Revenue

9 Months Ended

Sep. 30, 2022

Revenue

Revenue

10.  Revenue

Product Sales

On April 19, 2022, Elusys entered into a contract with Public Works and Government Services of Canada to deliver 3,000 vials of ANTHIM® (FDA-approved anthrax antitoxin) for treatment of inhalational anthrax due to Bacillus anthrax. The total contract award is $6.0 million with a delivery date on or before September 30, 2022.

This order was fulfilled on September 13, 2022 for the total contract amount of $6.0 million which is in accounts receivable on the consolidated balance sheet as of September 30, 2022. The Company did not believe there were factors that indicated the need for an allowance for doubtful accounts. During the quarter ended September 30, 2022, the Company had no bad debt expense.

Grant Revenue

In June 2016, Pelican entered into a cancer research grant contract (or “Grant Contract”) with CPRIT, under which CPRIT awarded a grant not to exceed $15.2 million for use in developing cancer treatments by targeting a novel T-cell costimulatory receptor (namely, TNFRSF25). The Grant Contract covers a period from June 1, 2016 through November 30, 2020, as amended through May 31, 2023. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017 and a third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded on a reimbursement basis after the Company has fulfilled every requirement of the grant and the grant has been approved to be finalized. As of September 30, 2022, all $15.2 million have been recognized to date.

The grant is subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican was required to provide $7.6 million in matching funds over the life of the project. Upon commercialization of the product, the terms of the grant require Pelican to pay tiered royalties in the low to mid-single digit percentages. Such royalties reduce to less than one percent after a mid-single-digit multiple of the grant funds have been paid to CPRIT in royalties.

On January 7, 2020, the Company was awarded a grant of up to $224,713 from the NIH. The NIH grant provided funding for development of the Company’s technologies for PTX-35. The grant funds were made available by the NIH to the Company as allowable expenses are incurred. The Company incurred $40,470 of allowable expenses under the grant and recognized the corresponding grant revenue in the quarter ended September 30, 2022. No NIH grant revenue was recognized in the quarter ended September 30, 2021.  

Through September 30, 2022, $15.2 million of grant funding has been recognized as revenue. As of September 30, 2022 and December 31, 2021, the Company had a grant receivable balance of $1.5 million and $1.3 million, respectively, for CPRIT proceeds not yet received but for which the costs had been incurred or the conditions of the award has been met. At the conclusion of the grant, the Company will be subject to an audit by CPRIT before the final grant payment can be approved and distributed.  The Company believes this will not be finalized until 2023. Due to the inviability of the PTX-35 candidate, the Company has decided not to move forward to a Phase 2 trial. However, the Company expects to receive the full outstanding receivable despite the termination of the trial.