Sublicense from Geron
received the Telomerase Sublicense from Geron in connection with our acquisition of Geron’s stem cell assets. The Telomerase
Sublicense grants Asterias an exclusive sublicense under certain patents owned by the University of Colorado’s University
License Equity Holdings, Inc. relating to telomerase and entitles Asterias to use the technology covered by the patents in the
development of AST-VAC1 and AST-VAC2 as immunological treatments for cancer. Under the Telomerase Sublicense, Asterias paid Geron
a one-time upfront license fee of $65,000, and Asterias will pay Geron an annual license maintenance fee of $10,000 due on each
anniversary of the effective date of the agreement, and a 1% royalty on sales of any products that Asterias may develop and commercialize
that are covered by the sublicensed patents. The Telomerase Sublicense will expire concurrently with the expiration of Geron’s
license. That license will terminate in November 2018 when the last of the licensed patents expires. The Telomerase Sublicense
may also be terminated by Asterias by giving Geron 90 days written notice, by us or by Geron if the other party breaches its obligations
under the sublicense agreement and fails to cure their breach within the prescribed time period, or by Asterias or by Geron upon
the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the other party.
is obligated to indemnify Geron, Geron’s licensor, and certain other parties for certain liabilities, including those for
personal injury, product liability, or property damage relating to or arising from the manufacture, use, promotion or sale of
a product, or the use by any person of a product made, created, sold or otherwise transferred by us or our sublicensees that is
covered by the patents sublicensed under this agreement.
Clinical Trial and Option Agreement with CRUK and CIRM Grant Award
September 2014, Asterias entered into a Clinical Trial and Option Agreement (the “CRUK Agreement”) with Cancer Research
UK (“CRUK”) and Cancer Research Technology Limited, a wholly-owned subsidiary of CRUK, pursuant to which CRUK has
agreed to fund Phase 1 clinical development of Asterias’ human embryonic stem cell derived AST-VAC2 allogeneic (non-patient
specific) dendritic cancer vaccine product candidate. Asterias, at its own cost, completed process development and manufacturing
scale-up of the AST-VAC2 manufacturing process and transferred the resulting cGMP-compatible process to CRUK. CRUK will, at its
own cost, manufacture clinical grade AST-VAC2 and will carry out the Phase 1 clinical trial of AST-VAC2 in cancer patients both
resected early-stage and advanced forms of lung cancer. Asterias will have an exclusive first option to obtain a license to use
the data from the clinical trial. If Asterias exercises that option, then Asterias will be obligated to make payments upon the
execution of the License Agreement, upon the achievement of various milestones, and royalties on sales of products. In connection
with the CRUK Agreement, Asterias sublicensed to CRUK for use in the clinical trials and product manufacturing process certain
patents that have been licensed or sublicensed to us by third parties. Asterias would also be obligated to make payments to those
licensors and sublicensors upon the achievement of various milestones, and then royalties on sales of products if AST-VAC2 is
successfully developed and commercialized.
October 16, 2014 Asterias signed a Notice of Grant Award (“NGA”) with CIRM, effective October 1, 2014, with respect
to a $14.3 million grant award for clinical development of Asterias’ product, AST-OPC1. The NGA was subsequently amended
effective November 26, 2014 and March 2, 2016. The NGA includes the terms under which CIRM will release grant funds to Asterias.
Under the NGA as amended on March 2, 2016, CIRM will disburse the grant funds to Asterias based on Asterias’ attainment
of certain progress milestones.
received $5.6 million under the NGA during 2015. During the fiscal year ended December 31, 2016, Asterias received an additional
$6.2 million under the NGA grant. In September 2017, we received the final $1.5 million payment under the CIRM grant which was
due upon achievement of certain clinical milestones. Revenues pursuant to the NGA recognized during the fiscal years ended December
31, 2017, 2016 and 2015 were $3.7 million, $6.6 million and $3.0 million, respectively. Although the cash payments from CIRM were
dependent on achieving certain milestones pursuant to the contract with CIRM, Asterias recognized grant income as related research
expenses are incurred. We had no deferred revenues related to the CIRM grant as of December 31, 2017. Deferred revenues relating
to the CIRM grant were $2.2 million at December 31, 2016.