Please refer to Note 8 for information on license agreements for technology in-licensed by the Company from third parties.

As of December 31, 2021, the Company’s NAV Technology Platform was being applied by NAV Technology Licensees in one commercially available product, Zolgensma, and in the development of a number of licensed products. Additionally, the Company has licensed intellectual property rights to collaborators for the joint development of certain product candidates. Consideration to the Company under its license agreements may include: (i) up-front and annual fees, (ii) milestone payments based on the achievement of certain development and sales-based milestones, (iii) sublicense fees, (iv) royalties on sales of licensed products and (v) other consideration payable upon optional goods and services purchased by licensees. Sublicense fees vary by license and range from a mid-single digit percentage to a low-double digit percentage of license fees received by licensees as a result of sublicenses. Royalties on net sales of commercialized products vary by license and range from a mid-single digit percentage to a low double-digit percentage of net sales by licensees.

	Years Ended December 31,
	2021		2020		2019
AbbVie collaboration and license agreement	$	370,000	$	—	$	—
Royalties on net sales of Zolgensma		94,978		61,631		20,829
Achievement of sales-based milestone for Zolgensma		—		80,000		—
Other license and royalty revenue		5,369		12,936		14,404
Total license and royalty revenue	$	470,347	$	154,567	$	35,233

Development milestone payments are evaluated each reporting period and are only included in the transaction price of each license and recognized as license revenue to the extent the milestones are considered probable of achievement. Sales-based milestones are excluded from the transaction price of each license agreement and recognized as royalty revenue in the period of achievement. As

of December 31, 2021, the Company’s license agreements, excluding additional licenses that could be granted upon the exercise of options by licensees, contained unachieved milestones which could result in aggregate milestone payments to the Company of up to $1.58 billion, including (i) $538.3 million upon the commencement of various stages of clinical trials, (ii) $21.0 million upon the submission of regulatory approval filings, (iii) $141.0 million upon the approval of commercial products by regulatory agencies and (iv) $877.0 million upon the achievement of specified sales targets for licensed products, including milestones payable upon first commercial sales of licensed products. To the extent the milestone payments are realized by the Company, the Company will be obligated to pay sublicense fees to licensors based on a specified percentage of the fees earned by the Company. The achievement of these milestones is highly dependent on the successful development and commercialization of licensed products and it is at least reasonably possible that some or all of the milestone fees will not be realized by the Company.

The following table presents changes in the balances of the Company’s net accounts receivable, contract assets and deferred revenue, as well as other information regarding revenue recognized, during the periods presented (in thousands):

	Years Ended December 31,
	2021			2020			2019
Accounts receivable, net, current and non-current:
Balance, beginning of period	$	46,266		$	42,303		$	31,599
Additions		472,347			158,682			39,203
Deductions		(483,912	)		(154,719	)		(28,499	)
Balance, end of period	$	34,701		$	46,266		$	42,303

Contract assets:
Balance, beginning of period	$	350		$	—		$	750
Additions		1,074			350			1,000
Deductions		(350	)		—			(1,750	)
Balance, end of period	$	1,074		$	350		$	—

Deferred revenue, current and non-current:
Balance, beginning of period	$	4,232		$	3,333		$	3,933
Additions		—			1,124			—
Deductions		(899	)		(225	)		(600	)
Balance, end of period	$	3,333		$	4,232		$	3,333

Revenue recognized during the period from:
Amounts included in deferred revenue at beginning of period	$	390		$	—		$	600
Performance obligations satisfied in previous periods	$	98,575		$	146,772		$	26,689

Additions to accounts receivable during the periods presented consisted primarily of royalties on net sales of Zolgensma, new licenses granted by the Company, the achievement of milestones by licensees, interest income recognized and decreases in the allowance for credit losses during the period. Deductions to accounts receivable during the periods presented consisted primarily of amounts collected from licensees and increases in the allowance for credit losses during the period. Additions to accounts receivable during the year ended December 31, 2021 include $370.0 million billed to AbbVie Global Enterprises Ltd. under the collaboration and license agreement which became effective in November 2021. Additions to accounts receivable during the year ended December 31, 2020 include $80.0 million billed to Novartis Gene Therapies upon the achievement of a sales-based milestone for net sales of Zolgensma in the third quarter of 2020.

