9. Milestones and Sponsored Research Agreements

 

Fortress   

 

The Company has a license agreement with the University College London Business PLC (“UCLB”) under which the Company received an exclusive, worldwide license to develop and commercialize CNDO-109 to activate NK cells for the treatment of cancer-related and other conditions. In consideration for the license, the Company made upfront payments totaling $0.1 million and may be required to make future milestone payments totaling up to approximately $22.0 million upon the achievement of various milestones related to regulatory or commercial events. In March 2016, the Company paid UCLB $0.4 million due upon completion of the Phase 1 study for Acute Myeloid Leukemia. In the event that CNDO-109 is commercialized, the Company is obligated to pay to UCLB annual royalties ranging from 3% to 5% based upon various levels of net sales of the product. Under the terms of the license agreement, the Company is allowed to grant sublicenses to third parties without the prior approval of UCLB. In the event that the Company sublicenses CNDO-109 to a third party, the Company is obligated to pay to UCLB all or a portion of the royalties the Company receives from the sub-licensee. Through December 31, 2017, the Company has not sub-licensed CNDO-109 to a third party.

 

 

In connection with its license agreement with NeuPharma, Inc. (“NeuPharma”), Checkpoint entered into a Sponsored Research Agreement with NeuPharma for certain research and development activities. Effective January 11, 2016, TGTX, a related party, agreed to assume all costs associated with this Sponsored Research Agreement and paid Checkpoint for all amounts previously paid by the Company.  For the year ended December 31, 2017 and 2016, approximately $0.6 million and $1.0 million, respectively, was recognized in revenue in connection with the Sponsored Research Agreement in the Consolidated Statements of Operations.

 

In October 2016, Cellvation entered research funding agreement with the University of Texas in connection with the license for a method and apparatus for conditioning cell populations for cell therapies. In connection with this agreement Cellvation agreed to fund $0.8 million of research quarterly through March 31, 2018. For the year ended December 31, 2017 and 2016, Cellvation recorded an expense of $0.1 million and $0.2 million, respectively, representing amounts due under this arrangement.

 

 

PepVax and Triplex Clinical Research and Support Agreements

 

In March 2016, Helocyte entered into an Investigator-Initiated Clinical Research Support Agreement, as amended, with the COH, to support a Phase 2 clinical study of its PepVax immunotherapy for CMV control in allogeneic stem cell transplant recipients (“PepVax Research Agreement”). The Phase 2 study is additionally supported by grants from the National Institutes of Health/National Cancer Institute (“NCI”). Under the terms of the agreement, Helocyte made an upfront payment to COH of $1.0 million, recorded as sponsored research expense, and will pay COH up to an additional $2.0 million upon the achievement of certain clinical milestones. Unless earlier terminated, the agreement expires upon the delivery of a final study report or December 31, 2018.

 

In February 2016, Helocyte entered into an Investigator-Initiated Clinical Research Support Agreement, as amended, with the COH, to support a Phase 2 clinical study of its Triplex immunotherapy for CMV control in allogeneic stem cell transplant recipients (“Triplex Research Agreement”). The Phase 2 study is additionally supported by grants from the NCI. Under the terms of the agreement, Helocyte made an upfront payment to COH of $1.0 million, recorded as sponsored research expense, and will pay COH up to an additional $3.4 million upon the achievement of certain clinical milestones. Unless earlier terminated, the agreement expires upon the delivery of a final study report or May 31, 2018.

 

For the years ended December 31, 2017, 2016 and 2015, Helocyte recorded approximately $3.7 million, $4.3 million and nil, consisting of $ 2.6 million, $1.8 million and nil in connection with the Triplex Research Agreement and $1.1 million, $2.5 million and nil connection with the PepVax Research Agreement and nil, respectively, recorded in research and development expenses in the Company’s Consolidated Statements of Operations in connection with these agreements.

 

 

On May 1, 2017, Helocyte and COH entered in a Sponsored Research Agreement for preclinical studies in connection with the development of Pentamer. In June 2017, Helocyte made an upfront payment of $1.5 million to fund the development plan, the payment was recorded as a prepayment on the Condensed Consolidated Balance Sheets. For the years ended December 31, 2017 and 2016, Helocyte recorded approximately $0.2 million and nil, respectively, in research and development expenses in the Company’s Consolidated Statements of Operations.

 

In March 2015, in connection with Mustang’s license with COH for the development of CAR-T, Mustang entered into a Sponsored Research Agreement in which Mustang will fund continued research in the amount of $2.0 million per year, payable in four equal annual installments, over the next five years. For the year ended December 31, 2017, 2016 and 2015, Mustang incurred expense of $2.0 million, $2.0 million $1.5 million, respectively and recorded as research and development expense in the Company’s Consolidated Statement of Operations.

 

 

On February 17, 2017, Mustang entered into a Clinical Research Support Agreement for CD123. Pursuant to the terms of this agreement Mustang made an upfront payment of approximately $20,000 and will contribute an additional $0.1 million per patient in connection with the on-going investigator-initiated study. Further, Mustang agreed to fund approximately $0.2 million over three years pertaining to the clinical development of CD123. For the year ended December 31, 2017 Mustang recorded approximately $1.1 million in research and development expenses in the Company’s Consolidated Statements of Operations.

 

 

Also, on February 17, 2017, Mustang entered into a Clinical Research Support Agreement for IL13R2 (“IL13R2 CRA”). Pursuant to the terms of this agreement Mustang made an upfront payment of approximately $9,300 and will contribute an additional $0.1 million per patient in connection with the on-going investigator-initiated study. Further, Mustang agreed to fund approximately $0.2 million over three years pertaining to the clinical development of IL13R2. For the year ended December 31, 2017, Mustang recorded approximately $1.4 million in research and development expenses under the IL13R2 CRA in the Company’s Consolidated Statements of Operations. 

 

 

Also, on July 3, 2017, in conjunction with the CD20 Technology License from Fred Hutch, Mustang entered into an investigator-initiated clinical trial agreement (“CD20 CTA”) to provide partial funding for a Phase 1/2 clinical trial at Fred Hutch evaluating the safety and efficacy of the CD20 Technology in patients with relapsed or refractory B-cell non-Hodgkin lymphomas. In connection with the CD20 CTA, Mustang agreed to fund up to $5.3 million of costs associated with the clinical trial, which commenced during the fourth quarter of 2017. For the year ended December 31, 2017 Mustang recorded $0.6 million of expense related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.

 

 

On November 28, 2017, Mustang entered into a Sponsored Research Agreement with Beth Israel Deaconess Medical Center Inc. (“BIDMC”) to perform research relating to gene editing, via the use of CRISPR/Cas9, to be used in enhancing the efficacy of chimeric antigen receptor T (CAR-T) cell therapies for solid tumor indications and to generate universal off the shelf CAR-T cell therapies for both liquid and solid tumor indications. The Company agreed to fund approximately $0.8 million over a three-year period. The Company recorded $0.1 million in 2017 related to this arrangement related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.