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Collaborative Research, Development and License Agreements | 12 Months Ended
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Dec. 31, 2022
Research and Development [Abstract] |
Collaborative Research, Development and License Agreements | 9. 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. 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. Advance 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, we received $6.3 million from CEPI in September 2020 for production scale-up and a fourth quarter 2020 reservation fee. In October 2020, CEPI terminated the Reservation Agreement and its right to place an order expired. Therefore, we recognized $6.3 million as other revenue in the year ended December 31, 2020. In January 2021, we entered into an agreement (the “CEPI Agreement”) with CEPI for the manufacture and reservation of a specified quantity of CpG 1018 adjuvant (“CpG 1018 Materials”). The CEPI Agreement enables CEPI to direct the supply of CpG 1018 Materials to CEPI partner(s). CEPI partner(s) would purchase CpG 1018 Materials under separately negotiated agreements. The CEPI Agreement also allows us to sell CpG 1018 Materials to third parties if not purchased by a CEPI partner within a two-year term. In exchange for reserving CpG 1018 Materials and agreeing to sell CpG 1018 Materials to CEPI partner(s) at pre-negotiated prices, CEPI agreed to provide payments in the form of an interest-free, unsecured, forgivable loan (the “Advance Payments”) of up to $99.0 million. We are obligated to repay the Advance Payments, in proportion to quantity sold, if and to the extent we receive payments from sales of CpG 1018 Materials reserved under the CEPI Agreement. If the vaccine programs pursued by CEPI partner(s) are unsuccessful and no alternative use is found for CpG 1018 Materials reserved under the CEPI Agreement, the applicable Advance Payments will be forgiven at the end of the two-year term. In May 2021, we entered into the first Amendment to the CEPI Agreement. This Amendment provided for the manufacture and reservation of an additional specified quantity of CpG 1018 adjuvant. In exchange for reserving an additional specified quantity of CpG 1018 adjuvant, CEPI agreed to provide additional Advance Payments of up to $77.4 million, together with the initial CEPI Agreement, for total Advance Payments of up to $176.4 million. We determined that the accounting of the Advance Payments is under the scope of ASC 606. The Advance Payments are to cover the costs of manufacture and to reserve CpG 1018 Materials, which is an output of our ordinary activities. As such, the Advance Payments are initially classified as long-term deferred revenue in our consolidated balance sheets. We are obligated to repay CEPI, in proportion to quantity sold and within a certain period, upon receipt of payment from CEPI partner(s). Thus, when we deliver CpG 1018 Materials to CEPI partner(s) or when we receive payment from CEPI partner(s), we reclassify the Advanced Payments from long-term deferred revenue to accrued liabilities. We recognize the Advance Payments as revenue when the amount (or a portion thereof) is forgiven by CEPI when (i) the CpG 1018 Materials are not sold through to CEPI partner(s), (ii) there is no alternative use and (iii) the CpG 1018 Materials are destroyed. Through December 31, 2022, we have received Advance Payments totaling approximate ly $175.0 million pursuant to the CEPI Agreement, as amended. Advance payments totalin g $107.7 mill ion and $128.8 million were recorded as CEPI accrual in our consolidated balance sheets as of December 31, 2022 and December 31, 2021, respectively, reflecting the outstanding balance of the CEPI Advance Payments. There was no deferre d revenue balance related to the CEPI Agreement as of December 31, 2022. As of December 31, 2021, deferred revenue totaling $5.4 million was recorded as other long-term liabilities in our consolidated balance sheets. There was no CEPI ac counts receivable balance as of December 31, 2022. As of December 31, 2021, we recorded $14.6 million in CEPI accounts receivable, which is included in other receivables in our consolidated balance sheets. Zhejiang Clover Biopharmaceuticals, Inc. and Clover Biopharmaceuticals (Hong Kong) Co., Limited In June 2021, we entered into an agreement with Zhejiang Clover Biopharmaceuticals, Inc. and Clover Biopharmaceuticals (Hong Kong) Co., Limited (collectively, “Clover”), for the commercial supply of CpG 1018 adjuvant, for use with Clover’s COVID-19 vaccine candidate, SCB-2019 (the “Clover Supply Agreement”). Under the Clover Supply Agreement, Clover has committed to purchase specified quantities of CpG 1018 adjuvant, at pre-negotiated prices pursuant to the CEPI Agreement, as amended, for use in Clover’s commercialization of vaccines containing