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Collaborative Research, Development and License Agreements | 6 Months Ended
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Jun. 30, 2020
Research And Development [Abstract] |
Collaborative Research, Development and License Agreements | 7. Collaborative Research, Development and License Agreements Coalition for Epidemic Preparedness Innovations In September 2020, we entered into a Reservation Agreement for the Provision of Goods (the “Reservation Agreement”) with Coalition for Epidemic Preparedness Innovations (“CEPI”) to make available specified quantities of CpG 1018 adjuvant, for purchases at certain prices, to CEPI and its COVID-19 vaccine development partners (“CEPI Partners”). Payments received under the Reservation Agreement are considered an exchange for our CpG 1018 adjuvant which is an output of our ordinary activities. As such, we account for the arrangement under the scope of ASC 606. Payments are recorded as deferred revenue and recognized as revenue in the period when we satisfy our performance obligation to deliver CpG 1018 ordered or when CEPI’s right to place an order expires. Pursuant to the Reservation Agreement, CEPI has paid us $6.3 million for production scale-up and a fourth quarter 2020 reservation fee. The $6.3 million payment is recorded as deferred revenue in our condensed consolidated balance sheets as of September 30, 2020. No revenue was recognized for the three months ended September 30, 2020. In October 2020, CEPI terminated the Reservation Agreement and its right to place an order expired. Therefore, we will recognize $6.3 million as revenue in the fourth quarter of 2020. Valneva SE In April 2020, we entered into a Collaboration Agreement with Valneva Scotland Limited (“Valneva”) to provide CpG 1018 adjuvant for use in the development of Valneva’s COVID-19 vaccine candidate. The Collaboration Agreement was amended in July 2020, to provide additional quantities of CpG 1018 adjuvant. In September 2020, we entered into a Supply Agreement (“Supply Agreement”) with Valneva to manufacture and supply specified quantities of CpG 1018 adjuvant for use in the commercialization of Valneva's COVID-19 vaccine candidate. We concluded that the Collaboration Agreement and the Supply Agreement were entered into at or near the same time, with the same customer and were negotiated as a package with a single commercial objective, that is the provision of CpG 1018 adjuvant to Valneva. Therefore, the Collaboration Agreement and the Supply Agreement should be combined and accounted for as a single arrangement. Pursuant to the Supply Agreement, we issued an invoice for $14.2 million, upon acceptance of Valneva’s binding purchase order, for advanced payment to purchase specified quantities of CpG 1018 adjuvant in the first and second quarters of 2021. In addition, we issued an invoice for $5.7 million for the first payment to purchase additional specified quantities of CpG 1018 adjuvant in the second quarter of 2021. We recorded the $14.2 million and $5.7 million as deferred revenue and other current liabilities, respectively in our condensed consolidated balance sheets. Bill & Melinda Gates Foundation Grant Agreement In July 2020, we entered into a grant agreement (the "Grant Agreement") with Bill & Melinda Gates Foundation (“BMGF”), under which we were awarded a grant of up to $3.4 million to scale up production of our CpG 1018 adjuvant to support the global COVID-19 response (the “Project”) and we received $1.2 million of the grant from BMGF which we accounted for as deferred revenue in our condensed consolidated balance sheets at September 30, 2020. Any grant funds, plus any income, that have not been used for, or committed to, the Project must be returned promptly to BMGF upon expiration or termination of the Grant Agreement. We and BMGF had also planned to execute a Global Access and Strategy/Commitment Agreement (“GASC Agreement”) in connection with the Grant Agreement. Upon execution of the GASC Agreement, we would receive the remaining $2.2 million in grant funding. As of November 5, 2020, the GASC Agreement has not been executed and if it is not executed we will not receive the remaining grant funding. Serum Institute of India Pvt. Ltd. In June 2017, we entered into an agreement to provide Serum Institute of India Pvt. Ltd. (“SIIPL”) with technical support. In consideration, SIIPL agreed to pay us at an agreed-upon hourly rate for services and reimburse certain out-of-pocket expenses. In addition, we have rights to commercialization of certain potential products manufactured at the SIIPL facility. For the three months ended September 30, 2020, we recognized collaboration revenue of $0.1 million. No collaboration revenue was recognized for the three months ended September 30, 2019. For the nine months ended September 30, 2020 and 2019, we recognized collaboration revenue of $0.8 million and $0.1 million, respectively. Merck, Sharp & Dohme Corp. In February 2018, we entered into a Sublicense Agreement (the “Sublicense Agreement”) with Merck. The Sublicense Agreement grants us, under certain non-exclusive U.S. patent rights controlled by Merck which relate to recombinant production of hepatitis B surface antigen, the right to manufacture, use, offer for sale, sell and import HEPLISAV-B in the United States and includes the right to grant further sublicenses. Under the terms of the Sublicense Agreement, we were obligated to pay $21.0 million in three installments. The first, second and third installment of $7.0 million each was paid in February 2018, 2019 and 2020, respectively. The Sublicense Agreement expired in April 2020, at which time the license became perpetual, irrevocable, fully paid-up and royalty free. As of September 30, 2020, the intangible asset has been fully amortized. At December 31, 2019, the intangible asset, net balance was $2.5 million. See Note 5.

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