COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Operating Lease

In August 2016, the Company entered into a multi-year, noncancelable lease for its Colorado-based office space, which was amended in June 2021 to, among other things, extend the lease term to December 31, 2022 (as amended, the “Boulder Lease”). Under the terms of the Boulder Lease, the Company may, at its option, renew the Boulder Lease for two additional terms of three years each. Upon adoption of ASC 842 and subsequent modification of the Boulder Lease, the Company recognized a right-of-use asset and corresponding lease liability for the lease. Minimum base lease payments under the lease agreement are recognized on a straight-line basis over the full term of the lease. In addition to base rental payments included in the contractual obligations table below, the Company is responsible for its pro rata share of the operating expenses for the building, which includes common area maintenance, utilities, property taxes, and insurance. Operating lease cost for the three months ended September 30, 2021 and 2020 was $16 thousand and $23 thousand, respectively. Lease expense for each of the nine months ended September 30, 2021 and 2020 was approximately $0.1 million.

The following is a summary of the contractual obligations related to operating lease commitments as of September 30, 2021, and the effect such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in thousands):


2021 (remaining three months)	$	5
2022	73

Total maturities	78
Less imputed interest	(5)
Present value of lease liability	$	73

License and Development Agreement with Voronoi

On August 27, 2021, the Company entered into a License and Development Agreement (the “Voronoi License Agreement”) with Voronoi Inc. (“Voronoi”), pursuant to which the Company acquired exclusive, worldwide rights to research, develop, and commercialize novel therapeutics generated from a proprietary DYRK1A inhibitor platform. In accordance with the terms of the Voronoi License Agreement, in exchange for the license rights, the Company made a one-time payment of $2.5 million in cash and issued $2.0 million, or 2,816,901 shares, of its common stock to Voronoi. As a result, the Company recorded $4.8 million in research and development expenses during the three and nine months ended September 30, 2021.

With respect to the first-generation compounds arising from the DYRK1A inhibitor platform, the Voronoi License Agreement provides that the Company will make payments to Voronoi of up to $211.0 million in the aggregate contingent upon achievement of specified development, regulatory, and commercial milestones. With

respect to the second-generation compounds arising from the DYRK1A inhibitor platform, the Company will make payments to Voronoi of up to $107.5 million in the aggregate contingent upon achievement of specified development, regulatory, and commercial milestones. Further, the Voronoi License Agreement provides that the Company will pay Voronoi tiered royalty payments ranging from low single digits up to 10% of net sales of products arising from the DYRK1A inhibitor platform. All of the contingent payments and royalties are payable in cash except for $1.0 million of the development and regulatory milestone payments, which amount is payable in shares of the Company’s common stock. Under the terms of the Voronoi License Agreement, the Company will be responsible for, and bear the future costs of, worldwide development and commercialization of all the licensed compounds.

Amended and Restated License Agreement with Bodor

In February 2020, the Company, together with Brickell Subsidiary and Bodor Laboratories, Inc. and Dr. Nicholas S. Bodor (collectively, “Bodor”) entered into an amended and restated license agreement (the “Amended and Restated License Agreement”). The Amended and Restated License Agreement supersedes the License Agreement, dated December 15, 2012, entered into between Brickell Subsidiary and Bodor, as amended by Amendment No. 1 to License Agreement, effective as of October 21, 2013, and Amendment No. 2 to License Agreement, effective as of March 31, 2015.

The Amended and Restated License Agreement retains with the Company a worldwide, exclusive license to develop, manufacture, market, sell, and sublicense products containing the proprietary compound sofpironium bromide based upon the patents referenced in the Amended and Restated License Agreement for a defined field of use. As of September 30, 2021, under the original License Agreement and the Amended and Restated License Agreement, the Company had remaining obligations to pay Bodor (i) a royalty on sales of product outside the Territory, including a low single-digit royalty on sales of certain product not covered by the patent estate licensed from Bodor; (ii) approximately 50 to 55% of all royalties the Company receives from Kaken for sales of product within the Territory; (iii) a percentage of non-royalty sublicensing income the Company receives from Kaken or other sublicensees; and (iv) up to an aggregate of $0.8 million (plus an additional $0.1 million for approvals of additional products) in cash payments and $1.0 million of shares of the Company’s common stock upon the achievement of certain regulatory milestones.

Under the terms of the Amended and Restated License Agreement, the Company made a $0.5 million milestone payment to Bodor following the closing of a public offering in June 2020 and accrued an additional $1.0 million related to its plan to initiate its U.S. Phase 3 pivotal program in the fourth quarter of 2020. As a result, the Company recorded $1.5 million as research and development expense in the condensed consolidated statements of operations during the nine months ended September 30, 2020. No similar or associated research and development expense was incurred in the three or nine months ended September 30, 2021, but the Company paid Bodor the applicable amount with respect to the royalties it received from Kaken for sales of ECCLOCK in Japan during those periods.