8. License Agreements

Avenue

License for clenbuterol (“ATX-04”)

In February 2026, Avenue entered into a license agreement with Duke University (“Duke”), pursuant to which Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to ATX-04, a selective β2-adrenergic agonist for Pompe disease, for the treatment of lysosomal storage diseases.

Under the ATX-04 License, Avenue made an upfront payment to Duke and has an obligation to make development, regulatory, and commercial milestone payments upon the achievement of certain milestones. In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04.

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Beginning with calendar year 2028 and until first regulatory approval, Avenue is obligated to make minimum annual royalty payments. In the event the ATX-04 License is terminated, minimum royalty obligations will cease, and Avenue will only be responsible for amounts due up to the termination date.

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 require substantial completion of research and development, regulatory and marketing approval efforts in order to reach technological feasibility and have no alternate use. For the three months ended March 31, 2026, there was a nominal amount of expense recognized by Avenue for the ATX-04 License.

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AnnJi Pharmaceutical Co. Ltd. (“AnnJi”) License Termination

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In April 2025, Avenue and AnnJi entered into a License Termination and Program Transfer Agreement, pursuant to which the prior license agreement for AJ201 was terminated, the parties dismissed all pending dispute resolution proceedings and provided mutual releases of claims, and Avenue transferred all rights to the program back to AnnJi. Avenue also agreed to a 48-month non-compete in specified territories.

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In connection with the termination, Avenue repurchased shares previously issued to AnnJi for nominal consideration and paid $0.2 million for legal expense reimbursement, which was accounted for as consideration payable to a customer and reduced revenue recognized.

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AnnJi agreed to pay Avenue $1.6 million (net of withholding taxes), which was recognized as revenue upon transfer of the underlying rights during the quarter ending June 30, 2025.

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Avenue is also eligible to receive (i) up to $5.0 million in development and regulatory milestones, (ii) up to $17.0 million in commercial milestones, (iii) royalties of 1.75% on net sales of AJ201, subject to reduction in certain circumstances, and (iv) a share of sublicensing income, subject to specified caps and minimums. These amounts represent variable consideration and are constrained until the achievement of the specified milestones.

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Journey

Journey holds global rights to Emrosi™ (Minocycline Hydrochloride Modified Release Capsules, 40 mg) pursuant to a license agreement with Dr. Reddy’s Laboratories, Ltd. (“DRL”), under which Journey has made upfront and milestone payments, including $15.0 million upon FDA approval in November 2024, at which time the licensed assets were assigned to Journey. Journey may be required to make additional regulatory and commercial milestone payments of up to $150.0 million and pays royalties ranging from 10% to 14% on net sales, subject to reduction in certain circumstances.

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In 2022, Journey acquired Amzeeq® and Zilxi® from Vyne Therapeutics, Inc., including contingent sales-based milestone payments of up to $450.0 million. As part of the transaction, Journey assumed a license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), under which Cutia has rights to commercialize the products in Greater China and Journey supplies finished product and earns low single-digit royalties on net sales.

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In August 2025, Journey commenced commercial supply of product to Cutia and recognized $40,000 of other revenue for the three months ended March 31, 2026 related to product sales.

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