In-licensing and Acquisition |
6 Months Ended |
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Jun. 30, 2026 | |
| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |
| In-licensing and Acquisition | In-licensing and Acquisition License Agreement with Arvinas and Pfizer
On May 11, 2026, we entered into a license agreement with Arvinas and Pfizer (together, the Licensors), which became effective on June 11, 2026 upon the early termination of the waiting period under the HSR Act. Pursuant to the license agreement, the Licensors granted us an exclusive, royalty-bearing license to develop, manufacture and commercialize VEPPANU (vepdegestrant) and vepdegestrant-containing products (the licensed products) worldwide.
Under the license agreement, we agreed to pay the Licensors a license fee of up to $85.0 million, including $70.0 million upfront payment which we paid in June 2026, and up to an additional $15.0 million payable upon the successful completion of certain transition activities. In addition, the Licensors are eligible to receive up to $60.0 million in regulatory milestones upon achievement of specified regulatory approvals, and up to $260.0 million in commercial milestones upon achievement of specified net sales thresholds. We are also obligated to pay tiered royalties on annual net sales of licensed products ranging in percentages from the mid-teens to mid-twenties, subject to certain reductions and customary adjustments, and to share a portion of sublicense revenue with the Licensors at tiered rates that decrease based on the timing of execution of the applicable sublicense.
Under the license agreement, we will have the sole rights and will be primarily responsible for the development and commercialization of the licensed products worldwide, subject to certain transition activities to be performed by the Licensors. The license agreement includes customary diligence obligations for us to use commercially reasonable efforts to develop and commercialize the licensed products, including to seek regulatory approvals in specified major markets. The license agreement will remain in effect on a product-by-product and country-by-country basis until the expiration of the applicable royalty term for each licensed product in each country, after which the license becomes fully paid-up and perpetual. The license agreement may be terminated by either party under customary circumstances, including for material
breach or certain insolvency events. In addition, the Licensors may terminate the license agreement if we cease all material development and commercialization activities for the licensed products for an extended period of time, subject to specified exceptions, or if we breach certain compliance-related obligations relating to anti-corruption and global trade controls. Upon termination of the license agreement prior to its expiration, the licenses granted to us will terminate and, at the Licensors’ request, the parties will negotiate in good faith an exclusive license from us to the Licensors under certain patent rights and know-how controlled by us covering the terminated licensed products. The license agreement contains customary provisions relating to, among other things, intellectual property, indemnification, confidentiality, and representations and warranties.
Pursuant to the license agreement, the Licensors will continue to be responsible for specified ongoing development, regulatory, manufacturing and transition activities. We are obligated to reimburse development costs incurred by the Licensors in connection with the ongoing studies, subject to an aggregate funding cap of $40.0 million and specified cumulative annual and quarterly funding caps through 2029. The related costs are recognized as research and development expense as the related services are performed. During the three and six months ended June 30, 2026, we recognized $1.5 million of research and development expense related to these activities.
In connection with the license agreement, we also agreed to purchase certain VEPPANU drug product inventory and related materials from Pfizer. As contemplated by the License Agreement, in July 2026, we entered into a manufacturing and supply agreement with Pfizer, which includes certain minimum purchase obligations. See related discussions in “Note 11 – Commitments and Contingencies - Purchase Commitments”.
We have concluded that the license agreement represents an asset acquisition of an intangible asset. Because the licensed products have received approval from the FDA prior to the execution of the license agreement, the acquired asset represents developed technology that is considered to have commercial viability. Remaining license fees payable upon the successful completion of certain transition activities as well as regulatory and commercial milestone payments will be capitalized as additional intangible assets in the period in which the corresponding milestone events are achieved and the payments become payable.
Following the effective date of the license agreement, we capitalized approximately $70.6 million as intangible assets consisting of the upfront payment and directly attributable transaction costs. The intangible assets are being amortized on a straight-line basis over their estimated useful life of 15 years, which reflects the expected period over which the licensed products will generate economic benefits. Amortization expense is recognized within cost of product sales. The contingent considerations relating to future milestones will be accounted for when the contingency is resolved and the consideration becomes payable. Royalties will be recognized as cost of product sales in the period in which the related product sales occur.
