Related Party Transactions

12 Months Ended

Dec. 31, 2018

Collaborations with Intrexon/ Precigen

During the year ended December 31, 2018, the Company and Precigen entered into an Exclusive License Agreement (Note 7).

During the year ended December 31, 2018, the Company issued an aggregate of 11,415 shares of Series 1 preferred stock to Intrexon, the holder of all of the outstanding shares of the Company’s Series 1 preferred stock, as monthly dividend payments. The Company recorded such shares of Series 1 preferred stock at a fair value of $18.9 million, which is a component of temporary equity and recorded a loss on the change of the derivative liabilities in the amount of $1.3 million. See Notes 3 and 12 for additional discussion regarding the accounting for and valuation of these derivative financial instruments.

During the years ended December 31, 2018, 2017, and 2016, the Company expensed $8.1 million, $21.4 million, and $22.2 million, respectively, for services performed by Intrexon. As of December 31, 2018, and 2017, the Company recorded $1.9 million and $6.8 million, respectively, in current liabilities on its balance sheet for amounts due to Intrexon.

Collaboration with Precigen and MD Anderson

On January 13, 2015, the company, together with Intrexon, entered into the MD Anderson

License

with MD Anderson (which Intrexon subsequently assigned to Precigen)

. Pursuant to the MD Anderson License,

the company, together with Precigen, hold an exclusive, worldwide license to certain technologies owned and licensed by MD Anderson including technologies relating to novel CAR T-cell therapies,

non-viral gene transfer systems, genetic modification and/or propagation of immune cells and other cellular therapy approaches, Natural Killer, or NK Cells, and TCRs,

arising from the laboratory of Laurence Cooper, M.D., Ph.D., who became the Company’s Chief Executive Officer in May 2015 and was formerly a tenured professor of pediatrics at MD Anderson and is now currently a visiting scientist under that institution’s policies. In partial consideration for entering into the MD Anderson License, the Company issued MD Anderson an aggregate of 11,722,163 shares of common stock for which the Company incurred a $67.3 million charge recorded in 2015.

The Company has determined that the rights acquired in the MD Anderson License represent in-process research and development with no alternative future use. During the year ending December 31, 2018, the Company made one quarterly payments totaling $2.7 million, bringing the total aggregate payments to $41.9 million under this arrangement. The net balance of cash resources on hand at MD Anderson available to offset expenses and future costs is $27.8 million, of which $18.4 million is included in other current assets and the remaining $9.4 million is included in non-current assets at December 31, 2018. The classification is based on management’s current estimate of plans to utilize the prepaid balance and is subject to revision on a quarterly basis.