Note 5 - Revenue	6 Months Ended
Jun. 30, 2024
Notes to Financial Statements
Revenue [Text Block]	NOTE 5. Revenue Royalty Revenue Related to Sale of Future Royalties The Company generates royalty revenue from the sale of Inavir in Japan, pursuant to a collaboration and license agreement that Aviragen entered into with Daiichi Sankyo Company, Limited (“Daiichi Sankyo”) in 2009. In September 2010, laninamivir octanoate was approved for sale by the Japanese Ministry of Health and Welfare for the treatment of influenza in adults and children, which Daiichi Sankyo markets as Inavir. Under the agreement, the Company currently receives a 4% royalty on net sales of Inavir in Japan. Based on information provided by Daiichi Sankyo, the Company believes the expiration of the last patent related to Inavir is in August 2036, at which time royalty revenue will cease. The Company’s royalty revenue is seasonal, in line with the flu season, so the majority of the Company’s royalty revenue and non-cash royalty revenue related to the sale of future royalties are earned in the first and fourth fiscal quarters. The royalty revenue related to Inavir recognized for the six months ended June 30, 2024 and 2023, was zero. The Company recognized non-cash royalty revenue related to sale of future royalties of $37,000 and $30,000 for the three months ended June 30, 2024 and 2023, respectively, and $0.6 million and $0.3 million for the six months ended June 30, 2024 and 2023, respectively. Both royalty revenue and the non-cash royalty revenue related to the sale of future royalties are subject to a 5% withholding tax in Japan, for which $2,000 and $1,000 was included in income tax expense for the three months ended June 30, 2024 and 2023, respectively, and $31,000 and $15,000 for the six months ended June 30, 2024 and 2023, respectively, further detailed in Note 6. Revenue from Government Contracts The Company recognized revenue from government contracts of $6.4 million and $8.0 million for the three and six months ended June 30, 2024, respectively, consisting of revenues from the 2024 ASPR-BARDA Contract (as defined below) and the 2024 ATI-RRPV Contract (as defined below) described in more detail below. Unbilled receivable from government contracts consists of government fixed fee revenue from HHS BARDA, which was earned and not yet billed. As of June 30, 2024, the amount of unbilled receivable was $3.7 million. 2024 ATI-RRPV Contract In June 2024, the Company entered into an agreement (the “2024 ATI-RRPV Contract”) with Advanced Technology International, the Rapid Response Partnership Vehicle’s Consortium Management Firm funded by HHS BARDA. Pursuant to the 2024 ATI-RRPV Contract, the Company will receive funding of up to $452.9 million to conduct a Phase 2b comparative study evaluating the Company’s oral pill XBB COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the U.S. Food and Drug Administration. The 2024 ATI-RRPV Contract provides for an initial award in the aggregate amount of up to $65.7 million, consisting of a fixed fee of $64.7 million and reimbursement of costs incurred in trial preparation activities. The 2024 ATI-RRPV Contract further contemplates additional funding up to $387.2 million if the Company and HHS BARDA decide to continue with the Phase 2b comparative study. The Company accounts for the 2024 ATI-RRPV Contract under Accounting Standards Codification 958-605 and recognizes revenue as the firm fixed-price milestone is earned and allowable cost-plus-fixed-fees are incurred. Reimbursable costs under the 2024 ATI-RRPV Contract primarily include direct labor, subcontract costs, materials, travel, and approved overhead and indirect costs. The 2024 ATI-RRPV Contract contains terms and conditions that are customary for contracts with HHS BARDA of this nature, including the U.S. government having the right to terminate the contract for convenience or to terminate for default if the Company fails to meet its obligations as set forth in the statement of work. Revenue from government contracts recognized on the 2024 ATI-RRPV Contract was $0.2 million for the three and six months ended June 30, 2024, based on costs incurred under the 2024 ATI-RRPV Contract. Management believes that if the 2024 ATI-RRPV Contract were to be terminated prior to completion of the Phase 2b comparative study, the costs incurred through the effective date of such termination and any settlement costs resulting from such termination would be allowable costs. Cost reimbursement payments to the Company are provisional payments subject to adjustment upon annual audit by the government. Management believes that revenue for periods not yet audited will be recorded in amounts that are expected to be realized upon final audit and settlement. When the final determination of the allowable costs for any year has been made, revenue and billings may be adjusted accordingly in the period that the adjustment is known. 2024 ASPR-BARDA Contract In January 2024, the Company was awarded a contract (the “2024 ASPR-BARDA Contract”) by HHS BARDA with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, the Company received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare the Company’s XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. The 2024 ASPR-BARDA Contract originally had a term that was set to expire in July 2024, but the Company entered into an amendment in July 2024 that extended the expiration date into October 2024. The Company accounts for the 2024 ASPR-BARDA Contract under Accounting Standards Codification 958-605 and recognizes revenue as donor-imposed conditions are met. Revenue from government contracts recognized on the 2024 ASPR-BARDA Contract was $6.2 million and $7.8 million for the three and six months ended June 30, 2024, respectively, based on the achievement of certain milestones under the 2024 ASPR-BARDA Contract. Grant Revenue In November 2022, the Company accepted a $3.5 million grant to perform research and development work for the Bill & Melinda Gates Foundation (the “BMGF Grant”) and received $2.0 million in advance that was recorded as restricted cash and deferred revenue. The Company received an additional $1.5 million in July 2023 upon completion of certain milestones. The Company recognizes revenue under research contracts only when a contract is executed and the contract price is fixed or determinable. Revenue from the BMGF Grant was recognized in the period during which the related costs were incurred and the related services rendered, as the applicable conditions under the contract were met. Costs of contract revenue were recorded as a component of operating expenses in the condensed consolidated statements of operations and comprehensive loss. The Company recognized revenue from the BMGF Grant of zero and $1.3 million for the three months ended June 30, 2024 and 2023, respectively, and zero and $1.7 million for the six months ended June 30, 2024 and 2023, respectively. The Company fully recognized revenue from the BMGF Grant during the year ended December 31, 2023.

