	'
Estimated useful life	'25 years	'

Organization_and_Significant_A7

Organization and Significant Accounting Policies (Details 5) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Long-lived assets	'	'	'
Impairment charge	$6,400,000	$825,000	$1,900,000
Licenses	'	'	'
Licenses	'	'	'
Intangible assets cost	36,200,000	36,200,000	'
Accumulated amortization	31,600,000	29,600,000	'
2014	1,900,000	'	'
2015	1,900,000	'	'
2016	$800,000	'	'
Licenses \| Minimum	'	'	'
Licenses	'	'	'
Estimated useful life	'5 years	'	'
Licenses \| Maximum	'	'	'
Licenses	'	'	'
Estimated useful life	'15 years	'	'

Organization_and_Significant_A8

Organization and Significant Accounting Policies (Details 6) (USD $)	12 Months Ended			3 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
	item	item	Maximum	Collaborations and Licensing Agreements
				Regulus Therapeutics Inc.
				Maximum
Equity method of accounting	'	'	'	'
Ownership percentage	'	'	20.00%	20.00%
Consolidation of variable interest entities	'	'	'	'
Number of variable interest entities in which the entity is not primary beneficiary	5	6	'	'
Carrying value of investments in variable interest entities	$53.40	'	'	'

Organization_and_Significant_A9

Organization and Significant Accounting Policies (Details 7) (RSUs)	12 Months Ended
	Dec. 31, 2013
RSUs	'
Stock Option Plans	'
Vesting period	'4 years

Recovered_Sheet1

Organization and Significant Accounting Policies (Details 8) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary of changes in accumulated other comprehensive income	'	'	'
Beginning balance accumulated other comprehensive income (loss)	$12,480,000	($770,000)	$949,000
Other comprehensive income (loss) before reclassifications, net of tax	10,253,000	13,250,000	-1,719,000
Amounts reclassified from accumulated other comprehensive income	-1,653,000	'	'
Net current period other comprehensive income (loss)	8,600,000	13,250,000	-1,719,000
Ending balance accumulated other comprehensive income (loss)	21,080,000	12,480,000	-770,000
Income tax expense included in other comprehensive income	$5,900,000	$9,100,000	'

Recovered_Sheet2

Organization and Significant Accounting Policies (Details 9) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Aug. 31, 2012	Sep. 30, 2012
In Thousands, unless otherwise specified	2 3/4 percent convertible senior notes	2 3/4 percent convertible senior notes	2 3/4 percent convertible senior notes	2 5/8 percent convertible subordinated notes
Long-term obligations	'	'	'	'
Interest rate on convertible debt (as a percent)	2.75%	'	'	2.63%
Debt issued	$201,250	$201,250	$201,300	'

Recovered_Sheet3

Organization and Significant Accounting Policies (Details 10) (USD $)

Dec. 31, 2013

Dec. 31, 2012

Mar. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Regulus Therapeutics Inc.

Sarepta Therapeutics, Inc.

Recurring basis

Total

Quoted Prices in Active Markets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Corporate debt securities

Debt securities issued by U.S. government agencies

Debt securities issued by the U.S. Treasury

Debt securities issued by states of the United States and political subdivisions of the states

Equity securities

Debt securities issued by the U.S. Treasury

Equity securities

Corporate debt securities

Debt securities issued by U.S. government agencies

Debt securities issued by states of the United States and political subdivisions of the states

Equity securities

Securities included in other current assets

Regulus Therapeutics Inc.

Securities included in other current assets

Regulus Therapeutics Inc.

Securities included in other current assets

Regulus Therapeutics Inc.

Organization and Significant Accounting Policies

Amount of transfer between Level 1 and Level 2 investments

Assets measured at fair value on a recurring basis

Cash equivalents

146,357,000

105,496,000

133,233,000

101,496,000

13,124,000

4,000,000

Available-for-sale securities

33,600,000

728,000

394,773,000

193,507,000

64,432,000

18,108,000

15,328,000

13,452,000

22,255,000

24,897,000

1,276,000

4,874,000

52,096,000

33,622,000

15,328,000

13,452,000

1,276,000

4,146,000

52,096,000

394,773,000

193,507,000

64,432,000

18,108,000

22,255,000

24,897,000

728,000

33,622,000

Total assets

696,517,000

393,956,000

201,933,000

119,094,000

494,584,000

240,512,000

34,350,000

Gross fair value of investment

44,400,000

1,000,000

Lack of marketability discount

10,800,000

296,000

Realized gain on sale of common stock

$1,100,000

Recovered_Sheet4

Organization and Significant Accounting Policies (Details 11) (Investments Valued Using Level 3 Inputs, USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Investments Valued Using Level 3 Inputs	'	'
Investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	'	'
Balance at the beginning of the period	$34,350	'
Purchases	'	3,040
Transfers into Level 3 investments	'	25,198
Total gains and losses included in gain on investments	-1,163	'
Total gains and losses included in accumulated other comprehensive income	32,272	6,112
Transfers out of Level 3 investments	-65,419	'
Cost basis of shares sold	-40	'
Balance at the end of the period	'	$34,350

Investment_in_Regulus_Therapeu1

Investment in Regulus Therapeutics Inc. (Details) (USD $)	12 Months Ended		1 Months Ended	3 Months Ended
In Thousands, except Share data in Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2013	Oct. 31, 2012	Dec. 31, 2012	Dec. 31, 2012
		Less than	Collaborations and Licensing Agreements	Collaborations and Licensing Agreements	Collaborations and Licensing Agreements
			Regulus	Regulus	Regulus
					Less than
Regulus Investments	'	'	'	'	'
Gain on investment in Regulus Therapeutics Inc.	$18,356	'	'	$18,400	'
Issuance of common stock (in shares)	'	'	12.7	'	'
Share price of common stock issued by investee (in dollars per share)	'	'	$4	'	'
Purchase of common stock at offering price	$3,000	'	$3,000	'	'
Ownership percentage in equity investments	'	20.00%	'	'	20.00%

Investments_Details

Investments (Details) (USD $)

12 Months Ended

3 Months Ended

0 Months Ended

12 Months Ended

25 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

entity

Maximum

Sarepta Therapeutics, Inc.

iCo Therapeutics Inc.