Additions to contract assets during the periods presented consisted of development milestones deemed probable of achievement by licensees during the period and revenue recognized from research and development services performed by the Company for which payment by the licensee is not unconditional. Deductions to contract assets during the periods presented consisted of the achievement of development milestones by licensees and billing of the associated milestone payments by the Company. Contract assets as of December 31, 2021 and 2020 are included in other current assets on the consolidated balance sheets.

As of December 31, 2021, the Company had recorded deferred revenue of $3.3 million which represents consideration received from licensees for performance obligations that have not yet been satisfied by the Company. Unsatisfied performance obligations consisted of (i) options granted to licensees that provide material rights to the licensee to acquire additional licenses from the Company, which will be satisfied upon the exercise or expiration of the options and (ii) research and development services to be performed by the Company related to licensed products, which will be satisfied as the research and development services are performed.

Revenue recognized from performance obligations satisfied in previous periods was primarily attributable to Zolgensma royalty revenues, the achievement of a sales-based milestone for net sales of Zolgensma, sublicense fees earned from licensees and changes in the transaction prices of the Company’s license agreements. Changes in transaction prices were primarily attributable to development milestones achieved or deemed probable of achievement during the periods, which were previously not considered probable of achievement.

	As of December 31,
	2021			2020
Current accounts receivable:
Billed to customers	$	365		$	30,573
Unbilled		32,074			20,104
Allowance for credit losses		—			(7,678	)
Current accounts receivable, net		32,439			42,999
Non-current accounts receivable:
Unbilled		6,020			3,267
Allowance for credit losses		(3,758	)		—
Non-current accounts receivable, net		2,262			3,267
Total accounts receivable, net	$	34,701		$	46,266

The following table presents the changes in the allowance for credit losses related to accounts receivable and contract assets for the years ended December 31, 2021 and 2020 (in thousands):

	Allowance for Credit Losses
	Accounts Receivable			Contract Assets
Balance at December 31, 2019	$	—		$	—
Provision for credit losses (recoveries)		7,678			—
Write-offs		—			—
Balance at December 31, 2020		7,678			—
Provision for credit losses (recoveries)		(2,569	)		—
Changes in present value discount of receivables		(1,243	)		—
Write-offs		(108	)		—
Balance at December 31, 2021	$	3,758		$	—

The Company’s allowance for credit losses as of December 31, 2021 and 2020 was related solely to accounts receivable from Abeona. Please refer to the section below, Abeona Therapeutics Inc., for further information regarding amounts due from Abeona and the associated allowance for credit losses. The Company’s provision for credit losses (recoveries) for the years ended December 31, 2021 and 2020 was $(2.6) million and $7.7 million, respectively, and was related solely to changes in estimates regarding the collectability of the accounts receivable due from Abeona. No allowance for credit losses was recorded as of December 31, 2019, and no provision for credit losses (recoveries) was recorded for the year ended December 31, 2019.

In March 2014, the Company entered into an exclusive license agreement (as amended, the March 2014 License) with Novartis Gene Therapies (formerly AveXis, Inc.). Under the March 2014 License, the Company granted Novartis Gene Therapies an exclusive, worldwide commercial license, with rights to sublicense, to the NAV Technology Platform, as well as other certain rights, for the treatment of SMA in humans by in vivo gene therapy.

In consideration for the rights granted under the license, Novartis Gene Therapies paid the Company (i) an up-front fee of $2.0 million upon the execution of the agreement in 2014, (ii) license fees totaling $180.0 million upon the amendment of the agreement in January 2018 and the subsequent acquisition of AveXis, Inc. (now Novartis Gene Therapies) by Novartis in May 2018, (iii) total cumulative payments of $12.3 million upon the achievement of various development milestones, and (iv) a sales-based milestone payment of $80.0 million upon the achievement of $1.0 billion in cumulative net sales of Zolgensma. In addition to the consideration above, Novartis Gene Therapies is obligated to pay to the Company fixed annual fees, royalties on net sales of licensed products and a percentage of any sublicense fees received by Novartis Gene Therapies from sublicensees for the licensed intellectual property rights. Royalties are payable by Novartis Gene Therapies at a mid-single to low double-digit percentage of net sales of licensed products using the NAV AAV9 vector, and a low double-digit percentage of net sales of licensed products using a licensed vector other than NAV AAV9, and are subject to reduction in specified circumstances.