Note 5 - Revenue

6 Months Ended

Jun. 30, 2024

NOTE 5. Revenue

Royalty Revenue Related to Sale of Future Royalties

The Company generates royalty revenue from the sale of Inavir in Japan, pursuant to a collaboration and license agreement that Aviragen entered into with Daiichi Sankyo Company, Limited (“Daiichi Sankyo”) in 2009. In September 2010, laninamivir octanoate was approved for sale by the Japanese Ministry of Health and Welfare for the treatment of influenza in adults and children, which Daiichi Sankyo markets as Inavir. Under the agreement, the Company currently receives a 4% royalty on net sales of Inavir in Japan. Based on information provided by Daiichi Sankyo, the Company believes the expiration of the last patent related to Inavir is in August 2036, at which time royalty revenue will cease. The Company’s royalty revenue is seasonal, in line with the flu season, so the majority of the Company’s royalty revenue and non-cash royalty revenue related to the sale of future royalties are earned in the first and fourth fiscal quarters. The royalty revenue related to Inavir recognized for the six months ended June 30, 2024 and 2023, was zero. The Company recognized non-cash royalty revenue related to sale of future royalties of $37,000 and $30,000 for the three months ended June 30, 2024 and 2023, respectively, and $0.6 million and $0.3 million for the six months ended June 30, 2024 and 2023, respectively. Both royalty revenue and the non-cash royalty revenue related to the sale of future royalties are subject to a 5% withholding tax in Japan, for which $2,000 and $1,000 was included in income tax expense for the three months ended June 30, 2024 and 2023, respectively, and $31,000 and $15,000 for the six months ended June 30, 2024 and 2023, respectively, further detailed in Note 6.

Revenue from Government Contracts

The Company recognized revenue from government contracts of $6.4 million and $8.0 million for the three and six months ended June 30, 2024, respectively, consisting of revenues from the 2024 ASPR-BARDA Contract (as defined below) and the 2024 ATI-RRPV Contract (as defined below) described in more detail below. Unbilled receivable from government contracts consists of government fixed fee revenue from HHS BARDA, which was earned and not yet billed. As of June 30, 2024, the amount of unbilled receivable was $3.7 million.