SCB-2019 and CpG 1018 adjuvant (“Clover Product”). The Clover Supply Agreement also provides terms for Clover to order additional quantities of CpG 1018 adjuvant beyond the quantities reserved by CEPI. The terms and conditions of the Clover Supply Agreement were operative through December 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. Pricing for CpG 1018 adjuvant is variable depending on the destination where Clover ultimately sells Clover Product to. Pursuant to the Clover Supply Agreement, our initial invoicing is at the lowest price tier, with a true-up mechanism to issue an additional invoice for the difference between the initial invoice price and the higher tiered price, if any. In addition, if the net selling price of such Clover Product exceeds a threshold specified in the Clover Supply Agreement, we are entitled to a royalty calculated as a percentage of the excess portion of such net selling price. For CpG 1018 adjuvant reserved for Clover under the CEPI Agreement, as amended, Clover is obligated to pay the purchase price upon the earliest of (i) the true-up exercise, (ii) within a specified period after Clover delivers Clover Product to a customer, or (iii) Clover’s receipt of payment for Clover Product from a customer. For CpG 1018 adjuvant ordered by Clover outside the CEPI Agreement, as amended, Clover is obligated to pay a specified percentage of the purchase price, as set forth in a purchase order submitted by Clover, upon our acceptance of such purchase order, and the remainder of the purchase price upon the release of such CpG 1018 adjuvant. We recognize revenue at the lowest price tier upon transfer of control of CpG 1018 adjuvant to Clover. The potential true-up amount and royalties are considered constrained. There is no significant financing component, as the timing between shipment and payment is expected to be within twelve months. Payments received or invoices issued before we transfer control of CpG 1018 adjuvant are recorded as deferred revenue. When we transfer control of CpG 1018 adjuvant that is reserved under the CEPI Agreement, as amended, we recognize product revenue and a corresponding contract asset as our right to consideration is contingent on something other than the passage of time, as outlined above. In August of 2022, we signed an amendment (the “Clover Amendment No 1”) to the Clover Supply Agreement. Per the Clover Amendment No 1, we and Clover agreed to modify the scope of the Clover Supply Agreement by reducing certain quantities of CpG 1018 adjuvant, which we originally intended to deliver in accordance with a purchase order previously issued by Clover (the "Original Purchase Order"). Per the Clover Amendment No 1, the Original Purchase Order was modified to deliver less quantities of CpG 1018 adjuvant (the “Modified Purchase Order”). Prior to the Clover Amendment No 1, we had received an advance payment of $68.0 million corresponding to the Original Purchase Order. Certain of the previously received advance payments have been applied (i) in the amount of $24.1 million as cancellation fees to recover manufacturing costs incurred with contract manufacturing organizations (“CMOs”) in connection with the cancelled portion of the Original Purchase Order, (ii) as final payment of $14.6 million for the remaining quantities of CpG 1018 adjuvant to be delivered under the Modified Purchase Order, and (iii) as final payment of $29.3 million for quantities of CpG 1018 adjuvant to be delivered through December 31, 2022. Prior to the Clover Amendment No 1, no quantities of CpG 1018 adjuvant had been delivered to Clover in connection with the Original Purchase Order. Therefore, no revenue had been recognized by us up to that point in time. The Clover Amendment No 1 was determined to be a contract modification in accordance with ASC 606. That is because the modification resulted in a decrease in scope of the original contract, and the remaining goods to be transferred under the Modified Purchase Order were deemed to be distinct. The total amount of consideration allocated to the remaining performance obligation totaled $53.2 million, which was recognized as product revenue, net, in the year ended December 31, 2022 upon the fulfilment of the Modified Purchase Order including delivery of CpG 1018 adjuvant. In October 2022, we executed the second amendment to the Clover Supply Agreement (the “Clover Amendment No 2”). Pursuant to the Clover Amendment No 2, we and Clover agreed to amend certain payment terms and further reduce certain quantities of CpG 1018 adjuvant to be delivered to Clover (the “Cancelled Portion”). The Clover Amendment No 2 primarily established: (i) a revised delivery schedule of CpG 1018 adjuvant were delivered through December 31, 2022, (ii) revised payment terms for certain amounts to be received from Clover, and (iii) potential future