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Collaboration Agreements | 3 Months Ended
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Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Collaboration Agreements | Collaboration Agreements The Company recognizes revenue for collaboration agreements using a cost-based input measure. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to budgeted costs expected to be incurred, and any upfront payments are deferred accordingly. Ono Pharmaceutical Co., Ltd In February 2024, the Company entered into a collaboration and license agreement (the “Ono Agreement”) with Ono, pursuant to which the parties will collaborate in the research and preclinical development of certain compounds selected by Ono from the Company’s pipeline of bifunctional fusion proteins directed toward a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases. Under the terms of the Ono Agreement, the Company is primarily responsible for carrying out research activities in accordance with a mutually agreed upon research plan (the “Research Plan”), subject to the oversight of a joint research committee consisting of representatives from each party. Ono is responsible for all research costs incurred under the Research Plan. The Company also granted Ono an exclusive option (the “Option”) to obtain an exclusive, sublicensable license to further research, develop, manufacture and commercialize products containing the specified bifunctional fusion proteins in any therapeutic area worldwide. The option period will extend from the effective date of the Ono Agreement until 90 days after the Company delivers its final report pursuant to the Research Plan. If Ono exercises the Option, the Company may receive licensing and clinical, regulatory, and commercial milestone payments of up to $217.5 million upon the exercise of the Option and the achievement of certain specified clinical, regulatory and commercial milestones, as well as tiered royalty payments on commercial sales ranging from mid-single digit to low-double digit percentages. Royalties are payable by Ono on a licensed product-by-licensed product and country-by-country basis during the product’s royalty term, defined as the period beginning on the first commercial sale of a product and ending on the later of (i) the expiration of the last-to-expire composition of matter claim within applicable product patent rights covering such product in such country, (ii) the expiration of regulatory exclusivity for such product in such country, and (iii) the tenth (10th) anniversary of such first commercial sale of a product in such country. The Ono Agreement may be terminated by mutual agreement of both parties or by either party upon an uncured material breach of the Ono Agreement or the insolvency of the other party. Ono may terminate the Ono Agreement at any time upon 90 days’ written notice to the Company. If Ono exercises such termination right, Ono will pay all of the Company’s costs up through the date of termination. In addition, after the conditions to exercise the Option have been met, the Company may terminate the Ono Agreement if Ono discontinues its development or commercialization efforts and other conditions are met. Further, under the terms of the Ono Agreement, the Company will receive an initial non-refundable payment of $5.4 million, consisting of a $2.0 million payment for the Option and an initial research funding payment of $3.4 million to cover the expected cost of the first six months of planned activities under the Research Plan. At the conclusion of the first six months, Ono may continue to reimburse nonclinical research activities under the Research Plan, and the Company may receive up to $7.0 million payable upon the achievement of certain milestones specified in the Research Plan. The Ono Agreement is a collaborative arrangement under ASC 808 as both companies are active participants that are exposed to significant risks and rewards. However, since the units of account identified under ASC 808 follow a typical vendor/customer relationship, the Company accounted for the transaction under ASC 606. The Company determined that the contingent promise to provide the license upon the exercise of the Option should be accounted for as a customer option, and the $2.0 million amount allocated to that option will be deferred and recognized when the Option is either exercised or expires. The Company will re-evaluate whether or not the license is distinct from research activities at the time of exercise when it delivers the license. The Company determined that the Option was not a material right. The Company identified a single performance obligation under the Research Plan consisting of the non-clinical research activities to develop candidate bifunctional fusion proteins. The Company will recognize revenue for the non-clinical research activities as the services are performed in accordance with the Research Plan using an inputs method. The future development milestone payments represent variable consideration that is fully constrained at inception of the arrangement as the achievement of the milestone events are highly uncertain and outside of the Company’s control. The Company will re-evaluate the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as other changes in circumstances occur. For the three months ended March 31, 2024 and 2023, the Company recognized $0.8 million and $0 of revenue under the Ono Agreement, respectively. ImmunoGen In 2022, the Company entered into the ImmunoGen Agreement, pursuant to which ImmunoGen will reimburse the Company for $2.0 million of the costs the Company incurs in the Phase 1B combination cohort evaluating SL-172154 in combination with mirvetuximab soravtansine in patients with platinum-resistant ovarian cancer. The Company dosed its first patient with mirvetuximab soravtansine in 2023 and recognized revenue of $0.3 million and $0.1 million under the ImmunoGen Agreement for the three months ended March 31, 2024 and 2023, respectively. In February 2024, ImmunoGen was acquired by AbbVie, Inc.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479402/808-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479402/808-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 808 -Publisher FASB -URI https://asc.fasb.org//808/tableOfContent + Details
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