Restructuring and Severance Charges

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Severance Charges

Restructuring and Severance Charges

The Company records liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. Employee severance costs are accrued when the restructuring actions are probable and estimable. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits, is recognized ratably over the future service period. The Company also records costs incurred with contract terminations associated with restructuring activities.

On September 30, 2019, prior to the Merger, NewLink adopted a restructuring plan to reduce its headcount by approximately 60%, which consisted primarily of clinical and research and development staff, and made several changes to senior leadership in order to conserve resources.

In addition to the restructuring, Charles J. Link, Jr, M.D. retired from NewLink and the NewLink board of directors, effective August 3, 2019 and Nicholas Vahanian retired from his position as the President and member of the board of directors, effective September 27, 2019, and his employment with the company ended on November 11, 2019.In conjunction with the restructuring and departure of former NewLink executives, NewLink recorded restructuring and severance charges of $5.6 million during the year ended December 31, 2019. As of March 31, 2020, the Company has $2.7 million accrued relating to remaining payments expected to be paid out over the next twelve months. No expense was recorded during the three months ended March 31, 2020.