Regulus Therapeutics Inc.

Excaliard Pharmaceuticals, Inc.

Collaborations and Licensing Agreements

Maximum

Contract maturity of available-for-sale securities

One year or less (as a percent)

34.00%

After one year but within two years (as a percent)

44.00%

After two years but within three years (as a percent)

22.00%

Total (as a percent)

100.00%

Percentage of available-for-sale securities with a maturity of less than two years

78.00%

Ownership interests in private and public companies

Equity investments not classified as equity method, ownership percentage

20.00%

0.00%

Number of privately-held companies in which the entity has an equity ownership interest of less than 20%

Number of publicly-held companies in which the entity has an equity ownership interest of less than 20%

Gain on investments and on sale of common stock

$2,378,000

$1,465,000

$4,182,000

$1,100,000

$490,000

Gain for payments received related to acquisition of equity investee by collaborative partner

$2,428,000

$2,177,000

$4,445,000

$844,000

$1,300,000

$4,400,000

$6,500,000

Investments_Details_2

Investments (Details 2) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified	security	Dec. 31, 2012
Investments	'	'
Cost Basis, Securities included in deposits and other assets	$625	$625
Estimated Fair Value, Securities included in deposits and other assets	625	625
Cost Basis	527,873	271,569
Unrealized Gains	37,535	22,581
Unrealized Losses	-619	-185
Other-Than-Temporary Impairment Loss	-880	-880
Estimated Fair Value	563,909	293,085
Temporarily impaired investments	'	'
Temporarily impaired securities, Number of Investments	163	'
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated Fair Value	269,870	'
Less than 12 months of temporary impairment, Unrealized Losses	-607	'
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated Fair Value	12,358	'
More than 12 months of temporary impairment, Unrealized Losses	-12	'
Total temporary impairment, Estimated Fair Value	282,228	'
Total temporary impairment, Unrealized Losses	-619	'
Available-for-sale securities:	'	'
Investments	'	'
Amortized Cost	510,184	253,839
Unrealized Gains	347	310
Unrealized Losses	-619	-185
Estimated Fair Value	509,912	253,964
Available-for-sale securities: \| Debt maturities of one year or less	'	'
Investments	'	'
Amortized Cost	179,659	144,909
Unrealized Gains	109	102
Unrealized Losses	-71	-77
Estimated Fair Value	179,697	144,934
Available-for-sale securities: \| Debt maturities of more than one year	'	'
Investments	'	'
Amortized Cost	330,525	108,930
Unrealized Gains	238	208
Unrealized Losses	-548	-108
Estimated Fair Value	330,215	109,030
Corporate debt securities	'	'
Temporarily impaired investments	'	'
Temporarily impaired securities, Number of Investments	148	'
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated Fair Value	213,469	'
Less than 12 months of temporary impairment, Unrealized Losses	-412	'
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated Fair Value	8,228	'
More than 12 months of temporary impairment, Unrealized Losses	-8	'
Total temporary impairment, Estimated Fair Value	221,697	'
Total temporary impairment, Unrealized Losses	-420	'
Corporate debt securities \| Debt maturities of one year or less	'	'
Investments	'	'
Amortized Cost	142,096	115,249
Unrealized Gains	75	81
Unrealized Losses	-27	-9
Estimated Fair Value	142,144	115,321
Corporate debt securities \| Debt maturities of more than one year	'	'
Investments	'	'
Amortized Cost	265,969	80,166
Unrealized Gains	177	112
Unrealized Losses	-393	-92
Estimated Fair Value	265,753	80,186
Debt securities issued by U.S. government agencies	'	'
Temporarily impaired investments	'	'
Temporarily impaired securities, Number of Investments	8	'
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated Fair Value	49,437	'
Less than 12 months of temporary impairment, Unrealized Losses	-143	'
Total temporary impairment, Estimated Fair Value	49,437	'
Total temporary impairment, Unrealized Losses	-143	'
Debt securities issued by U.S. government agencies \| Debt maturities of one year or less	'	'
Investments	'	'
Amortized Cost	23,242	12,100
Unrealized Gains	22	2
Unrealized Losses	-16	-66
Estimated Fair Value	23,248	12,036
Debt securities issued by U.S. government agencies \| Debt maturities of more than one year	'	'
Investments	'	'
Amortized Cost	41,308	8,034
Unrealized Gains	3	38
Unrealized Losses	-127	'
Estimated Fair Value	41,184	8,072
Debt securities issued by the U.S. Treasury \| Debt maturities of one year or less	'	'
Investments	'	'
Amortized Cost	6,239	1,000
Unrealized Gains	6	1
Estimated Fair Value	6,245	1,001
Debt securities issued by the U.S. Treasury \| Debt maturities of more than one year	'	'
Investments	'	'
Amortized Cost	9,062	12,424
Unrealized Gains	21	27
Estimated Fair Value	9,083	12,451
Debt securities issued by states of the United States and political subdivisions of the states	'	'
Temporarily impaired investments	'	'
Temporarily impaired securities, Number of Investments	7	'
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated Fair Value	6,964	'
Less than 12 months of temporary impairment, Unrealized Losses	-52	'
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated Fair Value	4,130	'
More than 12 months of temporary impairment, Unrealized Losses	-4	'
Total temporary impairment, Estimated Fair Value	11,094	'
Total temporary impairment, Unrealized Losses	-56	'
Debt securities issued by states of the United States and political subdivisions of the states \| Debt maturities of one year or less	'	'
Investments	'	'
Amortized Cost	8,082	16,560
Unrealized Gains	6	18
Unrealized Losses	-28	-2
Estimated Fair Value	8,060	16,576
Debt securities issued by states of the United States and political subdivisions of the states \| Debt maturities of more than one year	'	'
Investments	'	'
Amortized Cost	14,186	8,306
Unrealized Gains	37	31
Unrealized Losses	-28	-16
Estimated Fair Value	14,195	8,321
Equity securities	'	'
Investments	'	'
Cost Basis	17,689	17,730
Unrealized Gains	37,188	22,271
Other-Than-Temporary Impairment Loss	-880	-880
Estimated Fair Value	53,997	39,121
Equity securities \| Securities included in other current assets	'	'
Investments	'	'
Cost Basis	1,538	1,579
Unrealized Gains	618	4,175
Other-Than-Temporary Impairment Loss	-880	-880
Estimated Fair Value	1,276	4,874
Equity securities \| Regulus Therapeutics Inc.	'	'
Investments	'	'
Cost Basis	15,526	15,526
Unrealized Gains	36,570	18,096
Estimated Fair Value	$52,096	$33,622

