Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

18. RELATED PARTY TRANSACTIONS

Oxford Biomedica (US) LLC

As described in Note 6, the Company has significant influence over, but does not control, OXB (US) LLC through its noncontrolling representation on OXB Solution’s board of directors and the Company’s equity interest in OXB (US) LLC. In March 2022, concurrently with the closing of the transaction with OXB (US) LLC, the Company entered into certain ancillary agreements with OXB (US) LLC including a supply agreement, a lease assignment and assumption agreement, a sublease agreement and a transitional services agreement.

Supply Agreement

Pursuant to the terms of the Manufacturing and Supply Agreement with OXB (US) LLC entered into in March 2022 (the "Supply Agreement"), the Company agreed to purchase from OXB (US) LLC at least 50% of its clinical supply requirements of AAV-based products during the initial term of the supply agreement. The Supply Agreement provides for an initial term of three years, which may be extended for an additional one-year term. Under the Supply Agreement, the Company was committed to purchase a minimum number of batches of drug substance and drug product, as well as process development services, for a total commitment of approximately $29.7 million in 2023. As of December 31, 2023, the Company had no remaining purchase obligations to OXB (US) LLC pursuant to the Supply Agreement; there are no minimum purchase commitments in 2024 (year three) of the Supply Agreement. After the initial term, the Company will have the right to terminate the Supply Agreement for convenience or other reasons specified in the Supply Agreement upon prior written notice. Either party may terminate the Supply Agreement upon an uncured material breach by the other party or upon the bankruptcy or insolvency of the other party.

During the years ended December 31, 2023 and 2022, the Company recorded purchases of drug substance from OXB (US) LLC related to the Supply Agreement of approximately $21.7 million and $13.9 million, respectively, purchases of process development services of approximately $7.4 million and $12.5 million, respectively, and stability and other support of approximately $1.0 million and $1.8 million, respectively. These amounts are included within research and development expenses on the Company's consolidated statements of operations. The amounts due to OXB (US) LLC under the Supply Agreement were $3.1 million and $5.2 million as of December 31, 2023 and 2022, respectively, and were included in accounts payable and accrued expenses and other liabilities on the Company's consolidated balance sheets.

Lease Assignment and Sublease Agreement

As described in Note 10, the Company leases space for research and development, manufacturing and general office space in Bedford, Massachusetts. In March 2022, the Company and OXB (US) LLC entered into a lease assignment and assumption agreement pursuant to which Homology assigned all of its right, title and interest in, to and under this lease to OXB (US) LLC and a sublease agreement whereby OXB (US) LLC subleased certain premises in its facility to Homology. However, as the Company remained jointly and severally liable for the payment of rent under this lease, the Company was not released from being the primary obligor under such lease and therefore the related right-of-use asset and operating lease liability were not derecognized and the Company recorded sublease income from OXB (US) LLC as if it were subleasing the space to OXB (US) LLC. See Note 10 for details.

During the years ended December 31, 2023 and 2022, the Company recorded sublease income of $2.3 million and $2.0 million, respectively, related to the sublease agreement with OXB (US) LLC. This amount was recognized as a reduction to lease expense in the Company's consolidated statements of operations.

During 2023, OXB (US) LLC assumed responsibility for paying the landlord for invoices related to the leased property and, as such, the Company began making direct payments to OXB (US) LLC for amounts due to OXB (US) LLC under the sublease. Therefore, as of December 31, 2023, the amount of sublease income payable to OXB (US) LLC was $0.3 million and was included in accrued expenses on the Company's consolidated balance sheets. As of December 31, 2022, the amount of sublease income receivable from OXB (US) LLC was $0.5 million and was included in prepaid expenses and other current assets on the Company's consolidated balance sheets.

Transitional Services Agreement

Under the transitional services agreement with OXB (US) LLC (the “Services Agreement”), the Company is performing certain services for the benefit of OXB (US) LLC and OXB (US) LLC is performing certain services for the benefit of the Company. The term of the Services Agreement will not exceed eighteen months and lasts until the earlier of termination for convenience, termination for cause in the event of an uncured material breach, termination as a result of bankruptcy of either party, and expiration or termination of the only remaining outstanding service as set forth in the Services Agreement. Each company is fully reimbursing the other for these services. As of December 31, 2023, the Services Agreement was substantially complete.

Expenses incurred by the Company for services provided by OXB (US) LLC recognized under the Services Agreement totaled approximately $0.3 million and $0.7 million for the years ended December 31, 2023 and 2022, respectively, and are presented within research and development expenses in the consolidated statements of operations as the services related to facilities support within the Company's research and development labs. The Company did not have a payable balance to OXB (US) LLC under the Services Agreement as of December 31, 2023. As of December 31, 2022, the amount due to OXB (US) LLC under the Services Agreement was $0.1 million and was included in accrued expenses and other liabilities on the Company's consolidated balance sheets.

The Company provided finance, human resources, IT and legal services to OXB (US) LLC under the Services Agreement and recognized $0.5 million and $1.7 million for the years ended December 31, 2023 and 2022, respectively, for amounts reimbursed by OXB (US) LLC as a reduction to general and administrative expense in the Company's consolidated statements of operations. The Company did not provide reimbursable services to OXB (US) LLC under the Services Agreement during the second half of 2023 and did not have a receivable balance from OXB (US) LLC as of December 31, 2023. As of December 31, 2022, the Company had a receivable balance of $0.3 million from OXB (US) LLC which was recorded as a component of prepaid expenses and other current assets in the Company's condensed consolidated balance sheets. Pursuant to the Services Agreement, the Company had been paying vendors on OXB (US) LLC's behalf; this process was fully transitioned to OXB (US) LLC in 2023. As of December 31, 2022, the amount receivable from OXB (US) LLC for amounts paid to vendors on their behalf was $1.1 million and was included in prepaid expenses and other current assets on the Company's consolidated balance sheets. In addition, as of December 31, 2022, the Company had an amount due to OXB (US) LLC of $2.0 million as a result of a year-end reconciliation between the two companies related to vendor invoicing.