Novartis Gene Therapies launched commercial sales of Zolgensma, a licensed product under the March 2014 License, in the second quarter of 2019, upon which the Company began recognizing royalty revenue on net sales of the licensed product. Pursuant to the license agreement, Novartis Gene Therapies was obligated to pay a sales-based milestone fee of $80.0 million to the Company upon the achievement of $1.0 billion in cumulative net sales of licensed products. Novartis Gene Therapies achieved cumulative net sales of Zolgensma of $1.0 billion in the third quarter of 2020, upon which the Company recognized revenue of $80.0 million related to the sales-based milestone fee. Additionally, the Company recognized license revenue of $3.5 million and $3.5 million for the years ended December 31, 2020 and 2019, respectively, related to development milestones achieved during the periods which were previously considered not probable of achievement. As of December 31, 2020, all development and sales-based milestones under the March 2014 License had been achieved and associated milestone payments had been received from Novartis Gene Therapies.

The Company recognized the following amounts under the March 2014 License with Novartis Gene Therapies (in thousands):

	Years Ended December 31,
	2021		2020		2019
Royalties on net sales of Zolgensma	$	94,978	$	61,631	$	20,829
Achievement of sales-based milestone for Zolgensma		—		80,000		—
Other license revenue		—		3,500		3,500
Total license and royalty revenue	$	94,978	$	145,131	$	24,329

Interest income from licensing	$	22	$	26	$	29

As of December 31, 2021 and 2020, the Company had recorded total accounts receivable of $26.6 million and $19.6 million, respectively, from Novartis Gene Therapies under the March 2014 License, which consisted primarily of Zolgensma royalties receivable. Zolgensma royalties receivable recorded as of December 31, 2021 included $12.8 million expected to be paid to HCR in accordance with the Royalty Purchase Agreement discussed in Note 7.

In November 2018, the Company entered into a license agreement with Abeona (as amended, the November 2018 License) for the treatment of various diseases using the NAV Technology Platform. Pursuant to the November 2018 License, Abeona was required to pay a license fee of $8.0 million to the Company no later than April 1, 2020. Abeona failed to make this payment, and in April 2020, the Company delivered to Abeona a notice of its breach of the license agreement and written demand for payment. Upon expiration of the applicable cure period in May 2020, the license agreement terminated. As a result of the termination, Abeona was required to pay an additional $20.0 million license fee to the Company within 15 days of the termination date, which otherwise would have been due to the Company in November 2020. Unpaid balances due under the November 2018 License accrue interest at 1.5% per month.

In May 2020, after the termination of the November 2018 License, Abeona filed a claim in arbitration alleging that the Company had breached certain responsibilities to communicate with Abeona regarding the Company’s prosecution of licensed patents under the November 2018 License. The Company disputed Abeona’s claim and filed a counterclaim in arbitration demanding payment of the $28.0 million of unpaid fees from Abeona, plus accrued interest. A binding arbitration was held in March 2021 and the arbitration tribunal issued its ruling in July 2021, which denied Abeona’s claim and upheld the Company’s counterclaim. The arbitration tribunal’s ruling, which was subsequently amended to reflect a minor adjustment in the computation of accrued interest, awarded the Company a total of $33.6 million, which consisted of $28.0 million in damages and $5.6 million in accrued interest payable to the Company by Abeona.

