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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2017
Commitments and Contingencies [Abstract] |
Commitments and Contingencies | Note 6 - Commitments and Contingencies License and Research Agreements The Company has entered into license and research and development agreements with third parties under which the Company is obligated to make upfront payments as well as milestone and royalty payments. Notable inclusions in this category are:
a. | AbbVie Biotherapeutics Corp. - The Company entered into a Product Development and Patent License Agreement with AbbVie Biotherapeutics Corp. in 2003 to secure exclusive rights to a specific antibody when conjugated with alpha emitting radioisotopes. Upon execution of the agreement, the Company made a license fee payment of $3,000,000.
The Company agreed to make milestone payments totaling $7,750,000 for the achievement of the following agreed to and contracted milestones:
Milestones |  | Date Met |  | Payments |
(1) when Company initiates a Phase 1 Clinical Trial of a licensed product |  | July 2012 |  | $ | 750,000 |
(2) when Company initiates a Phase 2 Clinical Trial of a licensed product |  | September 2016 |  |  | 750,000 |
(3) when Company initiates a Phase 3 Clinical Trial of a licensed product |  | In future |  |  | 1,500,000 |
(4) Biological License Application filing with U.S. FDA |  | In future |  |  | 1,750,000 |
(5) First commercial sale |  | In future |  |  | 1,500,000 |
(6) after the first $10,000,000 in net sales |  | In future |  |  | 1,500,000 |
Total |  |  |  | $ | 7,750,000 |
Under the agreement, the Company shall pay to AbbVie Biotherapeutics Corp. on a country-by-country basis a royalty of 12% of net sales of all licensed products until the later of: (1) 12.5 years after the first commercial sale, or (2) when the patents expire. The Company met its first milestone in 2012 and upon reaching the milestone the Company paid AbbVie Biotherapeutics Corp. a milestone payment of $750,000 on July 24, 2012. The milestone payment for the Phase 1 Clinical Trial was recorded as research and development expense. In September 2016, the Company met its second milestone and accrued $750,000 as a research and development expense. As of June 30, 2017, the $750,000 accrual was included in the accounts payable and accrued expenses on the balance sheet.
b. | MSKCC - see Note 2 - Related Party Transactions.
c. | Oak Ridge National Laboratory (“ORNL”) – The Company is contracted to purchase radioactive material to be used for research and development, with a renewal option at the contract end. On January 9, 2017, the Company signed a contract with ORNL to purchase $0.7 million of radioactive material. During the six months ended June 30, 2017 and 2016, the Company purchased material from ORNL of approximately $0.3 million.
d. | Icon Clinical Research, LLC (“Icon”) provides project management services for the study of the drug Ac-225-HuM195 (Actimab-A) used in the Company’s Phase 1 and Phase 2 clinical trials. The total project was estimated to cost approximately $1.9 million and required a 12.5% down payment of the total estimated project cost. The down payment totaling $0.2 million was paid in 2007 and 2012. On August 6, 2012, October 22, 2012 and May 16, 2013, the agreement was amended to provide for additional services. The total project is now estimated at approximately $2.7 million. Icon invoices the Company when services are rendered and the Company records the related expense to research and development expense. For six months ended June 30, 2017 and 2016, the Company incurred expenses of approximately $0 and $0.3 million, respectively, related to this agreement.
e. | On June 15, 2012, the Company entered into a license and sponsored research agreement with Fred Hutchinson Cancer Research Center (“FHCRC”) to build upon previous and ongoing clinical trials, with BC8 (licensed antibody). FHCRC has currently completed both a Phase 1 and Phase 2 clinical trial with BC8 and the Company intends to start preparation for a pivotal trial leading to an FDA approval. The Company has been granted exclusive rights to the BC8 antibody and related master cell bank developed by FHCRC. The cost to develop the trial will range from $13.2 million to $23.5 million, depending on the trial design as required by the FDA. Under the terms of the sponsored research agreement, the Company will fund the FHCRC lab with $0.2 million per year for the first two years and $0.3 million thereafter. Payments made toward funding the lab will be credited toward royalty payments owed to FHCRC in the given year. A milestone payment of $1 million will be due to FHCRC upon FDA approval of the first drug. Upon commercial sale of the drug, royalty payments of 2% of net sales will be due to FHCRC. For the six months ended June 30, 2017 and 2016, the Company incurred expenses of approximately $44,000 and $0.4 million, respectively, related to this agreement.
