License and Collaboration Agreements	9 Months Ended
Sep. 30, 2019
License and Collaboration Agreements
License and Collaboration Agreements	8. License and Collaboration Agreements GARDP In July 2017, the Company entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership, or GARDP, for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries. The Phase 3 clinical trial was initiated in September 2019. NIAID The Company has ongoing zoliflodacin program activities conducted and funded by the U.S. government through its arrangements with the U.S. National Institute of Allergy and Infectious Diseases, or NIAID. Zai Lab In April 2018, the Company entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd., or Zai Lab, pursuant to which Zai Lab licensed exclusive rights to durlobactam (formerly ETX2514) and sulbactam-durlobactam, or SUL-DUR (formerly ETX2514SUL) in the Asia‑Pacific region (the “Zai Agreement”). Under the terms of the Zai Agreement, Zai Lab will fund most of the Company’s clinical trial costs in China for SUL-DUR, including all costs in China for the Company’s Phase 3 clinical trial of SUL-DUR, with the exception of Phase 3 patient drug supply. Zai Lab will conduct development activities, plan and obtain regulatory approval in a specified number of countries in the Asia‑Pacific region beyond China after regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia‑Pacific region and will commercialize licensed products for which it has obtained regulatory approval. The Company is obligated to conduct specified development activities for the Asia‑Pacific region. The Company is also obligated to supply Zai Lab with the licensed products for clinical development, although Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement. Both parties are prohibited from developing and commercializing products in the Asia‑Pacific region that would compete with the licensed products. The Company received an upfront, non‑refundable payment of $5.0 million, $0.6 million of research support funding and $0.3 million of certain other reimbursable clinical trial costs, less applicable taxes of $0.8 million from Zai Lab through September 2019. The Company is eligible to receive up to an aggregate of $98.0 million in additional research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products, including $7.0 million recorded within accounts receivable as of September 30, 2019 related to the achievement of certain milestones during the three months ended September 30, 2019. In the event the China Food and Drug Administration requires a modification or supplement to the trial protocol, and the Company delays Zai Lab from proceeding with such modified protocol and subsequently obtaining regulatory approval for the pivotal study of SUL-DUR in China, then the future sales‑based milestone payments that become due to the Company will be reduced by an agreed upon amount that increases with the length of the delay. Zai Lab will pay the Company a tiered royalty equal to a high‑single digit to low‑double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. The Company determined the $5.0 million non‑refundable upfront payment is the entire transaction price at the outset of the Zai Agreement. All other future potential milestone payments were excluded from the transaction price as they were fully constrained as the risk of significant reversal had not yet been resolved. The achievement of future potential milestones was not within the Company’s control and is subject to certain research and development success, regulatory approvals or commercial success and therefore carries significant uncertainty. The Company reevaluates the likelihood of achieving future milestones at the end of each reporting period. Future development milestone revenue from the arrangement is recognized as revenue in the period in which it is no longer probable that revenue attributable to the milestone will result in a significant reversal of cumulative revenue. The Company delivered the exclusive license and performed the initial technology transfer of licensed know-how prior to September 30, 2018 and recognized the entire $5.0 million transaction price as revenue during the nine months ended September 30, 2018. Payments received for research support and reimbursable clinical trial costs are recorded as an offset to research and development expense during the period in which the qualifying expenses are incurred. During the three and nine months ended September 30, 2019, the Company recognized $7.0 million of revenue under the Zai Agreement associated with the achievement of certain milestones during the three months ended September 30, 2019. The associated receivable is presented within accounts receivable on the consolidated balance sheet as of September 30, 2019. The Company evaluated the Zai Agreement under Topic 606 and identified two material promises: (1) an exclusive license to develop, manufacture and commercialize products containing durlobactam or SUL-DUR in the territory and (2) the initial technology transfer of licensed know‑how. The Company determined that the exclusive license and initial technology transfer were not distinct from one another, as the license has limited value without the transfer of the Company’s technology and Zai Lab would incur additional costs to recreate the Company’s know‑how. Therefore, the license and initial technology transfer were combined as a single performance obligation.

