Deferred revenue increased by $47.7 million from $2.1 million at
January 1, 2020 to $49.8 million at September 30, 2020. The
movement is largely due to the upfront payment of $50.0 million
received under the Astellas Collaboration Agreement in January 2020
offset by revenue recognized under our collaboration agreements in
the nine months ended September 30, 2020.
As of December 31, 2019, there was deferred revenue of $2.1 million
associated with the third target under the GSK Collaboration
Agreement, of which $0.4 million and $1.5 million was recognized as
revenue in the three and nine months ended September 30, 2020
respectively.
The Astellas Collaboration Agreement
On January 13, 2020, the Company entered into the Astellas
Collaboration Agreement. The Company received $50.0 million as a
non-refundable upfront payment in January 2020 after entering into
the agreement. Under the agreement the parties will agree on up to
three targets and will co-develop T-cell therapies directed to
those targets pursuant to an agreed research plan. For each target,
Astellas will fund co-development up until completion of a Phase 1
trial for products directed to such target.
Upon successful completion of the Phase 1 trial for a product,
Astellas and Adaptimmune will elect whether to progress with
co-development and co-commercialization of such product, or to
allow the other party to pursue the candidate independently. If the
parties progress with co-development and co-commercialization of a
product, then each party will grant the other party a co-exclusive
license to co-develop and co-commercialize such product in the
field of T-cell therapy. If a product is developed solely by one
party, then the other party will grant to the continuing party an
exclusive license to develop and commercialize such product in the
field of T-cell therapy.
In the three months ended June 30, 2020, the parties nominated the
target for the first collaboration program and the Company
commenced development of this target under the agreement and began
recognizing revenue for this performance obligation.
In addition, Astellas was also granted the right to develop,
independently of Adaptimmune, allogeneic T-cell therapy candidates
directed to two targets selected by Astellas. Astellas will have
sole rights to develop and commercialize products resulting from
these two targets.
Under the terms of the agreement, Adaptimmune could be entitled to
receive up to $847.5 million in further payments, including:
|
● |
Development milestones of up to
$73.75
million for each co-developed and co-commercialized product;
and |
|
● |
Development milestones of up to
$147.5
million per product and up to
$110.0
million in sales milestones for products developed unilaterally by
Astellas. |
In addition, Adaptimmune is entitled to receive research funding of
up to $7.5 million per year on a per collaboration target basis,
which is payable on a quarterly basis within standard payment
terms, and tiered royalties on net sales in the mid-single to
mid-teen digits.
In consideration for rights under certain contributed Astellas
technology for a product unilaterally developed by Adaptimmune,
Astellas could be eligible to receive up to $552.5 million,
including up to $147.5 million in milestone payments per product,
and up to $110.0 million in sales milestones for products developed
unilaterally by Adaptimmune. In addition, Astellas is entitled to
receive tiered royalties on net sales in the mid-single to mid-teen
digits.
To the extent that Astellas and Adaptimmune co-develop and
co-commercialize any product, the parties would share equally all
worldwide costs and profits.
Either party can terminate the agreement in the event of material
breach or insolvency of the other party. Astellas can terminate the
Agreement for convenience in its entirety or partly in relation to
any targets and products directed to such targets. Adaptimmune can
terminate the Agreement for convenience in relation to any target
it is unilaterally developing and to products directed to such
target.
The Company has assessed the agreement under the provisions of ASC
606, Revenue from Contracts with
Customers and ASC 808, Collaborative Arrangements. The Company
determined that Astellas is a customer and has applied the
provisions of ASC 606 to the contract and related performance
obligations. The Company identified the following performance
obligations under the agreement: (i) research services and rights
granted under the co-exclusive license for each of the three
co-development targets and (ii) the rights granted for each of the
two independent Astellas targets.