XML 27 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Collaboration and Licensing Agreements
6 Months Ended
Jun. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Collaboration and Licensing Agreements

10. COLLABORATION AND LICENSING AGREEMENTS

Diaxonhit (“DHT”)

In June 2013, the Company entered into an exclusive Distribution and Licensing Agreement with DHT, a French public company, whereby DHT agreed to have the AlloMap test performed in a European laboratory and commercialize the test in the European Economic Area (“EEA”). The agreement will expire at the later of the last-to-expire patent in the EEA or ten years from the first commercial sale of the test in the EEA, which occurred in 2014.

Consideration under the agreement includes an upfront cash payment of approximately €387,500 ($503,000) that is designated to offset royalties earned by the Company in the first three years following the first commercial sale. The Company is entitled to receive royalties from DHT as a percentage of net sales, as defined in the agreement, of AlloMap tests in the mid to high teens. Approximately €250,000 ($344,000) of the upfront payments is refundable under certain circumstances. Upon confirmation that the CE mark was in place, the Company also received an equity payment of DHT common stock with a value of €387,500 ($503,000). The CE mark is a mandatory conformity marking for certain products sold within the EEA. The Company sold the shares of DHT common stock in July 2013 for total consideration of $467,000.

Other consideration that may be earned by the Company includes agreed-upon per unit pricing for the supply of AlloMap products, and additional royalties that are payable upon the achievement of various sales milestones by DHT. In this arrangement, there is one combined unit of accounting.

Commercial sales of the AlloMap test began in the EEA in June 2014. Total revenues recognized from this arrangement for both the three months ended June 30, 2016 and 2015 were $16,000. Total revenues recognized from this arrangement for the six months ended June 30, 2016 and 2015 were $31,000 and $33,000, respectively.

CardioDx, Inc. (“CDX”)

In 2005, the Company entered into a services agreement with what at the time was a related party, CDX, whereby the Company provided CDX with biological samples and related data and performed laboratory services on behalf of CDX. Each company granted the other a worldwide license under certain of its intellectual property rights. Pursuant to this agreement, CDX pays royalties to the Company in an amount equal to a low single-digit percentage of the cash collected from sales of CDX licensed products. In 2009, CDX terminated the services portion of this agreement, however, the royalty obligation from CDX continues until the tenth anniversary of the first commercial sale of a CDX licensed product. The first commercial sale of such product by CDX occurred in 2009, therefore the royalty obligation to the Company continues until 2019. Initially, the Company recognized royalty revenues when earned. Commencing with the fourth quarter of 2015, the Company recognizes royalty revenues when payments are received as it was assessed that collection was not reasonably assured prior to receipt of payment. No royalty revenue was recognized for the three months ended June 30, 2016, and royalty revenues for the three months ended June 30, 2015 were $89,000. Royalty revenues for the six months ended June 30, 2016 and 2015 were $0.1 million and $0.2 million, respectively, and are included in collaboration and license revenue on the condensed consolidated statements of operations. The Company had no receivable balance from CDX at June 30, 2016 and December 31, 2015.