XML 64 R14.htm IDEA: XBRL DOCUMENT v3.19.3
Non-Controlling Interests
9 Months Ended
Sep. 30, 2019
Noncontrolling Interest [Abstract]  
Non-Controlling Interests

8.

Non-Controlling Interests

Spero Gyrase

As of September 30, 2019 and December 31, 2018, the Company’s only remaining non-controlling interest relates to Spero Gyrase, Inc., which totaled $0.4 million. In March 2016, the Company entered into an agreement with Vaxart (formerly Biota Pharmaceuticals, Inc. and Aviragen Therapeutics, Inc.) and its affiliates in order to acquire certain intellectual property and know-how related to certain compounds. In connection with the transaction, the Company established Spero Gyrase, a Delaware corporation, and issued to Vaxart 200 common shares of Spero Gyrase with a fair value of $1.1 million, which represented a 20% equity ownership interest in Spero Gyrase. In addition, Spero Gyrase agreed to make future milestone and royalty payments in exchange for the intellectual property. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the acquired technology as research and development expense in the consolidated statement of operations and comprehensive loss in the amount of $1.1 million, because the acquired technology had not reached commercial feasibility and had no alternative future use, and recorded a non-controlling interest in Spero Gyrase in a corresponding amount.

In connection with the agreement, Vaxart obtained anti-dilution rights to maintain their 20% equity ownership of Spero Gyrase at no additional cost to Vaxart in the event that Spero Gyrase completed subsequent funding events, subject to a maximum amount of such funding of $8.0 million.

The Company accounted for the anti-dilution rights as a derivative liability on its consolidated balance sheet (see Note 3). The fair value of the derivative liability associated with the anti-dilution rights upon issuance in March 2016 of $1.6 million was recorded as research and development expenses as it was deemed to represent additional consideration for the license.