11. Subsequent Events

As related to the Celgene Agreement discussed in Note 5, Celgene was advancing four preclinical collaboration programs, one of which is an ADC targeting B-cell maturation antigen (“BCMA”) for the treatment of multiple myeloma.  Celgene has worldwide development and commercialization rights with respect to this BCMA ADC.  

The U.S. Food and Drug Administration recently cleared the IND application for the BCMA ADC, which was discovered and manufactured by the Company and which is the first collaboration program IND.  The Company will continue to be responsible for clinical supply manufacturing and certain development services for this BCMA ADC and is eligible to receive from Celgene aggregate development and regulatory contingent payments of up to $275.0 million, if approved in multiple indications, and tiered royalties ranging from mid to high single digit percentages on worldwide sales of any resulting commercial products.  

With respect to the remaining three collaboration programs (BCMA-CD3, PD1-LAG3 and PD1-TIM3), Celgene has decided to not retain the option to acquire U.S. clinical development and commercialization rights to a second collaboration program. Celgene is therefore not paying the Company the $12.5 million option maintenance fee due on IND clearance for the first collaboration program, described above.  Consequently, the U.S. clinical development and commercialization rights to the other three collaboration programs remain owned by the Company, without any further option to Celgene.  For any products resulting from these three programs, Celgene will own ex-U.S. development and commercialization rights and will be obligated to pay the Company development and regulatory contingent payments and tiered royalties ranging from mid to high single digit percentages.