11. Sale of Research and Development Assets

12 Months Ended

Apr. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Sale of Research and Development Assets

Note 11 – Sale of Research and Development Assets

In February 2018, we entered into an Asset Assignment and Purchase Agreement (the “February 2018 Purchase Agreement”) with OncXerna Therapeutics, Inc. (“OncXerna”) (formerly known Oncologie, Inc.), pursuant to which we sold to Oncologie the majority of our research and development assets, which included the assignment of certain exclusive licenses related to our former phosphatidylserine (“PS”)-targeting program, as well as certain other licenses and assets useful and/or necessary for the potential commercialization of bavituximab.

Pursuant to the February 2018 Purchase Agreement, we received an aggregate of $8.0 million from OncXerna, of which $3.0 million was received in fiscal year 2018 and $5.0 million was received in fiscal year 2019. We are also eligible to receive up to an additional $95.0 million in the event that OncXerna achieves certain development, regulatory and commercialization milestones with respect to bavituximab. In addition, we are eligible to receive royalties on net sales that are upward tiering into the mid-teens in the event that OncXerna commercializes and sells products utilizing bavituximab or the other transferred assets. As of April 30, 2021, no development, regulatory or commercialization milestones have been achieved by OncXerna under the February 2018 Purchase Agreement. OncXerna is responsible for all future research, development and commercialization of bavituximab, including all related intellectual property costs and all other future liabilities and obligations arising out of the ownership of the transferred assets.

In September 2018, we entered into a separate Asset Assignment and Purchase Agreement (the “September 2018 Purchase Agreement”) with OncXerna, pursuant to which we sold to OncXerna our r84 technology, which included the assignment of certain licenses, patents and other assets useful and/or necessary for the potential commercialization of the r84 technology.

Pursuant to the September 2018 Purchase Agreement, we received $1.0 million from OncXerna, which amount was paid in fiscal year 2019. We are also eligible to receive up to an additional $21.0 million in the event that OncXerna achieves certain development, regulatory and commercialization milestones with respect to r84. In addition, we are eligible to receive royalties on net sales ranging from the low to mid-single digits in the event that OncXerna commercializes and sells products utilizing the r84 technology. As of April 30, 2021, no development, regulatory or commercialization milestones have been achieved by OncXerna under the September 2018 Purchase Agreement. OncXerna is responsible for all future research, development and commercialization of r84, including all related intellectual property costs and all other future liabilities and obligations arising out of the ownership of the transferred assets.

Discontinued Operations

As a result of the sale of our PS-targeting and r84 technologies, the abandonment of our remaining research and development assets, and the strategic shift in our corporate direction to focus solely on our CDMO business, the operating results from our former research and development segment have been excluded from continuing operations and presented as discontinued operations in the accompanying consolidated financial statements for all periods presented. During the fiscal year ended April 30, 2019, we recorded a gain of $1.0 million upon the completion of the February 2018 Purchase Agreement, which amount is included in income from discontinued operations, net of tax, in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended April 30, 2019. The results of operations from discontinued operations presented below include certain allocations that management believes fairly reflect the utilization of services provided to the former research and development segment. The allocations do not include amounts related to general corporate administrative expenses or interest expense. Therefore, these results of operations do not necessarily reflect what the results of operations would have been had the former research and development segment operated as a stand-alone segment.

There were no operating results from discontinued operations for the fiscal years ended April 30, 2021 and 2020.

The following table summarizes the results of discontinued operations for the fiscal year ended April 30, 2019 (in thousands):

Other income	$	125
Gain on sale of research and development assets before income taxes		1,000
Income tax expense		284
Income from discontinued operations, net of tax	$	841