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Commitments and Contingencies
9 Months Ended
Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

6. Commitments and Contingencies

Eversana Agreement

On January 10, 2021, the Company announced that it had entered into a master services agreement (the “Eversana Agreement”) with Eversana Life Science Services, LLC (“Eversana”) pursuant to which Eversana will provide the Company multiple services from its integrated commercial platform in preparation for the potential commercialization of lenzilumab.

Under the Eversana Agreement, Eversana will provide the Company with services in connection with the potential launch of lenzilumab. Eversana services during 2021 have comprised marketing, market access, consulting, field solutions, field operations, health economics and medical affairs. Additional services may be negotiated by the parties and set forth in statements of work delivered in accordance with the Eversana Agreement.

The Company agreed to pay Eversana fees and reimburse it for expenses in performing the services as established in applicable statements of work. Eversana agreed to defer a portion of its fees for certain work performed which fees would only be payable upon the Company’s receipt of an EUA from FDA for lenzilumab for newly hospitalized and hypoxic COVID-19 patients.On September 21, 2021, the Company notified Eversana that due to the declination letter received from FDA on September 8, 2021, it was terminating the initial statement of work related to commercialization support of lenzilumab for the treatment of COVID-19 in the United States. Eversana is disputing the termination notice and has requested payment of approximately $4.0 million for services rendered from April 1, 2021 to September 30, 2021. The parties are working to resolve a dispute over the amount of fees the Company is obligated to pay Eversana as a result of FDA’s decision to decline to grant EUA for lenzilumab.

The Eversana Agreement provides for a one-year term and will renew for subsequent one-year terms unless either party provides a notice of non-renewal. After the first year, the Company may terminate the Eversana Agreement upon advance written notice to Eversana. The Eversana Agreement contains customary provisions allowing either party to terminate the Eversana Agreement as a result of certain changes in law and material breaches and certain insolvency events by or relating to the other party.

The Eversana Agreement imposes customary mutual obligations on the parties to protect and not disclose the confidential information and intellectual property of the other, and contains insurance, non-solicitation, indemnification and limitation of liability provisions customary for service contracts of this type.

Manufacturing Agreements

The Company has entered into agreements with several CMOs to manufacture bulk drug substance (“BDS”) and fill/finish/drug product (“DP”) for lenzilumab for a potential launch of lenzilumab in anticipation of an EUA or CMA in 2021. The Company has also entered into agreements for packaging of the drug. These agreements represent large commitments, including upfront amounts prior to commencement of manufacturing and progress payments through the course of the manufacturing process and include payments for technology transfer. Since September 9, 2021, the Company has amended, and in some cases canceled, certain of these agreements, some of which were contingent on EUA, in an effort to reduce its future spending on lenzilumab production until and if authorization is received in the UK, EU, or U.S. These changes will significantly limit future production of lenzilumab but because most of the Company’s manufacturing agreements required payment of upfront fees upon execution and payments against performance of the services to be provided, often over a lengthy performance period, the changes will not have an immediate impact on the Company’s spending as the cancellations generally only impact production efforts that were not expected to commence until 2022. In addition, certain of the Company’s CMOs have been unsuccessful in their efforts to manufacture some batches of lenzilumab to the Company’s specifications for various reasons. The Company is working with these CMOs to determine if batches of BDS manufactured by them will be usable in the future or, if not, whether other financial recompense will be offered to the Company. As of September 30, 2021, the Company estimates that its commitments remaining to be incurred under these agreements are approximately $50.5 million for the fourth quarter of 2021, $55.9 million for 2022 and $4.3 million thereafter. Certain of these commitments and amounts accrued at quarter-end are in dispute and the Company intends to defer these payments, negotiate lower amounts or seek legal recourse for the amounts in question.