License Agreement	12 Months Ended
Dec. 31, 2021
License Agreement [Abstract]
License Agreement	7. License Agreement On December 24, 2020, the Company entered into the Wugen License transferring rights to Wugen to develop, manufacture, and commercialize certain cellular therapy products based on two of the Company’s fusion protein molecules. The term of the agreement will expire on a product-by-product and country-by-country basis, upon the later of (i) ten (10) years from the first commercial sale of the product or (ii) the expiration of the last-to-expire valid patent claim of such product. The Company retained regulatory T cell-based cellular therapy, injectable rights, and manufacturing rights, not granted to Wugen under the terms of the Wugen License. The Company and Wugen will enter into two supply agreements under industry-standard terms, under which the Company will provide cGMP and non-cGMP grade materials, including a development supply agreement and a commercial supply agreement. According to the terms of the agreement, Wugen will fund all future clinical development and commercialization activities for cellular therapy treatments for any indications utilizing the licensed fusion protein molecules covered by the Wugen License. In January 2021, two Phase 2 clinical trials related to treatment for relapsed / refractory acute myeloid leukemia based on one of the licensed molecules were initiated by the School of Medicine at Washington University in St. Louis and supported by Wugen. The Company concluded that Wugen is a customer and the Wugen License is a functional license under the provisions of Topic 606. The Company identified the following performance obligations at the inception of the agreement: • Provide Wugen with exclusive worldwide license rights for certain fusion proteins. • Sell vials of HCW9201 clinical grade product available immediately. • Transfer R&D know-how. • Supply of cGMP and non-cGMP grade materials for development. • Supply of cGMP grade materials for commercialization. For the year ended December 31, 2020 the Company recognized $4.1 million for performance obligations satisfied in the period. This is the first time the Company has entered into an out-license arrangement and the first time the Company has established prices for its goods and services. Accordingly, the standalone selling price of the various performance obligations is uncertain, and the Company determined that an observable standalone selling price is not available for the identified performance obligations under the Wugen License. Where a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering marketing conditions, entity-specific factors, and information about the customer that is reasonably available. The process for determining a standalone selling price involves significant judgment and includes consideration of multiple factors, including assumptions related to the market opportunity and the time needed to commercialize a product candidate pursuant to the relevant license, estimated direct expenses and other costs. The Company first determined the standalone selling price of $2.5 million for the vials of HCW9201 and the R&D know-how. The price was determined based on the cost of developing the know-how and the costs incurred in producing the vials. The standalone selling price for the license was determined using the residual approach and was priced at $1.6 million. As of December 31, 2020, the Company and Wugen had not finalized the development supply agreement. Therefore, there was no contract for purchase of materials during Wugen's development phase. The Company will defer recognition of revenues and costs for supply of materials during development until a contract is in place. The commercial supply agreement will be entered into in the future, pursuant to the terms of the Wugen License. For the year ended December 31, 2021, the Company entered into a master services agreement with Wugen related to the development supply agreement to provide cGMP and non-cGMP grade licensed material based on industry-standard terms. However, as of December 31, 2021, the Company and Wugen have not finalized any statements of work under the master services agreement, thus no contract exists. Until such time that the Company enters statements of work for Wugen orders related to licensed material for clinical development, the Company will defer recognition of revenues. The Wugen License includes milestone payments and royalties. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price. For revenue-based royalties, including milestone payments based on the level of sales, the Company will include royalties in the transaction price at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty is allocated has been satisfied (or partially satisfied). As part of management’s evaluation of the transaction price, the Company considers numerous factors, including whether the achievement of the milestones is outside of our control, contingent upon the efforts of others or subject to scientific risks of success. If the Company concludes it is probable that a significant revenue reversal would not occur, the associated milestone payment is included in the transaction price. Milestone payments that are not within our control, such as regulatory approvals, are generally not considered probable until those milestones are achieved. The Company reevaluates the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

License Agreement

12 Months Ended

Dec. 31, 2021

7. License Agreement

On December 24, 2020, the Company entered into the Wugen License transferring rights to Wugen to develop, manufacture, and commercialize certain cellular therapy products based on two of the Company’s fusion protein molecules. The term of the agreement will expire on a product-by-product and country-by-country basis, upon the later of (i) ten (10) years from the first commercial sale of the product or (ii) the expiration of the last-to-expire valid patent claim of such product.

