Note 12—Commitments and Contingencies
(A) Commitments
Lease Commitments
The Company has leases, consisting primarily of real estate leases. Refer to Note 11, “Leases” for further information.
Other Commitments
The Company has entered into commitments under various asset acquisition and license agreements. Potential material future milestone and royalty payments as of March 31, 2026 pursuant to certain key asset acquisition and license agreements are as follows:
•Anti-FcRn franchise (Immunovant): up to a maximum of $420.0 million to HanAll Biopharma Co., Ltd. upon the achievement of certain regulatory and sales milestone events and tiered mid-single-digits to mid-teens royalty on net sales.
•Brepocitinib (Priovant): mid tens-of-millions sales milestone payment to Pfizer if aggregate net sales in a given year exceed a mid-hundreds-of-millions amount and tiered sub-teens royalty on net sales.
•Mosliciguat (Pulmovant): up to a maximum of $280.0 million to Bayer AG upon the achievement of certain development, regulatory and commercial milestone events and tiered high-single-digits royalty on net sales.
•LNP Technology (Genevant): up to 20% of Royalty-Related Receipts (as defined in the Cross-License Agreement).
The Company has further commitments not reflected above relating to other asset acquisition and license agreements entered and expects to enter into additional asset acquisition and license agreements in the future, which may require upfront payments and long-term commitments of capital resources.
Additionally, the Company enters into agreements with contract service providers to assist in the performance of its research and development activities. Expenditures to contract research organizations and contract manufacturing organizations represent significant costs in the clinical development of its product candidates. Subject to required notice periods and certain obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. The Company expects to enter into additional collaborative research, contract research, manufacturing and supplier agreements in the future, which may require upfront payments and long-term commitments of capital resources.
As of March 31, 2026, the Company’s subsidiary, Immunovant, had an accumulated accrual of $42.5 million of non-cancelable contractual costs as a result of the discontinuation of batoclimab, of which $39.0 million was recognized as research and development expense during the year ended March 31, 2026.
(B) Loss Contingencies
The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when available information indicates that it is probable that a liability has been incurred and the amount of such loss can be reasonably estimated, and if the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation or claim, including an estimable range, if possible.
(C) Indemnification Agreements
The Company is a party to a number of agreements entered into in the ordinary course of business that contain typical provisions that obligate the Company to indemnify the other parties to such agreements upon the occurrence of certain events. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain. The Company also indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits. The maximum amount of potential future indemnification is unlimited; however, the Company currently maintains director and officer liability insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify its directors and officers. To date, the Company has not incurred any material costs related to these indemnification obligations and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements as of March 31, 2026 and 2025.