Business Agreements	12 Months Ended
Dec. 31, 2015
Business Agreements
Business Agreements	3. Business Agreements Sun Pharmaceutical Industries (formerly known as Ranbaxy Laboratories) In January 2014, the Company and Sun Pharmaceutical Industries Limited (formerly known as Ranbaxy Laboratories Limited) (“Sun”) executed a royalty-bearing and non-transferrable license agreement (“Sun License Agreement”) for BOW015 to Sun for a broad range of territories including India, selected Southeast Asian markets and North Africa. Under the terms of the Sun License Agreement, the Company and Sun will pursue the commercialization of BOW015 in India and Sun received the right to sell BOW015 in the territories specified in the agreement. Sun does not have the right to manufacture BOW015. Sun made an upfront payment of $500 upon the execution of the Sun License Agreement and is obligated to pay the Company up to $1,000 if certain development and regulatory approval milestones are achieved and up to $10,000 if certain sales milestones are achieved. Additionally, the Company is entitled to receive royalties in the mid-teens on net sales in the territories, which royalties are subject to reduction or renegotiation in certain limited circumstances. Under certain circumstances of uncured breach by the Company and termination of the Sun License Agreement by Sun, monetary damages of $500, would be due to Sun. Unless terminated earlier in accordance with the terms of the agreement, the Sun License Agreement expires 20 years following the first commercial sale in the territories. Under the Sun License Agreement, Sun is responsible for all activities related to the commercialization of BOW015 in the territories. The Company is responsible for performing the development activities required for obtaining regulatory approval in India, joint steering committee participation and clinical and commercial supply of product. The Company also agreed to perform the development activities required to obtain regulatory approval in other parts of the territories. These activities and the related fees will be agreed upon by Sun and the Company in future written agreements. The Company has determined that the deliverables under the Sun License Agreement are the license, development activities related to regulatory approval in India, joint steering committee services and the obligation to supply clinical and commercial product. The Company’s obligation to perform future development activities to obtain regulatory approval in other parts of the territories is not a deliverable at the inception of the agreement as the Company will be compensated separately for these activities, and it is uncertain at this time if the Company will ever be requested to perform these activities by Sun. The Company determined that the license and the other activities and services do not have standalone value apart from the requirement for the Company to deliver commercial material. Sun has not been granted a license to manufacture BOW015, which prevents them from using the license and related services for their intended purpose without the involvement of the Company. Therefore, the deliverables are not separable and represent one single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the last to be provided deliverable. As a result, no revenue was recognized until delivery of the commercial supply began. All amounts received from Sun were recorded as deferred revenue prior to the delivery of the commercial supply began. The arrangement includes the delivery of commercial material and therefore does not qualify for the milestone method of revenue recognition as the agreement is not a research and development arrangement. As a result, upon achievement of a milestone, the amounts will be included in the total arrangement consideration. In January 2014, the Company invoiced Sun $125 related to the filing for approval in India. In March 2014, the Drug Controller General in India approved BOW015 for commercial sale to the Indian market, upon which a payment from Sun of $250 became due and payable and was invoiced in April 2014. In September 2014, the Company executed a supply agreement with Sun, upon which an additional milestone payment of $125 became due. On September 9, 2014, the Company entered into an amendment (the “Sun License Amendment”) to the Sun License Agreement. The Sun License Amendment amended the Sun License Agreement to revise (i) the royalty tiers for net sales based on final product sale forecasts and supply costs in the territory, and (ii) Sun’s obligations with respect to minimum annual sales targets in any given country such that the obligations are subject to a final grant of approval for BOW015 by the applicable regulatory authority for all indications as have been granted for the innovator product in such country. Other than as set forth in the Sun License Amendment, the Sun License Agreement remains in full force and effect following the parties’ execution of the Sun License Amendment. In September 2014, the Company and Sun entered into a supply agreement for BOW015 under which the Company, through its third party manufacturing supplier, will provide Sun with finished products for clinical use, regulatory use and commercialization in accordance with the Sun License Agreement. Under the terms of the supply agreement, the Company’s designated manufacturer will receive consideration from Sun for commercial finished product. Unless terminated earlier in accordance with terms, the Company’s supply agreement with Sun expires 10 years from the effective date, subject to five two-year automatic renewal periods. In November 2014, the Company launched InfimabTM (BOW015) and Sun completed the first commercial sale of Infimab in India, signifying commercial supply of product has commenced. Upon this event, an additional milestone of $250 became due and payable and the Company began to recognize revenue, over the remaining term of the Sun License Agreement, associated with the upfront and milestone payments which were initially recorded as deferred revenue, excluding $500 which will remain deferred until the previously discussed breach and termination right lapses. As subsequent milestones are achieved, these