LICENSE AND COLLABORATION AGREEMENTS	12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LICENSE AND COLLABORATION AGREEMENTS	3. LICENSE AND COLLABORATION AGREEMENTS F. Hoffman-La Roche Ltd. On December 21, 2019, the Company entered into a license, collaboration and option agreement with Roche and a stock purchase agreement (the “Roche Agreement”) with Roche, providing Roche with exclusive commercial rights to ELEVIDYS outside the U.S. The Company retains all rights to ELEVIDYS in the U.S. and will perform all development activities within the joint global development plan necessary to obtain and maintain regulatory approvals for ELEVIDYS in the U.S. and the EU, unless otherwise agreed to by the parties. Further: (i) research and development expenses incurred under the joint global development plan will be equally shared between the Company and Roche, (ii) Roche is solely responsible for all costs incurred in connection with any development activities (other than those within the joint global development plan) that are necessary to obtain or maintain regulatory approvals outside the U.S, and (iii) the Company will continue to be responsible for the manufacturing of clinical and commercial supplies of ELEVIDYS. The Company has also granted Roche options to acquire ex-U.S. rights to certain future Duchenne-specific programs (the “Options”) in exchange for separate option exercise payments, milestone and royalty considerations, and cost-sharing provisions. The agreement became effective on February 4, 2020. The Roche Agreement is governed by a joint steering committee (“JSC”) formed by representatives from Roche and the Company. The JSC, among other activities, manages the overall strategic alignment between the parties, approves any material update to the joint global development plan and budget and oversees the operations of the subcommittees. The Company received an aggregate of approximately $1.2 billion in cash consideration from Roche, consisting of an up-front payment and an equity investment in the Company. The Company may receive up to $1.7 billion in development, regulatory and sales milestones related to ELEVIDYS. Upon commercial sale of ELEVIDYS outside of the U.S., the Company will become eligible to receive tiered royalty payments on net sales based on the average cost to manufacture ELEVIDYS. Of the $1.2 billion up-front cash received from Roche, (i) $312.1 million, net of issuance costs, was allocated to the approximately 2.5 million shares of the Company’s common stock issued to Roche based on the closing price when the shares were issued, (ii) $485.0 million was allocated to the Options, and (iii) $348.7 million was allocated to a single, combined performance obligation (“Combined Performance Obligation”) comprised of: (i) the license of IP relating to ELEVIDYS transferred to Roche, (ii) the related research and development services provided under the joint global development plan, (iii) the services provided to manufacture clinical supplies of ELEVIDYS, and (iv) the Company’s participation in the JSC, because the Company determined that the license of IP and related activities were not capable of being distinct from one another. The value assigned to the Options is reflected as deferred revenue and will not be recognized until an option is either: (i) exercised by Roche, or (ii) expires. If exercised, the value will be aggregated with the option exercise price and recognized over the applicable performance period. If expired, the value will be recognized immediately. The Company recognizes revenue related to the Combined Performance Obligation on a straight-line basis over the expected performance period of the joint global development plan, which extended through the fourth quarter of 2023. Revenue relating to future development, regulatory and sales milestones will be recognized when the milestone is probable of achievement (which is typically when the milestone has occurred). Any royalties payable by Roche in the future will be recognized in the period earned. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $98.5 million, $89.2 million and $89.5 million of collaboration and other revenues, respectively, the majority of which relates to the amortization of the Combined Performance Obligation. As of December 31, 2023, the fair value allocated to Combined Performance Obligation was fully amortized. As of December 31, 2023, the Company has total deferred revenue of $487.4 million, which is primarily associated with the Roche Agreement, of which $50.4 million is classified as current. Through 2023, no Options were exercised or expired. As such, deferred revenue related to the separate material rights for the Options remained unchanged at $485.0 million as of December 31, 2023 and 2022. On February 12, 2024, Roche declined to exercise a certain Option, which resulted in that Option's expiry and the immediate recognition of the value assigned to that Option as collaboration revenue. As such, the Company will recognize $48.0 million of collaboration revenue during the three months ended March 31, 2024 and as of December 31, 2023, this amount is appropriately classified as deferred