(7 )	Licenses, Royalty Collaborative and Contractual Arrangements

Royalty agreements

The Company entered into a royalty-bearing research and license agreement with GlaxoSmithKline (“GSK”) in 1990 for the development and commercialization of zanamivir, a neuraminidase inhibitor (“NI”) marketed by GSK as Relenza® to treat influenza. Under the terms of the agreement, the Company licensed zanamivir to GSK on an exclusive, worldwide basis and is entitled to receive royalty payments of 7% of GSK's annual net sales of Relenza

in the U.S., Europe, Japan and certain other countries as well as 10% of GSK's annual net sales of Relenza

in Australia, New Zealand, South Africa and Indonesia. Most of the Company’s Relenza

patents have expired and the only substantial remaining intellectual property related to the Relenza

patent portfolio is scheduled to expire in July 2019 in Japan. In the U.S., the Company has a pending patent application, No. 08/737,141, relating to inhalation treatment of influenza with Relenza

. In October 2016, the United States Court of Appeals for the Federal Circuit Decision Board upheld the United States Patent Office’s rejection of claims in the patent application. The Company is working with its partner GSK to evaluate possible next steps in the prosecution of this patent application. However, based on the most recent unsuccessful appeal, the Company believes it is unlikely that the U.S. patent claims will ever be issued and that the Company will not receive any further royalties on U.S. sales of the product.

The Company also generates royalty revenue from the sale of Inavir

(laninamivir octanoate or LANI) in Japan, pursuant to a collaboration and license agreement that the Company entered into with Daiichi Sankyo in 2009. In September 2010, Inavir

was approved for sale by the Japanese Ministry of Health and Welfare for the treatment of influenza in adults and children. Under the agreement, the Company currently receives a 4% royalty on net sales of Inavir

in Japan and is eligible to earn sales milestone payments. Under the collaboration and license agreement, the Company and Daiichi Sankyo have cross-licensed the world-wide rights to develop and commercialize the related intellectual property, and have agreed to share equally in any royalties, license fees, or milestone or other payments received from any third party licenses outside of Japan. Patents on the composition of matter for LANI in Japan generally expire in 2024.

On April 22, 2016, the Company entered into a Royalty Interest Acquisition Agreement (“Agreement”) with HCRP. Under the Agreement, HCRP made a $20 million cash payment to the Company in consideration for acquiring from the Sellers certain royalty rights (“Royalty Rights”) related to the approved product Inavir

in the Japanese market. The Royalty Rights were obtained pursuant to the collaboration and license agreements (the “License Agreement”) and a commercialization agreement that the Company entered into with Daiichi Sankyo Company, Limited.

The following tables summarize the key components of the Company’s revenues (in millions):

	Three Months Ended September 30,
	2016		2015
	(in millions)
Royalty revenue – Relenza ®	$	0.1	$	1.7
Total revenue	$	0.1	$	1.7

Collaborative and contract arrangements

In July 2016, the Company entered into an exclusive, worldwide license for RSV replication inhibitors intellectual property with Georgia State University Research Foundation (“GSURF”) in exchange for an upfront fee, future milestone payments and royalties on future net sales of any products that utilize the underlying RSV intellectual property. The Company has an obligation to make a minimum payment of $10,000 to GSURF annually until the license agreement expires or is terminated. The Company also entered into a two year sponsored research agreement with GSURF for annual sponsored research payments.

In connection with the Company’s BTA585 clinical trial, a Clinical Research Organization (“CRO”), engaged by the Company to provide certain services for this trial, notified the Company of its intent to explore additional compensation in an amount up to $1.6 million, due to a previous delay in the trial. The Company is currently reviewing the facts of the notice and due to the early stages of the matter described above, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from these matters. As such, the Company is not currently able to estimate the impact of the potential additional expense on its financial position or results of operations.