9.	Collaborative Research, Development and License Agreements

AstraZeneca

Pursuant to a research collaboration and license agreement, as amended, with AstraZeneca we discovered and performed initial clinical development of AZD1419, a TLR9 agonist product candidate for the treatment of asthma.

Under the amended agreement we received non-refundable payments of $3.0 million and $5.4 million in 2011 and in 2014, respectively. These payments were deferred and recognized over the estimated period of performance at the time of payment, as subsequently revised.

We have also received payments for development work of $3.0 million, $6.0 million and $8.0 million, in 2011, 2012 and 2014, respectively, which were deferred and recognized as research and development expenses were incurred.

In January 2016, we amended our agreement with AstraZeneca whereby AstraZeneca will conduct the Phase 2a safety and efficacy trial of AZD1419 in patients with asthma that originally was to be conducted by Dynavax. Under the terms of the January 2016 amendment, unused amounts remaining from the $8.0 million payment received in 2014 will be returned to AstraZeneca or offset against future milestone payments that may be earned by us under the agreement, net of amounts we recognized as development work that was performed.

In June 2016, all of our remaining contractual obligations under our agreement with AstraZeneca were completed. As no further performance obligations remain, we revised the estimated period of performance of development work to June 2016 from September 2016, and recognized remaining deferred payments as revenue as of June 30, 2016. The revision of the performance period led to the recognition of an additional $0.8 million in collaboration revenue during 2016.

In November 2016, AstraZeneca initiated the Phase 2a trial of AZD1419 in asthma patients. Upon AstraZeneca’s initiation of the Phase 2a trial, Dynavax earned a milestone payment of $7.2 million, which was offset against the $7.4 million in unused development funding previously advanced by AstraZeneca. Dynavax recognized the $7.2 million milestone as revenue during the fourth quarter of 2016. The remaining balance of unused development funding, net of the $7.2 million milestone payment, was $0.2 million which we recognized as a current liability on the accompanying consolidated balance sheets as of December 31, 2016.

Under the terms of the agreement, as amended, we are eligible to receive up to $100 million in additional milestone payments, based on the achievement of certain development and regulatory objectives. Additionally, upon commercialization, we are eligible to receive tiered royalties ranging from the mid to high single-digits based on product sales of any products originating from the collaboration. We have the option to co-promote in the United States products arising from the collaboration, if any. AstraZeneca has the right to sublicense its rights upon our prior consent.

The following table summarizes the revenues earned under our agreement with AstraZeneca, included as collaboration revenue in our consolidated statements of operations (in thousands):


	Year ended December 31,
	2016		2015		2014
Initial and milestone payment	$	7,722	$	238	$	681
Subsequent payment		1,953		892		2,554
Performance of research activities		103		1,635		2,174
Total	$	9,778	$	2,765	$	5,409

As of December 31, 2016, no deferred revenue from the initial payment, subsequent payment and development funding payments remained. Total deferred revenue from these payments as of December 31, 2015 was $2.7 million.

Absent early termination, the agreement will expire when all of AstraZeneca’s payment obligations expire. AstraZeneca has the right to terminate the agreement at any time upon prior written notice and either party may terminate the agreement early upon written notice if the other party commits an uncured material breach of the agreement.

GlaxoSmithKline (“GSK”)

In November 2014 our research and development collaboration and license agreement with GSK expired and we recognized as collaboration revenue $2.5 million, which represented the remaining unrealized portion of the initial $10.0 million payment on signing of the agreement. Revenue from the initial payment from GSK was deferred and was being recognized over the estimated period of performance. Upon expiration of the agreement with GSK in November 2014, we regained global rights to continue the development of DV1179 and other TLR 7/9 inhibitors for all indications. As of December 31, 2016 and 2015 no deferred revenue relating to the initial payment remains.