Collaboration and Licensing Agreements	9 Months Ended
Sep. 30, 2024
Collaboration and Licensing Agreements
Collaboration and Licensing Agreements	3. Collaboration and Licensing Agreements Gilead Collaboration and License Agreement In June 2018, the Company entered into the Gilead Collaboration Agreement whereby the Company and Gilead agreed to collaborate with respect to two preclinical research programs to evaluate potential vaccine products for the treatment, cure, diagnosis or prevention of HBV and HIV. In February 2022, the Company signed the Amended and Restated Collaboration Agreement, which altered key aspects of the collaboration pertaining to the HIV therapeutic. Most importantly, the Amended and Restated Collaboration Agreement allocated additional research and development responsibility to the Company with respect to the Company’s HIV candidate and provided for additional funding by Gilead of such research and development activities as well as increased later stage development and commercial milestone payments. Under the Gilead Collaboration Agreement, the Company granted Gilead an exclusive, royalty-bearing license to the Company’s technology platforms. Upon entering into the agreement in June 2018, the Company received a non-refundable $10.0 million upfront payment from Gilead and upon signing of the Restated Gilead Collaboration Agreement in February 2022, the Company received a program initiation fee of $15.0 million. Gilead is also obligated to make additional payments to the Company upon the achievement of pre-clinical, development and commercial milestones. The development milestones amount to $140.0 million for the HBV program, and up to $172.5 million for the HIV program, inclusive of a $10.0 million program completion fee, payable upon Gilead’s exercise of the option to pursue further development activities post Phase 1b. The commercial milestones amount to a total of $50.0 million for the HBV program, and $65.0 million for the HIV program. Additionally, Gilead is obligated to pay royalties on net sales for each program. Payments from Gilead generally have a 60-day payment term. The $10.0 million upfront payment, the $15.0 million initiation fee and $13.0 million in milestone payments were initially recorded as deferred revenue in the consolidated balance sheet and are recognized as revenue when revenue recognition criteria are met. As of September 30, 2024, $7.0 million of such payments were still recorded as a liability in deferred revenues, current and non-current. As of December 31, 2023, $7.5 million of upfront and milestone payments were included as a liability in deferred revenues, current and non-current. Approximately 38% of deferred revenue is expected to be recognized as revenue in the remainder of 2024, 51% in 2025 and the remaining 11% in 2026. In the three months ended September 30, 2024, the Company recognized $4.4 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for research and development services. In the three months ended September 30, 2023, the Company recognized $1.2 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.5 million of revenue from cost reimbursements for research and development services. In the nine months ended September 30, 2024, the Company recognized $5.7 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.5 million of revenue from cost reimbursements for research and development services. In the nine months ended September 30, 2023, the Company recognized $3.8 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $1.3 million of revenue from cost reimbursements for research and development services. Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of September 30, 2024 and December 31, 2023, the contract asset relating to the sublicense payment was $0.2 million and $0.1 million, respectively, and there was no liability relating to sublicense payment. Roche Collaboration and License Agreement In October 2022, the Company entered into the Roche Collaboration Agreement whereby the Company and Roche agreed to collaborate with respect to the development of novel arenaviral immunotherapies for KRAS-mutated cancers and, potentially, a second, novel arenaviral immunotherapeutic program targeting specific undisclosed cancer antigens. In January 2024, Roche provided written notice of the termination of the Roche Collaboration Agreement to the Company. The termination was made according to Roche’s right to terminate without cause, acknowledging that the Company had met all go-forward criteria under the agreement. Pursuant to the terms of the Roche Collaboration Agreement, following the termination notice, the Roche Collaboration Agreement terminated on April 25, 2024. Under the terms of the original Roche Collaboration Agreement, the Company had granted Roche an exclusive, royalty-bearing license to the Company’s technology platforms for KRAS-mutated cancers, and an option right to exclusively license a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. Upon the termination effective date of April 25, 2024, the Company regained full control of the associated intellectual property portfolio and full collaboration and licensing rights for this program. Upon signing the Roche Collaboration Agreement in October 2022, the Company received a non-refundable upfront payment of $25.0 million. This upfront payment, a $10.0 million milestone payment received in the three months ended March 31, 2023, and a $10.0 million milestone payment received in the three months ended June 30, 2024 were considered as part of the transaction price and were recognized as revenue when revenue recognition criteria were met over the period in which services were performed. As of September 30, 2024, no liabilities were recorded in deferred revenues, current and non-current. As of December 31, 2023, $26.8 million of such payments were included as a liability in deferred revenues, current and non-current. The Company considered the termination by Roche as a contract modification of the combined performance obligations and the transaction price. The modification was accounted for on a cumulative catch-up basis, applying the revised percent of completion to the revised transaction price, resulting in an immediate increase of revenue in the period of the modification. The transaction price was recognized as revenue over the remaining performance period using updated total estimated research and development costs. The remaining liability included in deferred revenues was recognized in the three months ended June 30, 2024. Accordingly, the Company recognized in the three months ended September 30, 2024 no revenue of the upfront and milestone payments that were originally recorded as deferred revenue. In the three months ended September 30, 2023, the Company recognized $4.9 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial. In the nine months ended September 30, 2024, the Company recognized revenues of $36.3 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.1 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial of HB-700. In the nine months ended September 30, 2023, the Company recognized $7.3 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial. Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of September 30, 2024 there was no contract asset and no liability relating to sublicense payments. As of December 31, 2023 the contract asset was $2.0 million and there was no liability relating to sublicense payments.

