California Institute of Regenerative Medicine Award

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

California Institute of Regenerative Medicine Award

California Institute of Regenerative Medicine Award

On September 18, 2015, the Company received an award in the amount of $19,919,449 from the California Institute of Regenerative Medicine (CIRM) to partially fund the Company’s phase 3 trial of ICT-107. The award provided for a $4,000,000 project initial payment, which was received during the fourth quarter of 2015, and up to $15,919,449 in future milestone payments that are primarily dependent on patient enrollment in the ICT-107 phase 3 trial. In August 2016, the Company and CIRM modified the award such that the Company received an additional $1.5 million initial payment. The total amount of the award and other award conditions remain unchanged. Under the terms of the CIRM award, the Company is obligated to share future ICT-107 related revenue with CIRM. The percentage of revenue sharing is dependent on the amount of the award received by the Company and whether the revenue is from product sales or license fees. The maximum revenue sharing amount the Company may be required to pay to CIRM is equal to nine (9) times the total amount awarded and received by the Company. The Company has the option to decline any and all amounts awarded by CIRM. As an alternative to revenue sharing, the Company has the option to convert the award to a loan, which such option the Company must exercise on or before ten (10) business days after the FDA notifies the Company that it has accepted the Company’s application for marketing authorization. In the event the Company exercises its right to convert the award to a loan, it will be obligated to repay the loan within ten (10) business days of making such election, including interest at the rate of the three-month LIBOR rate (0.92% as of December 31, 2016) plus 25% per annum. Since the Company may be required to repay some or all of the amounts awarded by CIRM, the Company plans to account for this award as a liability rather than revenue. If the Company was to lose this funding, it may be required to delay, postpone, or cancel its clinical trials or otherwise reduce or curtail its operations unless it is able to obtain adequate financing for its clinical trials from additional sources. As of December 31, 2016, the Company has accrued interest of $1,445,741, which is included in the CIRM liability on the Consolidated Balance Sheets.