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Patent and Technology License Agreements

3 Months Ended

Dec. 31, 2018

Patent and Technology License Agreements [Abstract]

PATENT AND TECHNOLOGY LICENSE AGREEMENTS

3.	PATENT AND TECHNOLOGY LICENSE AGREEMENTS

LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc. (“NAT”) to develop and commercialize Mino-Lok® on an exclusive, worldwide sub licensable basis, as amended. LMB pays an annual maintenance fee in June until commercial sales of a product subject to the license commence.. There was no maintenance fee paid in each of the three month periods ended December 31, 2018 and 2017.

LMB will also pay annual royalties on net sales of licensed products, with royalties ranging from the mid-single digits to the low double digits. In limited circumstances in which the licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low single digits. After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties of $100,000 in the first commercial year which is prorated for a less than 12-month period, increasing $25,000 per year to a maximum of $150,000 annually. LMB must also pay NAT up to $1,390,000 upon achieving specified regulatory and sales milestones. Finally, LMB must pay NAT a specified percentage of payments received from any sub licensees.

Unless earlier terminated by NAT, based on the failure to achieve certain development and commercial milestones, the license agreement remains in effect until the date that all patents licensed under the agreement have expired and all patent applications within the licensed patent rights have been cancelled, withdrawn or expressly abandoned.

See Note 8 for a description of the patent and technology license agreement that we entered into with the Board of Regents of the University of Texas System on behalf of the University of Texas M. D. Anderson Cancer Center on January 2, 2019.