Collaboration and License Agreement

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

3. Collaboration and License Agreement

Detailed description of the contractual terms and our accounting for the agreement described below is included in our audited financial statements and notes in the 2023 Annual Report.

During the six months ended June 30, 2024, we continued to perform under our exclusive global collaboration and license agreement (the “Collaboration Agreement”) with Jazz Pharmaceuticals Ireland Limited ("Jazz"), pursuant to which we recognized revenue utilizing the cost-to-cost input method, which best depicts the research and development services performed for the customer. Revenue from the transaction price was recognized over time as research and development services were performed. In June 2024, we executed a transfer agreement (the “Transfer Agreement”) to assign our rights in a development agreement with a contract manufacturer of our interferon alpha INDUKINE molecule JZP898 to Jazz. The execution of this Transfer Agreement was the last material performance obligation required of us under the Collaboration Agreement. As of the execution of the Transfer Agreement, we no longer have any material performance obligations under the Collaboration Agreement. As a result, during the three months ended June 30, 2024, all remaining deferred revenue related to the Collaboration Agreement has been recognized. The following table summarizes research and development costs incurred and revenue recognized in connection with our performance under the Collaboration Agreement:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(in thousands)		(in thousands)
Revenue recognized	1,143	8,081	1,885	12,545
Cost incurred	210	5,152	545	7,273

The following table presents changes in our contract liabilities during the six months ended June 30, 2024:


	Balance as of December 31, 2023		Additions		Reductions		Balance as of June 30, 2024
	(in thousands)
Contract liabilities:
Deferred revenue	$	1,340	$	—	$	(1,340)	$	—
Total contract liabilities	$	1,340	$	—	$	(1,340)	$	—

All deferred revenue related to the Collaboration Agreement has been recognized as of June 30, 2024

Unbilled receivables related to the Collaboration Agreement of $0.2 million and $0.4 million are included within other receivables in the accompanying condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively. Receivables related to the Collaboration Agreement of $0.3 million and $0.9 million are included within other receivables in the accompanying condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively. Revenue recognized during the six months ended June 30, 2024 and 2023, includes $1.3 million and $5.3 million of revenue that was included in deferred revenue as of December 31, 2023 and 2022, respectively.

At the end of each reporting period, we re-evaluate our estimate of the transaction price associated with the Collaboration Agreement and determine if variable consideration previously excluded from the transaction should be included in the transaction price based on changes in circumstances, if any. During the six months ended June 30, 2024 and 2023, we did not recognize any adjustment to the transaction price associated with variable consideration previously excluded from the transaction price. As of June 30, 2024, we have not received any royalty payments under the Collaboration Agreement.