revenue, current portion, on the Company's consolidated balance sheets. In accordance with the Roche Agreement, the parties agreed to enter into a supply agreement with Roche in order to supply them with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, the Company delivered several batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the year ended December 31, 2023, the Company recognized $9.2 million of contract manufacturing revenue related to these shipments, with no similar activity for the years ended December 31, 2022 or 2021. This revenue is included in collaboration and other revenues in the consolidated statements of operations and comprehensive loss. For the year ended December 31, 2023, the Company recognized $1.8 million of inventory costs related to these shipments, which is included in costs of goods sold in the consolidated statements of operations and comprehensive loss. As of December 31, 2023, there was $7.1 million of contract manufacturing collaboration receivable included in other current assets on the consolidated balance sheets. The costs associated with co-development activities performed under the Roche Agreement are included in operating expenses, with any reimbursement of costs by Roche reflected as a reduction of such expenses when the related expense is incurred. For the years ended December 31, 2023, 2022 and 2021, costs reimbursable by Roche and reflected as a reduction to operating expenses were $106.9 million, $117.8 million and $90.5 million, respectively. As of December 31, 2023 and 2022, there was $29.8 million and $41.8 million of collaboration and other receivables included in other current assets on the consolidated balance sheets, respectively. Genethon The Company entered into a sponsored research agreement in May 2017 and subsequently entered into a license and collaboration agreement with Genethon in November 2019 (the “Genethon Collaboration Agreement”) for Genethon’s micro-dystrophin gene therapy program for the treatment of Duchenne. The Genethon Collaboration Agreement grants the Company with exclusive rights in the majority of the world (primarily excluding the EU) to Genethon’s micro-dystrophin gene therapy products (“Genethon Products”) and other micro-dystrophin gene therapy products (“Other Licensed Products”). The Company may be liable for up to $157.5 million and $78.8 million in development, regulatory and sales milestones for the Genethon Products and Other Licensed Products, respectively. Furthermore, upon commercialization, the Company will be required to make tiered royalty payments based on net sales of the Genethon Products and the Other Licensed Products. Under the Genethon Collaboration Agreement, a joint steering committee was established to plan, monitor and coordinate development activities for Genethon Products and Other Licensed Products. The Company and Genethon are responsible for 75% and 25%, respectively, of development costs related to both the Genethon Products and the Other Licensed Products. Upon signing the Genethon Collaboration Agreement, the Company made an up-front payment of $28.0 million, which was recorded as research and development expense in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. Additionally, for the years ended December 31, 2023, 2022 and 2021, the Company recorded $6.6 million, $3.5 million and $11.7 million, respectively, of research and development expense related to reimbursable development costs incurred by Genethon for Genethon Products. For the year ended December 31, 2021, the Company recorded $4.0 million of research and development expense related to milestone achievements, with no similar activity during for the years ended December 31, 2023 and 2022. No additional development or regulatory milestones were deemed probable of being achieved and, accordingly, no additional expense has been recognized. Myonexus Therapeutics Inc. In April 2019, the Company completed its acquisition of Myonexus Therapeutics, Inc. (“Myonexus”), a clinical-stage gene therapy biotechnology company that was developing gene therapies for LGMD for $178.3 million. The Company may also be required to make up to $200.0 million in additional payments to selling shareholders of Myonexus based on the achievement of certain sales-and regulatory- related milestones. The acquisition was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets (the five LGMD gene therapy programs). The Company determined that one regulatory-related milestone (not solely based on drug approval by the FDA) met the definition of a derivative and recorded a contingent consideration liability. As of December 31, 2023 and 2022, the contingent consideration liability was $37.7 million and $35.5 million, respectively. The changes in fair value are recorded within other income (expense), net, in the Company’s consolidated statements of operations and comprehensive loss. Please read Note 5, Fair Value Measurements for further information on the change in fair value of the contingent consideration liability. Lacerta Therapeutics In August 2018, the Company entered into a license, development and option agreement (the “Lacerta License Agreement”) and