Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events

Subsequent Events

10. Subsequent Events

Collaboration Arrangements

Alfa Wassermann

On October 1, 2012, the Company entered into a development and commercialization agreement with Alfa Wassermann S.p.A. for velusetrag (or TD-5108), the Company’s investigational 5-HT4 agonist in development for gastrointestinal motility disorders. Under the agreement, the companies will collaborate in the execution of a two-part Phase 2 program to test the efficacy, safety and tolerability of velusetrag in the treatment of patients with gastroparesis. Alfa Wassermann has an exclusive option to develop and commercialize velusetrag in the European Union, Russia, China, Mexico and certain other countries, while the Company retains full rights to velusetrag in the US, Canada, Japan and certain other countries. The Company is entitled to funding for the Phase 2 program and, if the option is exercised, a $10.0 million option fee, potential future development, regulatory and sales payments totaling up to $53.5 million, and royalties on net sales by Alfa Wassermann ranging from the low teens to 20%.

Merck

On October 15, 2012, the Company signed a collaboration agreement with Merck, known as MSD outside the United States and Canada, to discover, develop and commercialize novel small molecule therapeutics directed towards a target being investigated for the treatment of hypertension and heart failure. In exchange for granting Merck a worldwide, exclusive license to the Company’s therapeutic candidates, the Company will receive a $5.0 million upfront payment, funding for research, and be eligible for potential future payments totaling up to $148.0 million for the first indication and royalties on worldwide annual net sales of any products derived from the collaboration. The Company will be responsible for discovery and Merck will be responsible for and fund all development and commercialization activities. The initial research term is twelve months, with optional extensions by mutual agreement, and Merck can terminate the agreement at any time.

R-Pharm CJSC

On October 19, 2012, the Company entered into two separate development and commercialization agreements with R-Pharm CJSC. The first was for TD-1792, the Company’s investigational glycopeptide-cephalosporin heterodimer antibiotic for the treatment of resistant Gram-positive infections, and the second was for telavancin. In both of the agreements, the Company granted R-Pharm exclusive development and commercialization rights in Russia, Ukraine, other member countries of the Commonwealth of Independent States, and Georgia. The Company is eligible to receive up to $2.0 million in near-term licensing fees, and potential future development payments of $4.0 million and sales payments of $6.0 million. The Company is entitled to receive a 15% royalty on net sales of TD-1792 and a 25% royalty on net sales of telavancin.