Quarterly report pursuant to Section 13 or 15(d)

Licenses Acquired

v3.8.0.1
Licenses Acquired
3 Months Ended
Mar. 31, 2018
Licenses Acquired [Abstract]  
Licenses Acquired
8. Licenses Acquired
 
In accordance with ASC 730-10-25-1, Research and Development, costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use. The licenses purchased by the Company and Mustang, Checkpoint, Helocyte, Caelum and Cyprium require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility. As such, for the three months ended March 31, 2018 and 2017, the purchase price of licenses acquired was classified as research and development-licenses acquired in the Condensed Consolidated Statements of Operations, as reflected in the table below:
 
 
 
For the Three Months Ended March 31,
 
($ in thousands)
 
2018
 
2017
 
Fortress Companies:
 
 
 
 
 
 
 
Checkpoint
 
$
–
 
$
400
 
Helocyte
 
 
21
 
 
–
 
Mustang
 
 
75
 
 
575
 
Cellvation
 
 
1
 
 
–
 
Caelum
 
 
–
 
 
219
 
Cyprium
 
 
–
 
 
100
 
Total
 
$
97
 
$
1,294
 
 
Checkpoint
 
The table below provides a summary of Checkpoint’s expense related to its licenses, for the three months ended March 31, 2018 and 2017 by license as recorded in the Condensed Consolidated Statements of Operations:
 
($ in thousands)
 
For the three months ended March 31
 
 
 
2018
 
2017
 
Jubliant Biosys License CK-103
 
$
–
 
$
400
 
Total licenses acquired expense
 
$
–
 
$
400
 
 
In addition, for the three months ended March 31, 2018 and 2017, approximately $44,000 and $28,000, respectively, was recognized in revenue from the collaboration agreement with TG Therapeutics, Inc. (“TGTX”), a related party, in the Condensed Consolidated Statements of Operations.
 
Mustang
 
The table below provides a summary of Mustang’s expense related to its licenses, for the three months ended March 31, 2018 and 2017 by license as recorded in the Condensed Consolidated Statements of Operations:
 
($ in thousands)
 
For the three months ended March 31
 
 
 
2018
 
2017
 
City of Hope (COH) IL-13 License
 
$
–
 
$
250
 
COH IV/ICV Agreement
 
 
–
 
 
125
 
University of California License for PSCA
 
 
–
 
 
200
 
Manufacturing License
 
 
75
 
 
–
 
Total licenses acquired expense
 
$
75
 
$
575
 
 
City of Hope Manufacturing Methods License
 
In January 2018, Mustang entered into a Non-Exclusive License Agreement (the “Manufacturing License”) with COH to acquire intellectual property rights in patent applications, know-how and regulatory filings pertaining to methods of manufacturing T-cells in connection with CAR-T development and isolated populations of therapeutic T-cells bearing specific surface markers. Mustang paid an upfront fee of $75,000 in connection with the Manufacturing License. COH is eligible to receive an annual maintenance fee of $15,000, which is creditable against royalties due to COH under the Manufacturing License. Royalty payments in the low single digits are due on net sales of licensed products, with lower royalties due with respect to licensed products that incorporate a chimeric antigen receptor that is separately licensed from COH to Mustang.
 
Option on Collaboration Agreement with TGTX
 
On February 2, 2018 Mustang entered into an Option Agreement the (“TGTX Mustang Option”) with TG Therapeutics, Inc. (“TGTX”), a related party, whereby TGTX was granted the option to enter into a global collaboration on the joint development and commercialization of product candidates pertaining to Mustang’s CD20 license agreement with the Fred Hutchinson Cancer Research Center. In consideration of the TGTX Mustang Option, TGTX paid an option fee of $50,000, which was recorded by Mustang as Collaboration Revenue Related Party in the Condensed Consolidated Statement of Operations. The Option expires 180 days after the effective date and can be extended for three months upon mutual written consent. Mr. Weiss, our Executive Vice Chairman, Strategic Development, serves as the Chief Executive Officer of TGTX.
 
Caelum
 
For the three months ended March 31, 2018 and 2017, respectively, Caelum recorded expense of nil and $0.2 million in connection with its license for CAEL-101 from Columbia University.
 
Cyprium
 
For the three months ended March 31, 2018 and 2017, respectively, Cyprium recorded expense of nil and $0.1 million in connection with its license for CUTX-101 (copper histidinate injection) from the Eunice Kennedy Shriver National Institute of Child Health and Human Development (“NICHD”).