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Cephalon Agreement
9 Months Ended
Jan. 31, 2012
Cephalon Agreement [Abstract]  
Cephalon Agreement [Text Block]

Note 9. Cephalon Agreement

 

On March 16, 2011, the Company entered into an agreement with Cephalon, Inc., (“Cephalon”), a wholly owned subsidiary of Teva Pharmaceutical Industries Ltd., pursuant to which the Company will conduct Tumorgraft studies on proprietary chemical compounds provided by Cephalon to determine the activity or response of a compound in potential clinical indications. In April 2011, Cephalon paid an initiation fee of $1.4 million to the Company, which is reflected within deferred revenue on the Condensed Consolidated Balance Sheet as of April 30, 2011. The Company anticipates that the studies will be completed within 18 months of the execution of the agreement. As models, along with required reports, are delivered, the deferred revenue will be recognized on a proportionate basis in accordance with the Company’s revenue recognition policies. Under this agreement, revenue of $444,000 and $681,000 was recognized during the three and nine months ended January 31, 2012. Cephalon will, under certain conditions, also pay the Company various amounts upon achieving certain milestones. Potential milestone payments to be received under the Agreement total $27 million. No milestones have been achieved to date. In addition, under certain conditions, Cephalon will pay the Company royalties on any commercialized products developed under the Agreement. No royalties have been received or earned to date.