payments will be recognized as revenue over the remaining term of the Sun License Agreement, including the five two-year automatic renewal periods. Royalty revenues from sales of Infimab will be recognized one quarter in arrears in conjunction with the Company’s accounting policy (Note 2). For the fiscal years ended December 31, 2015 and 2014, the Company recorded royalty revenue of $119 and $4, respectively, related to commercial sales under this agreement. The Company has invoiced Sun for a total of $1,250 in milestone payments, including the upfront payment, and received payments totaling $1,250 through December 31, 2015. Mabxience, S.A. On May 13, 2015, the Company entered into an Exclusive License Agreement (the “MabX Agreement”) with mAbxience S.A., a company organized and existing under the laws of Uruguay and a wholly owned subsidiary of CHEMO Group (“Mabxience”), for the development, manufacturing and commercialization of BOW015. Under the MabX Agreement, the Company licensed to Mabxience an exclusive, royalty-bearing, non-transferable, sublicenseable license to develop, manufacture, commercialize and distribute BOW015 in the Mabxience territory. The Mabxience territory consists of Argentina, Chile, Ecuador, Paraguay, Uruguay and Venezuela. Pursuant to the MabX Agreement, Mabxience will be solely responsible, at its expense, for all aspects of commercialization of licensed product in the Mabxience territory. As consideration for the license granted to Mabxience, the Company is eligible to receive certain non-refundable, non-creditable milestone payments up to $1,500 upon the achievement of certain commercial sales in the Mabxience territory. Specifically, the Company will earn $250 upon the first commercial sale for each first commercial sale in each of the territory countries. In addition, the Company is eligible to receive certain royalty payments in the high teen percentages and distribution payments from Mabxience. These potential milestone and royalty payments have not been earned as of December 31, 2015. Unless terminated earlier in accordance with the terms of the agreement or extended by mutual agreement of the parties, the MabX Agreement expires 15 years following the first commercial sale of BOW015 in the Mabxience territory. Polpharma On July 13, 2015, the Company entered into a Collaboration Agreement (the “Polpharma Collaboration Agreement”) with Swiss Pharma International AG, an affiliate of Pharmaceutical Works Polpharma S.A. (together with Swiss Pharma International AG, “Polpharma”), for the development and commercialization in certain designated territories of the Company’s product candidates, BOW015, BOW050 and BOW070. The designated territories include the European Union (with the exception of Austria, Belgium, Denmark, Finland, Luxembourg, the Netherlands and Sweden, which are reserved for the Company), together with certain countries in the Middle East, Turkey, Russia, and other countries comprising the Commonwealth of Independent States, or CIS. The Company will also retain exclusive rights for the three products in North America and other markets outside of the designated territories, including Switzerland and Norway. Within the designated territories, the Polpharma Collaboration Agreement contains exclusivity provisions such that each of the Company and Polpharma agrees not to exploit any other biosimilar product based on reference product other than the three products licensed under the Polpharma Collaboration Agreement, subject to limited exceptions. Under the Polpharma Collaboration Agreement, the Company and Polpharma have cross-licensed all intellectual property rights and technology relating to their applicable biosimilar development programs to enable the parties to develop and commercialize the three above-mentioned biosimilar products in the designated territories and the Company to develop and commercialize these biosimilar products outside of the designated territories. The three product programs will consist of process development, clinical trials, regulatory, manufacturing and commercialization activities in the designated territories. For such programs, the Company will lead the global product development and clinical programs and will also be responsible for process development, scale-up and manufacturing in the designated territories, both parties will collaborate on regulatory filings in the designated territories, and Polpharma will be responsible for the commercialization of the products in the designated territories. Polpharma has the right to be a second source manufacturer for any of the products, including a right to perform fill and finish production for all three products, subject to certain conditions. A joint management committee will oversee the collaboration on behalf of both parties. Polpharma will bear 51% and the Company will bear 49% of total costs associated with the development programs for the three products in the designated territories. For clinical trial costs incurred in connection with global development, the cost sharing ratio is changed from 100% to 38% of total costs. As a result, Polpharma will bear 19% and the Company will bear 81% of total clinical trial costs incurred. Following commercial launch, profits and losses for the three products in the designated territories will be split 51% for Polpharma and 49% for the Company. For the fiscal year ended December 31, 2015, the Company recorded revenue of $235 related to this agreement. The Company invoiced and received a payment in the amount of $760 from Polpharma in November 2015. As of December 31, 2015, the Company had a deferred revenue balance of $525 related to the payment received for services that will be performed in the first quarter of 2016. Livzon Mabpharm In September 2014, the Company entered into an Exclusive License and Collaboration Agreement (the “Livzon Agreement”) with Livzon Mabpharm Inc. (“Livzon”) for the global development and commercialization of certain antibodies or related biological compounds, including the Company’s BOW015, a biosimilar version of infliximab. Under the Livzon Agreement, the Company and Livzon each agreed to grant the other party, in the other party’s territory, exclusive, royalty-bearing