Collaboration and Licensing Agreements

9 Months Ended

Sep. 30, 2024

Collaboration and Licensing Agreements

3. Collaboration and Licensing Agreements

Gilead Collaboration and License Agreement

In June 2018, the Company entered into the Gilead Collaboration Agreement whereby the Company and Gilead agreed to collaborate with respect to two preclinical research programs to evaluate potential vaccine products for the treatment, cure, diagnosis or prevention of HBV and HIV. In February 2022, the Company signed the Amended and Restated Collaboration Agreement, which altered key aspects of the collaboration pertaining to the HIV therapeutic. Most importantly, the Amended and Restated Collaboration Agreement allocated additional research and development responsibility to the Company with respect to the Company’s HIV candidate and provided for additional funding by Gilead of such research and development activities as well as increased later stage development and commercial milestone payments.

Under the Gilead Collaboration Agreement, the Company granted Gilead an exclusive, royalty-bearing license to the Company’s technology platforms. Upon entering into the agreement in June 2018, the Company received a non-refundable $10.0 million upfront payment from Gilead and upon signing of the Restated Gilead Collaboration Agreement in February 2022, the Company received a program initiation fee of $15.0 million. Gilead is also obligated to make additional payments to the Company upon the achievement of pre-clinical, development and commercial milestones. The development milestones amount to $140.0 million for the HBV program, and up to $172.5 million for the HIV program, inclusive of a $10.0 million program completion fee, payable upon Gilead’s exercise of the option to pursue further development activities post Phase 1b. The commercial milestones amount to a total of $50.0 million for the HBV program, and $65.0 million for the HIV program. Additionally, Gilead is obligated to pay royalties on net sales for each program. Payments from Gilead generally have a 60-day payment term.

The $10.0 million upfront payment, the $15.0 million initiation fee and $13.0 million in milestone payments were initially recorded as deferred revenue in the consolidated balance sheet and are recognized as revenue when revenue recognition criteria are met. As of September 30, 2024, $7.0 million of such payments were still recorded as a liability in deferred revenues, current and non-current. As of December 31, 2023, $7.5 million of upfront and milestone payments were included as a liability in deferred revenues, current and non-current. Approximately 38% of deferred revenue is expected to be recognized as revenue in the remainder of 2024, 51% in 2025 and the remaining 11% in 2026.

