|ARRAY BIOPHARMA INC filed this Form 10-K on 08/11/2017|
Results of Operations
Below is a summary of our total revenue (dollars in thousands):
License and Milestone Revenue
License and milestone revenue consists of up-front license fees and ongoing milestone payments from partners and
Fiscal 2017 compared to Fiscal 2016 – We earned and recognized as revenue $12.9 million in fiscal 2017 for the achievement of six milestones which were primarily associated with our collaborations with Loxo, Genentech and Roche, compared to $1.3 million recognized for three milestones during fiscal 2016. Additionally, we recognized 12 months of license revenue from the upfront payments received from Pierre Fabre, Asahi Kasei and Mirati during fiscal 2017, resulting in $3.8 million additional revenue as compared to the prior year.
Fiscal 2016 compared to Fiscal 2015 – The majority of the license revenue for fiscal 2016 relates to $1.6 million in license fee revenue from Pierre Fabre, $1.3 million in revenue from Loxo, most of which resulted from a milestone payment, and $0.6 million in license fee revenue from Asahi Kasei. The majority of the license and milestone revenue for fiscal 2015 related to recognition of $20.0 million up-front fee received from Cascadian Therapeutics, which resulted from the License Agreement entered into with Cascadian Therapeutics in December 2014.
Reimbursement revenue consists of amounts received for reimbursement of costs we incur from our license partners and other counterparties where Array acts as a principal, controls the research and development activities, bears credit risk and may perform part of the services required in the transactions.
As discussed in Note 5 - Collaboration and Other Agreements to our financial statements included elsewhere in this Annual Report on Form 10-K, Array regained all development and commercialization rights to binimetinib, and obtained all development and commercialization rights to encorafenib from Novartis on March 2, 2015. In connection with the closing of these transactions, Array and Novartis entered into two Transition Agreements dated March 2, 2015, one associated with the binimetinib and the other associated with the encorafenib . Novartis Pharma will provide substantial financial support to Array under the Transition Agreements for all clinical trials involving binimetinib and encorafenib in the form of reimbursement to Array for all associated out-of-pocket costs and for one-half of Array’s fully-burdened full-time equivalent ("FTE") costs based on an annual FTE rate. As of June 30, 2016, Novartis Pharma had transitioned responsibility for all previously Novartis-conducted trials and will provide this continuing financial support to Array for completing the trials. As shown in the table above, we recognized approximately $107.2 million and $107.3 million in reimbursement revenue for the years ended June 30, 2017 and 2016, respectively, which consisted solely of reimbursements to Array from Novartis under the Transition Agreements for specific clinical trials involving binimetinib and encorafenib for the periods presented.