licenses under certain patent rights and know-how to develop, manufacture and commercialize BOW015 and up to four additional compounds chosen by mutual agreement of the parties (collectively, the “Collaboration Compounds”). Livzon’s territory consists of China, Hong Kong, Macau and Taiwan (the “Livzon Territory”), and the Company’s territory consists of the rest of the world. The parties share pre-clinical development expenses for each Collaboration Compound based on certain factors specific to each compound. Each party bears the responsibility and expenses for clinical development and commercialization of each Collaboration Compound in its territory. Livzon will be the preferred supplier of each Collaboration Compound for pre-clinical, clinical, and commercialization purposes, subject to Livzon’s satisfaction of certain performance criteria and subject to the negotiation of a separate supply agreement. As consideration for the license granted to Livzon to develop and commercialize BOW015, the Company is eligible to receive from Livzon a nonrefundable milestone payment of $2,500 upon the achievement of a specified regulatory milestone in the Livzon Territory. The Company is also eligible to receive from Livzon tiered royalties based on a percentage of net sales of BOW015 products in the Livzon Territory ranging from the low- to high-single digits. Any future Collaboration Compounds have cross-milestone and royalty obligations in amounts to be mutually agreed upon at a later date. If not terminated earlier or extended by mutual agreement of the parties, the Livzon Agreement expires in its entirety 20 years from the effective date. The Company determined that the substantive terms of the Livzon Agreement are those relating to the license granted to Livzon to develop and commercialize BOW015 and the related Technology Transfer, as defined in the Agreement, which is the know-how to develop and manufacture BOW015 as described above. Under the Livzon Agreement, Livzon is responsible for all activities related to the commercialization of BOW015 in the Livzon Territory. The Company is responsible for the Technology Transfer and a small amount of advisory services to Livzon. The Company has determined that the deliverables under the Livzon Agreement are the license, Technology Transfer and a small amount of advisory services. Additional obligations that may arise under the Livzon Agreement are not deliverables at the inception of the Livzon Agreement as the Company will be compensated separately for these activities, and it is uncertain at this time if the Company will ever be requested to perform these activities by Livzon. The Company determined that the license, Technology Transfer and advisory services do not have standalone value. The Technology Transfer is required to enable Livzon to manufacture BOW015. Without such capability, Livzon would not be able to use the license and services for their intended purpose without the involvement of the Company. Therefore, the deliverables are not separable and represent one single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the last to be provided deliverable. The Company determined that the specified regulatory milestone is not substantive due to the lack of development activities required from the Company subsequent to the execution of the Livzon Agreement. As a result of the factors above, no revenue will be recognized until the milestone is achieved and the $2,500 will be recognized as revenue after the milestone is achieved, over the remaining period of the Technology Transfer. As of December 31, 2014, no amounts have been paid and no amounts have become due and payable under the Livzon Agreement. On September 24, 2015, the Company entered into a New Collaboration Compound Supplement to the Collaboration Agreement (the “Livzon Supplement Agreement”) with Livzon. The Livzon Supplement Agreement amends the Livzon Agreement to add the Company’s product candidate, BOW070, a biosimilar version of Actemra® (tocilizumab), as one of the additional compounds to be developed and commercialized pursuant to the terms of the Livzon Agreement. Under the Livzon Supplement Agreement, the Company and Livzon each granted the other party, in the other party’s territory, exclusive, royalty-bearing licenses under certain patent rights and know-how to develop, manufacture and commercialize BOW070. Livzon’s territory consists of China, Hong Kong, Macau and Taiwan, and the Company’s territory consists of the rest of the world. Livzon will be responsible for certain pre-clinical development activities, including analytical and process development, characterization work and formulation development, with the costs for such pre-clinical development activities to be borne by both parties, and each party will be responsible at its sole expense for clinical development, regulatory filings and approvals, and commercialization of BOW070 in each such party’s territory. Livzon will be a preferred supplier of BOW070 for clinical and commercialization purposes, subject to Livzon’s satisfaction of certain performance criteria. As part of such preferred supplier designation, the parties have agreed to certain minimum supply price and purchase commitments following commercial launch of BOW070. The Company will pay a total of $4,500 to Livzon to complete the pre-clinical development activities, consisting of: (i) an initial cash payment of $1,500 within 10 days of entry into the Livzon Supplement Agreement, which amount was paid on October 10, 2015, and (ii) three additional cash payments of $1,000 each upon the achievement of certain pre-clinical development milestones. The Company is expensing costs under the Supplement Agreement, as incurred, over the period that the work is performed (currently estimated at 18 months). For the fiscal year ended December 31, 2015, the Company recorded expense of $500 under the Livzon Supplement Agreement. Each of the parties is eligible to receive from the other party royalty payments, based on gross margin of BOW070 in the other party’s territory, ranging from the low- to mid-single digit percentages. As of December 31, 2015, Livzon owned approximately 6.4% of the Company’s issued and outstanding common stock.

