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MYOKARDIA INC filed this Form 10-Q on 05/09/2019
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2. Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation.


The Company utilized a cost-based input method to measure proportional performance and calculated the corresponding amount of revenue to recognize. The Company believed this was the best measure of progress because other measures did not reflect how the Company executed its performance obligations under the contract with Sanofi. In applying the cost-based input methods of revenue recognition, the Company used actual costs incurred relative to budgeted costs to fulfill the combined performance obligations. Revenue was recognized based on actual costs incurred as a percentage of total actual and budgeted costs as the Company completed its performance obligations, which were fulfilled on December 31, 2018. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations were recorded in the period in which changes were identified and amounts could be reasonably estimated.


For the three months ended March 31, 2019 and 2018, the Company recognized zero and $5.3 million of collaboration and license revenue, respectively.  The Company will not recognize any further revenue from the Collaboration Agreement.    


There were no contract assets or liabilities as of March 31, 2019.  The following table presents changes in the Company’s contract liabilities, which excludes research and development reimbursements under the cost sharing plan further discussed below, for the three months ended March 31, 2018 (in thousands):




Three Months Ended March 31, 2018




Balance at

Beginning of Period









Balance at End

of Period


Contract liabilities:

















Deferred revenue

















Cost Sharing

During the three months ended March 31, 2019 and 2018, the Company has received research and development cost reimbursements from Sanofi under the terms of the Collaboration Agreement.

Since the inception of the Collaboration Agreement and up until the termination date, Sanofi had been conditionally responsible for reimbursing the Company for:



one half or more of the registration program plan (“RPP”) costs after clinical proof-of-concept is established for the lead compound under each of the HCM-1 and HCM-2 programs; and




if the Company has initiated a clinical trial of a compound under a proof-of-concept development plan and not terminated its development thereof and if another additional compound is identified as a development candidate for the same program, the Company is entitled to full reimbursement of pre-proof-of-concept (“pre-POC”) research and development costs on development candidates mutually identified as such additional compounds, with the objective of conducting IND-enabling studies and clinical trials on such candidate.

Effective October 2017, Sanofi is sharing RPP costs for the mavacamten program until June 30, 2019 pursuant to the Collaboration Agreement termination terms. Registration program costs are subject to review and approval by the Company and Sanofi and include amounts incurred relating to clinical trials, development and manufacturing of, and obtaining regulatory approvals for mavacamten, and include direct employee costs and direct out-of-pocket costs incurred, by or on behalf of a party, that are specifically identifiable or reasonably and directly allocable to those activities.

Pursuant to the additional compounds provisions of the Collaboration Agreement, in August 2018 Sanofi agreed to reimburse the Company for eligible costs it has incurred in the development of the MYK-224 compound, which was identified as an additional compound under the HCM-1 program. Eligible costs are subject to review and approval under the same procedures as under the RPP program; reimbursable costs consist of research and development activities agreed to by the Company and Sanofi that were negotiated and budgeted prior to the application for reimbursement. Reimbursements for this compound continued to be received from Sanofi until March 31, 2019, in accordance with the Collaboration Agreement termination terms.