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Agreements Related to Acquired Intellectual Property Rights
12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Agreements Related to Acquired Intellectual Property Rights

Note 3 — Agreements Related to Acquired Intellectual Property Rights

 

Patent License Agreement – Case Western Reserve University

 

On May 12, 2018, Lucid Diagnostics Inc., a majority-owned subsidiary of the Company, entered into a patent license agreement with Case Western Reserve University (“CWRU”), referred to as the “CWRU License Agreement”.

 

The CWRU License Agreement provides for the exclusive worldwide license of the intellectual property rights for the proprietary technologies of two distinct technology components - the “EsoCheck Cell Collection Device” referred to as the “EsoCheck™”; and a panel of proprietary methylated DNA biomarkers, a laboratory developed test (“LDT”), referred to as “EsoGuard™”; and together are collectively referred to as the “EsoGuard Technology”.

 

The CWRU License Agreement requires Lucid Diagnostics Inc. to achieve certain milestones with respect to regulatory filings and clearances and commercialization of products and services. In this regard, in , 2019, the Company recognized a $75 research and development expense in connection with a regulatory clearance milestone, which was paid in 2019. The CWRU License Agreement was amended to: change the achievement date of commercialization milestone from November 2020 to August 2021; to eliminate the payment with respect to the commercialization milestone; and to add a non-refundable payment to CWRU in consideration for the aforementioned changes to the commercialization milestone (“CWRU License Agreement Amendment”). In connection with such CWRU License Agreement Amendment, the Company recognized $100 of general and administrative expense, with such expense included in accrued expenses as of December 31, 2020. If the Company does not meet the remaining commercialization and regulatory clearance milestones listed in the CWRU License Agreement, then CWRU has the right, in its sole discretion, to require PAVmed Inc. to transfer to CWRU 80% of the shares of common stock of Lucid Diagnostics Inc. then held by PAVmed Inc. Such contingent milestone payments will be recognized in the period in which such payment obligations are incurred.

 

Lucid Diagnostics Inc. is required to pay a minimum annual royalty of a percentage of recognized net sales revenue resulting from the commercialization of the products and /or services developed using the CWRU License Agreement intellectual property, with the minimum amount of royalty payments based on net sales of such products and services, if any. Such contingent royalty payments will be recognized in the period in which such payment obligations are incurred.

 

As provided for under the CWRU License Agreement, reimbursement of CWRU billed patent fees of $250 and $200 were recognized as research and development expense in the years ended December 31, 2020 and 2019, respectively.

 

The CWRU License Agreement terminates upon the expiration of certain related patents, or on May 12, 2038 in countries where no such patents exist, or upon expiration of any exclusive marketing rights granted by the FDA or other U.S. government agency, whichever comes later.

 

License Agreement with Liquid Sensing Inc.

 

Upon its formation in October 2019, Solys Diagnostics Inc., a majority-owned subsidiary of PAVmed Inc. entered into a licensing agreement with Liquid Sensing, Inc., a subsidiary formed by Airware Inc., each an unrelated third-party, (“Liquid Sensing License Agreement”). Under the Liquid Sensing License Agreement, Solys Diagnostics Inc. was granted an exclusive worldwide license for six issued and one pending U.S. patents covering a proprietary nondispersive infrared laser technology to develop and commercialize such proprietary technology to non-invasively monitor tissue concentrations of glucose and other substances within the inpatient (e.g., hospital) field of use.

 

Solys Diagnostics Inc. advanced the research and development plan and completed a milestone consistent with the parameters and by the date under the Liquid Sensing License Agreement. Notwithstanding, PAVmed Inc. determined it would be in the best interests of the shareholders of PAVmed Inc. to terminate the Liquid Sensing License Agreement. In this regard, subsequent to December 31, 2020, PAVmed Inc. on behalf of itself and Solys Diagnostics Inc., delivered to Airware Inc. and Liquid Sensing Inc. a written notice of termination of the Liquid Sensing License Agreement, dated February 12, 2021 (“Liquid Sensing License Agreement Termination Notice”). The Liquid Sensing License Agreement Termination Notice proposes the development of a negotiated mutually agreeable final settlement between PAVmed Inc., Solys Diagnostics Inc., Airware Inc., and Liquid Sensing Inc.

 

A discussion of each of the Company’s majority-owned subsidiaries and the corresponding noncontrolling interest is presented in Note 12, Stockholders’ Equity and Common Stock Purchase Warrants.

 

Patent License Agreement - Tufts University - Antimicrobial Resorbable Ear Tubes

 

The Company previously executed a Patent License Agreement (the “Tufts Patent License Agreement”) with Tufts University and its co-owners, the Massachusetts Eye and Ear Infirmary and Massachusetts General Hospital (the “Licensors”). Pursuant to the Tufts Patent License Agreement, the Licensors granted the Company the exclusive right and license to certain patents in connection with the development and commercialization of antimicrobial resorbable ear tubes based on a proprietary aqueous silk technology conceived and developed by the Licensors.

 

The Tufts Patent License Agreement also provides for potential payments from the Company to the Licensors upon the achievement of certain product development and regulatory clearance milestones as well as royalty payments on net sales upon the commercialization of products developed utilizing the licensed patents. The Company will recognize as a current period expense for contingent milestone payments or royalties in the period in which such payment obligations are incurred, if any.