collections of approximately $10.0 million payable by Clover upon the fulfillment of certain financing or net sales milestones. The Clover Amendment No 2 was determined to be a contract modification in accordance with ASC 606. That is because the modification resulted in a decrease in scope of the original contract, as amended, and the remaining goods to be transferred under the Modified Purchase Order were deemed to be distinct. The total amount of consideration allocated to the remaining performance obligation totaled $87.0 million, which was recognized as product revenue, net, in the year ended December 31, 2022 upon the fulfilment of the Modified Purchase Order including delivery of CpG 1018 adjuvant. The terms and conditions of the Clover Supply Agreement, as amended, were operative through December 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. Contract asset balances of $71.3 million and $62.5 million, were included in other current assets in our consolidated balance sheets, as of December 31, 2022 and 2021, respectively. We had no accounts receivable balance from Clover as of December 31, 2022. Our accounts receivable balance from Clover totaled $2.1 million as of December 31, 2021. We recognized CpG 1018 adjuvant net product revenue o f $288.0 mill ion and $72.2 million from Clover, for the years ended Decemb er 31, 2022 and 2021, respectively. Additionally, during the year ended December 31, 2022 and in connection with amendments to the Clover Supply Agreement, which reduced or cancelled certain orders for CpG 1018 adjuvant, we recorded an inventory write-o ff of $34.3 m illion of excess CpG 1018 adjuvant raw materials and finish goods inventory. This excess inventory write-off was reflected as a charge to cost of sales – product, in the consolidated statements of operations for the year ended December 31, 2022. Biological E. Limited In July 2021, we entered into an agreement (the “Bio E Supply Agreement”) with Biological E. Limited (“Bio E”), for the commercial supply of CpG 1018 adjuvant, for use with Bio E’s subunit COVID-19 vaccine candidate, CORBEVAX™. Under the Bio E Supply Agreement, Bio E has committed to purchase specified quantities of CpG 1018 adjuvant, at pre-negotiated prices pursuant to the CEPI Agreement, as amended, for use in Bio E’s commercialization of its CORBEVAX vaccine (“Bio E Product”) with specified delivery dates in 2021 and the first quarter of 2022. The Bio E Supply Agreement also provides terms for Bio E to order additional quantities of CpG 1018 adjuvant beyond the quantities reserved by CEPI. The terms and conditions of the Bio E Supply Agreement were operative through December 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. Pricing for CpG 1018 adjuvant is variable depending on the destination where Bio E ultimately sells Bio E Product to. Pursuant to the Bio E Supply Agreement, our initial invoicing will be at the lowest price tier, with a true-up mechanism to issue an additional invoice for the difference between the initial invoice price and the higher tiered price, if any. In addition, if the net selling price of such Bio E Product exceeds a threshold specified in the Bio E Supply Agreement, we are entitled to a royalty calculated as a percentage of the excess portion of such net selling price. For CpG 1018 adjuvant reserved for Bio E under the CEPI Agreement, as amended, Bio E is obligated to pay, in full, the aggregate purchase price, as set forth in a purchase order submitted by Bio E, upon delivery of CpG 1018 adjuvant. For CpG 1018 adjuvant ordered by Bio E outside the CEPI Agreement, as amended, Bio E is obligated to pay a specified percentage of the purchase price, as set forth in a purchase order submitted by Bio E, upon our acceptance of such purchase order, and the remainder of the purchase price upon the delivery of such CpG 1018 adjuvant. We recognize revenue at the lowest price tier upon transfer of control of CpG 1018 adjuvant to Bio E. The potential true-up amount and royalties are considered constrained. There is no significant financing component, as the timing between shipment and payment is expected to be within twelve months. Payments received or invoices issued before we transfer control of CpG 1018 adjuvant are recorded as deferred revenue. In June 2022, we entered into an amendment to the Bio E Supply Agreement (the “Bio E Amendment No 1”). The Bio E Amendment No 1 primarily established a new payment schedule for certain outstanding invoices related to the CEPI product to be the earlier of December 31, 2022, or receipt of certain amounts from Biological E from the Government of India in connection with their Advance Purchase agreement for CORBEVAX. In October 2022, we entered into a second amendment to the Bio E Supply Agreement (the “Bio E Amendment No 2”), as amended. Per the Bio E Amendment No 2, we and Bio