Annual report pursuant to Section 13 and 15(d)

Subsequent Events

Subsequent Events
12 Months Ended
Dec. 31, 2015
Subsequent Events [Abstract]  
Subsequent Events


On January 5, 2016, Ionis Pharmaceuticals, Inc., formerly known as Ionis Pharmaceuticals, Inc., or Ionis, filed a lawsuit against our wholly owned subsidiary, OncoGenex Technologies Inc., or OncoGenex Technologies, in the United States District Court for the Southern District of California. Ionis claims that OncoGenex Technologies is in breach of an Amended and Restated License Agreement between Ionis and OncoGenex Technologies dated July 2, 2008, as amended, or License Agreement. Under the License Agreement, Ionis is entitled to a share of certain forms of non-royalty revenue received by OncoGenex Technologies, but is not entitled to a share of revenue received by OncoGenex Technologies for the reimbursement of research and development activities. In April 2015, we terminated a collaboration agreement with Teva Pharmaceuticals Industries Ltd. In connection with that termination, Teva paid us $23.2 million as an advance reimbursement for certain continuing research and development activities related to custirsen and certain other antisense inhibitors of clusterin. In the lawsuit, Ionis claims that OncoGenex Technologies is in breach of the License Agreement for failing to pay Ionis a share of the advance reimbursement payment from Teva and other non-monetary consideration received from Teva. Ionis seeks damages in the amount of at least $10 million and a declaratory judgment that, based on OncoGenex Technologies’ alleged breach, Ionis has the right to terminate the License Agreement. We intend to vigorously defend this matter and, based on our preliminary review, we believe we have valid defenses. However, litigation is inherently uncertain, and any judgment or injunctive relief entered against us or any adverse settlement could materially and adversely impact our business, financial condition, operating results and prospects. Because we are in the early stages of this matter, we are unable to estimate a reasonably possible range of loss, if any, that may result from this matter.


In January 2016, Scott Cormack, our Chief Executive Officer, married Michelle Griffin, a consultant to us.  During 2015, we paid Ms. Griffin approximately $0.5 million, for consulting services. We also granted Ms. Griffin options to purchase 37,500 shares of common stock, and 18,750 restricted stock units in 2015. In addition, pursuant to the consulting agreement with Ms. Griffin, as at December 31, 2015, we had an accrued termination liability of approximately $0.4 million.

In February 2016, we committed to a plan to reduce operating expenses, which included a workforce reduction of 11 employees, representing approximately 27% of our employees prior to the reduction. We estimate we will incur approximately $0.4 million in cash expenditures as a result of the workforce reduction, substantially all of which will be severance costs to be paid out in in the first quarter of 2016.