License and Collaboration Agreements

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

License and Collaboration Agreements

License and Collaboration Agreements

License agreement with Combioxin

In August 2021, we entered into a license agreement with Combioxin, SA under which the Company was granted exclusive, worldwide development and commercialization rights to CAL02, a novel first-in-class anti-infective agent ready for Phase 2b/3 development for the treatment of severe pneumonia in combination with traditional antibacterial drugs. The Company will be solely responsible for the development, regulatory, manufacturing and commercialization activities of CAL02. Combioxin will assist the Company in transitioning the manufacturing and supply of CAL02 to the Company.

Under the terms of the agreement, we paid $10 million as upfront license consideration that was expensed immediately as research and development and is reflected within the operating activities of the consolidated statements of cash flows as of December 31, 2021. The Company may pay to Combioxin up to $105 million upon achievement of certain development, regulatory and sales based milestone payments plus royalty payments at royalty rates ranging in low double digit percentages on the net sales of all products sold, subject to certain adjustments as provided in the agreement. The Company is also obligated to make certain payments based upon amounts received by sublicensees under the agreement.

License agreement with AOP Orphan

In August 2021, we entered into a licensing agreement with AOP Orphan Pharmaceuticals GmbH (“AOP Orphan”), a privately owned Austrian company devoted to the treatment of rare and special diseases, for the commercial rights to its product, landiolol in the United States, including an exclusive royalty-bearing license under certain patent rights and know-how to develop, commercialize and otherwise exploit any pharmaceutical product that contains landiolol. Landiolol, a leading hospital emergency use product, is currently approved in Europe for the treatment of non-compensatory sinus tachycardia and tachycardic supraventricular arrhythmias. We supported the submission of a new drug application (“NDA”) in the second quarter of 2022 by AOP Orphan to the FDA seeking approval for landiolol for the short term reduction of ventricular rate in patients with supraventricular tachycardia (“SVT”), including atrial fibrillation and atrial flutter.

Under the terms of the agreement, we made a $5 million upfront payment as consideration that was expensed immediately as research and development and was reflected within the operating activities of the consolidated statements of cash flows as of December 31, 2021. The licensing agreement provided for potential additional payments up to $25 million upon regulatory approval(s) and based upon commercial sales. We also entered into a supply agreement at the same time as the licensing agreement.

On June 6, 2023, we delivered notice (the “Notice”) of termination to AOP Orphan with respect to the above referenced license agreement, following AOP Orphan’s receipt of a complete response letter from the FDA whereby the FDA refused to approve the NDA for landiolol. The Notice provides that the licensing agreement be terminated as of June 6, 2023, which we believe alleviates any previous obligation for us to make any further payments to AOP Orphan. The Company cannot be certain that AOP Orphan will not dispute the Notice or on what terms any potential dispute may be resolved.

Collaboration with Syros

On January 7, 2020, we announced a strategic collaboration to advance SM-88, an oral product candidate for the treatment of patients with cancer, with a predecessor entity of Syros. SM-88 is an investigational agent in two Phase II studies, one for pancreatic cancer and another for prostate cancer.

Under the terms of a related co-promotion agreement, we would be responsible for 25% of the promotional sales effort of SM-88 and would receive 15% royalty on the net revenues of SM-88 in the United States. Syros is responsible for clinical development, regulatory approval, commercial strategy, marketing, reimbursement and manufacturing of SM-88. Syros retains the remaining 85% of net U.S. revenues and reserves the right to repurchase our U.S. co-promotion right for $200.0 million.

Our equity investment in Syros is included in Other assets on our condensed consolidated balance sheet. For the three months ended June 30, 2023 and 2022, the fair value adjustments for the equity investment were a gain of $0.2 million and a loss of $0.7 million, respectively. For the six months ended June 30, 2023 and 2022, the fair value adjustments for the equity investment was a loss of $0.2 million and a loss of $3.2 million, respectively. These adjustments were recorded in Other (expense) income on our condensed consolidated statements of operations.