Asset Purchase Agreement with Blueprint
We acquired the US rights to research, develop, manufacture and commercialize GAVRETO from Blueprint pursuant to an Asset Purchase Agreement entered in February 2024. The acquired assets from Blueprint include, among other things, applicable intellectual property related to pralsetinib in the US, including patents, copyrights and trademarks, as well as clinical regulatory and commercial data and records. Pursuant to the Asset Purchase Agreement, we agreed to pay a purchase price of $15.0 million, of which, $10.0 million was payable upon our first commercial sale of GAVRETO and an additional $5.0 million is payable on the first anniversary of the closing date of the agreement, subject to certain conditions. Blueprint is also eligible to receive up to $97.5 million in future commercial milestone payments and up to $5.0 million in future regulatory milestone payments. Blueprint is also entitled to tiered royalty payments on net sales of products containing pralsetinib (or related compounds) ranging from 10% to 30%, subject to certain reductions and offsets.
The total purchase price consideration amounted to $15.4 million, consisting of $15.0 million closing purchase price and $0.4 million of transaction costs. Of the total closing purchase price, $10.0 million was paid in July 2024, and the remaining $5.0 million was paid in June 2026. Because the closing purchase price consideration was contractually deferred and payable on separate dates after the acquisition date, we accounted for the arrangement, in substance, as seller-financed under ASC 230. The initial recognition of the deferred obligation was reported as a noncash investing and financing transaction at the acquisition date, and the subsequent cash payments of the closing purchase price were classified as financing activities in the condensed statements of cash flows.
We accounted for this transaction as an asset acquisition in accordance with ASC 805 Business Combinations (ASC 805) and recorded the total purchase consideration as intangible assets at the acquisition date. The intangible assets
are amortized on a straight-line basis over an estimated useful life of 12 years, with amortization recognized in cost of product sales. Royalties are also recognized in cost of product sales, as the related product sales occur.
License and Transition Services Agreement with Forma
We have a license and transition services agreement with Forma entered in July 2022, for an exclusive license to develop, manufacture and commercialize olutasidenib, a proprietary inhibitor of mutated IDH1 (mIDH1), for any uses worldwide, including for the treatment of AML and other malignancies. Under the terms of the license and transition services agreement, we paid an upfront fee of $2.0 million, and may be required to pay up to an additional $67.5 million upon achievement of specified development and regulatory milestones, and up to $165.5 million upon achievement of certain commercial milestones. Forma is also entitled to receive tiered royalties on net sales of licensed products at percentages ranging from the low-teens to mid-thirties, as well as a certain portion of sublicensing revenue, subject to certain standard reductions and offsets.
The transaction was accounted for as an acquisition of asset under ASC 730, Research and Development. Milestone payments incurred prior to regulatory approval of an indication associated with the acquired licensed asset were recognized as research and development expense. Accordingly, the upfront fee of $2.0 million was recorded as acquired in-process research and development (IPR&D) and expensed within research and development expense in the statements of operations in 2022. In addition, a $2.5 million regulatory milestone achieved prior to the FDA approval of REZLIDHIA in December 2022 was also recognized as research and development expense in 2022.
On December 1, 2022, the FDA approved REZLIDHIA capsules for the treatment of adult patients with R/R AML with susceptible IDH1 mutations, as detected by an FDA-approved test. Following approval and first commercial sale in December 2022, Forma became entitled to receive aggregate milestone payments of $15.0 million. Because these milestone obligations were incurred upon and after regulatory approval, the amounts were capitalized as intangible assets on our condensed balance sheet. The intangible assets are amortized on a straight-line basis over an estimated useful life of 14 years, with amortization recognized in cost of product sales. Royalties are also recognized in cost of product sales, as the related product sales occur.
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