a Series A Preferred Stock Purchase Agreement (the “Lacerta Stock Purchase Agreement”) with Lacerta Therapeutics, Inc. (“Lacerta”). The Lacerta License Agreement was terminated on May 8, 2023. The Company is no longer liable for any remaining development, regulatory and sales milestones associated with the Pompe License and is no longer required to make tiered royalty payments based on net sales of the Pompe product subsequent to its commercialization following termination of the Lacerta License Agreement. Under the Lacerta Stock Purchase Agreement, the Company purchased approximately 4.5 million shares of Series A preferred stock issued by Lacerta. Of the up-front payment of $38.0 million paid to Lacerta, $30.0 million was allocated to the Series A preferred stock investment and recorded as an other non-current asset in the accompanying consolidated balance sheets. Changes in the carrying value of the investment are reported as a component of earnings whenever there are triggering events that warrant impairment or observable price changes in orderly transactions for identical or similar investments of Lacerta in the future. For the year ended December 31, 2023, the Company fully wrote off its investment in Series A preferred stock of Lacerta and recorded an impairment loss of $30.0 million. For more information related to the Company's investment in Lacerta and the impairment incurred during the year ended December 31, 2023, please refer to Note 5, Fair Value Measurements. Nationwide Children’s Hospital In December 2016, the Company entered into an exclusive option agreement with Nationwide from which the Company obtained an exclusive right to acquire a worldwide license of the micro-dystrophin gene therapy technology for Duchenne and Becker muscular dystrophy. In October 2018, the Company exercised the option and entered into a license agreement with Nationwide, which granted the Company exclusive worldwide rights to develop, manufacture and commercialize a micro-dystrophin gene therapy product candidate. Under this agreement, the Company is liable for future regulatory milestone, sales milestone and sublicense payments as well as lower single-digit royalties upon commercialization. In July 2021, the Company entered into an agreement with Nationwide, settling a dispute relating to a sublicense payment owed by the Company resulting from the up-front payment received from Roche under the Roche Agreement and paid Nationwide $38.0 million. As a result of this payment, the Company has no further financial obligations to Nationwide resulting from the up-front payment received under the Roche Agreement. During the year ended December 31, 2023, the Company recorded $23.0 million as an in-licensed right intangible asset in its consolidated balance sheets, $10.0 million of which related to the regulatory approval of ELEVIDYS, and the remaining related to sales-based milestones as the Company determined that all sales-based milestones were achieved or were probable of being achieved. As of December 31, 2023, the in-licensed right asset with a net carrying value of $22.2 million is being amortized on a straight-line basis over the remaining life of the relevant patent. Royalty payments due to Nationwide associated with commercial sales of ELEVIDYS totaled $6.0 million for the year ended December 31, 2023 and were recorded as cost of sales in the accompanying consolidated statements of operations and comprehensive loss. BioMarin Pharmaceutical, Inc. In July 2017, the Company and UWA entered into a settlement agreement with BioMarin, and simultaneously entered into a license agreement, which was subsequently amended in April 2019 (the “BioMarin Agreement”), with BioMarin and Academisch Ziekenhuis Leiden (collectively with the Company, UWA and BioMarin, the “Settlement Parties”). The BioMarin Agreement provides the Company with an exclusive license to certain intellectual property with an option to convert the exclusive license into a co-exclusive license and the Settlement Parties agreed to stop most existing efforts to continue with ongoing litigation and opposition and other administrative proceedings concerning BioMarin’s intellectual property. BioMarin is also eligible to receive tiered royalty payments, ranging from 4% to 8%, based on the net sales for the three products and product candidates. In November 2021, the Company entered into a second settlement agreement and second amendment to the license agreement (the “Second Amendment”), which waived certain future milestone payments and altered royalty payment terms of the agreement. Under the Second Amendment, the Company may be liable for up to approximately $50.0 million in regulatory milestones for eteplirsen, casimersen and golodirsen. In addition, on and after July 1, 2022, the tiered royalty payments ranged from 4% to 5%. The royalty terms under the license agreement will expire in March 2024 in the U.S., December 2024 in the EU and no later than December 2024 in other countries. As a result of the execution of the license agreement with BioMarin, the Company recorded an in-licensed right intangible asset of $6.6 million in its consolidated balance