In accordance with ASC 730-10-25-1, Research and Development, costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use. The licenses purchased by the Company and Mustang, Checkpoint, Helocyte, Caelum and Cyprium require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility. As such, for the three months ended March 31, 2018 and 2017, the purchase price of licenses acquired was classified as research and development-licenses acquired in the Condensed Consolidated Statements of Operations, as reflected in the table below:

 

		For the Three Months Ended March 31,
($ in thousands)		2018			2017
Fortress Companies:
Checkpoint		$	–		$	400
Helocyte			21			–
Mustang			75			575
Cellvation			1			–
Caelum			–			219
Cyprium			–			100
Total		$	97		$	1,294

 

 

The table below provides a summary of Checkpoint’s expense related to its licenses, for the three months ended March 31, 2018 and 2017 by license as recorded in the Condensed Consolidated Statements of Operations:

 

($ in thousands)		For the three months ended March 31
		2018			2017
Jubliant Biosys License CK-103		$	–		$	400
Total licenses acquired expense		$	–		$	400

 

In addition, for the three months ended March 31, 2018 and 2017, approximately $44,000 and $28,000, respectively, was recognized in revenue from the collaboration agreement with TG Therapeutics, Inc. (“TGTX”), a related party, in the Condensed Consolidated Statements of Operations.

 

 

The table below provides a summary of Mustang’s expense related to its licenses, for the three months ended March 31, 2018 and 2017 by license as recorded in the Condensed Consolidated Statements of Operations:

 

($ in thousands)		For the three months ended March 31
		2018			2017
City of Hope (COH) IL-13 License		$	–		$	250
COH IV/ICV Agreement			–			125
University of California License for PSCA			–			200
Manufacturing License			75			–
Total licenses acquired expense		$	75		$	575

 

 

In January 2018, Mustang entered into a Non-Exclusive License Agreement (the “Manufacturing License”) with COH to acquire intellectual property rights in patent applications, know-how and regulatory filings pertaining to methods of manufacturing T-cells in connection with CAR-T development and isolated populations of therapeutic T-cells bearing specific surface markers. Mustang paid an upfront fee of $75,000 in connection with the Manufacturing License. COH is eligible to receive an annual maintenance fee of $15,000, which is creditable against royalties due to COH under the Manufacturing License. Royalty payments in the low single digits are due on net sales of licensed products, with lower royalties due with respect to licensed products that incorporate a chimeric antigen receptor that is separately licensed from COH to Mustang.

 

 

On February 2, 2018 Mustang entered into an Option Agreement the (“TGTX Mustang Option”) with TG Therapeutics, Inc. (“TGTX”), a related party, whereby TGTX was granted the option to enter into a global collaboration on the joint development and commercialization of product candidates pertaining to Mustang’s CD20 license agreement with the Fred Hutchinson Cancer Research Center. In consideration of the TGTX Mustang Option, TGTX paid an option fee of $50,000, which was recorded by Mustang as Collaboration Revenue Related Party in the Condensed Consolidated Statement of Operations. The Option expires 180 days after the effective date and can be extended for three months upon mutual written consent. Mr. Weiss, our Executive Vice Chairman, Strategic Development, serves as the Chief Executive Officer of TGTX.

 

 

For the three months ended March 31, 2018 and 2017, respectively, Caelum recorded expense of nil and $0.2 million in connection with its license for CAEL-101 from Columbia University.

 

 

For the three months ended March 31, 2018 and 2017, respectively, Cyprium recorded expense of nil and $0.1 million in connection with its license for CUTX-101 (copper histidinate injection) from the Eunice Kennedy Shriver National Institute of Child Health and Human Development (“NICHD”).