Annual report pursuant to Section 13 and 15(d)

Note 18 - Agreements

v3.20.1
Note 18 - Agreements
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Significant Agreements Disclosure [Text Block]
1
8
.
Agreements
 
 
a.
License Agreements:
 In
January 2002,
we completed a license agreement with the University of California, San Diego (“UCSD”) for the exclusive world-wide rights to
Tc99m
tilmanocept.  The license agreement was effective until the later of the expiration date of the longest-lived underlying patent.  In
July 2014,
we amended the license agreement to extend the agreement until the
third
anniversary of the expiration date of the longest-lived underlying patent.  Under the terms of the license agreement, UCSD granted us the exclusive rights to make, use, sell, offer for sale and import licensed products as defined in the agreement and to practice the defined licensed methods during the term of the agreement.  We could also sublicense the patent rights, subject to certain sublicense terms as defined in the agreement.  In consideration for the license rights, we agreed to pay UCSD a license issue fee of
$25,000
and license maintenance fees of
$25,000
per year.  We also agreed to make payments to UCSD upon successfully reaching certain clinical, regulatory and cumulative sales milestones, and a royalty on net sales of licensed products subject to a
$25,000
minimum annual royalty.  In addition, we agreed to reimburse UCSD for all patent-related costs and to meet certain diligence targets.
 
In connection with the
March 2017
closing of the Asset Sale to Cardinal Health
414,
the Company amended and restated its
Tc99m
tilmanocept license agreement with UCSD pursuant to which UCSD granted a license to the Company to exploit certain intellectual property rights owned by UCSD and, separately, Cardinal Health
414
entered into a license agreement with UCSD pursuant to which UCSD granted a license to Cardinal Health
414
to exploit certain intellectual property rights owned by UCSD for Cardinal Health
414
to sell
Tc99m
tilmanocept in the United States, Canada and Mexico. Total costs related to the UCSD license agreement for net sales and royalties of
Tc99m
tilmanocept outside the United States, Canada and Mexico were
$2,000
and
$1,000
in
2019
and
2018,
respectively, and were recorded in cost of revenue. Total costs related to the UCSD license agreement for annual maintenance fees, milestones and patent-related costs were
$191,000
and
$35,000
in
2019
and
2018,
respectively, and were recorded in research and development expenses.
 
In
July 2014,
the Company executed an expanded license agreement for the exclusive world-wide rights to all diagnostic and therapeutic uses of tilmanocept (other than
Tc99m
tilmanocept used in lymphatic mapping). The license agreement is effective until the
third
anniversary of the expiration date of the longest-lived underlying patent. Under the terms of the license agreement, UCSD has granted us the exclusive rights to make, use, sell, offer for sale and import licensed products as defined in the agreement and to practice the defined licensed methods during the term of the agreement. We
may
also sublicense the patent rights, subject to certain sublicense terms as defined in the agreement. As consideration for the license rights, we agreed to pay UCSD a license issue fee of
$25,000
and license maintenance fees of
$25,000
per year. We also agreed to make payments to UCSD upon successfully reaching certain clinical, regulatory and cumulative sales milestones, and a royalty on net sales of licensed products subject to a
$25,000
minimum annual royalty. In addition, we agreed to reimburse UCSD for all patent-related costs and to meet certain diligence targets. Total costs related to the UCSD license agreement for tilmanocept were
$355,000
and
$250,000
in
2019
and
2018,
respectively, and were recorded in research and development expenses.
 
In
December 2011,
we executed a license agreement with AstraZeneca AB for
NAV4694,
a proprietary compound that is primarily intended for use in diagnosing Alzheimer’s disease and other CNS disorders.  The license agreement is effective until the later of the
tenth
anniversary of the
first
commercial sale of
NAV4694
or the expiration of the underlying patents.  Under the terms of the license agreement, AstraZeneca granted us an exclusive worldwide royalty-bearing license for
NAV4694
with the right to grant sublicenses.  In consideration for the license rights, we paid AstraZeneca a license issue fee of
$5.0
million upon execution of the agreement.  We also agreed to pay AstraZeneca up to
$6.5
million in contingent milestone payments based on the achievement of certain clinical development and regulatory filing milestones, and up to
$11.0
million in contingent milestone payments due following receipt of certain regulatory approvals and the initiation of commercial sales of the licensed product.  In addition, we agreed to pay AstraZeneca a royalty on net sales of licensed and sublicensed products.  In
April 2018,
the Company executed a sublicense agreement to provide Meilleur worldwide rights to conduct research using
NAV4694,
as well as an exclusive license for the development and commercialization of
NAV4694
in Australia, Canada, China, and Singapore.  Meilleur also has an option to commercialize worldwide.  Total costs related to the AstraZeneca license agreement were
$0
in both
2019
and
2018.
 
 
b
.
Employment Agreements:
As of
December 31, 2019,
we had an employment agreement with
one
of our senior officers. The employment agreement contains termination and/or change in control provisions that would entitle the officer to approximately
four
times his annual salary and vest outstanding restricted stock and options to purchase Common Stock if there is a termination without cause or change in control of the Company (as defined) and his employment terminates. As of
December 31, 2019,
our maximum contingent liability under this agreement in such an event is approximately
$2.0
million. The employment agreement generally also provides for severance, disability and death benefits.