3. Business Agreements

Sun Pharmaceutical Industries (formerly known as Ranbaxy Laboratories)

In January 2014, the Company and Sun Pharmaceutical Industries Limited (formerly known as Ranbaxy Laboratories Limited) (“Sun”) executed a royalty-bearing and non-transferrable license agreement (“Sun License Agreement”) for BOW015 to Sun for a broad range of territories including India, selected Southeast Asian markets and North Africa. Under the terms of the Sun License Agreement, the Company and Sun will pursue the commercialization of BOW015 in India and Sun received the right to sell BOW015 in the territories specified in the agreement. Sun does not have the right to manufacture BOW015.

Sun made an upfront payment of $500 upon the execution of the Sun License Agreement and is obligated to pay the Company up to $1,000 if certain development and regulatory approval milestones are achieved and up to $10,000 if certain sales milestones are achieved. Additionally, the Company is entitled to receive royalties in the mid-teens on net sales in the territories, which royalties are subject to reduction or renegotiation in certain limited circumstances. Under certain circumstances of uncured breach by the Company and termination of the Sun License Agreement by Sun, monetary damages of $500, would be due to Sun.

Unless terminated earlier in accordance with the terms of the agreement, the Sun License Agreement expires 20 years following the first commercial sale in the territories.

Under the Sun License Agreement, Sun is responsible for all activities related to the commercialization of BOW015 in the territories. The Company is responsible for performing the development activities required for obtaining regulatory approval in India, joint steering committee participation and clinical and commercial supply of product. The Company also agreed to perform the development activities required to obtain regulatory approval in other parts of the territories. These activities and the related fees will be agreed upon by Sun and the Company in future written agreements.

The Company has determined that the deliverables under the Sun License Agreement are the license, development activities related to regulatory approval in India, joint steering committee services and the obligation to supply clinical and commercial product. The Company’s obligation to perform future development activities to obtain regulatory approval in other parts of the territories is not a deliverable at the inception of the agreement as the Company will be compensated separately for these activities, and it is uncertain at this time if the Company will ever be requested to perform these activities by Sun.

