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Subsequent Events
12 Months Ended
Dec. 31, 2015
Subsequent Events

20. Subsequent Events

Sanofi Termination

On January 4, 2016, the Company received written notice from Sanofi of its election to terminate in its entirety the Sanofi License Agreement. Sanofi’s notice indicated that the termination was pursuant to Sanofi’s right to terminate the agreement upon Sanofi’s good faith determination that the commercialization of AFREZZA is no longer economically viable in the United States, in which case the effective date of termination would be April 4, 2016. In the alternative, Sanofi indicated that the termination was also pursuant to its right to terminate the Sanofi License Agreement for any reason, in which case the Termination Date would be July 4, 2016. In the interest of an expedient transition, the Company is currently working with Sanofi to transfer and wind down the agreement activities by April 4, 2016, or as soon as practicable thereafter.

Pursuant to the terms of the Sanofi License Agreement, the Company and Sanofi are required to use diligent efforts to facilitate the smooth and orderly transition of relevant obligations and rights to the Company with respect to development and commercialization activities related to AFREZZA, and are also required to negotiate in good faith a written transition agreement for this purpose. As a result of the foregoing termination, effective on the Termination Date and thereafter during any period which Sanofi is required to perform any wind-down activities pursuant to the terms of the Sanofi License Agreement, the rights granted to Sanofi under the Sanofi License Agreement to develop and commercialize AFREZZA will become non-exclusive and the Company will have the right to engage one or more other distributors and/or licensees of AFREZZA. Sanofi will continue to distribute AFREZZA during the wind-down period as required by the agreement until such time that the Company or its designee takes over responsibility for distribution. All profits and losses from AFREZZA product sales by Sanofi or its affiliates after the Termination Date, if any, will continue to be shared 65% by Sanofi and 35% by the Company pursuant to the terms of the Sanofi License Agreement.

The Company and Sanofi are also parties to the Sanofi Supply Agreement, pursuant to which the Company is required to supply Sanofi or its affiliates or its sublicensees such quantities of AFREZZA as requested by Sanofi to cover its commercial requirements. As a result of the termination of the Sanofi License Agreement, the Sanofi Supply Agreement will terminate by its terms on the Termination Date.

Borrowings under Sanofi Loan Facility

On February 10, 2016, the Company borrowed $17.9 million under the Sanofi Loan Facility to finance the portion of its losses for the quarter ended December 31, 2015 (see Note 9 — Collaboration arrangement).