sheets as of December 31, 2017, representing the fair value of the U.S. license to BioMarin’s intellectual property. The intangible asset is being amortized on a straight-line basis over the remaining life of the patent and has a carrying value of $2.3 million as of December 31, 2023. The FDA approval of AMONDYS 45 in February 2021 resulted in a settlement charge to BioMarin of $10.0 million during the year ended December 31, 2021 and was expensed as incurred. For the years ended December 31, 2023, 2022 and 2021, the Company recognized royalty expense of $17.6 million, $30.4 million and $31.4 million, respectively, which is included in cost of sales in the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2023, no other regulatory milestones were deemed probable of being achieved and, accordingly, no additional in-licensed rights or expenses have been recognized. University of Western Australia In April 2013, the Company and UWA entered into an amendment to an existing exclusive license agreement relating to the treatment of Duchenne by inducing the skipping of certain exons. The agreement was further amended in June 2016. Under the amended agreement, the Company may be obligated to make payments to UWA totaling up to $26.0 million upon the achievement of certain development, regulatory and sales milestones. Additionally, the Company is required to pay a low-single-digit percentage royalty on net sales of products covered by issued patents licensed under the agreements with UWA. Corresponding to the FDA approval of EXONDYS 51 in 2016, VYONDYS 53 in 2019, and AMONDYS 45 in 2021, the Company recorded milestone payments of $1.0 million, $0.5 million and $0.5 million as in-licensed right intangible assets in its consolidated balance sheets, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patents and have a combined carrying value of $0.7 million as of December 31, 2023. For the years ended December 31, 2023, 2022 and 2021, the Company recorded $11.8 million, $10.5 million and $7.7 million in royalty expense, respectively, which is included in cost of sales, related to agreements with UWA. For the year ended December 31, 2023, no other development, regulatory or sales milestones were deemed probable of being achieved and, accordingly, no additional in-licensed rights or expenses have been recognized. Research and Option Agreements The Company has research and option agreements with third parties in order to develop various technologies and biologics that may be used in the administration of the Company’s genetic therapeutics. The agreements generally provide for research services related to pre-clinical development programs and options to license the technology for clinical development. Prior to the options under these agreements being executed, the Company may be required to make up to $34.8 million in research milestone payments. Under these agreements, there are $165.8 million in potential option payments to be made by the Company upon the determination to exercise the options. Additionally, if the options for each agreement are executed, the Company would incur additional contingent obligations and may be required to make development, regulatory, and sales milestone payments and tiered royalty payments based on the sales of the developed products upon commercialization. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $5.1 million, $6.0 million, and $3.0 million in research, option and milestone expense as research and development expense in the accompanying consolidated statements of operations and comprehensive loss, respectively. For the years ended December 31, 2023 and 2022, the Company exercised options in a research and option agreement and recognized $7.5 million and $8.5 million, respectively, of up-front expense as research and development expense in the accompanying consolidated statements of operations and comprehensive loss, separately from the research, option and milestone expense listed above. No option exercise payments were made during the year ended December 31, 2021. Milestone Obligations Including the agreements discussed above, the Company has license and collaboration agreements in place for which it could be obligated to pay, in addition to the payment of up-front fees upon execution of the agreements, certain milestone payments as a product candidate proceeds from the submission of an investigational new drug application through approval for commercial sale and beyond. As of December 31, 2023, the Company may be obligated to make up to $3.2 billion of future development, regulatory, commercial, and up-front royalty payments associated with its collaboration and license agreements. These obligations exclude potential future option and milestone payments for options that have yet to be exercised within agreements entered into by the Company as of December 31, 2023, which are discussed above. For the years ended December 31, 2023, 2022 and 2021, the Company recognized approximately $13.2 million, $32.6 million and $50.3 million relating to certain up-front, milestone, settlement and other payments as research and development expense, respectively, under these agreements.

