Collaborative Agreements

9 Months Ended

Sep. 30, 2015

Collaborative Agreements [Abstract]

Collaborative Agreements

(6) Collaborative Agreements

In January 2010, we signed a research collaboration and license agreement (the Agreement) with Novartis to discover and develop novel treatments for hearing loss and balance disorders. Under the terms of the Agreement, we licensed the world-wide rights to our preclinical hearing loss and balance disorders program to Novartis. In addition, the Agreement allows us to receive funding from Novartis for a research program focused on developing additional adenovectors for hearing loss. During the three months ended September 30, 2015 and 2014, we recognized $25,000 and $42,000, respectively, for work performed under the Agreement. For both the nine-months periods ended September 30, 2015 and 2014, we recognized approximately $0.1 million for work performed under the Agreement.

Under the Agreement, we are eligible to receive milestones payments of up to $206.6 million; including up to $0.6 million for the achievement of preclinical development activities, up to $26.0 million for the achievement of clinical milestones (including the non-rejection of an IND with respect to a covered product, the first patient visit in Phase I, Phase IIb and Phase III clinical trials), up to $45.0 million for the receipt of regulatory approvals and up to $135.0 million for sales-based milestones. During each of the years ended December 31, 2010 and 2011, we recognized $0.3 million of milestone payments as a result of the successful completion of preclinical development activities. In 2012 and 2013, there were no milestone payments received. In February 2014, we achieved the third milestone in the collaboration with Novartis. The $2.0 million milestone was triggered by the non-rejection by the FDA of the Investigational New Drug filed by Novartis for CGF166. In October 2014, we achieved the fourth milestone in the collaboration with Novartis. The $3.0 million milestone was triggered when the first patient was dosed in a Phase 1/2 clinical trial sponsored by Novartis utilizing GenVec technology for the treatment of severe-to-profound bilateral hearing loss.

As of September 30, 2015, milestones available under the Agreement include $21.0 million of additional clinical milestones, $45.0 million in regulatory milestones, and $135.0 million of sales-based milestones. We are also entitled to royalties on future sales. There have been no milestones achieved during 2015.

In connection with our collaboration with Novartis in hearing loss and balance disorders, in August 2010, we entered into an agreement with Novartis for the supply of services relating to development materials. Under this agreement, valued at $14.9 million, we agreed to manufacture clinical trial material for up to two lead candidates. For both the three-month periods ended September 30, 2015 and 2014 we recognized $0.1 million for services performed under this agreement. For both the nine-month periods ended September 30, 2015 and 2014 we recognized $0.2 million for services performed under this agreement.

In March 2015, we announced a collaboration with TheraBiologics, Inc. to develop cancer therapeutics leveraging both GenVec’s proprietary gene delivery platform and TheraBiologics’ proprietary neural stem cell technology. In exchange for profit sharing and/or royalty and milestone payments for the products being developed under the collaboration, we will contribute technology, know-how, vector construction, and technical and regulatory support to the program. TheraBiologics will be responsible for all other development costs.

In April 2015, we announced a new Research Collaboration Agreement with the Laboratory of Malaria Immunology and Vaccinology (LMIV) under which we will build new vaccine candidates based on our proprietary adenovectors isolated from gorillas and designed to deliver novel antigens discovered at the LMIV.

In June 2015, we announced a new multi-faceted collaboration agreement with the School of Medicine at Washington University at St. Louis (WUSTL) under which we and WUSTL will create modified versions of GenVec’s gorilla adenovectors that incorporate specialized targeting antibodies on the surface of the vectors. These antibodies are produced only by camels, alpacas and other camelids and are smaller and more stable in intracellular environments than their mouse or human counterparts. The ultimate goal of this collaboration is to create highly targeted therapeutics and vaccines.