CharityWatch Analysts perform an in-depth analysis of charities' audited financial statements and IRS tax filings, and often review other documents such as state filings, annual reports, and fundraising contracts during their evaluations. Below are select notes that CharityWatch believes may be of interest to donors.

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CharityWatch's rating of City of Hope & Affiliates includes the financial activities of the legal entities included in its audited consolidated financial statements for the fiscal year-ended 9/30/2015. These include the following public charities: (1) City of Hope (tax ID#95-3435919); (2) City of Hope National Medical Center (tax ID#95-1683875); (3) City of Hope Medical Foundation (tax ID#27-4803222); and (4) Beckman Research Institute of the City of Hope (tax ID#95-3432210).

In addition, according to the City of Hope & Affiliates consolidated audit of Sept. 30, 2015 (Note 1, Organization):

"The accounts of City of Hope include the assets, liabilities and results of operations of the supporting auxiliaries of City of Hope (the Auxiliaries). The Auxiliaries, located throughout the United States, are nonprofit public benefit unincorporated associations that coordinate fundraising activities to support the mission of the [City of Hope] Affiliated Group."
According to the City of Hope & Affiliates consolidated audit of Sept. 30, 2015 (Note 8, Capital Commitments):

"As of September 30, 2013, the [City of Hope] Affiliates have committed to spend approximately $11,991,000 through 2016 for building renovations, multiple campus facility renovations, and various information technology projects, including a clinical information system and an enterprise resource planning system."
According to the City of Hope & Affiliates consolidated audit of Sept. 30, 2015 (Note 13, Subsequent Events):

"In October 2015, City of Hope entered into a long-term lease agreement for a research building that qualifies as a capital lease. There is an option to purchase the building in 2017 for $15,500,000 and City of Hope intends to purchase the building at that time."
According to the City of Hope & Affiliates consolidated audit of Sept. 30, 2015 (Note 2, Royalty Income):

"The [City of Hope] Affiliated Group receives royalties from Genetech based on Genetech's revenues in the previous quarter from sales of its own drugs, as well as from royalties and other amounts paid by its licensees... During 2015 and 2014, the [City of Hope] Affiliated Group received and recognized royalty revenue totaling $290,887,000 and $249,845,000, respectively, primarily from sales of drugs by Genetech and other licensees of monoclonal antibodies, including Rituxan, Herceptin, Avastin, Humira, and others using technology developed at the Institute..."

According to the City of Hope & Affiliates consolidated audit of Sept. 30, 2015 (Note 8, Litigation and Administrative Actions):

"City of Hope has been engaged in various proceedings involving challenges to the validity of U.S. Patent No. 6,331,415 issued December 18, 2001, (Cabilly II), which City of Hope co-owns with Genetech. Cabilly II accounts for a substantial portion (99% for the years ended September 30, 2015 and 2014) of City of Hope royalty revenue. The proceedings include merged reexamination requests filed by two third parties in 2005 before the U.S. Patent & Trademark Office (PTO), which were resolved favorably for City of Hope and Genetech on May 19, 2009... On April 12, 2011, the PTO issued U.S. Patent No. 7,923,221 (Cabilly III, and together with Cabilly II, the Cabilly Patents). City of Hope and Genetech are also co-owners of Cabilly III, and both Cabilly II and III are set to expire in 2018."

"In April 2015, City of Hope and Genetech settled two cases involving challenges to the Cabilly patents, both filed in 2013... City of Hope made no payment in connection with either settlement."

"In July 2015, Sanofi-Aventis U.S. LLC (Sanofi) and Regeneron Pharmaceuticals, Inc. (Regeneron) filed a lawsuit against City of Hope and Genetech...challenging the validity of the Cabilly III patent and seeking declaratory judgment that its antibody drug Praluent...does not infringe the patents. Sanofi and Regeneron also challenged the validity of the Cabilly II patent in a petition for inter partes review filed July 27, 2015, in the PTO. Sanofi and Regeneron...received approval from the Food and Drug Administration to market and sell Praluent on July 24, 2015."

"The complaint and petition filed by Sanofi and Regeneron contain allegations that are similar in significant respects to allegations made in prior challenges to the Cabilly patents. The proceedings...are at a very early stage. The final outcome of the cases cannot be determined at this time. If either the Cabilly II or Cabilly III patent is ultimately declared invalid, royalties under the two Cabilly patents could be significantly reduced or eliminated in the future, which could have a material adverse impact on the financial condition of the [City of Hope] Affiliated Group."

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