Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue From Contract With Customer [Abstract]

Revenue Recognition

Note 10. Revenue Recognition

License Agreement with FL2022-001, Inc.

On September 30, 2022, the Company entered into a License Agreement (the “License Agreement”) with FL2022-001, Inc. (“Licensee”), a portfolio company of Foresite Labs, pursuant to which the Company granted Licensee an exclusive, royalty-bearing, sublicensable license to certain of its intellectual property rights to research, manufacture, develop and commercialize pharmaceutical products containing certain hydroxysteroid dehydrogenase inhibitors (collectively, the “Licensed Products”) in all fields of use and on a worldwide basis. In addition, for a period of time, the Company has agreed that neither it nor its affiliates or sublicensees will directly or indirectly, engage in or conduct any research, development, manufacture, commercialization, use or other exploitation of pharmaceutical products that would compete with the Licensed Products, subject to certain exceptions related to products of an acquirer or its affiliates in connection with a change of control of the Company.

Under the terms of the License Agreement, Licensee made an upfront payment of $1.25 million to the Company in October 2022. In addition, the Company is eligible to receive up to an aggregate of $4.25 million in milestone payments upon the achievement of certain regulatory milestone events. The Company will also be entitled to royalties on tiers of annual net sales of Licensed Products at rates in the low single digits, on a Licensed Product-by-Licensed Product and country-by-country basis, until the expiration of the last patent covering such Licensed Product in such country.

The Company did not recognize license revenue during the three and nine months ended September 30, 2022 as it had not yet satisfied the performance obligations required under the License Agreement.