The Company is eligible to receive contractual milestones for certain regulatory and commercial achievements and is also entitled to receive royalties based on a percentage of net sales of Ultomiris sold by Alexion, its affiliates or its sub licensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product-by-product and country-by-country basis until the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country.
In the third quarter of 2018, Alexion completed certain regulatory submission filings for ALXN1210, and the Company received $9.0 million in milestone payments. In the fourth quarter of 2018, Alexion completed certain regulatory submission filings and received U.S. Food and Drug Administration (FDA) marketing approval, and the Company received $11.0 million in milestone payments.
In the second quarter of 2019, Alexion received marketing authorization from Japan’s Ministry of Health, Labour and Welfare, and the Company earned a $4.0 million milestone.
Under ASC 606, we recognize revenue for sales-based royalties upon the subsequent sale of the product. We began earning royalty revenue from the sale of Ultomiris in the United States in 2019. For the six months ended June 30, 2019, we have estimated royalty revenue of $1.1 million related to sales of Ultomiris.
We recognized $4.0 million of milestone revenue and $1.1 million of royalty revenue under this arrangement for the three and six months ended June 30, 2019. There was no revenue recognized for the three and six months ended June 30, 2018. As of June 30, 2019, there is no deferred revenue related to this agreement.
Boehringer Ingelheim International GmbH
In 2007, the Company entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, the Company provided BI with a three-year research license to one of the Company’s technologies and commercial options. BI elected to exercise two commercial licenses from the compounds identified during the research term and one compound is currently in clinical development. No revenue related to this arrangement was recognized for the three- and six-month periods ended June 30, 2019 and 2018. There is no deferred revenue related to this agreement at June 30, 2019.
INmune Bio, Inc.
In October 2017, the Company entered into a License Agreement with INmune Bio, Inc. (INmune). Under the terms of the agreement, the Company provided INmune with an exclusive license to certain rights to a proprietary protein, XPRO1595. Under the agreement the Company received an upfront payment of $100,000, an equity interest in INmune and an option to acquire additional shares of INmune. The Company is eligible to receive a percentage of sublicensing revenue received for XPRO1595 and also royalties in the mid-single digit percentages on the sale of approved products.
The equity interest in INmune constituted of 1,585,000 shares of common stock and the option is to purchase up to an additional 10% of the fully diluted outstanding share of INmune for $10.0 million. We have recorded our equity interest in INmune at cost pursuant to ASC 323. We did not record our share of the net loss from INmune during the six months ended June 30, 2019 or 2018, respectively, as the carrying value has been reduced to zero.
In 2018, INmune filed a registration statement on Form S-1 with the Securities and Exchange Commission (SEC) which was declared effective by the SEC as of December 19, 2018.
The Company did not recognize any revenue related to the agreement for the three and six months ended June 30, 2019 and 2018. There is no deferred revenue as of June 30, 2019 related to this agreement.