E agreed to modify the scope of the Bio E Supply Agreement, as amended by reducing certain quantities of CpG 1018 adjuvant, which we originally intended to deliver in accordance with a purchase order previously issued by Bio E. Additionally, the Bio E Amendment No 2 extends payment terms for certain accounts receivable. The Bio E Amendment No 2 was determined to be a contract modification in accordance with ASC 606. That is because the modification resulted in a decrease in scope of the original contract, and the remaining goods to be transferred under the amended agreement were deemed to be distinct. The total amount of consideration allocated to the remaining performance obligation totaled $60.2 million, which was recognized as product revenue, net, in the year ended December 31, 2022 upon the fulfilment of the amended agreement including delivery of CpG 1018 adjuvant. The terms and conditions of the Bio E Supply Agreement, as amended, were operative through December 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. Our accounts receivable balance from Bio E totaled $117.8 million and $96.1 million, as of December 31, 2022 and 2021, respectively. We recognized CpG 1018 adjuvant net product revenue of $206.2 million and $185.7 million from Bio E, for the years ended December 31, 2022 and 2021, respectively. PT Bio Farma (Persero) In May 2022, we entered into a commercial supply agreement (the “Bio Farma Supply Agreement”) with PT Bio Farma (Persero) (“Bio Farma”) to manufacture and supply specified quantities of CpG 1018 adjuvant for use in the development and commercialization of Bio Farma’s COVID-19 vaccine, adjuvanted with our CpG 1018 adjuvant (“Bio Farma Product”), for delivery during the year ended December 31, 2022. The Bio Farma Supply Agreement also provides terms for Bio Farma to order additional quantities of CpG 1018 adjuvant for delivery throughout the life of the agreement. The terms and conditions of the Bio Farma Supply Agreement are operative through May 2023. Our supply obligations under this contract have been fully satisfied as of December 31, 2022, and we have no remaining deliverables under this arrangement. Pricing for CpG 1018 adjuvant is variable depending on the destination where Bio Farma ultimately sells Bio Farma Product to. Pursuant to the Bio Farma Supply Agreement, our initial invoicing will be at the lowest price tier, with a true-up mechanism to issue an additional invoice for the difference between the initial invoice price and the higher tiered price, if any. In addition, if the net selling price of such Bio Farma Product exceeds a threshold specified in the Bio Farma Supply Agreement, we are entitled to a royalty calculated as a percentage of the excess portion of such net selling price. Bio Farma is obligated to pay a specified percentage of the purchase price, as set forth in a purchase order submitted by Bio Farma, upon our acceptance of such purchase order, and the remainder of the purchase price upon the delivery of such CpG 1018 adjuvant. We recognize revenue at the lowest price tier upon transfer of control of CpG 1018 adjuvant to Bio Farma. The potential true-up amount and royalties are considered constrained. There is no significant financing component, as the timing between shipment and payment is expected to be within twelve months. Payments received or invoices issued before we transfer control of CpG 1018 adjuvant are recorded as deferred revenue. There was no accounts receivable or deferred revenue balance from Bio Farma as of December 31, 2022. We recognized CpG 1018 adjuvant net product revenue of $25.4 million from Bio Farma for the year ended December 31, 2022. Medigen Vaccine Biologics In February 2021, we entered into a Supply Agreement (“Medigen Supply Agreement”) with Medigen Vaccine Biologics (“Medigen”) to manufacture and supply specified quantities of CpG 1018 adjuvant for use in the development and commercialization of Medigen’s COVID-19 vaccine for delivery in the first and second quarters of 2021. In August 2021, we entered into a second supply agreement (“Medigen Supply Agreement No. 2”) to manufacture and supply additional specified quantities of CpG 1018 adjuvant for delivery in the third and fourth quarter of 2021. The terms and conditions of the Medigen Supply Agreement and the Medigen Supply Agreement No. 2 were operative through December 2021, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. Under Medigen Supply Agreement No. 2, pricing for CpG 1018 adjuvant is variable depending on the destination where Medigen ultimately sells Medigen Product to. Pursuant to the Medigen Supply Agreement No. 2, we invoice Medigen based on the highest-tier price, with a true-up mechanism to issue credit to Medigen for the difference between the initial invoice price and the lower tiered price, if any. We invoice Medigen a specified