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License, Clinical Trial and Sponsored Research Agreements | 12 Months Ended
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Dec. 31, 2019
License, Clinical Trial and Sponsored Research Agreements |
License, Clinical Trial and Sponsored Research Agreements | Note 3 - License, Clinical Trial and Sponsored Research Agreements Research and Development Expenses – All Licenses For the years ended December 31, 2019 and 2018, the Company recorded the following expense in research and development for licenses acquired:
|  | For the year ended December 31,
($ in thousands) |  | 2019 |  | 2018
City of Hope |  |  |  |  |  |
CD123 |  | $ | 250 |  | $ | —
CS1 |  |  | 200 |  |  | —
PSCA |  |  | 200 |  |  | —
HER2 |  |  | — |  |  | 200
Manufacturing |  |  | — |  |  | 75
CSL Behring (Calimmune) |  |  | 200 |  |  | —
UCLA |  |  | 300 |  |  | —
St. Jude - XSCID |  |  | — |  |  | 1,000
Nationwide Children's Hospital - C134 |  |  | 200 |  |  | —
Fortress PIK Dividend |  |  | 4,923 |  |  | 2,085
Total |  | $ | 6,273 |  | $ | 3,360
License Agreements City of Hope CD123 License (MB-102) In February 2017, the Company entered into an Amended and Restated Exclusive License Agreement with the City of Hope National Medical Center (“COH”) to acquire intellectual property rights pertaining to CD123 -specific chimeric antigen receptor (“CAR”) engineered T cell (“CAR T”) technology. Pursuant to this agreement, the Company and COH acknowledged that an upfront fee was previously paid. In addition, COH is eligible to receive an annual maintenance fee of $25,000 and milestone payments totaling $14.5 million upon the achievement of certain milestones. Royalty payments in the mid-single digits are due on net sales of licensed products. For the year ended December 31, 2019, the Company expensed a non-refundable milestone payment of $0.3 million upon the twelfth patient dosed in a Phase 1 clinical study of CD123. There was no expense recorded for the year ended December 31, 2018. CS1 License (MB-104) In May 2017, the Company entered into an exclusive license agreement with the COH for the use of CS1-specific CAR T technology. Pursuant to this agreement, the Company paid an upfront fee of $0.6 million and pays an annual maintenance fee of $50,000. Additional payments are due for the achievement of ten development milestones totaling $14.9 million, and royalty payments in the mid-single digits are due on net sales of licensed products. For the year ended December 31, 2019, the Company expensed a non-refundable milestone payment of $0.2 million upon the first patient dosed in a Phase 1 clinical study of CS1. There was no expense recorded for the year ended December 31, 2018. PSCA License (MB-105) In May 2017, the Company entered into an exclusive license agreement with COH for the use of prostate stem cell antigen ("PSCA") CAR T technology to be used in the treatment of prostate cancer, pancreatic cancer and other solid tumors. Pursuant to this agreement, the Company paid an upfront fee of $0.3 million and pays an annual maintenance fee of $50,000. Additional payments are due for the achievement of ten development milestones totaling $14.9 million, and royalty payments in the mid-single digits are due on net sales of licensed products. For the year ended December 31, 2019, the Company expensed a non-refundable milestone payment of $0.2 million upon the first patient dosed in a Phase 1 clinical study of PSCA. There was no expense recorded for the year ended December 31, 2018. HER2 Technology License On May 31, 2017, the Company entered into an exclusive license agreement with the COH for the use of human epidermal growth factor receptor 2 (HER2) CAR T technology, which will initially be applied in the treatment of glioblastoma multiforme. Pursuant to this agreement, the Company paid an upfront fee of $0.6 million and pays an annual maintenance fee of $50,000. Additional payments are due for the achievement of ten development milestones totaling $14.9 million, and royalty payments in the mid-single digits are due on net sales of licensed products. For the years ended December 31, 2019 and 2018, respectively, the Company expensed a non-refundable milestone payment of nil and $0.2 million upon the first patient dosed in a Phase 1 clinical study of HER2. Manufacturing License On January 3, 2018, the Company entered into a non-exclusive license agreement with COH to acquire patent and licensed know-how rights related to developing, manufacturing, and commercializing licensed products. The Company paid $75,000 in consideration for the licenses to the patent rights and the licensed know-how in addition to