Deferred Research and Development Arrangement
|9 Months Ended|
Sep. 30, 2011
|Deferred Research and Development Arrangement [Abstract]|
|Deferred Research and Development Arrangement||
In 2003, the Company entered into a collaborative research agreement with Rexgene Biotech Co., Ltd. ("Rexgene"), a shareholder. Rexgene is engaged in the development of pharmaceutical products in Asia and has agreed to assist the Company with the research, development and clinical trials necessary for registration of the Company's drug candidate, Archexin, in Asia. This agreement provides Rexgene with exclusive rights to license, sublicense, make, have made, use, sell and import Archexin in Asia. In accordance with the agreement, Rexgene paid the Company a one-time fee of $1,500,000 in 2003. The agreement terminates at the later of 20 years or the term of the patent. The amortization reduces research and development expenses for the periods presented.
The Company is using 20 years as its basis for recognition and accordingly $18,750 and $56,250 reduced research and development expenses for the three and nine months ended September 30, 2011 and 2010, respectively. The remaining $843,750 and $900,000 at September 30, 2011 and December 31, 2010, respectively, is reflected as deferred research and development arrangement on the balance sheet. The contribution is being used in the cooperative funding of the costs of development of Archexin. Royalties of 3% of net sales of licensed products will become payable to the Company on a quarterly basis once commercial sales of Archexin begin in Asia. The product is still under development and commercial sales in Asia are not expected to begin until at least 2013. Under the terms of the agreement, Rexgene does not receive royalties on Company net sales outside of Asia.
The entire disclosure for deferred research and development arrangement at the end of the reporting period, and descriptions and amounts of the significant changes that occurred during the reporting period. Deferred Research and Development Arrangement is a liability as of the balance sheet date related to a collaborative research agreement. Generally, an entity records deferred research and development arrangement when it receives consideration from a collaborator, and expenses the contribution over a period of time.