Company: DAWN
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0000950170-25-026654
Chunk: 358

Company: Day One Biopharmaceuticals, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 358
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 forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. We accrue costs for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the activities to be performed for each patient, the number of active clinical sites and the duration for which the patients will be enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, correspondence with CROs and review of contractual terms. We base our estimates on the best information available at the time.

If we do not identify costs that have begun to be incurred or if we under- or over-estimate the level of services performed or the costs of these services, actual expenses could differ from our estimates. To date, we have not experienced any material differences between accrued costs and actual costs incurred. However, due to the nature of estimates, we cannot assure that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical trials.

License revenue

We record license revenue related to the Ipsen License Agreement when Ipsen obtains control of the promised goods or services, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

To determine the amount of license revenue to recognize under the arrangement, we are required to make judgments related to identifying the performance obligations, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each performance obligation and determining the period of time over which revenue should be recognized for each performance obligation. The significant estimates made in allocating the transaction price is the amount and timing of tovorafenib net product revenues in the long-range forecast. We base our estimates on the best information available at the time.

If we do not properly estimate the cash flows, actual revenues could differ from our estimates. To date, we have not experienced any material differences between estimated and actual cash flows. However, due to the nature of estimates, we cannot assure that we will not make changes to our estimates in the future as we become aware of additional information.

New Accounting Pronouncements 

Refer to Note 2 of the Notes to our Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of recently issued and adopted accounting pronouncements.