LongTerm_Obligations_and_Commi2

Long-Term Obligations and Commitments (Details) (USD $)

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

Share data in Millions, except Per Share data, unless otherwise specified

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Aug. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Dec. 31, 2013

2 3/4 percent convertible senior notes

Long-term financing liability for leased research and development facility

Equipment Financing Arrangement

Leases and other obligations

2 5/8 percent convertible subordinated notes

On or after October 5, 2016

Minimum

Maximum

Long-term obligations

Total

$232,572,000

$226,821,000

$150,334,000

$143,990,000

$71,288,000

$70,550,000

$7,461,000

$9,993,000

$3,489,000

$2,288,000

Less: current portion

-4,408,000

-4,879,000

Total Long-Term Obligations

228,164,000

221,942,000

Interest rate on convertible debt (as a percent)

2.75%

2.63%

Proceeds raised net of issuance cost

194,697,000

194,700,000

Issuance costs

6,600,000

Amount of debt redeemed

162,500,000

Amount of debt redeemed including accrued interest

164,000,000

Loss on redemption of debt

4,770,000

4,800,000

Write-off of unamortized debt discount and debt issuance cost

3,600,000

Early redemption premium

1,200,000

Number of shares to be issued upon debt conversion

12.1

Conversion price (in dollars per share)

$16.63

Within 30 consecutive trading days, number of days with closing price of the entity's common stock at least 130% of the conversion price to trigger the redemption option

Period of consecutive trading days within which a closing price of the entity's common stock of at least 130% of the conversion price for at least 20 days triggers the redemption option

'30 days

Threshold closing price of the entity's common stock as percentage of conversion price, to trigger the redemption option

130.00%

Ratio of additional redemption price of debt instrument to principal amount

0.09

Redemption price as a percentage of principal

100.00%

If-converted value of notes in excess of principal

281,000,000

Debt issuance costs, amortization period

'7 years

Nonconvertible debt borrowing rate (as a percent)

8.00%

9.30%

Principal and accrued interest payable

202,600,000

Fair value of convertible notes

505,100,000

Non-cash interest expense related to the amortization of the debt discount and debt issuance costs

6,300,000

8,400,000

8,600,000

Summary of equity and liability components of the 2 3/4 percent notes

Principal amount of convertible notes outstanding

201,300,000

201,250,000

Unamortized portion of liability component

-50,916,000

-57,260,000

Long-term debt

232,572,000

226,821,000

150,334,000

143,990,000

71,288,000

70,550,000

7,461,000

9,993,000

3,489,000

2,288,000

Carrying value of equity component

59,528,000

Draw down period

'3 years

Interest rate swap period, used to calculate interest

'3 years

Basis for variable interest rate

'three year interest rate swap

Percentage added to variable rate basis

3.50%

4.00%

Additional principal amount drawn during the period

2,500,000

9,100,000

Interest rate on new draw down (as a percent)

4.39%

4.12%

Weighted average interest rate (as a percent)

4.28%

Maximum borrowing capacity for equipment purchases

$3,400,000

LongTerm_Obligations_and_Commi3

Long-Term Obligations and Commitments (Details 2) (USD $)	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Annual debt and other obligation maturities	'	'
Less: current portion	($4,408)	($4,879)
Plus: Deferred rent	1,600	1,400
Total Long-Term Obligations	228,164	221,942
Long-term obligations excluding long-term financing liability for leased facility	'	'
Annual debt and other obligation maturities	'	'
2014	10,246	'
2015	8,544	'
2016	6,117	'
2017	5,594	'
2018	5,594	'
Thereafter	207,805	'
Total minimum payments	243,900	'
Less: current portion	-4,408	'
Less: fixed and determinable interest	-34,498	'
Less: debt discount	-50,916	'
Plus: Deferred rent	1,647	'
Total Long-Term Obligations	155,725	'
Long-term financing liability for leased research and development facility	'	'
Annual debt and other obligation maturities	'	'
2014	6,179	'
2015	6,179	'
2016	6,550	'
2017	6,550	'
2018	6,943	'
Thereafter	105,508	'
Total minimum payments	$137,909	'

