Company: CNTB
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001835268-25-000058
Chunk: 22

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 each arrangement that includes milestone payments, the Company evaluates where the milestones are considered probable of being reached. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the Effective Date, the Company determined the transaction price to be $25 million, which is comprised of (i) a $21 million upfront payment for the grant of license to the Licensee and (ii) $4 million of cost reimbursement upon delivery of certain clinical trial reports. All other milestones are considered to be constrained at the Effective Date because these milestones are not within the control of the Company and therefore these milestones are not included in the transaction price.When an intellectual property license is determined to be a predominant promise in the arrangement, sales-based milestone payments and royalties are recognized at the later of when the associated performance obligation has been satisfied or when the sales occur. For cost reimbursements related to the supply of material for clinical development, the Company recognizes revenue when Simcere obtains control of the goods. For the three and nine months ended September 30, 2025, the Company recognized $16,000 and $64,000, respectively, in revenue under the License Agreement related to cost reimbursements for clinical materials. For the three and nine months ended September 30, 2024, the Company recognized $1.2 million and $25.3 million, respectively, in revenue under the License Agreement, which related to the upfront license fee, achievement of certain development milestones and cost reimbursements for clinical materials.Allocation of the Transaction PriceThe transaction price is generally allocated to the identified performance obligations based on the relative stand-alone selling price estimated for each distinct performance obligation. However the Company has allocated certain regulatory and development milestone payments only to certain specific performance obligation(s) where the terms of such payments relate specifically to the Company’s efforts to satisfy the respective performance obligation, and provided that such allocation is consistent with the objective that transaction price is allocated to each performance obligation in order to reflect the consideration to which the Company expects to be entitled to receive in exchange for satisfying those performance obligations. The Company allocated the $25.0 million transaction price based on relative stand-alone selling prices of each performance obligation as $23.8 million for the license, $0.1 million for the transfer of the current manufacturing process, $0.2 million for development and transfer of a new manufacturing process, and $0.9 million for completion of certain rademikibart development services.