f. | On February 27, 2014, the Company entered into a manufacturing agreement with Goodwin Biotechnology Inc. (“Goodwin”). Goodwin oversees the current Good Manufacturing Practices (“cGMP”) production of a monoclonal antibody anticipated to be used in the phase 3 clinical trial of Iomab-B. Total cost of the agreement is $6.8 million. The Company made a non-refundable payment of $0.6 million upon execution of the agreement. Periodic payments will be made upon reaching certain milestones. As of June 30, 2017, the remaining cost of the service agreement (only) is approximately $2.5 million. Goodwin bills the Company when services are rendered and the Company records the related expense to research and development costs. For each of the six months ended June 30, 2017 and 2016, the Company paid Goodwin approximately $0.3 million and $0.2 million, respectively. As of June 30, 2017 and December 31, 2016, the Company owed Goodwin $0.1 million.
g. | On February 16, 2016, the Company entered into a Contract Research Organization (“CRO”) agreement with Medpace, Inc. (“Medpace”). Medpace provides project management services for the study of Iomab-B used for the intended Phase 3 clinical trial. The total project is estimated to cost approximately $7.2 million. Medpace bills the Company when services are rendered and the Company records the related expense to research and development costs. For the six months ended June 30, 2017 and 2016, the Company paid Medpace approximately $1.4 million and $1.6 million, respectively.
h. | On August 4, 2016, the Company entered into a CRO agreement with Vector Oncology Solutions, LLC (“Vector”). Vector provides project management services for the study of Actimab-A used for the intended Phase 2 clinical trial. The total project is estimated to cost approximately $4.6 million. For the six months ended June 30, 2017, the Company paid Vector approximately $0.2 million.
Lease Agreements The Company does not own any real property. On March 10, 2016, effective as of January 1, 2016, Actinium entered into an Office Space License Agreement (the “License”) with Relmada Therapeutics, Inc. (“Relmada”), with whom at that time shared two common board members, for office space located at 275 Madison Avenue, 7th Floor, New York, NY 10016. On June 6, 2017, the Company and Relmada Therapeutics, Inc. (“Relmada”) entered into an Assignment and Consent Agreement (the “Assignment Agreement”) pursuant to which Relmada transferred its entire lease with GP 275 Owner, LLC to the Company. The lease with GP 275 Owner, LLC has a term of seven years and three months, with an annual rental rate starting at $312,660 per year for the first 4 years, and an annual rate of $341,610 for the remaining period. The Company will also be responsible for certain other costs, such as insurance, taxes, utilities, and maintenance. The Company issued a letter of credit of $390,825 to GP 275 Owner, LLC in connection with the lease and maintained a $390,825 certified deposit as collateral for the letter of credit. On June 8, 2017, the Company also entered into an Amended and Restated License Agreement with Relmada for office space located at 275 Madison Avenue, 7th Floor, New York, NY 10016. This agreement amends and restates to license agreement entered into between the parties on March 10, 2016. Pursuant to the terms of the amendment, the Company will continue to license the furniture, fixtures, equipment and tenant improvements located in the office space (the “FFE”). The Company will pay Relmada a license fee of $7,529 per month. The Company shall have at any time during the term of this amended agreement the right to purchase the FFE. The term of the amended agreement is contemporaneous with the lease with GP 275 Owner, LLC. In August 2016, the Company expanded its office space at 275 Madison Avenue, 6th Floor, New York, NY 10016, for an additional $2,400 per month over a 12-month term with an automatic renewal for an additional 12-month term unless the Company provides at least 90-day notice prior to the current termination date. The current lease is in effect until August 31, 2017. Future minimum obligations on the lease are:
For the twelve months ending June 30: |  |  |
2018 |  |  | 407,808 |
2019 |  |  | 405,421 |
2020 |  |  | 431,958 |
2021 |  |  | 431,958 |
Thereafter |  |  | 503,951 |
Total |  | $ | 2,181,096 |

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