LongTerm_Obligations_and_Commi4

Long-Term Obligations and Commitments (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
	item
	sqft
Operating Leases	'	'	'
Number of buildings in Carlsbad, California	3	'	'
Area of leased facilities	231,000	'	'
Annual future minimum payments under operating leases	'	'	'
2014	$1,470,000	'	'
2015	1,395,000	'	'
2016	1,538,000	'	'
2017	1,481,000	'	'
2018	1,451,000	'	'
Thereafter	19,126,000	'	'
Total minimum payments	26,461,000	'	'
Rent expense	1,800,000	1,900,000	4,600,000
Deferred rent	1,600,000	1,400,000	'
Book value of facility and associated parcel of land	86,198,000	91,084,000	'
Accumulated depreciation included in book value of facility	60,431,000	54,465,000	'
Purchase price of land, BioMed	10,198,000	10,198,000	'
Operating lease - manufacturing suites for drug development business	'	'	'
Operating Leases	'	'	'
Area of leased facilities	28,704	'	'
Number of lease extension options	4	'	'
Period of lease extension options	'5 years	'	'
Operating lease - adjacent building for laboratory, office space and manufacturing support	'	'	'
Operating Leases	'	'	'
Area of leased facilities	25,792	'	'
Number of lease extension options	2	'	'
Period of lease extension options	'5 years	'	'
Primary research and development facility	'	'	'
Operating Leases	'	'	'
Area of leased facilities	176,000	'	'
Number of lease extension options	4	'	'
Period of lease extension options	'5 years	'	'
Annual future minimum payments under operating leases	'	'	'
Book value of facility and associated parcel of land	66,700,000	68,900,000	'
Accumulated depreciation included in book value of facility	5,500,000	3,200,000	'
Purchase price of land, BioMed	$10,100,000	'	'

Stockholders_Equity_Details

Stockholders' Equity (Details) (USD $)	1 Months Ended	12 Months Ended
Stockholders' Equity (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Class of stock	'	'	'	'
Common stock, shares authorized to issue	'	200,000,000	200,000,000	'
Common stock, shares issued	'	116,471,371	101,481,134	'
Common stock, shares outstanding	'	116,471,371	101,481,134	'
Proceeds from issuance of common stock	$173,300,000	$173,292,000	'	'
Net proceeds from transactions	'	62,958,000	9,470,000	3,567,000
Preferred Stock	'	'	'	'
Class of stock	'	'	'	'
Preferred stock, shares authorized to issue	'	15,000,000	'	'
Preferred stock, shares outstanding	'	0	'	'
Series C Junior Participating Preferred Stock	'	'	'	'
Class of stock	'	'	'	'
Preferred stock, shares issued	'	0	'	'
Preferred stock, shares outstanding	'	0	'	'
Common stock	'	'	'	'
Class of stock	'	'	'	'
Common stock, shares authorized to issue	'	200,000,000	200,000,000	'
Common stock, shares issued	'	116,471,371	101,481,134	'
Common stock, shares outstanding	'	116,471,371	101,481,134	'
Common shares reserved for future issuance	'	19,810,897	'	'
Shares sold	9,617,869	'	'	'
Issuance price per share (in dollars per share)	$19	'	'	'
Additional shares sold pursuant to option granted to the underwriters	617,869	'	'	'
Underwriting discounts and commissions and other estimated offering expenses	9,500,000	'	'	'
Options exercises and employee stock purchase plan issuances (in shares)	'	5,372,000	1,438,000	646,000
Net proceeds from transactions	'	$63,000,000	$9,500,000	$3,600,000

Stockholders_Equity_Details_2

Stockholders' Equity (Details 2) (USD $)

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Jan. 31, 2000

Dec. 31, 2013

Jun. 30, 2009

Dec. 31, 2013

Stock options

Restricted stock units

1989 Stock Option Plan

1989 Stock Option Plan - Options Granted Before May 26, 2004

1989 Stock Option Plan - Options Granted After May 26, 2004

2000 Broad Based Equity Incentive Plan

2011 Equity Incentive Plan

2002 Nonemployee Directors Stock Option Plan

Employee Stock Purchase Plan (ESPP)

Stock options

Restricted stock units

Stock options

Minimum

Maximum

Minimum

Stock Plans

Number of shares authorized

20,000,000

5,990,000

5,500,000

1,200,000

2,424,596

Annual increase in reserve of common shares

150,000

Vesting period

'4 years

'2 years

'4 years

'3 years

'4 years

Annual vesting percentage

25.00%

Award term

'10 years

'7 years

'10 years

Number of options outstanding (in shares)

7,279

10,823

6,211,169

630,086

407,738

459,373

Options exercisable (in shares)

3,948

3,033,298

630,086

285,002

Number of shares available for grant

93,378

5,046,148

311,375

264,275

Percentage of employee compensation, maximum

10.00%

Percentage of fair market value as a purchase price

85.00%

Period for purchase of common stock

'6 months

Minimum holding period of purchased stock

'6 months

Shares issued for stock option exercises and ESPP purchases

102,812

Exercise price (in dollars per share)