LICENSE AND COLLABORATION AGREEMENTS

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

3. LICENSE AND COLLABORATION AGREEMENTS

F. Hoffman-La Roche Ltd.

On December 21, 2019, the Company entered into a license, collaboration and option agreement with Roche and a stock purchase agreement (the “Roche Agreement”) with Roche, providing Roche with exclusive commercial rights to ELEVIDYS outside the U.S. The Company retains all rights to ELEVIDYS in the U.S. and will perform all development activities within the joint global development plan necessary to obtain and maintain regulatory approvals for ELEVIDYS in the U.S. and the EU, unless otherwise agreed to by the parties. Further: (i) research and development expenses incurred under the joint global development plan will be equally shared between the Company and Roche, (ii) Roche is solely responsible for all costs incurred in connection with any development activities (other than those within the joint global development plan) that are necessary to obtain or maintain regulatory approvals outside the U.S, and (iii) the Company will continue to be responsible for the manufacturing of clinical and commercial supplies of ELEVIDYS. The Company has also granted Roche options to acquire ex-U.S. rights to certain future Duchenne-specific programs (the “Options”) in exchange for separate option exercise payments, milestone and royalty considerations, and cost-sharing provisions. The agreement became effective on February 4, 2020. The Roche Agreement is governed by a joint steering committee (“JSC”) formed by representatives from Roche and the Company. The JSC, among other activities, manages the overall strategic alignment between the parties, approves any material update to the joint global development plan and budget and oversees the operations of the subcommittees.

The Company received an aggregate of approximately $1.2 billion in cash consideration from Roche, consisting of an up-front payment and an equity investment in the Company. The Company may receive up to $1.7 billion in development, regulatory and sales milestones related to ELEVIDYS. Upon commercial sale of ELEVIDYS outside of the U.S., the Company will become eligible to receive tiered royalty payments on net sales based on the average cost to manufacture ELEVIDYS. Of the $1.2 billion up-front cash received from Roche, (i) $312.1 million, net of issuance costs, was allocated to the approximately 2.5 million shares of the Company’s common stock issued to Roche based on the closing price when the shares were issued, (ii) $485.0 million was allocated to the Options, and (iii) $348.7 million was allocated to a single, combined performance obligation (“Combined Performance Obligation”) comprised of: (i) the license of IP relating to ELEVIDYS transferred to Roche, (ii) the related research and development services provided under the joint global development plan, (iii) the services provided to manufacture clinical supplies of ELEVIDYS, and (iv) the Company’s participation in the JSC, because the Company determined that the license of IP and related activities were not capable of being distinct from one another.

The value assigned to the Options is reflected as deferred revenue and will not be recognized until an option is either: (i) exercised by Roche, or (ii) expires. If exercised, the value will be aggregated with the option exercise price and recognized over the applicable performance period. If expired, the value will be recognized immediately. The Company recognizes revenue related to the Combined Performance Obligation on a straight-line basis over the expected performance period of the joint global development plan, which extended through the fourth quarter of 2023. Revenue relating to future development, regulatory and sales milestones will be recognized when the milestone is probable of achievement (which is typically when the milestone has occurred). Any royalties payable by Roche in the future will be recognized in the period earned.

For the years ended December 31, 2023, 2022 and 2021, the Company recognized $98.5 million, $89.2 million and $89.5 million of collaboration and other revenues, respectively, the majority of which relates to the amortization of the Combined Performance Obligation. As of December 31, 2023, the fair value allocated to Combined Performance Obligation was fully amortized.

As of December 31, 2023, the Company has total deferred revenue of $487.4 million, which is primarily associated with the Roche Agreement, of which $50.4 million is classified as current. Through 2023, no Options were exercised or expired. As such, deferred revenue related to the separate material rights for the Options remained unchanged at $485.0 million as of December 31, 2023 and 2022. On February 12, 2024, Roche declined to exercise a certain Option, which resulted in that Option's expiry and the immediate recognition of the value assigned to that Option as collaboration revenue. As such, the Company will recognize $48.0 million of collaboration revenue during the three months ended March 31, 2024 and as of December 31, 2023, this amount is appropriately classified as deferred revenue, current portion, on the Company's consolidated balance sheets.