The Company determined that the license and the other activities and services do not have standalone value apart from the requirement for the Company to deliver commercial material. Sun has not been granted a license to manufacture BOW015, which prevents them from using the license and related services for their intended purpose without the involvement of the Company. Therefore, the deliverables are not separable and represent one single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the last to be provided deliverable. As a result, no revenue was recognized until delivery of the commercial supply began. All amounts received from Sun were recorded as deferred revenue prior to the delivery of the commercial supply began.

The arrangement includes the delivery of commercial material and therefore does not qualify for the milestone method of revenue recognition as the agreement is not a research and development arrangement. As a result, upon achievement of a milestone, the amounts will be included in the total arrangement consideration. In January 2014, the Company invoiced Sun $125 related to the filing for approval in India. In March 2014, the Drug Controller General in India approved BOW015 for commercial sale to the Indian market, upon which a payment from Sun of $250 became due and payable and was invoiced in April 2014. In September 2014, the Company executed a supply agreement with Sun, upon which an additional milestone payment of $125 became due.

On September 9, 2014, the Company entered into an amendment (the “Sun License Amendment”) to the Sun License Agreement. The Sun License Amendment amended the Sun License Agreement to revise (i) the royalty tiers for net sales based on final product sale forecasts and supply costs in the territory, and (ii) Sun’s obligations with respect to minimum annual sales targets in any given country such that the obligations are subject to a final grant of approval for BOW015 by the applicable regulatory authority for all indications as have been granted for the innovator product in such country. Other than as set forth in the Sun License Amendment, the Sun License Agreement remains in full force and effect following the parties’ execution of the Sun License Amendment.

In September 2014, the Company and Sun entered into a supply agreement for BOW015 under which the Company, through its third party manufacturing supplier, will provide Sun with finished products for clinical use, regulatory use and commercialization in accordance with the Sun License Agreement. Under the terms of the supply agreement, the Company’s designated manufacturer will receive consideration from Sun for commercial finished product. Unless terminated earlier in accordance with terms, the Company’s supply agreement with Sun expires 10 years from the effective date, subject to five two-year automatic renewal periods.

In November 2014, the Company launched InfimabTM (BOW015) and Sun completed the first commercial sale of Infimab in India, signifying commercial supply of product has commenced. Upon this event, an additional milestone of $250 became due and payable and the Company began to recognize revenue, over the remaining term of the Sun License Agreement, associated with the upfront and milestone payments which were initially recorded as deferred revenue, excluding $500 which will remain deferred until the previously discussed breach and termination right lapses. As subsequent milestones are achieved, these payments will be recognized as revenue over the remaining term of the Sun License Agreement, including the five two-year automatic renewal periods. Royalty revenues from sales of Infimab will be recognized one quarter in arrears in conjunction with the Company’s accounting policy (Note 2).

For the fiscal years ended December 31, 2015 and 2014, the Company recorded royalty revenue of $119 and $4, respectively, related to commercial sales under this agreement.

The Company has invoiced Sun for a total of $1,250 in milestone payments, including the upfront payment, and received payments totaling $1,250 through December 31, 2015.

Mabxience, S.A.

On May 13, 2015, the Company entered into an Exclusive License Agreement (the “MabX Agreement”) with mAbxience S.A., a company organized and existing under the laws of Uruguay and a wholly owned subsidiary of CHEMO Group (“Mabxience”), for the development, manufacturing and commercialization of BOW015.

Under the MabX Agreement, the Company licensed to Mabxience an exclusive, royalty-bearing, non-transferable, sublicenseable license to develop, manufacture, commercialize and distribute BOW015 in the Mabxience territory. The Mabxience territory consists of Argentina, Chile, Ecuador, Paraguay, Uruguay and Venezuela. Pursuant to the MabX Agreement, Mabxience will be solely responsible, at its expense, for all aspects of commercialization of licensed product in the Mabxience territory. As consideration for the license granted to Mabxience, the Company is eligible to receive certain non-refundable, non-creditable milestone payments up to $1,500 upon the achievement of certain commercial sales in the Mabxience territory. Specifically, the Company will earn $250 upon the first commercial sale for each first commercial sale in each of the territory countries. In addition, the Company is eligible to receive certain royalty payments in the high teen percentages and distribution payments from Mabxience.

