In June 2006, we entered into a license agreement with Janssen Pharmaceutical NV (Janssen NV), an affiliate of Johnson & Johnson, in which we received an exclusive worldwide, royalty-bearing license to seladelpar and certain other PPAR
d
compounds (the PPAR
d
Products) with the right to grant sublicenses to third parties to make, use and sell such PPAR
d
Products. Under the terms of the agreement, we have full control and responsibility over the research, development and registration of any PPAR
d
Products and are required to use diligent efforts to conduct all such activities. Janssen NV has the sole responsibility for the preparation, filing, prosecution, maintenance of, and defense of certain patents related to the PPAR
d
Products. Janssen NV has a right of first negotiation under the agreement to license PPAR
d
Products from us in the event that we elect to seek a third-party corporate partner for the research, development, promotion, and/or commercialization of such PPAR
d
Product. Under the terms of the agreement Janssen NV is entitled to receive up to an 8% royalty on net sales of PPAR
d
Products. Under the terms of the agreement, if we do not expend more than a de minimis amount of effort and resources on the research and/or development of at least one PPAR
d
Product, such action would constitute a default under the agreement. In addition, if we fail to use diligent efforts to promote, market and sell any PPAR
d
Product under the agreement, such action would constitute a default under the agreement. In the event of such default, or upon our termination of the agreement, we are