In accordance with the Roche Agreement, the parties agreed to enter into a supply agreement with Roche in order to supply them with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, the Company delivered several batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the year ended December 31, 2023, the Company recognized $9.2 million of contract manufacturing revenue related to these shipments, with no similar activity for the years ended December 31, 2022 or 2021. This revenue is included in collaboration and other revenues in the consolidated statements of operations and comprehensive loss. For the year ended December 31, 2023, the Company recognized $1.8 million of inventory costs related to these shipments, which is included in costs of goods sold in the consolidated statements of operations and comprehensive loss. As of December 31, 2023, there was $7.1 million of contract manufacturing collaboration receivable included in other current assets on the consolidated balance sheets.

The costs associated with co-development activities performed under the Roche Agreement are included in operating expenses, with any reimbursement of costs by Roche reflected as a reduction of such expenses when the related expense is incurred. For the years ended December 31, 2023, 2022 and 2021, costs reimbursable by Roche and reflected as a reduction to operating expenses were $106.9 million, $117.8 million and $90.5 million, respectively. As of December 31, 2023 and 2022, there was $29.8 million and $41.8 million of collaboration and other receivables included in other current assets on the consolidated balance sheets, respectively.

Genethon

The Company entered into a sponsored research agreement in May 2017 and subsequently entered into a license and collaboration agreement with Genethon in November 2019 (the “Genethon Collaboration Agreement”) for Genethon’s micro-dystrophin gene therapy program for the treatment of Duchenne. The Genethon Collaboration Agreement grants the Company with exclusive rights in the majority of the world (primarily excluding the EU) to Genethon’s micro-dystrophin gene therapy products (“Genethon Products”) and other micro-dystrophin gene therapy products (“Other Licensed Products”). The Company may be liable for up to $157.5 million and $78.8 million in development, regulatory and sales milestones for the Genethon Products and Other Licensed Products, respectively. Furthermore, upon commercialization, the Company will be required to make tiered royalty payments based on net sales of the Genethon Products and the Other Licensed Products. Under the Genethon Collaboration Agreement, a joint steering committee was established to plan, monitor and coordinate development activities for Genethon Products and Other Licensed Products. The Company and Genethon are responsible for 75% and 25%, respectively, of development costs related to both the Genethon Products and the Other Licensed Products.

Upon signing the Genethon Collaboration Agreement, the Company made an up-front payment of $28.0 million, which was recorded as research and development expense in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. Additionally, for the years ended December 31, 2023, 2022 and 2021, the Company recorded $6.6 million, $3.5 million and $11.7 million, respectively, of research and development expense related to reimbursable development costs incurred by Genethon for Genethon Products. For the year ended December 31, 2021, the Company recorded $4.0 million of research and development expense related to milestone achievements, with no similar activity during for the years ended December 31, 2023 and 2022. No additional development or regulatory milestones were deemed probable of being achieved and, accordingly, no additional expense has been recognized.

Myonexus Therapeutics Inc.

In April 2019, the Company completed its acquisition of Myonexus Therapeutics, Inc. (“Myonexus”), a clinical-stage gene therapy biotechnology company that was developing gene therapies for LGMD for $178.3 million. The Company may also be required to make up to $200.0 million in additional payments to selling shareholders of Myonexus based on the achievement of certain sales-and regulatory- related milestones. The acquisition was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets (the five LGMD gene therapy programs). The Company determined that one regulatory-related milestone (not solely based on drug approval by the FDA) met the definition of a derivative and recorded a contingent consideration liability. As of December 31, 2023 and 2022, the contingent consideration liability was $37.7 million and $35.5 million, respectively. The changes in fair value are recorded within other income (expense), net, in the Company’s consolidated statements of operations and comprehensive loss. Please read Note 5, Fair Value Measurements for further information on the change in fair value of the contingent consideration liability.

