Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

(9) Related Party Transactions

MPM Capital is a significant investor in the Company through one of its managed funds. In October 2016, the Company also began receiving consulting and management services pursuant to agreements with a Managing Director at MPM Capital and a principal at F2 Ventures, also a significant investor in the Company. For three months ended March 31, 2020, the Company incurred less than $0.1 million for management and advisory services in connection with those agreements. The Company did not incur any expenses relating to these management and advisory services agreements for the three months ended March 31, 2021.

For the three months ended March 31, 2020 and 2021, the Company paid MPM Capital less than $0.1 million for other operational support. These expenses were recorded as general and administrative expense.

In April 2020, the Company entered into a consulting agreement, or the 2020 Consulting Agreement, with Globeways Holdings Limited, or Globeways. Globeways and entities affiliated with F2 Ventures beneficially own in the aggregate greater than five percent of the Company’s outstanding units and Globeways is beneficially owned by a member of the Company’s board of directors. Pursuant to the 2020 Consulting Agreement, the board member provides leadership and advice regarding the Company’s scientific, clinical, product development and related activities and operations. Pursuant to the 2020 Consulting Agreement, the LLC pays Globeways a consulting fee at a monthly rate of $25,000. As the sole beneficial owner of Globeways, this board member receives all of the compensation paid to Globeways under the Globeways Agreements. For three months ended March 31, 2021, the Company incurred less than $0.1 million in costs related to this agreement. We do not expect to incur any further expenses as this agreement expired as of March 31, 2021.

Royalty Transfer Agreements

In October and December 2019 and May 2020, the Company’s subsidiaries Amber, Apollo, Florentine, MICA and Pearl entered into royalty transfer agreements with MPM Oncology Charitable Foundation, Inc. and UBS Optimus Foundation (together, the Foundations). Under these agreements, each Foundation is entitled to receive a royalty equal to 0.5% (1.0% in aggregate) of all global net sales of any products developed by the subsidiary, subject to limitations after patent expirations and on intellectual property developed after a change of control. The Company has deemed these royalty transfer agreements to be freestanding financial instruments that should be accounted for at fair value. Management has concluded that these instruments had no value at the inception of the agreements or at December 31, 2020 and March 31, 2021.

As of March 31, 2021, Amber, Florentine and MICA’s programs all remained in pre-clinical research, while Apollo and Pearl’s programs were in phase 1/2a clinical trials. Given that these programs are all still in early stages of development and face inherent technical, regulatory, and competitive risks associated with achieving approval and commercialization, the Company ascribed no value to the royalty transfer agreements as of December 31, 2020 and March 31, 2021. The Company currently does not have any applicable net sales and as a result has paid no royalties under these obligation as of December 31, 2020 and March 31, 2021 nor has the Company accrued any liability as of December 31, 2020 and March 31, 2021. The Company will monitor these instruments for changes in fair value at each reporting date.