Note 7 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

7. Commitments and Contingencies

Significant Contracts and Agreements

In

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, 2017

the Company has

not

commenced product sales and therefore has recognized

no

royalties on product sales.

In

July 2015,

the Company entered into a manufacturing services agreement with Lonza Ltd, or (“Lonza”) for the processing, development and manufacturing of the active pharmaceutical ingredient (“API”) in its lead product candidate, vonapanitase. Under the agreement, the Company will issue purchase orders authorizing Lonza to manufacture API 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, 2017,

the Company has issued a purchase order for

7.6

million Swiss Francs, approximately

$7.8

million at current exchange rates, for the manufacturing of

three

batches that commenced in

July 2017

and

one

batch to commence by the end of

2019.

As of

December 31, 2017,

nearly all of the services related to the

three

batches that commenced in

July 2017

have been rendered under this purchase order.

Operating Leases

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

2019.

In

August 2017,

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 (i) extend the term of the lease for a period of

fifteen

(

15

) months from

June 30, 2018

until

September 30, 2019

and (ii) increase the Company’s office space under the Lease Agreement by

2,552

square feet of additional property for a total of approximately

7,500

square feet of property (the “Leased Property”). The Leased Property is located at

200

West St., Waltham, Massachusetts. In addition, the Company has the option to extend the term of the Lease Agreement for an additional

one

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

six

months prior to the expiration of the term. Rental expense for each of the years ended

December 31, 2017,

2016

and

2015

was

$0.2

million.

Future minimum payments required under operating leases as of

December 31, 2017

are summarized as follows (in thousands):

Year Ending December 31:	Amount
2018	$	270
2019		207
Total minimum lease payments	$	477

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, 2017,

the Company has provided a security deposit in the amount of

$22,000

to the lessor.

Restricted cash related to facilities leases

At

December 31, 2017

and

2016,

the Company had

$22,000

and

$14,000,

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

December 31, 2017

and

2016,

the Company pledged an aggregate of

$22,000

and

$14,000,

respectively, to the bank as collateral for the letter of credit, which is included in other non-current assets.