Lacerta Therapeutics

In August 2018, the Company entered into a license, development and option agreement (the “Lacerta License Agreement”) and a Series A Preferred Stock Purchase Agreement (the “Lacerta Stock Purchase Agreement”) with Lacerta Therapeutics, Inc. (“Lacerta”). The Lacerta License Agreement was terminated on May 8, 2023. The Company is no longer liable for any remaining development, regulatory and sales milestones associated with the Pompe License and is no longer required to make tiered royalty payments based on net sales of the Pompe product subsequent to its commercialization following termination of the Lacerta License Agreement.

Under the Lacerta Stock Purchase Agreement, the Company purchased approximately 4.5 million shares of Series A preferred stock issued by Lacerta. Of the up-front payment of $38.0 million paid to Lacerta, $30.0 million was allocated to the Series A preferred stock investment and recorded as an other non-current asset in the accompanying consolidated balance sheets. Changes in the carrying value of the investment are reported as a component of earnings whenever there are triggering events that warrant impairment or observable price changes in orderly transactions for identical or similar investments of Lacerta in the future. For the year ended December 31, 2023, the Company fully wrote off its investment in Series A preferred stock of Lacerta and recorded an impairment loss of $30.0 million. For more information related to the Company's investment in Lacerta and the impairment incurred during the year ended December 31, 2023, please refer to Note 5, Fair Value Measurements.

Nationwide Children’s Hospital

In December 2016, the Company entered into an exclusive option agreement with Nationwide from which the Company obtained an exclusive right to acquire a worldwide license of the micro-dystrophin gene therapy technology for Duchenne and Becker muscular dystrophy. In October 2018, the Company exercised the option and entered into a license agreement with Nationwide, which granted the Company exclusive worldwide rights to develop, manufacture and commercialize a micro-dystrophin gene therapy product candidate. Under this agreement, the Company is liable for future regulatory milestone, sales milestone and sublicense payments as well as lower single-digit royalties upon commercialization.

In July 2021, the Company entered into an agreement with Nationwide, settling a dispute relating to a sublicense payment owed by the Company resulting from the up-front payment received from Roche under the Roche Agreement and paid Nationwide $38.0 million. As a result of this payment, the Company has no further financial obligations to Nationwide resulting from the up-front payment received under the Roche Agreement.

During the year ended December 31, 2023, the Company recorded $23.0 million as an in-licensed right intangible asset in its consolidated balance sheets, $10.0 million of which related to the regulatory approval of ELEVIDYS, and the remaining related to sales-based milestones as the Company determined that all sales-based milestones were achieved or were probable of being achieved. As of December 31, 2023, the in-licensed right asset with a net carrying value of $22.2 million is being amortized on a straight-line basis over the remaining life of the relevant patent. Royalty payments due to Nationwide associated with commercial sales of ELEVIDYS totaled $6.0 million for the year ended December 31, 2023 and were recorded as cost of sales in the accompanying consolidated statements of operations and comprehensive loss.

BioMarin Pharmaceutical, Inc.

In July 2017, the Company and UWA entered into a settlement agreement with BioMarin, and simultaneously entered into a license agreement, which was subsequently amended in April 2019 (the “BioMarin Agreement”), with BioMarin and Academisch Ziekenhuis Leiden (collectively with the Company, UWA and BioMarin, the “Settlement Parties”). The BioMarin Agreement provides the Company with an exclusive license to certain intellectual property with an option to convert the exclusive license into a co-exclusive license and the Settlement Parties agreed to stop most existing efforts to continue with ongoing litigation and opposition and other administrative proceedings concerning BioMarin’s intellectual property. BioMarin is also eligible to receive tiered royalty payments, ranging from 4% to 8%, based on the net sales for the three products and product candidates.

In November 2021, the Company entered into a second settlement agreement and second amendment to the license agreement (the “Second Amendment”), which waived certain future milestone payments and altered royalty payment terms of the agreement. Under the Second Amendment, the Company may be liable for up to approximately $50.0 million in regulatory milestones for eteplirsen, casimersen and golodirsen. In addition, on and after July 1, 2022, the tiered royalty payments ranged from 4% to 5%. The royalty terms under the license agreement will expire in March 2024 in the U.S., December 2024 in the EU and no later than December 2024 in other countries.