$9.04

Stockholders_Equity_Details_3

Stockholders' Equity (Details 3) (Stock options, USD $)	12 Months Ended
Stockholders' Equity (Details 3) (Stock options, USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock options	'	'	'
Number of shares	'	'	'
Outstanding at the beginning of the period (in shares)	10,823	'	'
Granted (in shares)	1,911	'	'
Exercised (in shares)	-5,216	'	'
Cancelled/forfeited/expired (in shares)	-239	'	'
Outstanding at the end of the period (in shares)	7,279	10,823	'
Exercisable at the end of the period (in shares)	3,948	'	'
Weighted Average Exercise Price Per Share	'	'	'
Outstanding at the beginning of the period (in dollars per share)	$11.30	'	'
Granted (in dollars per share)	$15.88	'	'
Exercised (in dollars per share)	$11.89	'	'
Cancelled/forfeited/expired (in dollars per share)	$11.19	'	'
Outstanding at the end of the period (in dollars per share)	$12.08	$11.30	'
Exercisable at the end of the period (in dollars per share)	$11.52	'	'
Average Remaining Contractual Term	'	'	'
Outstanding at the end of the period	'4 years 3 months 11 days	'	'
Exercisable at the end of the period	'3 years 1 month 17 days	'	'
Aggregate Intrinsic Value	'	'	'
Outstanding at the end of the period	$202,078,000	'	'
Exercisable at the end of the period	111,685,000	'	'
Weighted average fair value of options granted (in dollars per share)	$7.10	$3.55	$4.85
Intrinsic value of options exercised	69,600,000	7,600,000	686,000
Cash received from exercise of stock options	62,000,000	8,700,000	2,800,000
Weighted-average fair value of options exercised (in dollars per share)	$25.24	'	'
Unrecognized estimated non-cash stock-based compensation expense	$9,600,000	'	'
Weighted average period for recognition	'1 year 1 month 6 days	'	'

Stockholders_Equity_Details_4

Stockholders' Equity (Details 4) (RSUs, USD $)	12 Months Ended
In Millions, except Share data in Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Number of Shares	'	'
Non-vested at the beginning of the period (in shares)	188	'
Granted (in shares)	297	'
Vested (in shares)	-47	'
Cancelled/forfeited (in shares)	-13	'
Non-vested at the end of the period (in shares)	425	'
Weighted Average Grant Date Fair Value per Share	'	'
Non-vested at the beginning of the period (in dollars per share)	$8.37	'
Granted (in dollars per share)	$17.42	'
Vested (in dollars per share)	$16.64	'
Cancelled/forfeited (in dollars per share)	$11.78	'
Non-vested at the end of the period (in dollars per share)	$13.67	'
Unrecognized compensation cost related to RSUs	$3.50	'
Weighted average period for recognition	'1 year 6 months	'
Employees	'	'
Weighted Average Grant Date Fair Value per Share	'	'
Granted (in dollars per share)	$16.94	$8.22
Board of Directors	'	'
Weighted Average Grant Date Fair Value per Share	'	'
Granted (in dollars per share)	$27.95	$12.94

Stockholders_Equity_Details_5

Stockholders' Equity (Details 5) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Allocation of stock-based compensation expense	'	'	'
Stock-based compensation expense	$11,418	$8,571	$9,845
Research, development and patents	'	'	'
Allocation of stock-based compensation expense	'	'	'
Stock-based compensation expense	9,673	7,246	8,527
General and administrative	'	'	'
Allocation of stock-based compensation expense	'	'	'
Stock-based compensation expense	$1,745	$1,325	$1,318

Stockholders_Equity_Details_6

Stockholders' Equity (Details 6)	12 Months Ended
Stockholders' Equity (Details 6)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Stock Options:	'	'	'
Weighted-average assumptions	'	'	'
Risk-free interest rate (as a percent)	1.10%	1.10%	2.30%
Dividend yield (as a percent)	0.00%	0.00%	0.00%
Volatility (as a percent)	51.10%	50.70%	52.40%
Expected life	'5 years 1 month 6 days	'5 years 1 month 6 days	'5 years 3 months 18 days
Board of Director Stock Options:	'	'	'
Weighted-average assumptions	'	'	'
Risk-free interest rate (as a percent)	2.20%	1.30%	2.90%
Dividend yield (as a percent)	0.00%	0.00%	0.00%
Volatility (as a percent)	52.70%	51.30%	52.80%
Expected life	'7 years 2 months 12 days	'7 years 7 months 6 days	'7 years 9 months 18 days
ESPP:	'	'	'
Weighted-average assumptions	'	'	'
Risk-free interest rate (as a percent)	0.10%	0.10%	0.10%
Dividend yield (as a percent)	0.00%	0.00%	0.00%
Volatility (as a percent)	62.90%	44.50%	34.90%
Expected life	'6 months	'6 months	'6 months

Stockholders_Equity_Details_7

Stockholders' Equity (Details 7) (USD $)	Apr. 30, 2011	Apr. 30, 2006
Warrants	'	'
Warrants to purchase shares granted to the members of Symphony GenIsis Holdings LLC	'	4,250,000
Exercise price (in dollars per share)	'	$8.93
Outstanding warrants	0	'

Income_Taxes_Details

Income Taxes (Details) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes	'	'	'
Unrealized gains on available-for-sale securities, amount of tax recorded in other comprehensive income	$5,914	$9,111	'
Current:	'	'	'
State	2	2	11
Total current	2	2	11
Deferred:	'	'	'
Federal	-5,082	-7,827	'
State	-834	-1,284	'
Total deferred	-5,916	-9,111	'
Income Tax Expense (Benefit)	($5,914)	($9,109)	$11

