On May 3, 2018, the Company entered into a Warrant to Purchase Common Stock Agreement (“Warrant Agreement”) with Myonexus Therapeutics, Inc. (“Myonexus”), a clinical-stage gene therapy biotechnology company that was developing gene therapies for Limb-Girdle muscular dystrophies (“LGMD”). Pursuant to the terms of the Warrant Agreement, the Company made an up-front payment of $60.0 million to purchase an exclusive option to acquire Myonexus for $200.0 million plus sales-related and regulatory-related contingent payments.

On February 27, 2019, the Company announced that it exercised the exclusive option to acquire Myonexus. The final exercise price as negotiated between the Company and Myonexus was $165.0 million. In addition, the Company incurred transaction fees and other fees associated with the exercise of approximately $8.8 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 closed on April 4, 2019.

As a result of the acquisition, the Company added five LGMD gene therapy programs, including MYO-101, MYO-102 and MYO-201 that are currently in Phase 1/2 clinical trials, to its research and development portfolio. The acquisition of Myonexus has been 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).

Additionally, the Company assessed whether any of the contingent payments met the definition of a derivative under ASC 815 and, therefore, should be accounted for as contingent consideration. The Company identified that one regulatory-related milestone (not solely based on drug approval by the FDA) met the definition of a derivative. As a result, the Company recorded a contingent consideration liability of $4.5 million at the acquisition date. Any changes in the fair value of the contingent consideration liability after the acquisition date will be reported in the Company’s statement of operations. This amount was estimated through a probability-weighted expected return method that incorporated industry-based probability adjusted assumptions relating to the achievement of the milestone and thus the likelihood of making the payments. This fair value measurement was based upon significant inputs not observable in the market and therefore represented a Level 3 fair value measurement. The Company did not assume any other liabilities as a result of the acquisition.

The following table summarizes the total consideration for the acquisition and the value of assets acquired and liability assumed:

Consideration
Purchase price	$	165,000
Transactions costs and other fees		8,753
Contingent consideration		4,500
Total consideration	$	178,253

Assets Acquired
Cash and cash equivalents	$	1,197
Prepaids		3,816
In-process research and development		173,240
Total assets acquired	$	178,253

Liability Assumed
Contingent consideration		4,500
Total liability assumed	$	4,500

The acquired in-process research and development asset relates to the LGMD asset group. Due to the stage of development of this asset group, significant risk remains, and it is not yet probable that there is future economic benefit from this asset. Absent successful clinical results and regulatory approval, there is no alternative future use associated with the LGMD asset group. Accordingly, the value of this asset of $173.2 million was immediately expensed to research and development expense during the three months ended June 30, 2019.

The portion of the $200.0 million in contingent payments related to the sales milestone will be accrued when and if the sales milestone becomes probable of being achieved, and the related payment will be capitalized and amortized over the life of the patent. As of September 30, 2019, the sales milestone was not probable of being achieved and, therefore, no assets or expense were recognized.

On October 3, 2016, the Company entered into an exclusive Collaboration and License Agreement (the “Collaboration Agreement”) with Summit (Oxford) Ltd. (“Summit”), which grants us the exclusive right to commercialize products in Summit’s utrophin modulator pipeline in the EU, Switzerland, Norway, Iceland, Turkey and the Commonwealth of Independent States. On June 27, 2018, Summit announced that it decided to discontinue the development of ezutromid after reviewing the top-line results from its Phase 2 trial. On August 16, 2019, the Company terminated the Collaboration Agreement. As of September 30, 2019, the Company had $0.5 million remaining to be paid to Summit in accordance with the agreement. There were no additional charges associated with the termination of the agreement.

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 September 30, 2019, the Company may be obligated to make up to $1,508.7 million of future development, regulatory, commercial, and up-front royalty milestone payments associated with its license and collaboration agreements. For the three and nine months ended September 30, 2019, the Company recognized up-front and milestone expenses of $10.2 million and $25.7 million, respectively, as research and development expense in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss. For the three and nine months ended September 30, 2018, the Company recognized up-front and milestone expenses of $18.0 million and $78.0 million, respectively, as research and development expense in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.