As a result of the execution of the license agreement with BioMarin, the Company recorded an in-licensed right intangible asset of $6.6 million in its consolidated balance sheets as of December 31, 2017, representing the fair value of the U.S. license to BioMarin’s intellectual property. The intangible asset is being amortized on a straight-line basis over the remaining life of the patent and has a carrying value of $2.3 million as of December 31, 2023.

The FDA approval of AMONDYS 45 in February 2021 resulted in a settlement charge to BioMarin of $10.0 million during the year ended December 31, 2021 and was expensed as incurred. For the years ended December 31, 2023, 2022 and 2021, the Company recognized royalty expense of $17.6 million, $30.4 million and $31.4 million, respectively, which is included in cost of sales in the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2023, no other regulatory milestones were deemed probable of being achieved and, accordingly, no additional in-licensed rights or expenses have been recognized.

University of Western Australia

In April 2013, the Company and UWA entered into an amendment to an existing exclusive license agreement relating to the treatment of Duchenne by inducing the skipping of certain exons. The agreement was further amended in June 2016. Under the amended agreement, the Company may be obligated to make payments to UWA totaling up to $26.0 million upon the achievement of certain development, regulatory and sales milestones. Additionally, the Company is required to pay a low-single-digit percentage royalty on net sales of products covered by issued patents licensed under the agreements with UWA. Corresponding to the FDA approval of EXONDYS 51 in 2016, VYONDYS 53 in 2019, and AMONDYS 45 in 2021, the Company recorded milestone payments of $1.0 million, $0.5 million and $0.5 million as in-licensed right intangible assets in its consolidated balance sheets, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patents and have a combined carrying value of $0.7 million as of December 31, 2023. For the years ended December 31, 2023, 2022 and 2021, the Company recorded $11.8 million, $10.5 million and $7.7 million in royalty expense, respectively, which is included in cost of sales, related to agreements with UWA. For the year ended December 31, 2023, no other development, regulatory or sales milestones were deemed probable of being achieved and, accordingly, no additional in-licensed rights or expenses have been recognized.

Research and Option Agreements

The Company has research and option agreements with third parties in order to develop various technologies and biologics that may be used in the administration of the Company’s genetic therapeutics. The agreements generally provide for research services related to pre-clinical development programs and options to license the technology for clinical development. Prior to the options under these agreements being executed, the Company may be required to make up to $34.8 million in research milestone payments. Under these agreements, there are $165.8 million in potential option payments to be made by the Company upon the determination to exercise the options. Additionally, if the options for each agreement are executed, the Company would incur additional contingent obligations and may be required to make development, regulatory, and sales milestone payments and tiered royalty payments based on the sales of the developed products upon commercialization.

For the years ended December 31, 2023, 2022 and 2021, the Company recognized $5.1 million, $6.0 million, and $3.0 million in research, option and milestone expense as research and development expense in the accompanying consolidated statements of operations and comprehensive loss, respectively. For the years ended December 31, 2023 and 2022, the Company exercised options in a research and option agreement and recognized $7.5 million and $8.5 million, respectively, of up-front expense as research and development expense in the accompanying consolidated statements of operations and comprehensive loss, separately from the research, option and milestone expense listed above. No option exercise payments were made during the year ended December 31, 2021.

Milestone Obligations

Including the agreements discussed above, the Company has license and collaboration agreements in place for which it could be obligated to pay, in addition to the payment of up-front fees upon execution of the agreements, certain milestone payments as a product candidate proceeds from the submission of an investigational new drug application through approval for commercial sale and beyond. As of December 31, 2023, the Company may be obligated to make up to $3.2 billion of future development, regulatory, commercial, and up-front royalty payments associated with its collaboration and license agreements. These obligations exclude potential future option and milestone payments for options that have yet to be exercised within agreements entered into by the Company as of December 31, 2023, which are discussed above. For the years ended December 31, 2023, 2022 and 2021, the Company recognized approximately $13.2 million, $32.6 million and $50.3 million relating to certain up-front, milestone, settlement and other payments as research and development expense, respectively, under these agreements.