Agreement with S*Bio Pte Ltd.

9 Months Ended

Sep. 30, 2012

Agreement with S*Bio Pte Ltd.

Agreement with S*Bio Pte Ltd.

Note 16. Agreement with S*Bio Pte Ltd.

In May 2011, the Company entered into a Termination and Separation Agreement, or the Termination Agreement, with S*BIO to terminate its collaboration agreement and amend the Company’s rights with respect to ONX 0803 and ONX 0805. Under the Termination Agreement, the Company’s option rights to ONX 0803 and ONX 0805, which it had not exercised, reverted to S*BIO and S*BIO will retain responsibility for all development and commercialization of these compounds. The Company retained its equity interest in S*BIO and, in addition to any value associated with its equity interest, may receive up to $20.0 million from S*BIO based on agreed portions of any partnering revenue or future royalty revenue related to ONX 0803 and ONX 0805, or proceeds from any acquisition of S*BIO.

In connection with the termination of the collaboration agreement with S*BIO, during the first quarter of 2011, the Company concluded that it will no longer receive clinical development services subsequent to March 31, 2011 relating to the $20.0 million advance funding payment provided to S*BIO in May 2010. The Company recorded a $12.7 million write-off during the first quarter of 2011, for the remaining unamortized balance of prepaid research and development expense relating to the advance funding payment. In addition, the Company reassessed the fair value of its equity investment in S*BIO in accordance with Accounting Standards Codification (“ASC”) 325-20-35, Investments — Other, and determined that it was impaired, accordingly, in 2011, the Company recorded an impairment charge of $3.8 million in the “Other expense” line item in the Condensed Consolidated Statement of Operations.

S*BIO qualifies as a variable interest entity, or VIE. However, the Company does not have the power to direct the activities that most significantly impact the performance of S*BIO. Therefore, the Company is not considered the primary beneficiary and consolidation is not required. The Company wrote off its remaining equity investment in S*BIO to zero during September 2012.

In June 2012, the Company received $6.0 million in cash and equity from S*BIO as a result of the license of the Janus Associated Kinase 2 (JAK2) inhibitor. During the quarter ended September 30, 2012, the equity securities were redeemed for $1.1 million.