an annual maintenance fee. Royalty payments in the low-single digits are due on net sales of licensed products. CSL Behring (Calimmune) On August 23, 2019, the Company entered into a non-exclusive license agreement with CSL Behring (Calimmune, Inc.) ("Calimmune License") for the rights to the cell bank to be used in the manufacture of the XSCID vector that was separately licensed from St. Jude Children's Research Hospital, Inc. ("St. Jude"), in August 2018. Pursuant to the terms of the Calimmune License, the Company paid an upfront fee of $0.2 million. CSL Behring is eligible to receive additional payments totaling $1.2 million upon the achievement of three development and commercialization milestones. Royalty payments in the low-single digits are due on net sales of licensed products. Upon the execution of the Calimmune License, the Company recorded research and development expense of $0.2 million in the Statements of Operations for the year ended December 31, 2019. No payments were made in 2018. University of California Los Angeles On March 17, 2017, the Company entered into an exclusive license agreement with the Regents of the University of California at Los Angeles (“UCLA License”) to acquire intellectual property rights in patent applications related to engineered anti-prostate stem cell antigen antibodies for cancer targeting and detection. In September 2019, COH commenced its Phase 1 clinical trial resulting in the achievement of a development milestone, and the Company recorded an expense of $0.3 million in the Statements of Operations for the year ended December 31, 2019. No expense was recorded in 2018. St. Jude Children’s Research Hospital On August 2, 2018, the Company entered into an exclusive worldwide license agreement with St. Jude for the development of a first-in-class ex vivo lentiviral gene therapy for the treatment of X-linked severe combined immunodeficiency (“XSCID”). The Company paid $1.0 million in consideration for the exclusive license in addition to an annual maintenance fee of $0.1 million (beginning in 2019). St. Jude is eligible to receive payments totaling $13.5 million upon the achievement of five development and commercialization milestones. Royalty payments in the mid-single digits are due on net sales of licensed products. For the years ended December 31, 2019 and 2018, respectively, the Company recorded an expense of nil and $1.0 million in connection with this license. Nationwide Children's Hospital In February 2019, Mustang announced that it partnered and entered into an exclusive worldwide license agreement with Nationwide Children's Hospital ("Nationwide") to develop their C134 oncolytic virus (MB-108) for the treatment of glioblastoma multiforme ("GBM"). Mustang intends to combine MB-108 with MB-101 (IL13Rα2-specific CAR T) to potentially enhance efficacy in treating GBM. The Company paid $0.2 million in consideration for the license to exclusive, worldwide rights to develop and commercialize products that incorporate data, know-how and/or MB-108 that were developed at Nationwide. Additional payments are due to Nationwide upon achievement of development and commercialization milestones totaling $152.8 million. Royalty payments in the low-single digits are due on net sales of licensed products. For the years ended December 31, 2019 and 2018, respectively, the Company recorded an expense of $0.2 million and nil in connection with this license. Research and Development Expenses - Sponsored Research and Clinical Trial Agreements For the year ended December 31, 2019 and 2018, the Company recorded the following expense in research and development for sponsored research and clinical trial agreements:
|  | For the year ended December 31,
($ in thousands) |  | 2019 |  | 2018
City of Hope |  | $ | 2,000 |  | $ | 2,000
City of Hope - CD123 |  |  | 1,202 |  |  | 835
City of Hope - IL13Rα2 |  |  | 876 |  |  | 1,056
City of Hope - Manufacturing |  |  | 457 |  |  | 458
Fred Hutch - CD20 |  |  | 762 |  |  | 1,301
St. Jude - XSCID |  |  | 777 |  |  | —
BIDMC - CRISPR |  |  | 69 |  |  | 69
Total |  | $ | 6,143 |  | $ | 5,719
