Collaboration and License Agreements

6 Months Ended

Jun. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

COLLABORATION AND LICENSE AGREEMENTS

NOTE 8: COLLABORATION AND LICENSE AGREEMENTS

Development and Commercial License Agreement with Servier

On February 24, 2016, the Company entered into a development and commercial license agreement, as subsequently amended, with predecessor entities to Servier. This agreement establishes a collaboration between the Company and Servier to develop allogeneic chimeric antigen receptor T (“CAR T”) cell therapies for up to six unique antigen targets selected by Servier. Servier selected one target at the agreement’s inception. The Company granted Servier a development license and will perform early-stage R&D on the selected targets and develop the resulting therapeutic product candidates through Phase 1 clinical trials and manufacture clinical trial material for use in Phase 2 clinical trials. Also, the Company and Servier have formed a joint steering committee (“JSC”) to provide high-level oversight and decision making regarding the activities covered under the agreement.

The Company recognizes revenue from the upfront payment of $105.0 million based on an input method in the form of research effort relative to expected research effort at the completion of the performance obligation, which is based on the actual time of R&D activities performed relative to expected time to be incurred in the future to satisfy the performance obligation. Management evaluates and adjusts the total expected research effort for the performance obligation on a quarterly basis based upon actual research accomplishments, changes in research approach as determined by the JSC, Servier’s selection and direction on antigen targets, and the probability of continuing research efforts in the future. The transfer of control occurs over this time period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation. The remaining performance obligation associated with the $105.0 million upfront payment is expected to be satisfied over an approximate 5 year period as of June 30, 2020.

During the six months ended June 30, 2020 and 2019, the Company recognized revenue under the agreement with Servier of approximately $2.6 million and $3.0 million, respectively. Deferred revenue related to the agreement with Servier amounted to $78.2 million and $80.9 million as of June 30, 2020 and December 31, 2019, respectively, of which $23.1 million and $15.0 million, respectively is included in current liabilities. No development or sales-based milestone payments were received during the six months ended June 30, 2020 and 2019.  

Collaboration and License Agreement with Gilead

On July 6, 2020 (the “Termination Notice Date”), Gilead Sciences (“Gilead”) notified the Company of its termination of the Collaboration and License Agreement between Gilead and the Company, dated September 10, 2018, as subsequently amended by Amendment No. 1 to the Collaboration and License Agreement, dated March 10, 2020 (as amended, the “Gilead Agreement”). Pursuant to the termination notice, the Gilead Agreement will terminate effective September 4, 2020.  Upon termination, the Company will regain full rights and all data it generated for the in vivo chronic hepatitis B virus (“HBV”) program developed under the Gilead Agreement. The Company is exploring partnership or alternative opportunities to enable the continued development of ARCUS-based HBV therapies, the progression toward the submission of an IND for this product candidate and the reassessment of the timing of such IND submission.

Revenue associated with the combined performance obligation was recognized on a straight-line basis as the R&D services were provided through the Termination Notice Date. During the six months ended June 30, 2020 and 2019, the Company recognized revenue under the Gilead Agreement of approximately $3.9 million and $6.7 million, respectively. The Company did not have deferred revenue related to the Gilead Agreement as of  June 30, 2020. Deferred revenue amounted to $1.5 million as of December 31, 2019. No development or sales-based milestone payments were received during the six months ended June 30, 2020.