Commitments and Contingencies

Operating Leases

The Company leases a manufacturing facility located in Winnipeg, Manitoba Canada, which consists of an approximately 31,400 square foot manufacturing, laboratory, warehouse and office facility, under a five year renewable lease through September 2020 with a right to renew the lease for one subsequent five-year term. The minimum monthly rent under this lease is approximately $25,000 per month, plus additional rent and applicable taxes. Rent expense under this lease was $86,000 for the period beginning on the Acquisition Date through December 31, 2016.

The Company leased its corporate headquarters in Cambridge, Massachusetts under an operating lease that was scheduled to expire on April 30, 2018. On October 14, 2016, the Company and the landlord mutually agreed to terminate the lease and voluntarily surrender the premises. The Company recorded $565,000, $494,000 and $416,000 in rent expense for the years ended December 31, 2016, 2015 and 2014, respectively, for this lease.

The minimum aggregate future lease commitment at December 31, 2016 is as follows (in thousands):



2017	$	324
2018	296
2019	296
2020	222
	$	1,138

License Agreements

The Company is a party to or assignee of license agreements that may require it to make future payments relating to license fees, sublicense fees, milestone fees, and royalties on future sales of licensed products.

The following outlines the license agreements the Company believes it will owe payments under if its product candidates reach certain milestones and begin to generate revenue.

The Schepens Eye Research Institute, Inc. / The Massachusetts Eye and Ear Infirmary

In July 2010, the Company entered into a license agreement with The Schepens Eye Research Institute, Inc. (“Schepens”), pursuant to which Schepens granted the Company an exclusive royalty-bearing license, with the right to grant sublicenses, to certain intellectual property rights for the development of IL-1blocker for ophthalmic indications. The Company is obligated to pay Schepens up to $4.7 million and issue up to 105,000 shares of its common stock in milestone payments, contingent upon the issuance of certain patents. In addition, the Company is obligated to pay Schepens a tiered single-digit royalty based on net sales of the licensed product. During the year ended December 31, 2014, the Company paid Schepens and expensed $350,000 upon the achievement of a clinical milestone. On February 10, 2016, the Company provided notice to Schepens of the Company’s termination of the license agreement, which termination was effective 60 days following receipt of such notice by Schepens.

The University of Zurich

The Company has an exclusive license agreement with the University of Zurich ("Zurich"), which grants the Company an exclusive license, with the right to sublicense, to make, have made, use and sell under certain patents primarily directed to the Company's targeting agent, including EpCAM chimera, and related immunoconjugates and methods of use and manufacture of the same. These patents cover some key aspects of the Company’s product candidates Vicinium and Proxinium. The Company is obligated to pay $750,000 in milestone payments for its first product candidate in the event it reaches the applicable clinical development milestones. As part of the consideration, the Company is also obligated to pay up to a 4% royalty on the net product sales for any products that are covered by the applicable Zurich patent rights. The Company has the right to reduce the amount of royalties owed to Zurich if the total royalty rate owed by the Company to Zurich and any other third party is 10% or greater, provided that the royalty rate may not be less than 2% of net sales. The obligation to pay royalties in a particular country expires upon the expiration, lapse or abandonment of the last of the Zurich patent rights that covers the manufacture, use or sale of a product and there is no obligation to pay royalties in a country if there is no patent rights that cover the manufacture, use or sale of a product.

Merck KGaA

The Company holds an exclusive license agreement with Merck KGaA ("Merck") pursuant to which the Company was granted an exclusive license, with the right to sublicense, under certain patents and technology relating to aspects of VB6-845d, to make, use, sell and import VB6-845d or any products that would otherwise infringe such patents in the field of therapeutic or diagnostic purposes in humans. Under the agreement, the Company may be obligated to make milestone payments in respect of certain stages of regulatory approval reached by a product candidate generated by this technology or covered by a licensed patent including: (a) $2,000,000 upon the start of the first Phase 3 clinical trial for a licensed product; (b) $2,000,000 upon submission of the first Biologics License Application ("BLA") for a licensed product; (c) $2,000,000 upon the approval of the first BLA in certain countries for a licensed product and $1,000,000 upon each of the second and third approvals of a BLA in certain additional countries for the same licensed product (total of $4,000,000); and (d) $2,000,000 upon the approval of the second BLA in certain countries for a licensed product; and $1,000,000 upon each of the second and third approvals of the second BLA in certain additional countries for the same licensed product (total of $4,000,000). The Company may be obligated to pay a 1.5% royalty on the net product sales up to $150,000,000 and a 2% royalty on the net product sales above such amount.

The license remains in force on a country-by-country basis and product-by-product basis, and expires at the longer of (i) the expiration of the last to expire patent within the licensed patent rights that covers a licensed product and (ii) 10 years from the first commercial sale of a licensed product in such country; provided that no royalty is payable for more than 15 years from the first commercial launch of a licensed product anywhere in the world.

Legal Contingencies

The Company does not currently have any contingencies related to ongoing legal matters.