Income_Taxes_Details_2

Income Taxes (Details 2) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes	'	'	'
Pre tax loss	($66,558)	($74,587)	($84,790)
Reconciliation between income taxes on income from continuing operations and statutory U.S. taxes	'	'	'
Statutory rate	-23,295	-26,105	-29,677
State income tax net of federal benefit	-3,823	-4,284	-4,870
Net change in valuation allowance	28,850	25,269	41,136
Gain on investment in Regulus Therapeutics Inc.	'	-6,353	'
Tax credits	-15,839	806	-4,202
Noncontrolling interest	'	'	1,448
Deferred tax true-up	8,023	839	-4,236
Other	170	719	412
Income Tax Expense (Benefit)	($5,914)	($9,109)	$11
Reconciliation between the effective tax rate on income from continuing operations and the statutory U.S. tax rate	'	'	'
Statutory rate (as a percent)	35.00%	35.00%	35.00%
State income tax net of federal benefit (as a percent)	5.70%	5.70%	5.70%
Net change in federal valuation allowance (as a percent)	-43.30%	-33.90%	-48.50%
Gain on investment in Regulus Therapeutics Inc. (as a percent)	'	8.50%	'
Tax credits (as a percent)	23.80%	-1.10%	5.00%
Noncontrolling interest (as a percent)	'	'	-1.70%
Deferred tax true-up (as a percent)	-12.10%	-1.10%	5.00%
Other items (as a percent)	-0.20%	-0.90%	-0.50%
Effective rate (as a percent)	8.90%	12.20%	0.00%

Income_Taxes_Details_3

Income Taxes (Details 3) (USD $)	12 Months Ended
Income Taxes (Details 3) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Deferred Tax Assets:	'	'
Net operating loss carryovers	$260,462,000	$244,539,000
R&D credits	65,600,000	46,928,000
Capitalized R&D	2,736,000	22,223,000
Deferred revenue	28,555,000	7,285,000
Accrued restructuring	3,304,000	3,605,000
Other	7,107,000	18,931,000
Total deferred tax assets	367,764,000	343,511,000
Deferred Tax Liabilities:	'	'
Convertible debt	-20,895,000	-23,322,000
Intangible and capital assets	-4,614,000	-6,784,000
Net deferred tax asset	342,255,000	313,405,000
Valuation allowance	-342,255,000	-313,405,000
Expected increase in shareholders' equity when deferred tax assets on non-qualified stock options and incentive stock options are ultimately realized	27,800,000	'
Federal	'	'
Operating loss carryforwards	'	'
Net operating loss carryforwards	685,800,000	'
California	'	'
Operating loss carryforwards	'	'
Net operating loss carryforwards	$894,900,000	'

Income_Taxes_Details_4

Income Taxes (Details 4) (Research and development, USD $)	Dec. 31, 2013
In Millions, unless otherwise specified	Dec. 31, 2013
Federal	'
Tax credit carryforwards	'
Tax credit carryforwards	$62.60
California	'
Tax credit carryforwards	'
Tax credit carryforwards	$22.20

Income_Taxes_Details_5

Income Taxes (Details 5) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary the gross amounts of unrecognized tax benefits	'	'	'
Beginning balance of unrecognized tax benefits	$10,872	$9,834	$8,968
Decrease for prior period tax positions	'	-174	-97
Increase for prior period tax positions	9,821	791	'
Increase for current period tax positions	3,271	421	963
Ending balance of unrecognized tax benefits	$23,964	$10,872	$9,834

Collaborative_Arrangements_and1

Collaborative Arrangements and Licensing Agreements (Details) (USD $)

1 Months Ended

3 Months Ended

12 Months Ended

1 Months Ended

3 Months Ended

12 Months Ended

1 Months Ended

7 Months Ended

12 Months Ended

7 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

3 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

0 Months Ended

1 Months Ended

12 Months Ended

25 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

3 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

Jun. 30, 2013

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Oct. 31, 2012

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2013

Jun. 30, 2013

Aug. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Jan. 31, 2012

Dec. 31, 2013

Oct. 31, 2013

Jun. 30, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Sep. 30, 2013

Dec. 31, 2013

Sep. 30, 2013

Dec. 31, 2013

31-May-07

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

31-May-07

Jan. 31, 2013

Jan. 31, 2008

Mar. 31, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

31-May-11

Mar. 31, 2010

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Mar. 31, 2010

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Feb. 28, 2013

Nov. 30, 2013

Dec. 31, 2013

Nov. 30, 2013

Apr. 30, 2013

Dec. 31, 2013

Dec. 31, 2006

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Dec. 31, 2009

Dec. 31, 2013

Mar. 31, 2004

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Mar. 31, 2007

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

Nov. 30, 2007

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Aug. 31, 2005

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2009

Aug. 31, 2003

Dec. 31, 2013

Dec. 31, 2011

Dec. 31, 2013

Jan. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Jun. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Jan. 31, 2009

Dec. 31, 2013

Dec. 31, 2001

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2004

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2013

Maximum

Collaborations and Licensing Agreements

AstraZeneca

Biogen Idec

Bristol-Myers Squibb

Genzyme Corporation

Glaxo Smith Kline

Roche

Achaogen, Inc.

Alnylam

Antisense Therapeutics Limited

Atlantic Pharmaceuticals Limited, formerly Atlantic Healthcare (UK) Limited

Excaliard Pharmaceuticals, Inc.

iCo Therapeutics Inc.

OncoGenex

Regulus Therapeutics Inc.

Xenon Pharmaceuticals Inc.

CHDI Foundation, Inc.

