Genmab License Agreement |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Revenue from Contract with Customer [Abstract] | |
| Genmab License Agreement | Genmab License Agreement Background On February 14, 2025, the Company entered into a license agreement (the “License Agreement”) with Genmab A/S (“Genmab”) pursuant to which the Company granted to Genmab an exclusive worldwide license to leverage its proprietary LockBody technology platform to perform research on up to three undisclosed targets selected during a multi-year research period. Additionally, the License Agreement provides Genmab with the option to obtain an exclusive commercial license for worldwide development and commercialization of products against each of the selected three targets. Genmab will conduct all research and development activities under the License Agreement, which may combine the Company’s LockBody technology with Genmab’s proprietary antibody technologies. The LockBody technology platform is designed to improve the therapeutic index of therapies by allowing the conditional activation of potent cell killing mechanisms in diseased tissue, but not in non-diseased tissue. Under the terms of the License Agreement, the Company received a non-refundable upfront payment of $15.0 million related to the license of the LockBody technology platform. Additionally, the Company may receive, in the future, an aggregate of up to $15.0 million when (and if) Genmab exercises the options to acquire the exclusive commercial licenses as discussed above. Further, the Company is eligible to receive potential payouts of up to $234.0 million in development, regulatory and sales milestones per product, as well as tiered royalties ranging in the mid single-digits on annual global net licensed product sales. The License Agreement includes various representations, warranties, covenants, indemnities, and other customary provisions. Unless earlier terminated in accordance with its terms, the License Agreement will expire upon expiration of the last royalty term for the last licensed product. Genmab may terminate the License Agreement or on a target-by-target basis for convenience upon specified time periods. On a target-by-target basis, if Genmab elects not to exercise its option for an exclusive commercial license for worldwide development and commercialization of products against the applicable target (a “Reserved Target”), then the License Agreement will automatically terminate with respect to such Reserved Target. Subject to the terms and specified exceptions set forth in the License Agreement, either party may terminate the License Agreement for the other party’s uncured material breach or insolvency upon a specified notice period. Accounting Treatment The Company assessed the License Agreement in accordance with ASC 606, Revenue with Contracts from Customers, and concluded that the promises in the License Agreement represent a transaction with a customer. The following promises within the License Agreement were identified: (i) the exclusive license of the Lockbody technology platform and the ability to perform research on up to three targets, (ii) initial and continuing know-how transfer for the Lockbody technology platform, and (iii) participation in a joint steering committee (“JSC”). The promises related to the know-how transfer and JSC participation were determined to be immaterial in the context of the contract as the time commitment and related cost is expected to be inconsequential to the total contract consideration. Accordingly, they were not assessed as performance obligations. Additionally, the Company also evaluated the options to acquire exclusive commercial licenses contained within the License Agreement to determine if they provide Genmab with any material rights. The Company concluded that the options were not issued at a significant and incremental discount and therefore do not provide Genmab with a material right. As such, these options were excluded as performance obligations and will be accounted for when (and if) they are exercised. As a result, the Company determined that the promise to provide the exclusive license constitutes a single performance obligation within the License Agreement. Further, the exclusive license represents functional intellectual property given the Company will not be providing any additional services to Genmab outside of the right to use the licensed intellectual property. Accordingly, the $15.0 million up front payment was recognized as revenue at a point in time during the first quarter of 2025, upon delivery of the exclusive license to Genmab at contract inception. As of June 30, 2025, the Company has constrained all variable consideration related to potential milestone payments associated with the License Agreement given the level of uncertainty associated with their achievement. Accordingly, no revenue relating to these milestones has been recognized.
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