Asset Acquisition and License Agreements

9 Months Ended

Sep. 30, 2019

Research and Development [Abstract]

Asset Acquisition and License Agreements

Asset Acquisition and License Agreements

SRX Cardio, LLC

In December 2015, we entered into an option agreement with SRX Cardio to explore a novel approach to develop a drug in the field of hypercholesterolemia. This agreement provided us an option to enter into an exclusive license agreement as well as responsibility to lead and fund the development effort during the option period. We made an upfront payment of $0.5 million.

In September 2016, we exercised our right to enter into an exclusive license agreement.

During the second quarter of 2019, we made a decision to discontinue the clinical development of the intellectual property asset that was licensed from SRX Cardio, and a notice was provided to terminate the SRX Cardio relationship. As a result, in the second quarter of 2019, we recorded (1) a full impairment charge of $3.2 million related to the in-process research and development intangible asset, which was recorded in research and development expense, and (2) a gain of $2.3 million for the de-recognition of the contingent milestone payable to SRX Cardio associated with the licensed hypercholesterolemia program, which was recorded in net loss attributable to noncontrolling interest in these condensed consolidated financial statements.

During the third quarter of 2019, the exclusive license agreement signed in September 2016 was formally terminated, and SRX Cardio was deconsolidated from our condensed consolidated financial statements as of September 30, 2019. We recorded a loss of $76 thousand upon deconsolidation which was measured as a difference between the carrying amount of noncontrolling interest in SRX and the carrying amount of the SRX’s net assets. There was no fair value associated with consideration received or any retained noncontrolling interest in SRX upon the deconsolidation. In addition, our discontinuance of the hypercholesterolemia program from SRX was not a development that represented a significant strategic shift that has a material impact on our operations and financial results. As such, the deconsolidation of SRX was not presented as a discontinued operation in our condensed consolidated financial statements as of September 30, 2019.