12.

License Agreements and Collaborations

Collaborations

In March 2009 and March 2010, the Company entered into collaboration agreements with a third-party to develop antibodies using the Synageva proprietary expression platform. The collaboration agreements included up-front payments of $0.2 million, potential future milestone payments to the Company totaling $0.4 million and potential option payments payable to the Company.

Revenue recognized under these collaboration agreements was $0.2 million, $0.3 million and $0.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. Revenue was recognized using the proportional performance method.

In August 2011, the Company entered into a collaboration agreement with Mitsubishi Tanabe Pharma Corporation ("Mitsubishi Tanabe") whereby the Company is utilizing its proprietary expression technology for the development of a certain targeted compound. The agreement includes an upfront license payment to the Company of $3.0 million, on-going reimbursement or funding of development costs, estimated during the initial development period to be approximately $1.5 million, and the potential for an additional payment due upon the successful completion of the initial development. Mitsubishi Tanabe also has an option to obtain an exclusive royalty-bearing license, with the right to grant sublicenses, to further develop and commercialize the licensed compound (the "Option"). Additionally, upon exercise of the Option, the parties intend to negotiate a follow-on collaboration and license agreement that may include potential future development and commercial sales based milestone payments, and potential royalty payments. The Company determined that the Option is substantive as the decision to exercise is in the control of Mitsubishi Tanabe and is not essential to the functionality of the other deliverables. Therefore, the Option was not considered to be a deliverable at the inception of the collaboration agreement. The Option terminates sixty days from date the Joint Steering Committee ("JSC") determines whether the initial development was successful.

The Company evaluated the collaboration agreement in accordance ASC 605-25 and ASU 2009-13 in order to determine whether the deliverables at the inception of the agreement: (i) the license , (ii) research services during the development period, and (iii) JSC participation should be accounted for as a single unit or multiple units of accounting. The Company concluded that the license does not have standalone value to Mitsubishi Tanabe because (i) Mitsubishi Tanabe does not have the ability to transfer or sublicense and (ii) the activities to be conducted during the development period are highly dependent on the Company's unique knowledge and understanding of its proprietary technology which is critical to optimizing the compound. The Company determined that the JSC is a deliverable through the development period. The Company concluded that the license, the research services performed during the development term and the JSC obligation represent a single unit of account.

Revenue recognized under this arrangement for the year ended December 31, 2011 totaled approximately $0.5 million. Revenue was recognized using the proportional performance method.

Roche Collaboration

The Roche License Agreement

On May 25, 2011, Trimeris entered into the Roche License Agreement with Roche, pursuant to which Roche has an exclusive license to manufacture and sell FUZEON worldwide and the Company receives royalty payments equal to 16% of worldwide net sales of FUZEON occurring from and after January 1, 2011. The Roche License Agreement superseded and replaced the Prior Roche Agreements. Under the Roche License Agreement, Roche may deduct from its royalty payments to us 50% of any royalties paid to third parties which are reasonably required to allow Roche to sell FUZEON in a given country, including royalties paid to Novartis Vaccines and Diagnostics, Inc. ("Novartis")." To calculate the royalty revenue paid to Synageva, a 5.5% distribution charge is deducted from Roche's reported net sales, and Synageva receives a 16% royalty on the adjusted net sales amount.

Roche may terminate the Roche License Agreement as a whole or for a particular country or countries in its sole discretion with advance notice. The Roche License Agreement will effectively terminate upon expiration of the last relevant patent covering FUZEON, which is expected to occur in 2021.

FUZEON is manufactured and distributed by Roche through Roche's sales and distribution network throughout the world in countries where regulatory approval has been received. Roche has control over all aspects of the commercialization of FUZEON, including, but not limited to, pricing, sales force activities and promotional activities.