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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
12. | Commitments and Contingencies
Litigation and Legal Matters The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s condensed consolidated financial statements. Purchasing Commitments Property and Equipment The Company’s commitments related to purchase of property and equipment contracted but not yet reflected in the condensed consolidated financial statements were $4.0 million as of June 30, 2025 and were expected to be incurred within one year. Etorel IP Rights In May 2024, the Company entered into an IP rights transfer agreement with a third party, Jiangsu Wangao Pharmaceuticals Co., Ltd., to acquire the intellectual property associated with Etorel (the “Etorel IP Rights”). The Etorel IP Rights are recorded as technology rights in Intangible Assets in Note 5 — Intangible Assets. The commercial sales of Etorel commenced in June 2025. According to the agreement, except for RMB 35.0 million, or approximately $4.9 million, based on the June 30, 2025 spot exchange rate, the Company is committed to additional annual payments over eight years following the commencement of commercial sales, which will be contingent consideration based on actual annual sales in future years. The contingent payment in the first year will be 5% of sales for that year minus RMB 10 million, or approximatel y $1.4 million, based on the June 30, 2025 spot exchange rate. The contingent payment in the second year will be 4% of sales for that year minus RMB 10 million, or approximately $1.4 million, based on the June 30, 2025 spot exchange rate. The contingent payments in the third year through the eighth year will be 3%, 2%, 2%, 1%, 1%, and 1% of sales in each year, respectively. Hydronidone In September 2020, Gyre Pharmaceuticals entered into an IP transfer agreement (the “Hydronidone Transfer Agreement”) with GNI Japan and certain of its wholly owned subsidiaries (the “GNI Group”). According to the Hydronidone Transfer Agreement, Gyre Pharmaceuticals acquired the exclusive right to use Hydronidone IP rights in mainland China and the right of first offer for the global IP rights (the “Hydronidone IP Rights”). Under the Hydronidone Transfer Agreement, in exchange for the Hydronidone IP Rights, Gyre Pharmaceuticals is obligated to pay GNI Group $4.6 million upon submission of the Hydronidone New Drug Application (“NDA”) to Center for Drug Evaluation of the NMPA, $1.2 million after the NDA passes the NMPA’s Center for Food and Drug Review and Inspection’s on-site registration inspection for the Hydronidone product, and $6.9 million upon NMPA’s approval of the NDA. As of June 30, 2025, the payment conditions have not been met, and no payments have been made. Research and Development Programs In addition to the $12.7 million commitment to GNI for the Hydronidone program, as of June 30, 2025, Gyre Pharmaceuticals has committed to allocate $22.0 million toward future research and development activities for various programs. Indemnification Agreements In the normal course of business, the Company enters into agreements that indemnify others for certain liabilities that may arise in connection with a transaction or certain events and activities. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, the Company may be required to reimburse the loss. These indemnifications are generally subject to various restrictions and limitations. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/440/tableOfContent + Details
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