The Company entered into a license agreement (the “License Agreement”), a services agreement (the “Services Agreement”), and a royalty purchase agreement (the “Royalty Purchase Agreement”) in October 2020 with Arena. The Company amended the License Agreement in January 2022 to add an additional program. Arena was purchased by Pfizer in March 2022. The following section summarizes these related party agreements.

Pursuant to the License Agreement, the Company has obtained an exclusive, royalty bearing, sublicensable, worldwide license under certain know-how and patents of Arena to develop and commercialize LP352 for any use in humans, LP143 and certain 5-HT2A compounds for the treatment of any central nervous system (“CNS”) indication in humans (excluding the treatment, prevention or amelioration of pain or any gastrointestinal, non-CNS autoimmune or cardiovascular disorder), and LP659 for the treatment of selected CNS indications in humans (pharmaceutical products containing any such compounds, Licensed Products). As consideration for the rights granted to the Company under the License Agreement, the Company will be required to pay to Arena a mid-single digit royalty on net sales of Licensed Products of LP352, and a low-single digit royalty on net sales of all other Licensed Products, by the Company, its affiliates or its sublicensees, subject to standard reductions. The Company’s royalty obligations continue on a Licensed Product-by-Licensed Product and country-by-country basis until the later of the (i) tenth anniversary of the first commercial sale of such product in such country or (ii) expiration of the last-to-expire valid claim of the patents licensed by us under the License Agreement covering the manufacture, use or sale of such product in such country.

In connection with the License Agreement, the Company also entered into a Services Agreement with Arena under which Arena agreed to perform certain research and development services, general administrative services, management services and other mutually agreed services for the Company and receive service fees therefore on an hourly rate based on an annual full time equivalent rate agreed upon by the parties. Arena invoices the Company for services provided on a monthly basis, in arrears. The Services Agreement will continue until December 31, 2022, and will automatically renew for successive one-year terms. Either party may terminate the Services Agreement for any reason, subject to specified notice periods. Payments for services provided under the Services Agreement are recorded to research and development or general and administrative, on the statement of operations, as appropriate. The Company has significantly reduced its activities under the Services Agreement, including as a result of its having hired employees or contracted with third parties with the requisite expertise, and the Company is no longer substantially dependent on such services from Arena.

The following table summarizes the services expensed under the Services Agreement:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Research and development	$	6	$	218	$	93	$	464
General and administrative		—		24		—		94
Total	$	6	$	242	$	93	$	558

There were $2,000 and $188,000 of related party amounts related to the Services Agreement in accounts payable as of June 30, 2022 and December 31, 2021, respectively.

In October 2020, the Company entered into a Royalty Purchase Agreement with 356 Royalty Inc., a wholly-owned subsidiary of Arena (“356 Royalty”), and Arena, pursuant to which it purchased the right to receive all milestone payments, royalties, interest and other payments relating to net sales of lorcaserin, owed or otherwise payable to 356 Royalty by Eisai Inc. and Eisai Co., Ltd., pursuant to the Transaction Agreement, dated December 28, 2016, as amended, by and among 356 Royalty, Eisai Inc. and Eisai Co., Ltd. The Company made a one-time payment to Arena of $0.1 million. The Company expensed this amount to research and development expense on the statement of operations and comprehensive loss as lorcaserin is subject to regulatory approval and there are risks and uncertainties as to whether royalties will ultimately be paid and collected.