percentage of the aggregate price of the order upon acceptance of the order and the remaining upon delivery. In addition, we are entitled to a royalty calculated as a percentage of the adjusted net sales. We recognize revenue upon transfer of control of CpG 1018 adjuvant to Medigen at the highest-tiered price. The potential royalties are considered constrained. There is no significant financing component, as the timing between shipment and payment is expected to be within twelve months. Payments received or invoices issued before we transfer control of CpG 1018 adjuvant are recorded as deferred revenue. We had no accounts receivable from Medigen as of December 31, 2022. Our accounts receivable from Medigen totaled $2.4 million as of December 31, 2021. We did not recognize CpG 1018 adjuvant net product revenue from Medigen during the year ended December 31, 2022. We recognized CpG 1018 adjuvant net product revenue of $26.7 million and $1.2 million from Medigen, for the years ended December 31, 2021 and 2020, respectively. Valneva SE In April 2020, we entered into a collaboration agreement ("Valneva Collaboration Agreement") with Valneva Scotland Limited (“Valneva”) to provide CpG 1018 adjuvant for use in the development of Valneva’s COVID-19 vaccine candidate ("VLA2001"). The Valneva Collaboration Agreement was amended in July 2020, to provide additional quantities of CpG 1018 adjuvant. In September 2020, we entered into a supply agreement (“Valneva Supply Agreement”) with Valneva to manufacture and supply specified quantities of CpG 1018 adjuvant for use in the commercialization of VLA2001. We concluded that the Valneva Collaboration Agreement and the Valneva 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 to provide CpG 1018 adjuvant to Valneva. Therefore, the Valneva Collaboration Agreement and the Valneva Supply Agreement should be combined and accounted for as a single arrangement. In October 2021, we and Valneva entered into a letter agreement (the “Valneva Amendment”) modifying certain deliverables of the Valneva Supply Agreement. Specifically, the Valneva Amendment modifies the original Valneva Supply Agreement as follows: (1) cancels certain purchase orders for CpG 1018 adjuvant previously issued under the original Valneva Supply Agreement that had not been fulfilled as of the date of the Valneva Amendment; and (2) provides a future delivery schedule for commercial supply of CpG 1018 adjuvant through the end of 2022. As of the date of the Valneva Amendment, we had received non-refundable advance payments of approximately $55.4 million associated with the cancelled purchase orders. The terms and conditions of the Valneva Supply Agreement, as amended by the Valneva Amendment, were operative through our final delivery date in June 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder. In accordance with revenue recognition guidance in ASC 606, the Valneva Amendment was determined to be a contract modification and will be accounted for prospectively as one agreement with consideration allocated to future performance obligations. We have identified one remaining performance obligation, which was the delivery of CpG 1018 adjuvant through the end of 2022. The total amount of consideration allocated to the remaining performance obligation includes approximately $55.4 million of advance payments received as of the date of the Valneva Amendment plus additional future consideration to be received in connection with final delivery of product. We satisfied our remaining performance obligation to deliver CpG 1018 adjuvant under the Valneva Amendment in June 2022. Accordingly, we recognized the $55.4 million of advance payments as product revenue in the year ended December 31, 2022. As of December 31, 2022, there w as no deferred r evenue balance related to Valneva. As of December 31, 2021, deferred revenue related to Valneva was $55.4 million. There was no accounts receivable balance related to Valneva, as of December 31, 2022 and 2021. We recognized CpG 1018 net product revenue of $68.0 million, $89.4 million and $2.0 million for the y ears ended December 31, 2022, 2021 and 2020, respectively. U.S. Department of Defense In September 2021, we entered into an agreement with the DoD for the development of a recombinant plague vaccine adjuvanted with CpG 1018 adjuvant for approximatel y $22.0 million ov er two and a half years. Under the agreement, we are condu cting a Phase 2 clinical trial combining our CpG 1018 adjuvant with the DoD's rF1V vaccine. We recognized revenue of $8.8 million and $0.5 million f or the years ended December 31, 2022 and 2021, which is included in other revenue in our consolidated statements of operations.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -URI https://asc.fasb.org/topic&trid=5833765 + Details
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