Sales of Future Royalties

6 Months Ended

Jun. 30, 2024

Ultomiris Royalty Sale Agreement

The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be recorded as deferred income on the balance sheets as none of the criteria for classification as debt were met in accordance with ASC 470 Debt. The Company records the non-cash royalty revenue under the “units-of-revenue” method in the consolidated statements of loss. For the three and six months ended June 30, 2024, the Company recognized $6.9 million and $16.3 million of non-cash royalty revenue, respectively. There is $140.6 million in deferred income as of June 30, 2024.

Monjuvi Royalty Sale Agreement

The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be classified as debt pursuant to ASC 470 Debt. At June 30, 2024, the Company reassessed the estimate of total future royalty payments and updated the estimated effective interest rate to 17.5%. The Company will continue to reassess the estimate of total future royalty payment and prospectively adjust the imputed interest rate and related amortization if the estimate is materially different. For the three and six months ended June 30, 2024, the Company recognized $1.6 million and $4.4 million of non-cash royalty revenue, respectively, and $0.8 million and $1.9 million of non-cash interest expense, respectively.

The following table shows the activity within debt for the six months ended June 30, 2024 (in thousands):


	June 30, 2024

Beginning balance of debt related to sale of future royalties	$	20,974
Royalties owed to OMERS	834
Royalties paid to OMERS	(4,448)
Non-cash interest expense recognized	1,900
Ending balance of debt related to sale of future royalties	$	19,260

Debt - short-term	6,947
Debt - long-term	12,313
Total debt	$	19,260