Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies |
Commitments and Contingencies
Licensing Commitments
The Company has license agreements with two parties under which the Company is obliged to pay annual license fees. One agreement requires annual license payments for Strep-tag technology that represents tool technologies used for research purposes only. This agreement expires in 2024. Another license agreement also requires a minimum annual license fee for an exclusive license to certain patents related to the Company's core Anticalin technology platform. This agreement expires upon expiration of the last patent subject to that agreement. The minimum annual license fee commitments under the two agreements as of December 31, 2017 (in thousands):
The Company is also obliged to pay low single digit royalties, including annual minimum royalties, on sales of products that utilize its core Anticalin technology platform. Should the Company grant licenses or sublicenses to those patents to third parties, it will be obliged to share a percentage of resulting revenue with the licensee, which percentage of resulting revenue is creditable against annual license payments. In addition, payment obligations are reduced by the Company's proportionate contribution to a joint invention. Payment obligations terminate on expiration or annulment of the last patent covered by the agreement.
Leases
The Company leases office and laboratory space in Freising, Germany as well as office space in Boston, Massachusetts. The German lease agreement has a defined termination date, which is eight months after the end of each quarter, with unlimited renewal periods at the Company's discretion. In June 2016, the Company entered into a second lease agreement for additional office space in the same building, which has a fixed term of one year along with unlimited renewal periods. As Pieris did not cancel this lease agreement by June 2017, the term of the lease extended by one year until June 2019. In August 2015, the Company entered into an Agreement of Sublease to lease approximately 3,950 square feet in Boston, MA. The term of the lease expires in February 2022.
The Company records rent expense on a straight-line basis over the lease term period. For the years ended December 31, 2017 and 2016 respectively, the Company recognized rent expense under its existing lease agreements in an amount of $0.5 million and $0.5 million for the years ended December 31, 2017 and 2016, respectively.
The Company’s contractual commitments of the non-cancellable portion under these operating leases as of December 31, 2017 are as follows (in thousands):
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