Subsequent to the arbitration tribunal’s ruling in July 2021, Abeona filed an additional claim in a second arbitration to enforce a purported settlement relating to the unpaid fees, which the Company disputed. In November 2021, the Company and Abeona entered into a settlement agreement and mutual release (the Settlement Agreement) to resolve all arbitration and legal proceedings and mutually release each party from any and all claims under the November 2018 License. Pursuant to the Settlement Agreement, Abeona will pay the Company a total of $30.0 million as follows: (i) $20.0 million which was paid in November 2021, (ii) $5.0 million payable in November 2022, which is fully secured by an irrevocable standby letter of credit issued to the Company by a reputable U.S. financial institution, and (iii) $5.0 million payable on the earlier of the third anniversary of the Settlement Agreement in November 2024 or the closing of a specified type of transaction by Abeona.

As of December 31, 2020, the Company had recorded gross accounts receivable of $30.1 million from Abeona under the November 2018 License, which consisted of the $8.0 million fee due in April 2020, the $20.0 million fee due within 15 days of the termination of the license agreement in May 2020 and accrued interest on the outstanding balances. As a result of its assessment of credit risk, the Company recorded an allowance for credit loss of $7.7 million as of December 31, 2020 related to the accounts receivable due from Abeona. As of December 31, 2020, the Company had recognized interest income from licensing of $2.1 million related to the unpaid license fees from Abeona, which was included in the gross accounts receivable balance of $30.1 million. In accordance with its interest accrual policy, the Company ceased the recognition of interest income accrued under the license agreement subsequent to the establishment of the allowance for credit losses in the third quarter of 2020.

In accordance with the Settlement Agreement, the Company received a payment of $20.0 million from Abeona in November 2021. As of December 31, 2021, the Company had recorded gross accounts receivable of $8.8 million from Abeona under the Settlement Agreement, which consisted of current accounts receivable of $5.0 million for the payment due in November 2022, and non-current accounts receivable of $3.8 million for the present value of the $5.0 million payment due by November 2024. While the Company anticipates taking appropriate measures to enforce the full collection of amounts due from Abeona under the Settlement Agreement, the Company assessed the collectability of the accounts receivable from Abeona as it relates to credit risk. In performing this assessment, the Company evaluated Abeona’s credit profile and financial condition, as well its expectations regarding Abeona’s future cash flows and ability to satisfy the contractual obligations of the Settlement Agreement. As a result of its analysis, the Company recorded an allowance for credit losses of $3.8 million as of December 31, 2021 related to the non-current accounts receivable due from Abeona. The Company recorded a provision for credit losses (recoveries) of $(2.6) million and $7.7 million for the years ended December 31, 2021 and 2020, respectively, as a result of changes in estimates regarding the allowance during the periods. The present value discount of the non-current accounts receivable from Abeona is accreted as interest income from licensing through the contractual due date using the effective interest method. The Company has elected to record increases in the allowance for credit losses associated with the accretion of the present value discount of the receivable as a reduction of the associated interest income, resulting in no interest income recognized during the period related to the accretion of the present value discount on the non-current receivable from Abeona.

In September 2021, the Company entered into a collaboration and license agreement with AbbVie Global Enterprises Ltd. (AbbVie), a subsidiary of AbbVie Inc., to jointly develop and commercialize RGX-314, the Company’s product candidate for the treatment of wet AMD, DR and other chronic retinal diseases (the AbbVie Collaboration Agreement). The AbbVie Collaboration Agreement became effective in November 2021.

Pursuant to the AbbVie Collaboration Agreement, the Company granted AbbVie a co-exclusive license to develop and commercialize RGX-314 in the United States and an exclusive license to develop and commercialize RGX-314 outside the United States. The Company and AbbVie will collaborate to develop RGX-314 in the United States, and AbbVie will be responsible for the development of RGX-314 in specified markets outside the United States. Through December 31, 2022, the Company will be responsible for development expenses for certain ongoing trials of RGX-314 and the parties will share additional development expenses related to RGX-314. Beginning on January 1, 2023, AbbVie will be responsible for the majority of all RGX-314 development expenses.

