Company: DAWN
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0000950170-25-026654
Chunk: 347

Company: Day One Biopharmaceuticals, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 347
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 prior written notice or for certain other specified reasons. We may terminate the Ipsen License Agreement if Ipsen or any of its affiliates challenge the validity of any patents controlled by us that are licensed under the Ipsen License Agreement. Both we and Ipsen may terminate the Ipsen License Agreement (i) for material breach by the other party and a failure to cure such breach within the time period specified in the Ipsen License Agreement or (ii) the other party’s bankruptcy event.

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Components of Results of Operations

Revenue

Product revenue, net

In April 2024, the FDA approved OJEMDA for the treatment of patients 6 months of age and older with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement, or BRAF V600 mutation. We record product revenue net of estimated discounts, chargebacks, rebates, specialty distributor fees, copay assistance, and product returns.

License revenue

In July 2024, we entered into the Ipsen License Agreement, pursuant to which, we licensed to Ipsen, on an exclusive basis, the right to commercialize tovorafenib in all territories outside the United States and agreed to provide certain research and development and manufacturing services. The portion of the transaction price allocated to the licenses was recognized as revenue upon delivery of the licenses in the year ended of December 31, 2024. The transaction price allocated to the research and development services is being recognized over time as services are delivered.

Operating expenses 

Cost of product revenue

Cost of product revenue includes the cost of inventory sold, amortization expense of intangible assets and third-party royalties payable on our net product revenue. Cost of goods sold may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. We expect to use inventory previously expensed to research and development within the next seven months, and accordingly, we expect our cost of product revenue of OJEMDA to increase as a percentage of product revenue in future periods as we produce and sell inventory that reflects the full cost of manufacturing the product.

Research and development expenses 

Research and development expenses consist primarily of external and internal expenses incurred for our research activities, including our discovery and in-licensing undertakings, and the development of our product candidates. 

External expenses include: 

•costs incurred under agreements with third-party contract research organizations, or CROs, contract manufacturing organizations, or CMOs, and other third parties