License Fee Payable

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

License Fee Payable

License Fee PayableOn February 28, 2018, the Company was notified that EBS had entered into a license agreement with a Third Party (as defined in the Adapt Agreement) with regard to one or more patents pursuant to which EBS invoked its right under Section 5.5 of the Adapt Agreement to offset 50% of certain payments paid to such Third Party from the amounts payable by EBS to the Company under the Adapt Agreement and SWK under the SWK Purchase Agreement. On March 1, 2018, the Company received net milestone payments of $6.1 million, which was net of 50% of a license fee payment EBS made to the Third Party.

EBS reduced such milestone payment by $6.25 million pursuant to Section 5.5 of the Adapt Agreement. The portion of the milestone payment that the Company would have otherwise received was reduced by $5.6 million.

As provided in Amendment No. 2 to the Adapt Agreement, which the parties entered into on March 18, 2019, EBS has made and will in the future make payments to the Third Party Licensee and will be allowed to reduce the royalties and milestones that the Company would be due under the License Agreement by a maximum of $9.0 million in relation to such payments. Under the SWK Purchase Agreement, the Company retains 90% of the royalties payable under the Adapt Agreement, with SWK entitled to 10%. The maximum amount payable by the Company is therefore $8.1 million (90% of $9 million), of which the Company has recorded $5.4 million as a current liability and $2.7 million as a long-term liability at December 31, 2018. As provided in Amendment No. 2, EBS will be allowed to reduce the royalties and milestones that the Company would be due under the Adapt Agreement during the year ended December 31, 2019 by a maximum of $1.8 million each quarter. As provided in the Adapt Agreement, if Net NARCAN® Sales (as defined in the Adapt Agreement) exceed $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, EBS may deduct $2.7 million from the $13.5 million (90% of $15.0 million) milestone payable to the Company.

As of December 31, 2019, the Company has paid the amount payable of $8.1 million as net sales of NARCAN® exceeded $200 million during the nine months ended September 30, 2019. Accordingly, as of December 31, 2019 no further payments are due related to the License Fee Payable.