Abbott Molecular Inc.

Eyetech Pharmaceuticals, Inc.

Roche Molecular Systems

Idera Pharmaceuticals, Inc., formerly Hybridon, Inc.

Verva Pharmaceuticals Ltd.

Cold Spring Harbor Laboratory

University of Massachusetts

Regulus Therapeutics Inc.

Maximum

Collaborations and Licensing Agreements

Agreement entered into in December 2012

Agreement entered into in August 2013

Collaborations and Licensing Agreements

Agreement entered into in January 2012

Agreement entered into in June 2012

Agreement entered into in December 2012

Agreement entered into in September 2013

Collaborations and Licensing Agreements

Agreement entered into in January 2005

Agreement entered into in August 2003

Collaborations and Licensing Agreements

Collaborative Arrangement of Partner with Sanofi

Collaborations and Licensing Agreements

Agreement entered into in November 2010

Collaborations and Licensing Agreements

Regulus Therapeutics Inc.

target

drug

Forecast

Pre-specified events

Development milestones

Regulatory milestones

ISIS-AR

Three drugs

ISIS-STAT3 License

Development milestones

Regulatory milestones

License fee and substantive milestones

agreement

Forecast

Development milestones

Regulatory milestones

License fee and substantive milestones

Development milestones

Regulatory milestones

License fee and substantive milestones

target

Development milestones

Regulatory milestones

License fee and substantive milestones

Maximum

Antisense drug for neurological disease

Other modalities

Development milestones

Minimum

Maximum

Pre-specified events

Regulatory milestones

Commercialization milestones

program

Maximum

Pre-specified events

Development milestones

Development milestones up to Phase 2 proof-of-concept

Regulatory milestones

Commercialization milestones

ISIS-TTR

ISIS-GSK3

ISIS-GSK4

Drug targeting HTT protein

Additional drugs

Drug using Roche's proprietary brain shuttle technology

drug

Series A preferred stock

Maximum

Phase 3

Pre-specified events

Phase 3

Pre-specified events

Development milestones

Regulatory milestones

Development, regulatory and commercial milestones

Maximum

Regulatory milestones

Phase 3

Development milestones

Regulatory milestones

Clinical, regulatory and sales milestones

Development and regulatory milestones

Phase 3

Development milestones

Regulatory milestones

Development and regulatory milestones

Minimum

Maximum

Development milestones

Regulatory milestones

Development and regulatory milestones

Phase 2

Phase 3

Development milestones

Regulatory milestones

Development, regulatory and commercial milestones

Phase 2

drug

payment

Cumulative net sales from $140 million to $2.1 billion

Cumulative net sales over $2.1 billion

Regulatory milestones

Patent, clinical and regulatory milestones

Clinical and regulatory milestones

Clinical, regulatory and sales milestones

drug

Development milestones

Regulatory milestones

License fee and substantive milestones

Pre-specified events

Development milestones

Regulatory milestones

program

Development milestones

Regulatory milestones

Commercialization milestones

License fee and substantive milestones

Development milestones

Commercialization milestones

Forecast

Minimum

Maximum

Minimum

Maximum

Collaborative Arrangements and Licensing Agreements

Number of targets

Upfront and near-term payments

$31,000,000

Upfront fee received

6,000,000

25,000,000

31,000,000

750,000

29,000,000

12,000,000

30,000,000

100,000,000

15,000,000

175,000,000

3,000,000

35,000,000

2,500,000

30,000,000

5,000,000

1,000,000

500,000

10,000,000

2,000,000

Upfront fee recorded as deferred revenue

19,500,000

11,200,000

7,600,000

700,000

100,000,000

Number of drugs the collaborative partner may license under a separate research program

Number of collaborations

Period of exclusive rights to use antisense technology

'6 years

Period during which a change in control could result in requirement to refund upfront payment

'6 years

Equity investment in entity

173,300,000

173,292,000

150,000,000

Equity investment in entity (in shares)

5,000,000

Profit share as percentage of commercial sales

30.00%

50.00%

Milestone payment earned

10,000,000

11,500,000

19,500,000

10,000,000

8,000,000

25,000,000

2,000,000

7,500,000

3,000,000

10,000,000

5,000,000

750,000

Cumulative milestone payments earned under collaborative arrangement at period end

7,000,000

9,300,000

24,000,000

3,000,000

Number of programs under which drugs are to be developed

Average maximum milestone payments receivable per program

20,000,000

Increase in payments that the Company is eligible to receive under collaboration

35,000,000

Maximum amount of payments receivable

970,000,000

315,500,000

655,000,000

45,200,000

105,000,000

163,200,000

78,800,000

150,000,000

303,800,000

49,000,000

130,000,000

259,000,000

60,000,000

130,000,000

260,000,000

90,000,000

35,000,000

55,000,000

1,500,000,000

700,000,000

825,000,000

1,200,000,000

185,500,000

526,500,000

445,000,000

46,000,000

67,000,000

170,000,000

80,000,000

362,000,000

50,000,000

46,300,000

7,500,000

1,400,000

7,700,000

40,000,000

8,400,000

47,700,000

7,900,000

40,500,000

48,400,000

1,500,000

2,000,000

3,500,000

1,300,000

4,500,000

5,800,000

2,800,000

Number of milestone payments

Next prospective milestone

15,000,000

3,250,000

18,000,000

14,000,000

10,000,000

25,000,000

1,000,000

22,000,000

4,000,000

375,000

600,000

1,500,000

4,000,000

1,300,000

500,000

Maximum amount of payments receivable per drug under strategic alliance

136,500,000

3,400,000

1,100,000

2,300,000

Maximum amount of payments receivable per program

59,000,000

130,000,000

259,000,000

Minimum annual net revenues to earn next milestone payment

250,000,000

Initial development cost contributed

125,000,000

Period following an acquisition within which collaborator may purchase rights to receive payments