These potential milestone and royalty payments have not been earned as of December 31, 2015.

Unless terminated earlier in accordance with the terms of the agreement or extended by mutual agreement of the parties, the MabX Agreement expires 15 years following the first commercial sale of BOW015 in the Mabxience territory.

Polpharma

On July 13, 2015, the Company entered into a Collaboration Agreement (the “Polpharma Collaboration Agreement”) with Swiss Pharma International AG, an affiliate of Pharmaceutical Works Polpharma S.A. (together with Swiss Pharma International AG, “Polpharma”), for the development and commercialization in certain designated territories of the Company’s product candidates, BOW015, BOW050 and BOW070. The designated territories include the European Union (with the exception of Austria, Belgium, Denmark, Finland, Luxembourg, the Netherlands and Sweden, which are reserved for the Company), together with certain countries in the Middle East, Turkey, Russia, and other countries comprising the Commonwealth of Independent States, or CIS. The Company will also retain exclusive rights for the three products in North America and other markets outside of the designated territories, including Switzerland and Norway. Within the designated territories, the Polpharma Collaboration Agreement contains exclusivity provisions such that each of the Company and Polpharma agrees not to exploit any other biosimilar product based on reference product other than the three products licensed under the Polpharma Collaboration Agreement, subject to limited exceptions.

Under the Polpharma Collaboration Agreement, the Company and Polpharma have cross-licensed all intellectual property rights and technology relating to their applicable biosimilar development programs to enable the parties to develop and commercialize the three above-mentioned biosimilar products in the designated territories and the Company to develop and commercialize these biosimilar products outside of the designated territories. The three product programs will consist of process development, clinical trials, regulatory, manufacturing and commercialization activities in the designated territories. For such programs, the Company will lead the global product development and clinical programs and will also be responsible for process development, scale-up and manufacturing in the designated territories, both parties will collaborate on regulatory filings in the designated territories, and Polpharma will be responsible for the commercialization of the products in the designated territories. Polpharma has the right to be a second source manufacturer for any of the products, including a right to perform fill and finish production for all three products, subject to certain conditions. A joint management committee will oversee the collaboration on behalf of both parties.

Polpharma will bear 51% and the Company will bear 49% of total costs associated with the development programs for the three products in the designated territories. For clinical trial costs incurred in connection with global development, the cost sharing ratio is changed from 100% to 38% of total costs. As a result, Polpharma will bear 19% and the Company will bear 81% of total clinical trial costs incurred. Following commercial launch, profits and losses for the three products in the designated territories will be split 51% for Polpharma and 49% for the Company.

For the fiscal year ended December 31, 2015, the Company recorded revenue of $235 related to this agreement. The Company invoiced and received a payment in the amount of $760 from Polpharma in November 2015. As of December 31, 2015, the Company had a deferred revenue balance of $525 related to the payment received for services that will be performed in the first quarter of 2016.

Livzon Mabpharm

In September 2014, the Company entered into an Exclusive License and Collaboration Agreement (the “Livzon Agreement”) with Livzon Mabpharm Inc. (“Livzon”) for the global development and commercialization of certain antibodies or related biological compounds, including the Company’s BOW015, a biosimilar version of infliximab.

Under the Livzon Agreement, the Company and Livzon each agreed to grant the other party, in the other party’s territory, exclusive, royalty-bearing licenses under certain patent rights and know-how to develop, manufacture and commercialize BOW015 and up to four additional compounds chosen by mutual agreement of the parties (collectively, the “Collaboration Compounds”). Livzon’s territory consists of China, Hong Kong, Macau and Taiwan (the “Livzon Territory”), and the Company’s territory consists of the rest of the world. The parties share pre-clinical development expenses for each Collaboration Compound based on certain factors specific to each compound. Each party bears the responsibility and expenses for clinical development and commercialization of each Collaboration Compound in its territory. Livzon will be the preferred supplier of each Collaboration Compound for pre-clinical, clinical, and commercialization purposes, subject to Livzon’s satisfaction of certain performance criteria and subject to the negotiation of a separate supply agreement.

