Company: HCWB
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000950170-25-046724
Chunk: 109

Company: HCW Biologics Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 109
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 last-to-expire valid patent claim of such product.  The Company concluded that Wugen is a customer and the Wugen License is a functional license under the provisions of Topic 606.    WY Biotech LicenseOn November 17, 2024, the Company entered into the WY Biotech License transferring rights to WY Biotech to develop and commercialize a preclinical molecule constructed with the Company’s T-cell Receptor β Chain constant region (“TRBC”) drug discovery and development platform.  The term of the agreement with expire on the date on which all obligations under this Agreement between the parties with respect to the payment of milestones or royalties with respect to licensed products have passed or expired.  On March 17, 2025, the parties agreed to the principal terms of an amendment to the terms of the WY Biotech License.  The Company concluded that WY Biotech is a customer and the WY Biotech License, as amended, is a functional license under the provisions of Topic 606.  

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Opt-In Right for WY Biotech LicenseUnder the terms of the WY Biotech License, the Company has an “opt-in right” for United States, Canada, Central America, and South America markets for no cost, that may be exercised after the completion of a Phase 1 trial in China.  WY Biotech is responsible for all of the costs for the clinical study.  The Company will make a determination of whether it will exercise the Opt-In Right upon the release of a human-data read-out from the Phase 1 trial to be conducted by WY Biotech.  Milestones and RoyaltiesIn addition to upfront fees and revenues from other transactions that took place upon entering the these licenses, the licenses includes milestone payments and royalties. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price. For revenue-based royalties, including milestone payments based on the level of sales, the Company will include royalties in the transaction price at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalties are allocated has been satisfied (or partially satisfied). As part of management’s evaluation of the transaction price, the Company considers numerous factors, including whether the achievement of the milestones is outside of its control, contingent upon the efforts of others or subject to scientific risks of success. If the Company concludes it is probable that a significant revenue reversal would not occur, the associated milestone payment is included