Quarterly report pursuant to Section 13 or 15(d)

Grant and Licensing Revenues

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Grant and Licensing Revenues
9 Months Ended
Sep. 30, 2018
Revenue Recognition and Deferred Revenue [Abstract]  
Grant and Licensing Revenues

10. Grant and Licensing Revenues


In June 2016, Pelican entered into a Cancer Research Grant Contract (“Grant Contract”) with CPRIT, under which CPRIT awarded a grant not to exceed $15.2 million for use in developing cancer treatments by targeting a novel T-cell costimulatory receptor (namely, TNFRSF25). The Grant Contract covers a period from June 1, 2016 through October 31, 2019.


Upon commercialization of the product, the terms of the Grant Contract require Pelican to pay tiered royalties in the low to mid-single digit percentages. Such royalties reduce to less than one percent after a mid-single-digit multiple of the grant funds have been paid to CPRIT in royalties.


The Company recognized grant revenue of approximately $1.8 million and $3.7 million during the three and nine months ended September 30, 2018 for qualified expenditures under the grant. The Company recognized grant revenue of approximately $0.5 million and $0.9 million during the three and nine months ended September 30, 2017, including an additional $0.02 million of research funding revenue for research and development services provided to Shattuck Labs, Inc. which research funding agreement terminated January 31, 2017.


As of September 30, 2018, the Company had deferred revenue of $3.1 million for proceeds received from the CPRIT grant, but for which the costs had not been incurred or the conditions of the award had not been met. The Company had deferred revenue, net of current portion of $0.2 million grant funds received from an economic development grant agreement with the City of San Antonio (“Economic Development Grant”), for the purpose of defraying costs toward the purchase of laboratory equipment.