'180 days

Ownership percentage of Isis stock below which strategic partner may acquire additional shares without prior consent

2.00%

Research and development revenue recognized

144,194,000

96,415,000

96,190,000

1,500,000

License fee recognized

3,091,000

5,634,000

2,896,000

2,000,000

4,000,000

Convertible promissory note repaid by Xenon

1,500,000

Revenue earned

42,248,000

23,585,000

38,092,000

43,360,000

19,873,000

11,601,000

47,340,000

23,235,000

147,285,000

102,049,000

99,086,000

29,100,000

9,300,000

37,000,000

8,500,000

188,000

290,000

2,400,000

32,500,000

67,600,000

72,300,000

35,300,000

8,200,000

17,700,000

5,100,000

1,500,000

2,700,000

375,000

210,000

671,000

3,000

7,000

750,000

3,500,000

84,000

80,000

414,000

2,000,000

2,400,000

362,000

499,000

790,000

618,000

1,000,000

828,000

10,000

Percent of total revenue

20.00%

9.00%

25.00%

8.00%

22.00%

66.00%

73.00%

24.00%

8.00%

18.00%

Deferred revenue

9,300,000

15,700,000

145,100,000

62,600,000

126,000

3,800,000

11,500,000

19,900,000

25,000,000

229,000

400,000

Expense reimbursement paid

3,000,000

Upfront fees received from collaborative partner per third-party agreement

1,900,000

Upfront fee received by collaborative partner from third party

25,000,000

Maximum amount of milestone payments payable under strategic alliance

6,100,000

600,000

500,000

Upfront fee in the form of equity securities

1,500,000

2,000,000

750,000

Payment received in form of securities

500,000

Number of drugs to be developed and commercialized

Ownership interest percentage

20.00%

10.00%

12.00%

11.00%

0.00%

6.00%

9.00%

Maximum amount of milestone payments payable per drug

3,400,000

Amount received for sale of equity investment in party to collaborative arrangement

2,428,000

2,177,000

4,445,000

844,000

1,300,000

4,400,000

6,500,000

490,000

Percentage share of milestone payments for payments up to $370 million

30.00%

Payments receivable, eligible for percentage share

370,000,000

Royalties as percentage of sales

3.88%

7.00%

Royalty due period from first commercial sale

'10 years

Payment following first commercial sale of product if change in control of collaborative partner

20,000,000

Period due for payment following first commercial sale of product

'21 days

Remaining payment following first commercial sale of product

10,000,000

Sale price of interest owned in subsidiary

215,000,000

Earn out payments receivable as a percentage of cumulative net sales of sold subsidiary

2.50%

5.00%

1.50%

3.00%

Cumulative net sales, threshold for earnout payments

140,000,000

2,100,000,000

Purchase of common stock at offering price

3,000,000

Common stock owned

7,000,000

Number of drugs in clinical development

Gain (loss) on change in ownership interest percentage

18,356,000

18,400,000

Percentage share of payments receivable by collaborative partner

7.50%

Cumulative revenue recognized to date

$40,500,000

Concentration_of_Business_Risk2

Concentration of Business Risk (Details)	12 Months Ended
Concentration of Business Risk (Details)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenue \| Partner A	'	'	'
Concentration of business risk	'	'	'
Concentration percentage	25.00%	8.00%	0.00%
Revenue \| Partner B	'	'	'
Concentration of business risk	'	'	'
Concentration percentage	24.00%	8.00%	18.00%
Revenue \| Partner C	'	'	'
Concentration of business risk	'	'	'
Concentration percentage	22.00%	66.00%	73.00%
Revenue \| Partner D	'	'	'
Concentration of business risk	'	'	'
Concentration percentage	20.00%	9.00%	0.00%
Contract receivables \| Significant Partners	'	'	'
Concentration of business risk	'	'	'
Concentration percentage	91.00%	83.00%	'
Number of significant partners	3	4	'

Employment_Benefits_Details

Employment Benefits (Details) (USD $)	12 Months Ended
Employment Benefits (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employment Benefits	'	'	'
Employee contribution limit per calendar year for employees under 50 years of age	$17,500	'	'
Employee contribution limit per calendar year for employees 50 years of age or over	23,000	'	'
Employers matching contributions	$574,000	$529,000	$487,000

Quarterly_Financial_Data_Unaud2

Quarterly Financial Data (Unaudited) (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly financial data	'	'	'	'	'	'	'	'	'	'	'
Revenue	$42,248	$23,585	$38,092	$43,360	$19,873	$11,601	$47,340	$23,235	$147,285	$102,049	$99,086
Operating expenses	62,106	49,090	46,020	41,735	45,992	39,647	43,644	41,690	198,951	170,973	170,186
Income (loss) from operations	-19,858	-25,505	-7,928	1,625	-26,119	-28,046	3,696	-18,455	-51,666	-68,924	-71,100
Net loss	($24,276)	($24,570)	($10,126)	($1,672)	($2,637)	($37,639)	($1,207)	($23,995)	($60,644)	($65,478)	($84,801)
Basic and diluted net loss per share (in dollars per share)	($0.21)	($0.21)	($0.09)	($0.02)	($0.03)	($0.37)	($0.01)	($0.24)	($0.55)	($0.65)	($0.85)