3. Collaboration Agreement

Cyprium

Agreement with Sentynl

On February 24, 2021, Cyprium entered into an asset purchase agreement with Sentynl. Pursuant to the terms of the agreement, Sentynl paid Cyprium an upfront fee of $8.0 million specifically earmarked to complete the CUTX-101 development program for the treatment of Menkes disease, through the filing of Cyprium’s New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”).  As further compensation, Cyprium is eligible to receive up to an additional $12.0 million, to be paid (i) $3.0 million upon NDA acceptance by the FDA and (ii) $9.0 million upon FDA approval of the NDA and transfer of CUTX-101 to Sentynl.  The Company will recognize revenue associated with these future milestones based upon achievement.  At June 30, 2022, none of these future milestones was deemed probable.  

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Upon the transfer of CUTX-101 to Sentynl, Cyprium would be eligible to earn up to an additional five potential sales milestones totaling up to $255.0 million, in addition to royalties on CUTX-101 net sales ranging from mid-single digits up to the mid-twenties. Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101.

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In connection with the $8.0 million upfront payment from Sentynl, the Company is recognizing revenue using an input method based upon the costs incurred to date in relation to the total estimated costs to complete the development activities.  Accordingly, revenue is being recognized over the period in which the development activities are expected to occur.  For the three-month period ending June 30, 2022 and 2021, the company recognized revenue of $0.6 million and $2.4 million, respectively.  For the six months ended June 30, 2022 and 2021, the company recognized revenue of $1.2 million and $3.2 million, respectively.