8. License and Collaboration Agreements

GARDP

In July 2017, the Company entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership, or GARDP, for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries. The Phase 3 clinical trial was initiated in September 2019.

NIAID

The Company has ongoing zoliflodacin program activities conducted and funded by the U.S. government through its arrangements with the U.S. National Institute of Allergy and Infectious Diseases, or NIAID.

Zai Lab

In April 2018, the Company entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd., or Zai Lab, pursuant to which Zai Lab licensed exclusive rights to durlobactam (formerly ETX2514) and sulbactam-durlobactam, or SUL-DUR (formerly ETX2514SUL) in the Asia‑Pacific region (the “Zai Agreement”). Under the terms of the Zai Agreement, Zai Lab will fund most of the Company’s clinical trial costs in China for SUL-DUR, including all costs in China for the Company’s Phase 3 clinical trial of SUL-DUR, with the exception of Phase 3 patient drug supply. Zai Lab will conduct development activities, plan and obtain regulatory approval in a specified number of countries in the Asia‑Pacific region beyond China after regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia‑Pacific region and will commercialize licensed products for which it has obtained regulatory approval. The Company is obligated to conduct specified development activities for the Asia‑Pacific region. The Company is also obligated to supply Zai Lab with the licensed products for clinical development, although Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement. Both parties are prohibited from developing and commercializing products in the Asia‑Pacific region that would compete with the licensed products.

The Company received an upfront, non‑refundable payment of $5.0 million, $0.6 million of research support funding and $0.3 million of certain other reimbursable clinical trial costs, less applicable taxes of $0.8 million from Zai Lab through September 2019. The Company is eligible to receive up to an aggregate of $98.0 million in additional research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products, including $7.0 million recorded within accounts receivable as of September 30, 2019 related to the achievement of certain milestones during the three months ended September 30, 2019. In the event the China Food and Drug Administration requires a modification or supplement to the trial protocol, and the Company delays Zai Lab from proceeding with such modified protocol and subsequently obtaining regulatory approval for the pivotal study of SUL-DUR in China, then the future sales‑based milestone payments that become due to the Company will be reduced by an agreed upon amount that increases with the length of the delay. Zai Lab will pay the Company a tiered royalty equal to a high‑single digit to low‑double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.

The Company determined the $5.0 million non‑refundable upfront payment is the entire transaction price at the outset of the Zai Agreement. All other future potential milestone payments were excluded from the transaction price as they were fully constrained as the risk of significant reversal had not yet been resolved. The achievement of future potential milestones was not within the Company’s control and is subject to certain research and development success, regulatory approvals or commercial success and therefore carries significant uncertainty. The Company reevaluates the likelihood of achieving future milestones at the end of each reporting period. Future development milestone revenue from the arrangement is recognized as revenue in the period in which it is no longer probable that revenue attributable to the milestone will result in a significant reversal of cumulative revenue.

The Company delivered the exclusive license and performed the initial technology transfer of licensed know-how prior to September 30, 2018 and recognized the entire $5.0 million transaction price as revenue during the nine months ended September 30, 2018. Payments received for research support and reimbursable clinical trial costs are recorded as an offset to research and development expense during the period in which the qualifying expenses are incurred. During the three and nine months ended September 30, 2019, the Company recognized $7.0 million of revenue under the Zai Agreement associated with the achievement of certain milestones during the three months ended September 30, 2019. The associated receivable is presented within accounts receivable on the consolidated balance sheet as of September 30, 2019.

The Company evaluated the Zai Agreement under Topic 606 and identified two material promises: (1) an exclusive license to develop, manufacture and commercialize products containing durlobactam or SUL-DUR in the territory and (2) the initial technology transfer of licensed know‑how. The Company determined that the exclusive license and initial technology transfer were not distinct from one another, as the license has limited value without the transfer of the Company’s technology and Zai Lab would incur additional costs to recreate the Company’s know‑how. Therefore, the license and initial technology transfer were combined as a single performance obligation.