As consideration for the license granted to Livzon to develop and commercialize BOW015, the Company is eligible to receive from Livzon a nonrefundable milestone payment of $2,500 upon the achievement of a specified regulatory milestone in the Livzon Territory. The Company is also eligible to receive from Livzon tiered royalties based on a percentage of net sales of BOW015 products in the Livzon Territory ranging from the low- to high-single digits. Any future Collaboration Compounds have cross-milestone and royalty obligations in amounts to be mutually agreed upon at a later date.

If not terminated earlier or extended by mutual agreement of the parties, the Livzon Agreement expires in its entirety 20 years from the effective date.

The Company determined that the substantive terms of the Livzon Agreement are those relating to the license granted to Livzon to develop and commercialize BOW015 and the related Technology Transfer, as defined in the Agreement, which is the know-how to develop and manufacture BOW015 as described above. Under the Livzon Agreement, Livzon is responsible for all activities related to the commercialization of BOW015 in the Livzon Territory. The Company is responsible for the Technology Transfer and a small amount of advisory services to Livzon.

The Company has determined that the deliverables under the Livzon Agreement are the license, Technology Transfer and a small amount of advisory services. Additional obligations that may arise under the Livzon Agreement are not deliverables at the inception of the Livzon Agreement as the Company will be compensated separately for these activities, and it is uncertain at this time if the Company will ever be requested to perform these activities by Livzon.

The Company determined that the license, Technology Transfer and advisory services do not have standalone value. The Technology Transfer is required to enable Livzon to manufacture BOW015. Without such capability, Livzon would not be able to use the license and services for their intended purpose without the involvement of the Company. Therefore, the deliverables are not separable and represent one single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the last to be provided deliverable.

The Company determined that the specified regulatory milestone is not substantive due to the lack of development activities required from the Company subsequent to the execution of the Livzon Agreement. As a result of the factors above, no revenue will be recognized until the milestone is achieved and the $2,500 will be recognized as revenue after the milestone is achieved, over the remaining period of the Technology Transfer. As of December 31, 2014, no amounts have been paid and no amounts have become due and payable under the Livzon Agreement.

On September 24, 2015, the Company entered into a New Collaboration Compound Supplement to the Collaboration Agreement (the “Livzon Supplement Agreement”) with Livzon. The Livzon Supplement Agreement amends the Livzon Agreement to add the Company’s product candidate, BOW070, a biosimilar version of Actemra® (tocilizumab), as one of the additional compounds to be developed and commercialized pursuant to the terms of the Livzon Agreement.

Under the Livzon Supplement Agreement, the Company and Livzon each granted the other party, in the other party’s territory, exclusive, royalty-bearing licenses under certain patent rights and know-how to develop, manufacture and commercialize BOW070. Livzon’s territory consists of China, Hong Kong, Macau and Taiwan, and the Company’s territory consists of the rest of the world. Livzon will be responsible for certain pre-clinical development activities, including analytical and process development, characterization work and formulation development, with the costs for such pre-clinical development activities to be borne by both parties, and each party will be responsible at its sole expense for clinical development, regulatory filings and approvals, and commercialization of BOW070 in each such party’s territory. Livzon will be a preferred supplier of BOW070 for clinical and commercialization purposes, subject to Livzon’s satisfaction of certain performance criteria. As part of such preferred supplier designation, the parties have agreed to certain minimum supply price and purchase commitments following commercial launch of BOW070.

The Company will pay a total of $4,500 to Livzon to complete the pre-clinical development activities, consisting of: (i) an initial cash payment of $1,500 within 10 days of entry into the Livzon Supplement Agreement, which amount was paid on October 10, 2015, and (ii) three additional cash payments of $1,000 each upon the achievement of certain pre-clinical development milestones. The Company is expensing costs under the Supplement Agreement, as incurred, over the period that the work is performed (currently estimated at 18 months). For the fiscal year ended December 31, 2015, the Company recorded expense of $500 under the Livzon Supplement Agreement.

Each of the parties is eligible to receive from the other party royalty payments, based on gross margin of BOW070 in the other party’s territory, ranging from the low- to mid-single digit percentages.

As of December 31, 2015, Livzon owned approximately 6.4% of the Company’s issued and outstanding common stock.