The Company will lead the manufacturing of RGX-314 for clinical development and U.S. commercial supply, and AbbVie will lead the manufacturing of RGX-314 for commercial supply outside the United States. Manufacturing expenses will be allocated between the parties in accordance with the terms of the AbbVie Collaboration Agreement and supply agreements determined in accordance with the agreement. If requested by AbbVie, the Company will manufacture up to a specified portion RGX-314 for commercial supply outside the United States at a price specified in the agreement. AbbVie will lead the commercialization of RGX-314 globally, and the Company will participate in U.S. commercialization efforts as provided under a commercialization plan determined in accordance with the agreement. The Company and AbbVie will share equally in the net profits and net losses associated with the commercialization of RGX-314 in the United States. Outside the United States, AbbVie will be responsible, at its sole cost, for the commercialization of RGX-314.

In consideration for the rights granted under the AbbVie Collaboration Agreement, AbbVie paid the Company an up-front fee of $370.0 million upon the effective date of the agreement in November 2021, and is required to pay to the Company up to $1.38 billion upon the achievement of specified development and sales-based milestones, of which $562.5 million are based on development milestones and $820.0 million are sales-based milestones. AbbVie is also required to pay to the Company tiered royalties on net sales of RGX-314 outside the United States at percentages in the mid-teens to low twenties, subject to specified offsets and reductions.

The AbbVie Collaboration Agreement contains provisions for termination, including termination for convenience by AbbVie. Contemporaneously with entering into the AbbVie Collaboration Agreement in September 2021, the Company entered into a sublicense agreement with AbbVie (the AbbVie Sublicense Agreement) pursuant to which the Company granted AbbVie an exclusive sublicense to exploit licensed products in connection with the AbbVie Collaboration Agreement under specified patents licensed to the Company by Penn. The AbbVie Sublicense Agreement became effective contemporaneously with the AbbVie Collaboration Agreement in November 2021 and is coterminous with the AbbVie Collaboration Agreement.

The Company evaluated its various commitments under the AbbVie Collaboration Agreement and identified the following distinct units of account: (i) delivery of an intellectual property license for the rights to develop and commercialize RGX-314 globally, (ii) development, manufacturing and commercialization activities for RGX-314 in the United States, and (iii) manufacturing of commercial supply for sales of RGX-314 outside the United States, if requested by AbbVie. In determining the distinct units of account, the Company concluded that the license granted to AbbVie to develop and commercialize RGX-314 is distinct from the other goods and services promised under the agreement, as AbbVie can benefit from the license on a standalone basis and, based on the stage of development of RGX-314, the underlying licensed products and know-how are not expected to be significantly modified as a result of other goods and services promised under the agreement.

For each of the distinct units of account identified under the AbbVie Collaboration Agreement, the Company determined whether the transactions should be accounted for as a contract with a customer within the scope of Topic 606 or as a collaborative arrangement within the scope of Topic 808. The Company concluded that the units of account for the delivery of the functional intellectual property license and the manufacturing of commercial supply for sales of RGX-314 outside the United States should be accounted for as revenue under Topic 606, as AbbVie is deemed to be a customer for these transactions. The Company concluded that the unit of account for development, manufacturing and commercialization activities for RGX-314 in the United States should be accounted for as a collaborative arrangement under Topic 808, as these represent joint operating activities for which the Company and AbbVie are both active participants and exposed to significant risks and rewards dependent on the commercial success of such activities.

The Company applied the requirements of Topic 606 to the AbbVie Collaboration Agreement for the units of account in which AbbVie was deemed to be a customer. The Company determined that there is only one material performance obligation under the agreement for the delivery of the intellectual property license to develop and commercialize RGX-314 globally. The Company evaluated options granted to AbbVie under the agreement and determined that the options do not represent material rights, and therefore are not considered separate performance obligations under the current contract. Specifically, the Company concluded that the option granted to AbbVie to purchase commercial supply of RGX-314 from the Company for a portion of sales outside the United States does not convey a material right, as the option is not priced at an incremental discount to the standalone selling price of the underlying goods and services. Additionally, the Company identified various promises under the AbbVie Collaboration Agreement which were determined to be immaterial in the context of the contract and will not be accounted for as a separate performance obligations.

