Company: DAWN
Filing Date: 2025-03-06
Form Type: 10-K/A
Source: 0000950170-25-034878
Chunk: 39

Company: Day One Biopharmaceuticals, Inc.
Filing Date: 2025-03-06
Form: 10-K/A
Chunk 39
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 trials, and EU companion diagnostic research and development services related to pLGG could be performed by a third-party. The Company determined that the promise of the manufacturing technology transfer is a customer option that does not represent a material right given the value of the services is not material and fulfillment of this promise is ancillary to the main transaction. Accordingly, the manufacturing technology transfer is not a performance obligation at the outset of the arrangement. Upon execution of the Ipsen License Agreement, the transaction price was determined to be $ 78.2 million, representing the aggregate of the upfront license fee of $ 70.8 million and the premium paid by Ipsen on its equity investment in the Company of $ 7.4 million (the excess of the value of the shares of the Company issued to Ipsen), representing additional consideration from Ipsen for the rights under the Ipsen License Agreement. Commercial launch milestones related to first commercial sale(s) in certain territories, sales-based milestones and royalties on net sales upon commercialization by Ipsen were excluded from the transaction price and will be recognized when the related sales occur as they were determined to predominantly relate to the intellectual property and, therefore, have been excluded from the transaction price in accordance with the sales-based royalty exception. The Company allocated the transaction price to the performance obligations based on their relative standalone selling price. The Company developed the estimated stand-alone selling price for each license using discounted cash flow models. In developing this estimate, the Company applied judgment in the determination of the assumptions relating to forecasted future revenues, the discount rate, and the probability of success. The stand-alone selling price for each of the research and development services was estimated based on the Company’s forecasted costs to be incurred to fulfill the obligations plus a reasonable margin. The portion of the transaction price allocable to the relapsed or refractory and front-line pLGG licenses to intellectual property was recognized as license revenue at the point in time in which Ipsen had the right to use the license/know-how, which occurred during the year ended December 31, 2024. The portion of the transaction price allocable to the relapsed or refractory, front-line and companion diagnostic research and development services performance obligations will be recognized over time as the services are delivered based on costs incurred relative to the total estimated cost to deliver the services. During the year ended December 31, 2024, $ 73.9 million of license revenue was recognized with $ 1.6 million and $ 3.2 million of the undelivered