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Collaborative Research, Development and License Agreements | 3 Months Ended
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Mar. 31, 2023
Research and Development [Abstract] |
Collaboration, Development and Supply Agreements | 6. Collaboration, Development and Supply Agreements Coalition for Epidemic Preparedness Innovations In January 2021, we entered into an agreement (together with subsequent amendments, the “CEPI Agreement”) with Coalition for Epidemic Preparedness Innovations (“CEPI”) for the manufacture and reservation of a specified quantity of CpG 1018 adjuvant (“CpG 1018 Materials”). In May 2021, we entered into the first amendment to the CEPI Agreement. 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”). 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. Through March 31, 2023, we have received Advance Payments totaling approximately $175.0 mill ion pursuant to the CEPI Agreement, of which $67.3 million have been repaid. As of March 31, 2023, remaining Advance Payments totaling $47.4 million in CEPI accrual and $60.3 million in CEPI accrual long-term were reflected in our condensed consolidated balance s heets, representing the outstanding balance of the CEPI Advance Payments relating to the Bio E Supply Agreement and Clover Supply Agreement (each as defined and discussed below), respectively. As of December 31, 2022, we recorded Advance Payments of $107.7 million included in CEPI accrual. There were no deferred revenue balances related to the CEPI Agreement as of March 31, 2023 and December 31, 2022. As a subsequent event, on April 27, 2023, we entered into a waiver and second amendment to the CEPI Agreement by and between us and CEPI (the “CEPI-Bio E Assignment Agreement”). Pursuant to the CEPI-Bio E Assignment Agreement, CEPI has forgiven the entirety of the outstanding Advance Payments for CpG 1018 Materials allocated to and ordered by Bio E under the CEPI Agreement, and has assumed our previous rights to $47.4 million of Bio E accounts receivable. 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 (together with subsequent amendments, the “Clover Supply Agreement”). Under the Clover Supply Agreement, Clover committed to purchase specified quantities of CpG 1018 adjuvant, at pre-negotiated prices pursuant to the CEPI Agreement, 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. In 2022 and 2023, we signed four amendments to the Clover Supply Agreement. The terms and conditions of the Clover Supply Agreement were operative through December 2022, and as of March 31, 2023, we had satisfied all delivery obligations thereunder. For CpG 1018 adjuvant reserved for Clover under the CEPI Agreement, Clover is obligated to pay us 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. When we transfer control of CpG 1018 adjuvant that is reserved under the CEPI Agreement, 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. The contract asset of $71.3 million relating to Clover was included in other current assets as of December 31, 2022, and it was subsequently reclassified to other assets (long term) as of March 31, 2023. The contract asset was reclassified to long term assets to reflect the timing of expected long term demand for CpG 1018 adjuvant for Clover Product. Corresponding CEPI Advance Payments of $60.3 million relating to Clover are recorded in CEPI accrual long-term in our condensed consolidated balance sheets as of March 31, 2023. These Advance Payments may be repaid using cash collected from Clover or forgiven in accordance with the CEPI Agreement. We had no ac counts receivable balance from Clover as of March 31, 2023 and December 31, 2022. We did not recognize CpG 1018 adjuvant net product revenue from Clover for the three months ended March 31, 2023. We recognized CpG 1018 adjuvant net product revenue of $22.3 million from Clover for the three months ended March 31, 2022. Biological E. Limited In July 2021, we entered into an agreement (together with subsequent amendments, 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 committed to purchase specified quantities of CpG 1018 adjuvant, at pre-negotiated prices pursuant to the CEPI Agreement, 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. In June 2022 and in October 2022, we entered into amendments to the Bio E Supply Agreement (the “Bio E Amendment No 1” and the “Bio E Amendment No 2”, together the “Bio E Amendments”). The Bio E Amendments primarily established: (i) 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 Bio E from the Government of India in connection with their Advance Purchase agreement for CORBEVAX, and (ii) further modified the scope of the Bio E Supply Agreement, by reducing certain quantities of CpG 1018 adjuvant to be delivered. The terms and conditions of the Bio E Supply Agreement were operative through December 2022, and as of March 31, 2023, we had satisfied all delivery obligations thereunder. As of March 31, 2023, net accounts receivable from Bio E, which relates to CpG 1018 Materials delivered under the Bio E Supply Agreement and CEPI Agreement, was $61.9 million, net of an allowance for doubtful accounts of $12.3 million. The allowance for doubtful accounts of $12.3 million was determined by assessing changes in Bio E’s credit risk, contemplation of ongoing negotiations relating to Bio E Amendment No 3 (defined below), and Bio E's dependence on cash collections from the Government of India, which have been delayed and significantly reduced in connection with the overall reduction in demand for CORBEVAX from the Government of India. In connection with the Bio E accounts receivable, a corresponding liability for CEPI Advance Payments of $47.4 million (the “Bio E CEPI Advance”) is recorded in CEPI accrual, reflecting amounts previously provided by CEPI under the CEPI Agreement in our condensed consolidated balance sheets as of March 31, 2023. As of March 31, 2023, the Bio E CEPI Advance may be repaid using cash collected from Bio E or, in the alternative, forgiven in accordance with the CEPI Agreement. As a subsequent event, on April 26, 2023, we entered into a third amendment to the Bio E Supply Agreement (the “Bio E Amendment No 3”), and on April 27, 2023, we entered into the CEPI-Bio E Assignment Agreement. Pursuant to the CEPI-Bio E Assignment Agreement, CEPI has forgiven the entirety of remaining amounts outstanding relating to the Bio E CEPI Advance Payments for CpG 1018 Materials allocated to Bio E and has assumed our previous rights to collect $47.4 million of Bio E accounts receivable. The CEPI-Bio E Assignment Agreement results in a remaining accounts receivable balance from Bio E of $14.5 million, net of the allowance for doubtful accounts of $12.3 million discussed above. Pursuant to the Bio E Amendment No 3, on April 26, 2023, we collected $13.5 million from Bio E and expect to collect the remaining $1.0 million in August 2023. The Bio E Amendment No 3 provides for additional future payment of either $5.5 million in the event that Bio E receives at least $125.0 million, or $12.3 million in the event that Bio E receives at least $250.0 million in future payments from the Government of India associated with its CORBEVAX product on or before August 15, 2025. These additional amounts are not considered collectible until the achievement of these future milestones. We did not recognize CpG 1018 adjuvant net product revenue from Bio E for the three months ended March 31, 2023. We recognized CpG 1018 adjuvant net product revenue of $67.3 million from Bio E for the three months ended March 31, 2022. 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 approximately $22.0 million over two and a half years. Under the agreement, we will conduct a Phase 2 clinical trial combining our CpG 1018 adjuvant with the DoD's rF1V vaccine. For the three months ended March 31, 2023 and 2022, we recognized revenue of $3.5 m illion and $1.6 million, respectively, which is included in other revenue in our condensed consolidated statements of operations.

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