Upon the effective date of the agreement and as of December 31, 2021, the transaction price of the AbbVie Collaboration Agreement was $370.0 million, which consisted solely of the up-front payment in November 2021. The $370.0 million transaction price was fully recognized as revenue upon the delivery of the license to AbbVie in November 2021. Variable consideration under the AbbVie Collaboration Agreement, which has been excluded from the transaction price, includes $562.5 million in payments for development milestones that have not yet been achieved and were not considered probable of achievement. Additionally, the transaction price excludes sales-based milestone payments of $820.0 million and royalties on net sales of RGX-314 outside the United States. Development milestones will be added to the transaction price and recognized as revenue upon achievement, or if deemed probable of achievement. In accordance with the sale- or usage-based royalty exception under Topic 606, royalties on net sales and sales-based milestones will be recognized as revenue in the period the underlying sales occur or milestones are achieved.

The Company applied the requirements of Topic 808 to the AbbVie Collaboration Agreement for the units of account which were deemed to be a collaborative arrangement. Both the Company and AbbVie will perform various activities related to the development, manufacturing and commercialization of RGX-314 in the United States. Development costs are shared between the parties in accordance with the terms of the AbbVie Collaboration Agreement, and the parties will share equally in the net profits and losses derived from sales of RGX-314 in the United States. The Company accounts for payments to and from AbbVie for the sharing of development costs in accordance with its accounting policy for collaborative arrangements. Amounts owed to AbbVie for the Company’s share of development costs incurred by AbbVie are recorded as research and development expense in the period the costs are incurred. Amounts owed to the Company for AbbVie’s share of development costs incurred by the Company are recorded as a reduction of research and development expense in the period the costs are incurred. At the end of each reporting period, the Company records a net amount due to or from AbbVie as a result of the cost-sharing arrangement. As of December 31, 2021, the Company had recorded $5.9 million due from AbbVie for reimbursement of development costs under AbbVie Collaboration Agreement which is included in other current assets on the consolidated balance sheet.

The Company recognized the following amounts under the AbbVie Collaboration Agreement (in thousands):

In July 2019, the Company entered into a collaboration and license agreement with Neurimmune AG (Neurimmune) pursuant to which the Company and Neurimmune will jointly develop and commercialize novel gene therapies using AAV vectors from the NAV Technology Platform to deliver human antibodies for chronic neurodegenerative diseases. The Company and Neurimmune will share all research and development costs for the first two years of the agreement, after which each party will have the option, on a target-by-target basis, to: (i) continue as a 50% partner in the collaboration; (ii) receive a phase-based worldwide royalty in lieu of continued development investment; or (iii) negotiate with the other party to lead the development and commercialization of the respective program. Unless the parties agree otherwise, upon the commercialization of any product candidates, if any, it is anticipated that profits and losses will be shared equally on a worldwide basis.

The Company determined that the collaboration and license agreement with Neurimmune is a collaborative arrangement within the scope of Topic 808, and that no unit of account under the arrangement should be accounted for as a transaction with a customer within the scope of Topic 606. The Company accounts for payments to and from Neurimmune for the sharing of development costs in accordance with its accounting policy for collaborative arrangements. Amounts owed to Neurimmune for the Company’s share of development costs incurred by Neurimmune are recorded as research and development expense in the period the costs are incurred. Amounts owed to the Company for Neurimmune’s share of development costs incurred by the Company are recorded as a reduction of research and development expense in the period the costs are incurred. At the end of each reporting period, the Company records a net amount due to or from Neurimmune as a result of the cost-sharing arrangement. As of December 31, 2021 and 2020, the Company had recorded $0.4 million and $0.3 million, respectively, due to Neurimmune for reimbursement of development costs under the collaboration and license agreement which is included in accrued expenses and other current liability on the consolidated balance sheets.

During the years ended December 31, 2021, 2020 and 2019, the Company recorded $0.2 million, $0.3 million and less than $0.1 million, respectively, in net cost reimbursement to Neurimmune for development activities under the collaboration and license agreement, which were recorded as research and development expenses.