The Company retained regulatory T cell-based cellular therapy, injectable rights, and manufacturing rights, not granted to Wugen under the terms of the Wugen License. The Company and Wugen will enter into two supply agreements under industry-standard terms, under which the Company will provide cGMP and non-cGMP grade materials, including a development supply agreement and a commercial supply agreement.

According to the terms of the agreement, Wugen will fund all future clinical development and commercialization activities for cellular therapy treatments for any indications utilizing the licensed fusion protein molecules covered by the Wugen License. In January 2021, two Phase 2 clinical trials related to treatment for relapsed / refractory acute myeloid leukemia based on one of the licensed molecules were initiated by the School of Medicine at Washington University in St. Louis and supported by Wugen.

The Company concluded that Wugen is a customer and the Wugen License is a functional license under the provisions of Topic 606. The Company identified the following performance obligations at the inception of the agreement:

•

Provide Wugen with exclusive worldwide license rights for certain fusion proteins.

•

Sell vials of HCW9201 clinical grade product available immediately.

•

Transfer R&D know-how.

•

Supply of cGMP and non-cGMP grade materials for development.

•

Supply of cGMP grade materials for commercialization.

For the year ended December 31, 2020 the Company recognized $4.1 million for performance obligations satisfied in the period. This is the first time the Company has entered into an out-license arrangement and the first time the Company has established prices for its goods and services. Accordingly, the standalone selling price of the various performance obligations is uncertain, and the Company determined that an observable standalone selling price is not available for the identified performance obligations under the Wugen License. Where a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering marketing conditions, entity-specific factors, and information about the customer that is reasonably available. The process for determining a standalone selling price involves significant judgment and includes consideration of multiple factors, including assumptions related to the market opportunity and the time needed to commercialize a product candidate pursuant to the relevant license, estimated direct expenses and other costs.

The Company first determined the standalone selling price of $2.5 million for the vials of HCW9201 and the R&D know-how. The price was determined based on the cost of developing the know-how and the costs incurred in producing the vials. The standalone selling price for the license was determined using the residual approach and was priced at $1.6 million.

As of December 31, 2020, the Company and Wugen had not finalized the development supply agreement. Therefore, there was no contract for purchase of materials during Wugen's development phase. The Company will defer recognition of revenues and costs for supply of materials during development until a contract is in place. The commercial supply agreement will be entered into in the future, pursuant to the terms of the Wugen License.

For the year ended December 31, 2021, the Company entered into a master services agreement with Wugen related to the development supply agreement to provide cGMP and non-cGMP grade licensed material based on industry-standard terms. However, as of December 31, 2021, the Company and Wugen have not finalized any statements of work under the master services agreement, thus no contract exists. Until such time that the Company enters statements of work for Wugen orders related to licensed material for clinical development, the Company will defer recognition of revenues.

The Wugen License includes milestone payments and royalties. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price. For revenue-based royalties, including milestone payments based on the level of sales, the Company will include royalties in the transaction price at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty is allocated has been satisfied (or partially satisfied). As part of management’s evaluation of the transaction price, the Company considers numerous factors, including whether the achievement of the milestones is outside of our control, contingent upon the efforts of others or subject to scientific risks of success. If the Company concludes it is probable that a significant revenue reversal would not occur, the associated milestone payment is included in the transaction price. Milestone payments that are not within our control, such as regulatory approvals, are generally not considered probable until those milestones are achieved. The Company reevaluates the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.