Research and Development Arrangements and Related Party Transactions

12 Months Ended

Dec. 31, 2012

Research and Development Arrangements and Related Party Transactions [Abstract]

Research and development arrangements and related party transactions

3. Research and development arrangements and related party transactions:

In June 2012, the Company entered into an agreement to terminate its license agreement with the University of Medicine and Dentistry of New Jersey (“UMDNJ”) and certain sublicenses related to the Bioral^® drug delivery technology previously developed by the Company under such license. Under this agreement, the Company agreed to assign to UMDNJ its know-how to the Bioral^® technology. All sublicenses related to the Bioral^® technology have been formally terminated, and the Company has assigned to UMDNJ its know-how and patent rights to the Bioral^® technology in consideration of 10% of future potential revenues collected by UMDNJ for commercialization of Bioral^® formulated Amphotericin B products and 3.5% for non-Bioral ^® formulated Amphotericin B products which utilize such patent rights and know-how. In conjunction with the termination agreement, the Company also donated to New Jersey Health Foundation, a not-for-profit organization, the UMDNJ and the H. Lee Moffitt Cancer Center and Research Foundation, Inc. in Tampa, Florida, various items of unused and fully depreciated lab equipment. These donations had no impact on the Company’s condensed consolidated financial statements.

The Company rents office space for accounting and administrative staff in Tampa, Florida from Accentia Biopharmaceuticals, Inc., a related party (“Accentia”), and shares one employee, with personnel costs paid based on the approximate time spent on Company activities. Rent payments to Accentia were $0.06 million for years 2012, 2011 and 2010, respectively, and are included in general and administrative costs, related party.

In 2009, as part of a settlement arrangement, the Company received a warrant from Accentia Biopharmaceuticals, Inc., a related party (“Accentia”), to purchase 2 million shares of common stock of Biovest International, Inc. (“Biovest”) held by Accentia. Biovest is a majority-owned subsidiary of Accentia. Such warrant has an exercise price of $0.84 per share. During the year ended December 31, 2012, the stock price of Biovest’s common stock decreased, resulting in a derivative loss of $0.3 million in the accompanying condensed consolidated statement of operations. During the year December 31, 2011, the stock price of

Biovest’s common stock decreased, resulting in a derivative loss of $0.9 million which is included within the derivative loss in the accompanying condensed consolidated statement of operations.