fiscal 2011. The decrease was primarily due to fewer scientists engaged on our collaboration with
Genentech during the second half of fiscal 2011, which resulted in $5.0 million less revenue compared to
fiscal 2010. This decrease was partially offset by increased revenue of $1.7 million and $700 thousand
from funded research under our collaborations with Amgen and Novartis, respectively.
clinical trials we may conduct for our collaborators and the cost of chemical compounds sold from our
inventory. These costs consist mainly of compensation, associated fringe benefits, share-based
compensation, preclinical and clinical outsourcing costs and other collaboration-related costs, including
supplies, small tools, travel and meals, facilities, depreciation, recruiting and relocation costs and other
direct and indirect chemical handling and laboratory support costs.
2012 compared to fiscal 2011. The decrease was primarily the result of fewer scientists engaged on our
collaborations with Genentech and Amgen during the second half of fiscal 2012. Cost of Revenue
decreased as a percentage of total revenue due to the increased License and Milestone Revenue
recognized in fiscal 2012 as discussed above.
2.1%, but decreased as a percentage of total revenue. The increase in absolute dollars was related to the
restructuring charges incurred during the fourth quarter as discussed under
Report. We recorded $1.3 million to Cost of Revenue from the reduction in force. In addition, related to the
restructuring, we vacated a portion of one of our significant laboratory facilities at our Longmont facility
and recorded $339 thousand to Cost of Revenue in accelerated depreciation on leasehold
improvements. This increase was partially offset by reduced outsourcing costs to advance our partnered
programs with Amgen and Novartis through clinical trials, as our partners now bear all or an increased
share of the development costs compared to the prior year. The decrease as a percentage of revenue is
the result of increased License and Milestone Revenue recognized during the year which did not have a
direct impact on our expenses.
our proprietary drug programs for scientific and clinical personnel, supplies, inventory, equipment, small
tools, travel and meals, depreciation, consultants, sponsored research, allocated facility costs, costs
related to preclinical and clinical trials and share-based compensation. We manage our proprietary
programs based on scientific data and achievement of research plan goals. Our scientists record their
time to specific projects when possible; however, many activities simultaneously benefit multiple projects
and cannot be readily attributed to a specific project. Accordingly, the accurate assignment of time and
project. As a result, we do not report costs on a program basis.
presented (dollars in thousands):
Discovery decreased $6.8 million, or 10.7%, during fiscal 2012 compared to the prior year. The decrease
was the result of our new license agreement with Genentech and our new collaboration and license
agreement with ASLAN Pharmaceuticals which resulted in the corresponding program costs shifting to
the collaboration partner.
Discovery for fiscal 2011 decreased by $9.0 million because our development costs for AMG 151 and
MEK162 both shifted out of Research and Development Expenses for Proprietary Drug Discovery to Cost
of Revenue as a result of partnering those programs with Amgen and Novartis during the third and fourth
quarters of fiscal 2010, respectively. Those decreases were partially offset by the increased development
costs from continuing to progress our most advanced wholly-owned drug programs through the clinic.
Also included in fiscal 2011 Research and Development Expenses for Proprietary Drug Discovery were
restructuring charges incurred during the fourth quarter as discussed in
Report. We recorded $2.1 million and $1.5 million to Research and Development Expenses for
Proprietary Drug Discovery from the reduction in force and accelerated depreciation on leasehold
included in Cost of Revenue or Research and Development Expenses for Proprietary Drug Discovery and
include other management, business development, accounting, information technology and
administration costs, including patent filing and prosecution, recruiting and relocation, consulting and
professional services, travel and meals, sales commissions, facilities, depreciation and other office