In the three months ended September 30, 2024, the Company recognized $4.4 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for research and development services. In the three months ended September 30, 2023, the Company recognized $1.2 million of the upfront and milestone payments that were originally

recorded as deferred revenue. Furthermore, the Company recognized $0.5 million of revenue from cost reimbursements for research and development services.

In the nine months ended September 30, 2024, the Company recognized $5.7 million of the milestone and initiation payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.5 million of revenue from cost reimbursements for research and development services. In the nine months ended September 30, 2023, the Company recognized $3.8 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $1.3 million of revenue from cost reimbursements for research and development services.

Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of September 30, 2024 and December 31, 2023, the contract asset relating to the sublicense payment was $0.2 million and $0.1 million, respectively, and there was no liability relating to sublicense payment.

Roche Collaboration and License Agreement

In October 2022, the Company entered into the Roche Collaboration Agreement whereby the Company and Roche agreed to collaborate with respect to the development of novel arenaviral immunotherapies for KRAS-mutated cancers and, potentially, a second, novel arenaviral immunotherapeutic program targeting specific undisclosed cancer antigens. In January 2024, Roche provided written notice of the termination of the Roche Collaboration Agreement to the Company. The termination was made according to Roche’s right to terminate without cause, acknowledging that the Company had met all go-forward criteria under the agreement. Pursuant to the terms of the Roche Collaboration Agreement, following the termination notice, the Roche Collaboration Agreement terminated on April 25, 2024.

Under the terms of the original Roche Collaboration Agreement, the Company had granted Roche an exclusive, royalty-bearing license to the Company’s technology platforms for KRAS-mutated cancers, and an option right to exclusively license a second, novel arenaviral immunotherapeutic program targeting undisclosed cancer antigens. Upon the termination effective date of April 25, 2024, the Company regained full control of the associated intellectual property portfolio and full collaboration and licensing rights for this program.

Upon signing the Roche Collaboration Agreement in October 2022, the Company received a non-refundable upfront payment of $25.0 million. This upfront payment, a $10.0 million milestone payment received in the three months ended March 31, 2023, and a $10.0 million milestone payment received in the three months ended June 30, 2024 were considered as part of the transaction price and were recognized as revenue when revenue recognition criteria were met over the period in which services were performed. As of September 30, 2024, no liabilities were recorded in deferred revenues, current and non-current. As of December 31, 2023, $26.8 million of such payments were included as a liability in deferred revenues, current and non-current.

The Company considered the termination by Roche as a contract modification of the combined performance obligations and the transaction price. The modification was accounted for on a cumulative catch-up basis, applying the revised percent of completion to the revised transaction price, resulting in an immediate increase of revenue in the period of the modification. The transaction price was recognized as revenue over the remaining performance period using updated total estimated research and development costs.

The remaining liability included in deferred revenues was recognized in the three months ended June 30, 2024. Accordingly, the Company recognized in the three months ended September 30, 2024 no revenue of the upfront and milestone payments that were originally recorded as deferred revenue. In the three months ended September 30, 2023, the Company recognized $4.9 million of the upfront and milestone payments that were originally recorded as deferred

revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial.

In the nine months ended September 30, 2024, the Company recognized revenues of $36.3 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.1 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial of HB-700. In the nine months ended September 30, 2023, the Company recognized $7.3 million of the upfront and milestone payments that were originally recorded as deferred revenue. Furthermore, the Company recognized $0.3 million of revenue from cost reimbursements for activities related to the preparation of a first in human trial.

Sublicense fees payable to certain licensors of technologies upon the receipt of the deferred upfront and milestone payments, were capitalized as a contract asset and will be amortized over the period in which the revenue from the triggering payment is recognized. As of September 30, 2024 there was no contract asset and no liability relating to sublicense payments. As of December 31, 2023 the contract asset was $2.0 million and there was no liability relating to sublicense payments.