|PACIRA PHARMACEUTICALS, INC. filed this Form 10-K on 03/01/2017|
PACIRA PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 15—COMMERCIAL PARTNERS AND OTHER AGREEMENTS (Continued)
due to CrossLink. This fee of $7.1 million is payable to CrossLink quarterly over two years, beginning in the fourth quarter of 2016, and was recorded in selling, general and administrative expense in the consolidated statements of operations. At December 31, 2016, $5.3 million is classified in accrued expenses and $1.8 million is classified in other liabilities.
Amylin Pharmaceuticals, Inc.
In March 2008, the Company entered into a development and licensing agreement with Amylin Pharmaceuticals, Inc., or Amylin. Under the development and licensing agreement, the Company provided Amylin with access to its proprietary DepoFoam drug delivery technology to conduct research, feasibility and formulation work, and for the manufacturing of pre-clinical and clinical material for various Amylin products. The Company was entitled to payments from Amylin for its work on the formulation and development of compounds with the DepoFoam technology, its achievement of certain clinical development milestones, its achievement of certain worldwide sales and a tiered royalty based upon sales. The development and licensing agreement with Amylin was in effect until January 2017.
NOTE 16—RELATED PARTY TRANSACTIONS
The Company’s former Chief Medical Officer, Dr. Gary Patou, is a partner of MPM Asset Management LLC, or MPM, an investor in the Company. The Company incurred related consulting expenses of $0.1 million, $0.3 million and $0.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. At December 31, 2016 there was nothing payable to MPM and at December 31 2015, the amount payable to MPM was $0.1 million. The Company’s agreement with MPM expired on December 31, 2015. The Company contracted with Dr. Patou directly for his services for the first six months of 2016.
In December 2012, the Company entered into a worldwide license, development and commercialization agreement with Aratana as discussed in Note 15, Commercial Partners and Other Agreements. MPM and its affiliates are holders of capital stock of Aratana. David Stack, the Company’s Chief Executive Officer and Chairman is a managing director at MPM.
In April 2012, the Company entered into a consulting agreement with Dr. Gary Pace, a director of the Company, whereby Dr. Pace would provide consulting services. The Company recorded expenses under the consulting arrangement of less than $0.1 million for each of the years ended December 31, 2016, 2015 and 2014. In connection with the consulting arrangement, Dr. Pace received an option to purchase 20,000 shares of common stock at an exercise price of $11.02 per share and an option to purchase 70,000 shares of common stock at an exercise price of $16.67 per share. At December 31, 2016, there was nothing payable to Dr. Pace for consulting services and at December 31, 2015, less than $0.1 million was payable to Dr. Pace for consulting services.
NOTE 17—COMMITMENTS AND CONTINGENCIES
The Company’s leases for its research and development, manufacturing and warehouse facilities in San Diego, California expire in August 2020 and its lease for its corporate headquarters in Parsippany, New Jersey expires in March 2028.
As of December 31, 2016, aggregate annual minimum payments due under the Company’s lease obligations are as follows (in thousands):
Total rent expense, net of amortization of unfavorable lease obligations and tenant improvements, under all operating leases for the years ended December 31, 2016, 2015 and 2014 was $6.0 million, $5.7 million and $4.9 million, respectively. Deferred rent at December 31, 2016 and 2015 was $8.6 million and $9.2 million, respectively. The Company’s research and