City of Hope In March 2015, the Company entered into a Sponsored Research Agreement (“SRA”) with COH in which the Company will fund continued research in the amount of $2.0 million per year, payable in four equal installments, through the first quarter of 2020. The research covered under this arrangement is for IL13Rα2, CD123 and the Spacer technology. For the year ended December 31, 2019 and 2018, the Company recorded $2.0 million, respectively, in research and development expenses on the Statements of Operations in connection with this agreement. CD123 Clinical Research Support Agreement In February 2017, the Company entered into a Clinical Research Support Agreement for CD123 (the “CD123 CRA”). Pursuant to the terms of the CD123 CRA the Company made an upfront payment of $19,450 and will contribute an additional $97,490 per patient in connection with the on-going investigator-initiated study. Further, the Company agreed to fund approximately $0.2 million over three years pertaining to the clinical development of CD123. For the year ended December 31, 2019 and 2018, the Company recorded $1.2 million and $0.8 million, respectively, in research and development expenses under the CD123 CRA on the Statements of Operations. IL13Rα2 Clinical Research Support Agreement In February 2017, the Company entered into a Clinical Research Support Agreement for IL13Rα2 (the “IL13Rα2 CRA”). Pursuant to the terms of the IL13Rα2 CRA the Company made an upfront payment of approximately $9,300 and will contribute an additional $0.1 million related to patient costs in connection with the on-going investigator-initiated study. Further, the Company agreed to fund approximately $0.2 million over three years pertaining to the clinical development of IL13Rα2. For the year ended December 31, 2019 and 2018, the Company recorded $0.9 million and $1.1 million, respectively, in research and development expenses under the IL13Rα2 CRA on the Statements of Operations. Sponsored Research Agreement On January 3, 2018, the Company entered into an SRA with COH to optimize and develop CAR T cell processing procedures. Pursuant to the SRA, the Company will fund continued research in the amount of $0.9 million for the program, which has an initial term of two (2) years. For the year ended December 31, 2019 and 2018, the Company recorded $0.5 million and $0.4 million, respectively, in research and development expenses under the COH - Manufacturing SRA on the Statements of Operations. Fred Hutchinson Cancer Research Center CD20 Clinical Trial Agreement On July 3, 2017, in conjunction with the CD20 Technology License from Fred Hutchinson Cancer Research Center (“Fred Hutch”), Mustang entered into an investigator-initiated clinical trial agreement (“CD20 CTA”) to provide partial funding for a Phase 1/2 clinical trial at Fred Hutch evaluating the safety and efficacy of the CD20 Technology in patients with relapsed or refractory B-cell non-Hodgkin lymphomas. In connection with the CD20 CTA, the Company agreed to fund up to $5.3 million of costs associated with the clinical trial, which commenced during the fourth quarter of 2017. For the year ended December 31, 2019 and 2018, the Company recorded $0.6 million and $0.9 million, respectively, of expense in connection with this agreement. Sponsored Research Agreement On March 17, 2018, the Company entered into an SRA with Fred Hutch related to developing and optimizing processes and systems associated with CD20 cell processing. Pursuant to the SRA, the Company will fund continued research in the amount of $0.6 million during the term of the SRA, which expired in March 2019. For the year ended December 31, 2019 and 2018, the Company recorded expense of approximately $0.2 million and $0.4 million, respectively, in connection with this agreement. CRISPR Sponsored Research Agreement with Beth Israel Deaconess Medical Center, Inc. On November 28, 2017, the Company entered into an SRA with Beth Israel Deaconess Medical Center Inc. (“BIDMC”) to perform research relating to gene editing, via the use of CRISPR/Cas9, to be used in enhancing the efficacy of CAR T cell therapies for solid tumor indications and to generate universal off-the-shelf CAR T cell therapies for both liquid and solid tumor indications. The Company agreed to fund approximately $0.8 million over a three-year period. For the year ended December 31, 2019 and 2018, the Company recorded approximately $0.1 million and $0.1 million, respectively, of expense in connection with this agreement. In December 2018, the Company terminated the SRA with BIDMC due to the departure of key personnel from BIDMC. Services Agreement with Children’s CGMP, LLC In December 2019, the Company entered into a Non-Interventional Services Agreement with Children’s CGMP, LLC (“CGMP”), an affiliate of St. Jude Children’s Research Hospital, pursuant to which CGMP provides lentiviral vector for non-clinical XSCID (MB-107) research purposes, as well as related advisory services. We agreed to fund approximately $0.8 million upon execution of the agreement, which was recorded in research and development expenses for the year ended December 31, 2019, in the Company’s Statements of Operations.

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