5. Iloperidone Sublicense 

 

In November 1997, we granted Novartis a worldwide sublicense to iloperidone (Fanapt®) in exchange for tiered royalties on net sales ranging from 8% to 10% and assumption of responsibility for all clinical development, registration, manufacturing and marketing of the product. Novartis had the right to commercialize Fanapt in the United States and Canada. In June 2004, Novartis transferred all rights to commercialize Fanapt in the United States and Canada to Vanda Pharmaceuticals, Inc. and in December 2014 assigned the agreement to Vanda. Our rights under the agreements have not changed. Pursuant to agreements entered into during 2011, we sold substantially all of our future royalties on the sales of Fanapt ^® to a third party and, accordingly, we no longer recognize revenue. See Note 8, “Royalty Liability” for further discussion of our royalty liabilities.