Commitments and Contingencies

Significant Contracts and Agreements

February

2002,

the Company entered into an agreement to license certain intellectual property with Johns Hopkins University. The agreement calls for payments to be made by the Company upon the commencement of product sales, in the form of a royalty of

2.5%

on net sales of the product. As of

December

31,

2016

the Company has not commenced product sales and therefore has recognized no royalties on product sales.

July

2015,

the Company entered into a manufacturing services agreement with Lonza Ltd for the processing, development and manufacture of the active pharmaceutical ingredient (“API”) in its lead product candidate, vonapanitase. Under the agreement, the Company will execute purchase orders authorizing Lonza to manufacture the batches and will pay for the services and batches in accordance with terms and assumptions in the agreement and to be set forth in a project plan. As of

December

31,

2016,

the Company has executed

one

purchase order of

$1.9

million for the manufacturing of

one

batch which commenced in

June

2016

and finished in the

fourth

quarter of

2016.

The Company has made payments of

1.0

million Swiss Francs and accrued

0.9

million Swiss Francs for the manufacturing services rendered under the agreement as of

December

31,

2016.

Additionally, in connection with this transaction, the Company issued and paid for a purchase order of

0.2

million Swiss Francs, related to Lonza’s acquisition of raw materials used within manufacturing of this batch. Lastly, the Company has issued a purchase order for

7.6

million Swiss Francs, approximately

$7.5

million at current exchange rates, for the manufacturing of

three

batches to commence in

July2017

and

one

batch to commence in late

2018.

No services have been rendered under this purchase order as of

December

31,

2016.

Operating Leases

The Company has various non-cancellable operating leases for facilities and office equipment that expire at various dates through

2018.

August

2014,

the Company entered into an Amendment (the “Lease Amendment”) to the existing Lease Agreement dated

July

13,

2009

(the “Lease Agreement”), with Boston Properties Limited Partnership (“Lessor”) pursuant to which the Company has agreed to extend the lease for approximately

5,000

square feet of property to be used for office space (the “Leased Property”) located at

200

West St., Waltham, Massachusetts. The term of the Lease Amendment commences on

January

2015

(the “Commencement Date”) and expires in

June

2018,

approximately

three

years and

six

months from the Commencement Date. The Company has the option to extend the term for an additional

one

-year period upon the Company's written notice to the Lessor at least

nine

months in advance of the extension. Rental expense for each of the years ended

December

31,

2016,

2015

and

2014

was

$0.2

million.

Future minimum payments required under operating leases as of

December

31,

2016

are summarized as follows (in thousands):

Year Ending December 31:	Amount

2017	$	168
2018		84
Total minimum lease payments	$	252

In addition to the base rent, the Company is also responsible for its share of operating expenses and real estate taxes, in accordance with the terms of the lease agreement. As of

December

31,

2016,

the Company has provided a security deposit in the amount of

$14,000

to the lessor.

Restricted cash related to facilities leases

December

31,

2016

and

2015,

the Company had

$14,000

in an outstanding letter of credit to be used as collateral for leased premises. At

December

31,

2016

and

2015,

the Company pledged an aggregate of

$14,000

to the bank as collateral for the letter of credit, which is included in long-term assets.