Lineage Cell Therapeutics, Inc. - 10-K filing on 2022-03-10

Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Our disaggregated revenues were as follows (in thousands):


	Year Ended December 31,
	2021		2020

Royalties	$	2,776	$	773

Grant revenues
Israel Innovation Authority (“IIA”)	$	445	$	666
National Institutes of Health (“NIH”)		-		387
Total grant revenues		445		1,053

Revenues under collaborative agreements
Upfront license fees		452		-
Event-based development milestones		123		-
Reimbursements, cost-sharing payments		545		-
Total revenues under collaborative agreements		1,120		-

Total revenue	$	4,341	$	1,826

Schedule of Contract With Customer Asset and Liability

Accounts receivable and other receivable, net, and deferred revenues (contract liabilities) from contracts with customers, including collaboration partners, consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
	(unaudited)
Accounts receivable and other receivable, net ⁽¹⁾⁽²⁾	$	50,640	$	242
Deferred revenues ⁽¹⁾⁽²⁾		50,500		-

	(1)	Increase in accounts receivable due to accrual of $50.0 million upfront payment related to Roche Agreement, offset to deferred revenues.

	(2)	Excludes government grants as Lineage has determined government grants are outside the scope of ASU 2014-09 - Revenue from Contracts with Customers (Topic 606).

Schedule of Collaboration Agreements

The following table presents amounts under our collaboration agreements included in the transaction price (i.e., cumulative amounts triggered or probable) as of December 31, 2021 (in thousands):

	Upfront ⁽¹⁾		Development ⁽²⁾		Reimbursements⁽³⁾		Total
Collaboration partner and agreement date:
ITI (April 2021)⁽⁴⁾	$	500	$	500	$	2,220	$	3,220
Roche (December 2021) ⁽⁵⁾		50,000		-		-		50,000
Total amounts under our collaboration agreements included in the transaction price	$	50,500	$	500	$	2,220	$	53,220

(1)	Upfront license fees.

(2)	Event-based development and regulatory milestones amounts.

(3)	Reimbursements and costs-sharing payments.

(4)	Regarding the accounting treatment for the collaborative agreement, the license and related development deliverables were determined to be highly interdependent and interrelated and have been combined as one performance obligation. Delivery is determined to be over time and revenue will be recognized utilizing an input method of costs incurred over total estimated costs in the work plan. The regulatory milestones are variable consideration that are fully constrained until the uncertainty of each milestone has been resolved. Sales-based milestones and royalties are variable consideration that will not be included in the transaction price until the related commercialization and sales have occurred. The cost reimbursements are considered variable consideration and are included in the transaction price. Revenues related to the cost reimbursements are presented gross on the consolidated statement of operations instead of a reduction to the costs being reimbursed. We currently estimate the unsatisfied performance obligations within the contract to be completed by December 31, 2022.

(5)	Regarding the accounting treatment for the collaborative agreement, the license, technology transfer and related clinical deliverables were determined to be highly interdependent and interrelated and have been combined as one performance obligation. Delivery is determined to be over time and revenue will be recognized utilizing an input method of costs incurred over total estimated costs to complete the performance obligation. A material customer option for additional goods and services was included in the transaction price, and $12.0 million of the transaction price was allocated to the second performance obligation. The option will be recognized when the customer exercises the option or when the option expires. Regulatory and development milestones are variable consideration that are fully constrained until the uncertainty of each milestone has been resolved. Sales-based milestones and royalties are variable consideration that will not be included in the transaction price until the related commercialization milestones and sales targets have occurred. We currently estimate the unsatisfied performance obligations within the contract to be completed by December 31, 2026.