Collaboration and Licensing Agreements	9 Months Ended
Sep. 30, 2022
Collaboration and Licensing Agreements
Collaboration and Licensing Agreements	3. Collaboration and Licensing Agreements Gilead Collaboration and License Agreement In June 2018, the Company entered into the Gilead Collaboration Agreement whereby the Company and Gilead agreed to collaborate with respect to two preclinical research programs to evaluate potential vaccine products for the treatment, cure, diagnosis or prevention of HBV and HIV. In February 2022, the Company signed an Amended and Restated Collaboration Agreement, which altered key aspects of the collaboration pertaining to the HIV therapeutic. Most importantly, the Amended and Restated Collaboration Agreement allocated additional research and development responsibility to the Company with respect to the Company’s HIV candidate and provided for additional funding by Gilead of such research and development activities as well as increased later stage development and commercial milestone payments. Under the original Gilead Collaboration Agreement, the Company granted Gilead an exclusive, royalty-bearing license to the Company’s technology platforms. Upon entering into the agreement in June 2018, the Company received a non-refundable $10.0 million upfront payment from Gilead and upon signing of the amended and restated agreement, the Company received a program initiation fee of $15.0 million. Gilead is also obligated to make additional payments to the Company upon the achievement of pre-clinical, development and commercial milestones. The development milestones amount to $140.0 million for the HBV program, and up to $172.5 million, inclusive of the $10.0 million option exercise payment, for the HIV program upon Gilead’s exercise of such option. The commercial milestones amount to a total of $50.0 million for the HBV program, and $65.0 million for the HIV program upon Gilead’s exercise of the option. Additionally, Gilead is obligated to pay royalties on net sales for each program. Payments from Gilead generally have a 60 days payment term. The $10.0 million upfront payment, the $15.0 million initiation fee and $8.0 million in milestone payments were initially recorded as deferred revenue in the consolidated balance sheet and are recognized as revenue when revenue recognition criteria are met. As of September 30, 2022, $13.9 million of such payments were still recorded as a liability in deferred revenues, current and non-current. As of December 31, 2021, $4.3 million of upfront and milestone payments were included as a liability in deferred revenues, current. Approximately 6% of deferred revenue is expected to be recognized as revenue in the remainder of 2022, 59% in 2023, 23% in 2024 and the remaining 12% in 2025. As of September 30, 2022, $0.4 million of cost reimbursements for research and development services were recorded as a liability in deferred revenues. As of December 31, 2021, $1.2 million of cost reimbursements for research and development services were recorded as a liability in deferred revenues. Reimbursements for external costs are recognized as revenues in the period in which the services are provided and external costs are recognized. In the three months ended September 30, 2022, the Company recognized $1.3 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.9 million revenue from cost reimbursements for research and development services, of which $0.1 million were initially recorded as deferred revenue in the consolidated balance sheet. In the three months ended September 30, 2021, the Company recognized $0.2 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $3.7 million revenue from cost reimbursements for research and development services, of which $1.0 million were initially recorded as deferred revenue in the consolidated balance sheet. In the nine months ended September 30, 2022, the Company recognized $2.9 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $3.5 million revenue from cost reimbursements for research and development services, of which $0.7 million were initially recorded as deferred revenue in the consolidated balance sheet. In the nine months ended September 30, 2021, the Company recognized $1.9 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $12.7 million revenue from cost reimbursements for research and development services, of which $1.6 million were initially recorded as deferred revenue in the consolidated balance sheet. Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of September 30, 2022 and December 31, 2021, the contract asset relating to the sublicense payment was $0.2 million and $0.3 million, respectively.

Collaboration and Licensing Agreements

9 Months Ended

Sep. 30, 2022

Collaboration and Licensing Agreements

3. Collaboration and Licensing Agreements

Gilead Collaboration and License Agreement

In June 2018, the Company entered into the Gilead Collaboration Agreement whereby the Company and Gilead agreed to collaborate with respect to two preclinical research programs to evaluate potential vaccine products for the

treatment, cure, diagnosis or prevention of HBV and HIV. In February 2022, the Company signed an Amended and Restated Collaboration Agreement, which altered key aspects of the collaboration pertaining to the HIV therapeutic. Most importantly, the Amended and Restated Collaboration Agreement allocated additional research and development responsibility to the Company with respect to the Company’s HIV candidate and provided for additional funding by Gilead of such research and development activities as well as increased later stage development and commercial milestone payments.

Under the original Gilead Collaboration Agreement, the Company granted Gilead an exclusive, royalty-bearing license to the Company’s technology platforms. Upon entering into the agreement in June 2018, the Company received a non-refundable $10.0 million upfront payment from Gilead and upon signing of the amended and restated agreement, the Company received a program initiation fee of $15.0 million. Gilead is also obligated to make additional payments to the Company upon the achievement of pre-clinical, development and commercial milestones. The development milestones amount to $140.0 million for the HBV program, and up to $172.5 million, inclusive of the $10.0 million option exercise payment, for the HIV program upon Gilead’s exercise of such option. The commercial milestones amount to a total of $50.0 million for the HBV program, and $65.0 million for the HIV program upon Gilead’s exercise of the option. Additionally, Gilead is obligated to pay royalties on net sales for each program. Payments from Gilead generally have a 60 days payment term.

The $10.0 million upfront payment, the $15.0 million initiation fee and $8.0 million in milestone payments were initially recorded as deferred revenue in the consolidated balance sheet and are recognized as revenue when revenue recognition criteria are met. As of September 30, 2022, $13.9 million of such payments were still recorded as a liability in deferred revenues, current and non-current. As of December 31, 2021, $4.3 million of upfront and milestone payments were included as a liability in deferred revenues, current. Approximately 6% of deferred revenue is expected to be recognized as revenue in the remainder of 2022, 59% in 2023, 23% in 2024 and the remaining 12% in 2025.

As of September 30, 2022, $0.4 million of cost reimbursements for research and development services were recorded as a liability in deferred revenues. As of December 31, 2021, $1.2 million of cost reimbursements for research and development services were recorded as a liability in deferred revenues. Reimbursements for external costs are recognized as revenues in the period in which the services are provided and external costs are recognized.

In the three months ended September 30, 2022, the Company recognized $1.3 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.9 million revenue from cost reimbursements for research and development services, of which $0.1 million were initially recorded as deferred revenue in the consolidated balance sheet. In the three months ended September 30, 2021, the Company recognized $0.2 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $3.7 million revenue from cost reimbursements for research and development services, of which $1.0 million were initially recorded as deferred revenue in the consolidated balance sheet.

In the nine months ended September 30, 2022, the Company recognized $2.9 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $3.5 million revenue from cost reimbursements for research and development services, of which $0.7 million were initially recorded as deferred revenue in the consolidated balance sheet. In the nine months ended September 30, 2021, the Company recognized $1.9 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $12.7 million revenue from cost reimbursements for research and development services, of which $1.6 million were initially recorded as deferred revenue in the consolidated balance sheet.

Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from

the triggering payment is recognized. As of September 30, 2022 and December 31, 2021, the contract asset relating to the sublicense payment was $0.2 million and $0.3 million, respectively.