2024 ATI-RRPV Contract

In June 2024, the Company entered into an agreement (the “2024 ATI-RRPV Contract”) with Advanced Technology International, the Rapid Response Partnership Vehicle’s Consortium Management Firm funded by HHS BARDA. Pursuant to the 2024 ATI-RRPV Contract, the Company will receive funding of up to $452.9 million to conduct a Phase 2b comparative study evaluating the Company’s oral pill XBB COVID-19 vaccine candidate against an mRNA vaccine comparator approved by the U.S. Food and Drug Administration. The 2024 ATI-RRPV Contract provides for an initial award in the aggregate amount of up to $65.7 million, consisting of a fixed fee of $64.7 million and reimbursement of costs incurred in trial preparation activities. The 2024 ATI-RRPV Contract further contemplates additional funding up to $387.2 million if the Company and HHS BARDA decide to continue with the Phase 2b comparative study. The Company accounts for the 2024 ATI-RRPV Contract under Accounting Standards Codification 958-605 and recognizes revenue as the firm fixed-price milestone is earned and allowable cost-plus-fixed-fees are incurred. Reimbursable costs under the 2024 ATI-RRPV Contract primarily include direct labor, subcontract costs, materials, travel, and approved overhead and indirect costs. The 2024 ATI-RRPV Contract contains terms and conditions that are customary for contracts with HHS BARDA of this nature, including the U.S. government having the right to terminate the contract for convenience or to terminate for default if the Company fails to meet its obligations as set forth in the statement of work. Revenue from government contracts recognized on the 2024 ATI-RRPV Contract was $0.2 million for the three and six months ended June 30, 2024, based on costs incurred under the 2024 ATI-RRPV Contract.

Management believes that if the 2024 ATI-RRPV Contract were to be terminated prior to completion of the Phase 2b comparative study, the costs incurred through the effective date of such termination and any settlement costs resulting from such termination would be allowable costs. Cost reimbursement payments to the Company are provisional payments subject to adjustment upon annual audit by the government. Management believes that revenue for periods not yet audited will be recorded in amounts that are expected to be realized upon final audit and settlement. When the final determination of the allowable costs for any year has been made, revenue and billings may be adjusted accordingly in the period that the adjustment is known.

2024 ASPR-BARDA Contract

In January 2024, the Company was awarded a contract (the “2024 ASPR-BARDA Contract”) by HHS BARDA with a base and all options value of $9.3 million. Under the 2024 ASPR-BARDA Contract, the Company received an award to support clinical trial planning activities for a Phase 2b clinical trial that would compare the Company’s XBB vaccine candidate to an mRNA comparator to evaluate efficacy for symptomatic and asymptomatic disease, systemic and mucosal immune induction, and adverse events. The 2024 ASPR-BARDA Contract originally had a term that was set to expire in July 2024, but the Company entered into an amendment in July 2024 that extended the expiration date into October 2024. The Company accounts for the 2024 ASPR-BARDA Contract under Accounting Standards Codification 958-605 and recognizes revenue as donor-imposed conditions are met. Revenue from government contracts recognized on the 2024 ASPR-BARDA Contract was $6.2 million and $7.8 million for the three and six months ended June 30, 2024, respectively, based on the achievement of certain milestones under the 2024 ASPR-BARDA Contract.

Grant Revenue

In November 2022, the Company accepted a $3.5 million grant to perform research and development work for the Bill & Melinda Gates Foundation (the “BMGF Grant”) and received $2.0 million in advance that was recorded as restricted cash and deferred revenue. The Company received an additional $1.5 million in July 2023 upon completion of certain milestones. The Company recognizes revenue under research contracts only when a contract is executed and the contract price is fixed or determinable. Revenue from the BMGF Grant was recognized in the period during which the related costs were incurred and the related services rendered, as the applicable conditions under the contract were met. Costs of contract revenue were recorded as a component of operating expenses in the condensed consolidated statements of operations and comprehensive loss. The Company recognized revenue from the BMGF Grant of zero and $1.3 million for the three months ended June 30, 2024 and 2023, respectively, and zero and $1.7 million for the six months ended June 30, 2024 and 2023, respectively. The Company fully recognized revenue from the BMGF Grant during the year ended December 31, 2023.