SEC Filings

10-K
ARRAY BIOPHARMA INC filed this Form 10-K on 08/11/2017
Entire Document
 

Collaboration and Other Revenue

Collaboration and other revenue consists of revenue for our performance of drug discovery and development activities
in collaboration with partners, which includes development of proprietary drug candidates we out-license, as well as
screening, lead generation, and lead optimization research. We also report recognition of the previously deferred revenue related to ongoing obligations from the Novartis Agreements as collaboration revenue.

Fiscal 2017 compared to Fiscal 2016Collaboration and other revenue was $23.8 million and $26.7 million for the years ended June 30, 2017 and 2016, respectively, representing a decrease of 11% over the comparable period. Collaboration and other revenue includes $1.8 million of deferred revenue recognized during the year ended June 30, 2017 for the up-front payment received from Novartis upon the effective date of the Novartis Agreements in March 2015, compared to $3.6 million recognized during fiscal 2016. We recognized this revenue over a 28-month deferral period, which was our estimate of the number of months we expected to be required to materially complete our performance with respect to the applicable clinical trials under the Novartis Agreements. The entire deferred balance has been recognized as revenue as of June 30, 2017. During the year ended June 30, 2017, we also recognized $7.6 million additional incremental revenue under new or expanded collaborations with Pierre Fabre, Asahi Kasei and Mirati. These increases were offset by $8.4 million decreased revenue associated with the conclusion of the Celgene and Biogen collaborations during fiscal 2016 and fewer FTEs working on our collaboration with Loxo as compared to the prior year.

Fiscal 2016 compared to Fiscal 2015 – Collaboration and other revenue was $26.7 million and $24.5 million for the years ended June 30, 2016 and 2015, respectively, or an increase of 9% over the comparable period. Collaboration and other revenue includes $3.6 million of deferred revenue recognized during the year ended June 30, 2016 for the up-front payment received from Novartis upon the effective date of the Novartis Agreements in March 2015. We are recording this revenue over a 22-month deferral period, which is the estimated number of months we expect will be required to complete our performance with respect to the applicable clinical trials under the Novartis Agreements. During the year ended June 30, 2016, we also recorded revenue of $3.1 million, $11.4 million, $3.3 million and $2.8 million for our performance of drug discovery and development activities related to Celgene, Loxo, Mirati and Biogen, respectively. During the year ended June 30, 2015, we recorded revenue of $4.1 million, $9.2 million, $1.2 million and $4.6 million for our performance of drug discovery and development activities related to Celgene, Loxo, Mirati and Biogen, respectively. Our collaboration arrangement with Biogen was terminated during fiscal 2016.


Cost of Partnered Programs
 
Cost of partnered programs represents research and development costs attributable to discovery and development including preclinical and clinical trials we may conduct for or with our partners. Research and development costs primarily consist of personnel related expenses, including salaries, benefits, costs to recruit and relocate new employees, travel, and other related expenses, stock-based compensation, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials and consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, software and facilities, and laboratory costs and other supply costs.
  
Below is a summary of our cost of partnered programs (dollars in thousands):
 
 
 
 
 
 
 
Change
 
Change
 
Year Ended June 30,
 
2017 vs. 2016
 
2016 vs. 2015
 
2017
 
2016
 
2015
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of partnered programs
$
35,395

 
$
23,166

 
$
44,392

 
$
12,229

 
53
%
 
$
(21,226
)
 
(48
)%

Fiscal 2017 compared to Fiscal 2016 Cost of partnered programs increased $12.2 million in fiscal 2017 compared to the prior year primarily due to increases in our share of development costs relating to the BEACON CRC trial of binimetinib and encorafenib in partnership with Pierre Fabre.


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