Collaboration and Licensing Revenue

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration and Licensing Revenue

Collaboration and Licensing Revenue

The Company's collaborations and licensing agreements may provide for multiple promises to be satisfied by the Company and typically include a license to the Company's technology platforms, participation in collaboration committees, and performance of certain research and development services. Based on the nature of the promises in the Company's collaboration and licensing agreements, the Company typically combines most of its promises into a single performance obligation because the promises are highly interrelated and not individually distinct. Options to acquire additional services are considered to determine if they constitute material rights. At contract inception, the transaction price is typically the upfront payment received and is allocated to the performance obligations. The Company has determined the transaction price should be recognized as revenue based on its measure of progress under the agreement primarily based on inputs necessary to fulfill the performance obligation.

The Company determines whether collaborations and licensing agreements are individually significant for disclosure based on a number of factors, including total revenue recorded by the Company pursuant to collaboration and licensing agreements, collaborators or licensees with equity method investments, or other qualitative factors. Collaboration and licensing revenues generated from consolidated subsidiaries are eliminated in consolidation.

Intrexon Energy Partners and Intrexon Energy Partners II Collaborations

In July 2022, the Company obtained control of the Board of Managers of each of Intrexon Energy Partners, LLC and Intrexon Energy Partners II, LLC via the purchase of membership interests not previously owned for $7,000. The Company had

collaboration agreements with both Intrexon Energy Partners, LLC and Intrexon Energy Partners II, LLC, under which certain revenue had been deferred. Based on the Company's assessment of the status of each collaboration agreement in the third quarter of 2022, the Company determined that there was a substantial likelihood that no further performance obligations would occur under the respective collaboration agreements upon gaining control of those entities. Accordingly, in September 2022, the Company recognized the remaining balance of deferred revenue associated with Intrexon Energy Partners, LLC and Intrexon Energy Partners II, LLC, less the amounts paid to acquire the membership interests of the investors.

For the three and nine months ended September 30, 2022, the Company recognized $3,768 of revenue related to Intrexon Energy Partners, LLC and $10,793 related to Intrexon Energy Partners II, LLC.

There were no amounts recognized as revenue for the three and nine months ended September 30, 2023.

Alaunos License Agreement

On April 3, 2023, the Company entered into an amended and restated exclusive license agreement (the “License Agreement”), with Alaunos Therapeutics (“Alaunos”). The License Agreement amended and replaced the terms of the Exclusive License Agreement by and between the Company and Alaunos, dated October 5, 2018.

Pursuant to the terms of the License Agreement, the Company has granted Alaunos an exclusive, worldwide, royalty-free, sub-licensable license to research, develop and commercialize T-cell receptor products, designed for neoantigens for the treatment of cancer or the treatment and prevention of human papilloma virus, or HPV, to the extent that the primary reason for such treatment or prevention is to prevent cancer, which is referred to as the HPV Field. The Company has also granted Alaunos an exclusive, worldwide, royalty-free, sub-licensable license for certain patents relating to the Sleeping Beauty technology to research, develop and commercialize TCR Products for both neoantigens and shared antigens for the treatment of cancer and in the HPV Field. The Company also granted Alaunos certain non-exclusive rights with respect to shared antigens, NK cells and gamma delta T-cells. Alaunos will be solely responsible for all aspects of the research, development and commercialization of the exclusively licensed products for the treatment of cancer and will not be subject to a diligence obligation with respect to such efforts.

Pursuant to the License Agreement, Alaunos no longer has any rights to certain of the Company’s technology including with respect to (i) products utilizing the Company’s RheoSwitch® gene switch, or RTS to express IL-12, or the IL-12 Products, for the treatment of cancer, (ii) chimeric antigen receptor, or CAR, products including CD19 and BCMA, or (iii) products utilizing an additional construct that expresses RTS IL-12, or Gorilla IL-12 Products, for the treatment of cancer and in the HPV Field. In addition, the Company may research, develop and commercialize products for the treatment of cancer, outside of the products exclusively licensed to Alaunos. Alaunos will provide the Company with certain access to information and materials related to Alaunos’s prior use of the Company’s technologies that is no longer within the scope of the License Agreement.

In consideration of the licenses and other rights granted by the Company, Alaunos will pay the Company an annual license fee of $0.1 million. Neither Alaunos nor the Company will have any other obligations with respect to the payment of milestones or royalties on products developed in connection with the License Agreement.

The Company has agreed that, during the term of the License Agreement, it will not use the licensed intellectual property to research, develop or commercialize any exclusive product for the treatment of cancer. The License Agreement will terminate on a product-by-product and/or country-by-country basis upon the expiration of the last to expire patent claim for a licensed product. In addition, Alaunos may terminate the License Agreement on a country-by-country or program-by-program basis following written notice to the Company, and either party may terminate the License Agreement following notice of a material breach. The License Agreement also contains customary representations, warranties and covenants from Alaunos and the Company, as well as customary provisions related to indemnity, confidentiality and other matters.

Deferred Revenue

Deferred revenue primarily consists of upfront and milestone consideration received for the Company's collaboration and licensing agreements. Revenue is recognized as services are performed. The arrangements classified as long-term are not active while the respective counterparties evaluate the status of the project and its desired future development activities since the Company cannot reasonably estimate the amount of services, if any, to be performed over the next year.

As of September 30, 2023 and December 31, 2022, the Company had long-term deferred revenue for collaboration and licensing arrangements of $1,818, and deferred revenue classified as current related to prepaid products and services of $509 and $25, respectively.