Subsequent Events	6 Months Ended
Jun. 30, 2020
Disclosure Text Block
Subsequent Events	16. Subsequent Events Roche – Pralsetinib Collaboration Collaboration Agreement. On July 13, 2020, the Company entered into a collaboration agreement (the Roche collaboration agreement) with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively, Roche), pursuant to which the Company granted Roche exclusive rights to develop and commercialize the Company’s drug candidate pralsetinib worldwide, excluding the CStone territory, and a co-exclusive license in the U.S. to develop and commercialize pralsetinib. In addition, Roche will have the right to opt in to a next-generation RET compound co-developed by the Company and Roche. Under the Roche collaboration agreement, the Company received an upfront cash payment of $675.0 million in the third quarter of 2020. In addition, the Company will be eligible to receive up to an additional $927.0 million in contingent payments, including specified development, regulatory and sales-based milestones for pralsetinib and any licensed product containing a next-generation RET compound. In the U.S., the Company and Roche will work together to co-commercialize pralsetinib and will equally share responsibilities, profits and losses. In addition, the Company is eligible to receive tiered royalties ranging from high-teens to mid-twenties on annual net sales of pralsetinib outside the U.S., excluding the CStone territory. In addition, the Company and Roche have agreed to co-develop pralsetinib globally in RET-altered solid tumors, including non-small cell lung cancer, medullary thyroid carcinoma and other thyroid cancers, as well as other solid tumors. The Company and Roche will share global development costs for pralsetinib at a rate of 45 percent for the Company and 55 percent for Roche up to a specified amount of aggregate joint development costs, after which the Company’s share of global development costs for pralsetinib will be reduced by a specified percentage. The Company and Roche will also share specified global development costs for any next-generation RET compound co-developed under the collaboration in a similar manner. Unless earlier terminated in accordance with its terms, the Roche collaboration agreement will expire on a licensed product-by-licensed product basis (i) in the U.S. upon the expiration of the gross profit sharing term for such licensed product and (ii) outside the U.S. on a country-by-country basis at the end of the applicable royalty term for such licensed product. Roche may terminate the agreement in its entirety or on a licensed product-by-licensed product or country-by-country basis subject to certain notice periods. Either party may terminate the Roche collaboration agreement for the other party’s uncured material breach or insolvency. Subject to the terms of the Roche collaboration agreement, effective upon termination of the agreement, the Company is entitled to retain specified licenses to be able to continue to exploit the licensed products. The Company is currently evaluating the revenue recognized under the Roche collaboration agreement and expects to recognize revenue related to a majority of the $675.0 million upfront cash payment during the third quarter of 2020. Stock Purchase Agreement. In connection with the Roche collaboration agreement, on July 13, 2020, the Company entered into a stock purchase agreement with Roche Holdings, Inc. (Roche Holdings) pursuant to which the Company issued and sold 973,386 of its shares of common stock to Roche Holdings in the third quarter of 2020 in a private placement at a purchase price of $96.57 per share and received approximately $94.0 million in gross proceeds. Under the stock purchase agreement, the Company will issue and sell an additional 62,133 of its shares of common stock to Roche Holdings in a private placement at a purchase price of $96.57 per share and will receive approximately $6.0 million in additional gross proceeds, subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The Company is currently evaluating the accounting treatment for the stock purchase agreement and expects to recognize a majority of the investment within Stockholders’ Equity. Clementia License Agreement Under the Clementia agreement, the Company received a $20.0 million cash milestone payment in July 2020.

Subsequent Events

6 Months Ended

Jun. 30, 2020

16. Subsequent Events

Roche – Pralsetinib Collaboration

Collaboration Agreement. On July 13, 2020, the Company entered into a collaboration agreement (the Roche collaboration agreement) with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively, Roche), pursuant to which the Company granted Roche exclusive rights to develop and commercialize the Company’s drug candidate pralsetinib worldwide, excluding the CStone territory, and a co-exclusive license in the U.S. to develop and commercialize pralsetinib. In addition, Roche will have the right to opt in to a next-generation RET compound co-developed by the Company and Roche.

Under the Roche collaboration agreement, the Company received an upfront cash payment of $675.0 million in the third quarter of 2020. In addition, the Company will be eligible to receive up to an additional $927.0 million in contingent payments, including specified development, regulatory and sales-based milestones for pralsetinib and any licensed product containing a next-generation RET compound.

In the U.S., the Company and Roche will work together to co-commercialize pralsetinib and will equally share responsibilities, profits and losses. In addition, the Company is eligible to receive tiered royalties ranging from high-teens to mid-twenties on annual net sales of pralsetinib outside the U.S., excluding the CStone territory. In addition, the Company and Roche have agreed to co-develop pralsetinib globally in RET-altered solid tumors, including non-small cell lung cancer, medullary thyroid carcinoma and other thyroid cancers, as well as other solid tumors. The Company and Roche will share global development costs for pralsetinib at a rate of 45 percent for the Company and 55 percent for Roche up to a specified amount of aggregate joint development costs, after which the Company’s share of global development costs for pralsetinib will be reduced by a specified percentage. The Company and Roche will also share specified global development costs for any next-generation RET compound co-developed under the collaboration in a similar manner.

Unless earlier terminated in accordance with its terms, the Roche collaboration agreement will expire on a licensed product-by-licensed product basis (i) in the U.S. upon the expiration of the gross profit sharing term for such licensed product and (ii) outside the U.S. on a country-by-country basis at the end of the applicable royalty term for such licensed product. Roche may terminate the agreement in its entirety or on a licensed product-by-licensed product or country-by-country basis subject to certain notice periods. Either party may terminate the Roche collaboration agreement for the other party’s uncured material breach or insolvency. Subject to the terms of the Roche collaboration agreement, effective upon termination of the agreement, the Company is entitled to retain specified licenses to be able to continue to exploit the licensed products.

The Company is currently evaluating the revenue recognized under the Roche collaboration agreement and expects to recognize revenue related to a majority of the $675.0 million upfront cash payment during the third quarter of 2020.

Stock Purchase Agreement. In connection with the Roche collaboration agreement, on July 13, 2020, the Company entered into a stock purchase agreement with Roche Holdings, Inc. (Roche Holdings) pursuant to which the Company issued and sold 973,386 of its shares of common stock to Roche Holdings in the third quarter of 2020 in a private placement at a purchase price of $96.57 per share and received approximately $94.0 million in gross proceeds. Under the stock purchase agreement, the Company will issue and sell an additional 62,133 of its shares of common stock to Roche Holdings in a private placement at a purchase price of $96.57 per share and will receive approximately $6.0

million in additional gross proceeds, subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

The Company is currently evaluating the accounting treatment for the stock purchase agreement and expects to recognize a majority of the investment within Stockholders’ Equity.

Clementia License Agreement

Under the Clementia agreement, the Company received a $20.0 million cash milestone payment in July 2020.