Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

a. Operating Leases

As of December 31, 2012, we leased office, manufacturing and laboratory space, under lease agreements expiring in December 2020.

Rental payments are recognized as rent expense on a straight-line basis over the term of the lease. In addition to rents due under these agreements, we are obligated to pay additional facilities charges, including utilities, taxes and operating expenses. We also lease certain office equipment under non-cancelable operating leases, which expire at various times through April 2013.

As of December 31, 2012, future minimum annual payments under all operating lease agreements are as follows:

Years ending December 31,	MinimumAnnual Payments
2013	$	2,410
2014		2,410
2015		2,470
2016		2,532
2017		2,595
Thereafter		8,182
Total	$	20,599

Rental expense totaled approximately $2,074, $3,475 and $3,544 for 2012, 2011 and 2010, respectively. For 2012 amounts paid exceeded rent expense by $419, due to the recognition of lease incentives. For 2011 and 2010, we recognized rent expense in excess of amounts paid of $63 and $181, respectively, due to the recognition of escalation clauses and lease incentives. Additional facility charges, including utilities, taxes and operating expenses, for 2012, 2011 and 2010 were approximately $2,845, $4,033 and $3,645, respectively.

b. Licensing, Service, Supply and Related Party Agreements

Progenics has entered into intellectual property-based license and service agreements in connection with its product development programs. Progenics has recognized milestone, license and sublicense fees and supply costs, which are included in research and development expenses, totaling approximately $1,170, $578 and $1,266 for 2012, 2011 and 2010, respectively.

Agreement	Paid from inception to December 31, 2012		Future (1) Commitments		Terms
Progenics agreements with:
Lonza Sales AG	$	909	$	808	Annual license fee payments, milestones and royalties, as applicable, in respect of oncology and other products.
PSMA LLC agreements with:
Seattle Genetics, Inc.		4,400		13,800	Milestone and periodic maintenance payments to use ADC technology to link chemotherapeutic agents to monoclonal antibodies that target prostate specific membrane antigen. ADC technology is based in part on technology licensed by SGI from third parties.
Amgen Fremont, Inc. (formerly Abgenix)		1,350		5,750	Milestones and royalties to use XenoMouse® technology for generating fully human antibodies to PSMA LLC's PSMA antigen.
Former member of PSMA LLC		241		52,216	Annual minimum royalty payments and milestones to use technology related to PSMA.

⁽¹⁾Amounts based on known contractual obligations as specified in the respective license agreements, which are dependent on the achievement or occurrence of future milestones or events and exclude amounts for royalties which are dependent on future sales and are unknown.

c. Consulting Agreements

As part of our research and development efforts, we have from time to time entered into consulting agreements with external scientific specialists. These agreements contain various terms and provisions, including fees to be paid by us and royalties, in the event of future sales, and milestone payments, upon achievement of defined events, payable by us. Certain of these scientists are advisors to Progenics, and some have purchased our Common Stock or received stock options which are subject to vesting provisions. Two members of our Board formerly had consulting agreements; no payments in respect of these agreements have been made since 2010. We have recognized expenses with regard to the consulting agreements of $8, $27 and $179 for 2012, 2011 and 2010, respectively. Those expenses include the fair value of stock options granted during 2011 and 2010, which were fully vested at grant date, of approximately $11 and $42, respectively. Such amounts of fair value are included in research and development expense for each year presented (see Note 10).

d. Retirement Agreement

On March 14, 2012, Progenics and company founder Paul J. Maddon entered into an agreement providing for his retirement as Chief Science Officer. In connection with Dr. Maddon's retirement and termination of his employment agreement, Progenics agreed to pay him an amount equal to $1,789 and provide other benefits under the agreement.

e. Related Party Agreement

In December 2012, Progenics entered into a financial advisory agreement with MTS Health Partners, L.P., of which the Company's Board Chair is a Senior Managing Director and partner, on customary terms and conditions, whereby MTS will receive a monthly retainer of $10 during the term of the agreement (which may be terminated by either party on 30 days notice), $300 for MTS' services in connection with the Molecular Insight acquisition described in Note 15, and in connection with other transactions, if any, as to which MTS provides services to the Company, such other amounts as the parties may mutually agree.