Sale of Future Royalties

6 Months Ended

Jun. 30, 2025

Other Liabilities Disclosure [Abstract]

Jemperli Royalty Monetization Agreement

In October 2021, we signed a royalty monetization agreement (“Jemperli Royalty Monetization Agreement”) with Sagard Healthcare Royalty Partners, LP (“Sagard”). Under the terms of the Jemperli Royalty Monetization Agreement, we received $250.0 million in exchange for royalties and milestones payable to us under our GSK collaboration on annual global net sales of Jemperli.

In May 2024, we entered into an amendment to the Jemperli Royalty Monetization Agreement, Amendment No. 1 (the “Jemperli Amendment”) under which we sold additional receivables to Sagard in exchange for $50.0 million. The Jemperli Amendment includes all Jemperli sales, including any product containing Jemperli, whether or not such product constitutes a combination product, and the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard under the Jemperli Amendment is either $600.0 million if received by the end of March 31, 2031, or $675.0 million if received thereafter. Once either of these thresholds are met, the Jemperli Royalty Monetization Agreement and the Jemperli Amendment will expire, resulting in us regaining all subsequent Jemperli royalties and milestones. As of June 30, 2025, Sagard has received a total of $121.5 million in royalties and milestones.

We retained the rights to a $75.0 million sales milestone when Jemperli annual net sales exceed $1.0 billion.

The proceeds received from Sagard of $250.0 million and $50.0 million were recorded as a nonrecourse liability, net of transaction costs of $0.4 million and $0.1 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method. The aggregate future estimated payments, less the $299.5 million, net of proceeds, will be recognized as non-cash interest expense over the life of the agreement. Royalty and milestone revenue will be recognized as earned on net sales of Jemperli, and these payments to Sagard will be recorded as a reduction of the liability when paid. As such payments are made to Sagard, the balance of the liability will be effectively repaid over the life of the Jemperli Royalty Monetization Agreement.

We estimate the effective interest rate used to record non-cash interest expense under the Jemperli Royalty Monetization Agreement based on the estimate of future royalty payments to be received by Sagard. As of June 30, 2025, the estimated effective rate under the agreement was 28.9%. Over the life of the arrangement, the actual effective interest rate will be affected by the amount and the timing of the royalty payments received by Sagard and changes in our forecasted royalties. At each reporting date, we will reassess our estimate of total future royalty payments to be received and if such payments are materially different than our prior estimates, we will prospectively adjust the imputed interest rate and the related amortization of the royalty obligation.

We recognized Jemperli non-cash royalty revenue of approximately $21.1 million and $38.4 million during the three and six months ended June 30, 2025, respectively and approximately $10.1 million and $16.3 million during the three and six months ended June 30, 2024, respectively.

We recognized non-cash interest expense of approximately $19.3 million and $37.2 million during the three and six months ended June 30, 2025, respectively, and $10.7 million and $16.8 million during the three and six months ended June 30, 2024. The interest and amortization of issuance costs are reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.

The following table shows the activity within the liability account for the six months ended June 30, 2025:


(in thousands)	June 30, 2025
Liability related to sale of future Jemperli royalties and milestones – balance at 12/31/2024	$	323,658


Amortization of issuance costs	56
Royalty and milestone payments to Sagard	(57,681)
Non-cash interest expense recognized(1)	37,106
Liability related to sale of future royalties and milestones – ending balance	$	303,139

(1) Of the non-cash interest expense recognized, $0.6 million was negative amortization for the six months ended June 30, 2025.

Zejula Royalty Monetization Agreement

In October 2020, in connection with GSK Amendment No. 3, GSK agreed, under the terms of a settlement agreement (the “GSK Settlement Agreement”), to pay us a royalty of 0.5% on all GSK net sales of Zejula starting January 1, 2021.

In September 2022, we signed a purchase and sale agreement (the “Zejula Royalty Monetization Agreement”) with a wholly owned subsidiary of DRI to monetize all of our future royalties on global net sales of Zejula under the GSK Settlement Agreement. Under the terms of the Zejula Royalty Monetization Agreement, we received $35.0 million in exchange for all royalties payable by GSK to us under the GSK Settlement Agreement on global net sales of Zejula starting in July 2022. In addition, under the Zejula Royalty Monetization Agreement, we are entitled to receive an additional $10.0 million payment from DRI if Zejula is approved by the U.S. Food and Drug Administration for the treatment of endometrial cancer on or prior to December 31, 2025.

The proceeds received from DRI of $35.0 million were recorded as a nonrecourse liability, net of transaction costs of $0.2 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method. Royalty revenue will be recognized as earned on net sales of Zejula, and these royalty payments to DRI will be recorded as a reduction of the liability when paid. The aggregate future estimated payments, less the $34.8 million, of net proceeds, will be recorded as non-cash interest expense over the life of the agreement. As such payments are made to DRI, the balance of the liability will be effectively repaid over the life of the Zejula Royalty Monetization Agreement.

We recognized Zejula non-cash royalty revenue of approximately $1.1 million and $2.0 million during the three and six months ended June 30, 2025, respectively, and $0.9 million and $1.9 million during the three and six months ended June 30, 2024, respectively.

We recognized non-cash interest expense of approximately $0.3 million and $0.5 million during the three and six months ended June 30, 2025, respectively, and $0.2 million and $0.4 million during the three and six months ended June 30, 2024, respectively. The interest and amortization of issuance costs is reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.

The following table shows the activity within the liability account for the six months ended June 30, 2025:


(in thousands)	June 30, 2025
Liability related to sale of future Zejula royalties and milestones – balance at 12/31/2024	$	29,768


Amortization of issuance costs	14
Royalty and milestone payments to DRI	(2,051)
Non-cash interest expense recognized(1)	491
Liability related to sale of future royalties and milestones – ending balance	$	28,222

(1) Of the non-cash interest expense recognized, none was negative amortization for the six months ended June 30, 2025.