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Collaboration and Licensing Agreements | 12 Months Ended
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Dec. 31, 2024
Collaboration and Licensing Agreements [Abstract] |
Collaboration and Licensing Agreements | COLLABORATION AND LICENSING AGREEMENTS We out-licensed to external partners the development of tenapanor and commercialization of tenapanor through agreements with Kyowa Kirin in Japan, Fosun Pharma in China and Knight in Canada for the development and commercialization of tenapanor for certain indications in their respective territories. We recognize revenue from such arrangements as licensing revenue, product supply revenue or non-cash royalty revenue related to the sale of future royalties. Our significant accounting policies for such revenue streams are as follows: Licensing revenue includes: •upfront license fees, as well as developmental, regulatory and commercialization milestone payments. We assess upfront and milestone payments using the most likely amount method, including variable payments only when it is probable that no significant revenue reversal will occur. Upfront license fees are recognized upon receipt. Milestones tied to external factors, such as regulatory approvals, are considered probable when those accomplishments are achieved. •sales-based royalties, other than non-cash royalty revenue related to the sale of future royalties as discussed below, are recognized when sales occur or when related performance obligations are met. Product supply revenue includes drug substance or drug supply revenue received from our out-licensing agreements. Product supply revenue is recognized when control of goods is transferred upon delivery. Advanced payments from partners for drug substance are recognized as deferred revenue until delivery. Non-cash royalty revenue related to the sale of future royalties includes royalties earned and received under the Kyowa Kirin Agreement, which are remitted to HCR upon receipt, pursuant to the HCR Agreement as discussed in Note 8. Deferred Royalty Obligation Related To The Sale Of Future Royalties. The following table summarizes total revenue by collaboration partner:
| Year Ended December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Licensing revenue |  |  |  |  |
Kyowa Kirin | $ | — |  |  | $ | 30,000 |  |  | $ | 35,000 |
Fosun Pharma | — |  |  | 5,000 |  |  | — |
METiS | — |  |  | 750 |  |  | — |
Knight | 78 |  |  | 59 |  |  | 31 |
Total licensing revenue | $ | 78 |  |  | $ | 35,809 |  |  | $ | 35,031 |
Product supply revenue |  |  |  |  |
Kyowa Kirin | 11,649 |  |  | 6,092 |  |  | 1,518 |
Fosun Pharma | — |  |  | 29 |  |  | 9 |
Total supply revenue | $ | 11,649 |  |  | $ | 6,121 |  |  | $ | 1,527 |
Non-cash royalty revenue related to the sale of future royalties |  |  |  |  |
Kyowa Kirin | $ | 2,692 |  |  | $ | — |  |  | $ | — |
Kyowa Kirin We granted Kyowa Kirin an exclusive license (Kyowa Kirin Agreement) to develop and commercialize certain NHE3 inhibitors including tenapanor in Japan for the treatment of cardiorenal diseases and conditions, excluding cancer, in exchange for future royalties defined below, an upfront license fee of $30.0 million, and potential future development and regulatory milestones up to $55.0 million, of which $35.0 million has been received and recognized as revenue to date, as well as approximately ¥8.5 billion for commercialization milestones, or approximately $54.0 million at the currency exchange rate on December 31, 2024. In addition, we are eligible to receive royalties on net sales of tenapanor in Japan throughout the term of the agreement. Under a Commercial Supply Agreement, we supply tenapanor drug substance that will be used to satisfy Kyowa Kirin’s commercial needs which includes advanced payments for reimbursement of costs plus a reasonable overhead for the supply of product. In February 2024, Kyowa Kirin announced the launch of tenapanor, marketed as PHOZEVEL®, for patients with CKD with hyperphosphatemia in Japan. The Kyowa Kirin Agreement was amended to reduce the royalty rate Kyowa Kirin would pay on tenapanor sales in Japan from high teens to low double digits for a two-year period of time following the first commercial sale in Japan, and then to mid-single digits for the remainder of the royalty term (2022 Amendment). As consideration for reduction in the royalty rate, Kyowa Kirin agreed to pay us up to an additional $40.0 million payable in two tranches, with the first payment due following Kyowa Kirin’s filing with the Japanese MHLW of its application for marketing approval for tenapanor and the second payment due following Kyowa Kirin’s receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan, both of which occurred as of September 30, 2023. As discussed in Note 8. Deferred Royalty Obligation Related To The Sale Of Future Royalties, future royalties and commercial milestone payments we may receive under the license, as amended, will be remitted to HCR pursuant to the HCR Agreement. The following table presents changes in our current and non-current deferred revenue balances, which are all attributable to Kyowa Kirin:
| 2024 |  | 2023
(in thousands) | Current |  | Non-Current |  | Current |  | Non-Current
Balance at January 1, | $ | 7,182 |  | $ | 8,644 |  | $ | 4,211 |  | $ | 9,025
Prepaid product supply | 3,716 |  | 8,212 |  | 1,547 |  | 5,629
Product supply delivered | (9,836) |  | — |  | (4,586) |  | —
Reclassify amounts to be recognized in the next twelve months | 9,624 |  | (9,624) |  | 6,010 |  | (6,010)
Balance at December 31, | $ | 10,686 |  | $ | 7,232 |  | $ | 7,182 |  | $ | 8,644
Fosun Pharma We have an exclusive license agreement with Fosun Pharma (Fosun Agreement) for the development, commercialization and distribution of tenapanor in China for both hyperphosphatemia and IBS-C. The Fosun Agreement granted exclusive license rights to Fosun Pharma in exchange for an upfront license fee of $12.0 million, recognized upon execution of the agreement, and potential regulatory milestone payments up to $113.0 million, of which $8.0 million has been received and recognized to date. In addition, we are eligible to receive reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20%. Knight We have an exclusive license agreement with Knight (Knight Agreement) for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C. The Knight Agreement granted exclusive license rights to Knight in exchange for an upfront license fee of $2.3 million, recognized upon execution, and potential regulatory and commercialization milestones up to CAD 22.2 million, or approximately $15.4 million at the currency exchange rate on December 31, 2024, of which $0.7 million has been received and recognized to date. In addition, we are eligible to receive royalties ranging from the mid-single digits to the low twenties throughout the term of the agreement and a transfer price for manufacturing supply services. METiS We have an exclusive license agreement with METiS Therapeutics Inc., (METiS Agreement) for the development and commercialization of a portfolio of TGR5 agonist compounds that we discovered and developed for all therapeutic areas in exchange for an upfront license fee of $0.8 million, recognized upon execution in 2023. In addition, we may be eligible to receive development and commercialization milestone payments worth up to $243.0 million. We are also eligible to receive royalties ranging within the mid-single digits throughout the term of the agreement. AstraZeneca In June 2015, we entered into a termination agreement with AstraZeneca (AstraZeneca Termination Agreement) pursuant to which we have agreed to pay AstraZeneca (i) future royalties at a royalty rate of 10% of net sales of tenapanor or other NHE3 products by us or our licensees, and (ii) 20% of non-royalty revenue received from a new collaboration partner should we elect to license, or otherwise provide rights to develop and commercialize tenapanor or other NHE3 products, up to a maximum of $75.0 million in aggregate for (i) and (ii). Royalty expense recognized under this agreement as other cost of revenue on our statements of operations and comprehensive loss was $34.7 million, $12.4 million and $3.6 million in 2024, 2023 and 2022, respectively. As of December 31, 2024, we have recognized $62.3 million of the total $75.0 million outstanding royalty obligation.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479402/808-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479402/808-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 808 -Publisher FASB -URI https://asc.fasb.org/808/tableOfContent + Details
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