FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS AND LIABILITIES, FINANCIAL POSITIONAND PROFITS AND LOSSES 20 • In February 2013, the Group entered into a license agreement For each of these licensing and col laboration agreements, with Novartis. The Company issued 670,588 ordinary shares as based on the significant uncertainties in the development of the consideration paid for the licenses. The amount of the intangible product candidates as well as the Group having sole discretion asset recognized was €275 K (seeNote 4) and determined by to decide whether it would like to proceed with the research and reference to the fair value of the ordinary shares that were development activities, the Group has concluded, based on the granted by the Company in exchange for the licenses. Upon stage of development of its product candidates, that it is remote commercialization of any product covered by the licenses, the that a payment will be made by the Group to the parties under Company will be obligated to pay a royalty of 5% of net sales. these licensing and collaboration agreements. • In February 2014, the Company entered into a non-exclusive Note 20: Relationships with related parties license, development and commercialization agreement with Avalanche Technologies (“Avalanche” renamed “Adverum The Group did not conclude any new significant transactions with Biotechnologies”), a biotechnology company. The annual related parties during the period. license fee payable by the Group is $30 K, which was a €27 K Key management personnel compensation payment each year from 2014 to 2017 recognized as research The compensation amounts presented below, which were and development expenses in the statement of income. Upon awarded to key management personnel which are members of the completion of development milestones, the Group has to Board of Directors of the Group, were recognized as expenses pay specified non-refundable fees of up to $5,900 K. As of during the period presented: December 31, 2017, the residual commitments amount to $5,900 K. Upon commercialization of any product covered As of December 31, by the license patents, the Group wil l be obligated to pay a percentage of net sales as a royalty. The royalty rate varies In thousands of euros 2016 2017 depending on the amount of net sales. Short-term employee benefits 635 899 • In March 2014, the Company entered into a research Share-based payments benefits 1,357 1,859 col laboration agreement with Friedrich Miescher Institute, Total 1,992 2,758 (“FMI”), a biomedical research institute under which the parties The methods and assumptions used for the measurement of agreed to collaborate in research comprising the design, planning share-based payments are described in Note 16. and carrying out of experiments on different animal models with the aim of testing new therapeutic approaches, including the Liabilities to key management personnel as of December 31, 2016 development and testing of optogenetic tools. Under the terms and 2017 are set forth below: of this research collaboration agreement, the Group agreed to pay €111 K to FMI in each of2014, 2015 and 2016 as a As of December 31, contribution to the cost of the research work. The amount paid to In thousands of euros 2016 2017 FMI each year has been recognized as research and development Variable compensation 125 128 expenses in the statement of income. A first amendment to this Total 125 128 research collaboration agreement was signed in April 2017 to extend the term of the contract in effect until May 31, 2018. As a Transactions with related parties: consequence, the Group agreed to pay €111 K to FMI recognized Mr. Bernard Gilly, CEO of GenSight Biologics, is a shareholder as a research and development expense as a contribution to the (27%) of Passage de l’Innovation as of December 31, 2017. In cost of the research work for the extended period. The remaining 2015, the Company entered into an agreement with Passage costs for 2018 amount to €46 K. de l’Innovation for the rental of its new premises. As described • In January 2016, the Group entered into a license agreement above, an amendment was signed on May 2017, as well as a new with M.I.T., upon exercising an option right granted under the service agreement in connection with human resources, legal and patent option agreement between M.I.T. and the Group, dated intellectual property services. The related amounts presented January 9, 2015. Under the terms of this license agreement, the below were recognized as expenses during the period presented: Group recognized as a research and development expense and agreed to pay a license issue fee of $45 K, license maintenance As of December 31, fees up to $100 K per year and variable payments up to In thousands of euros 2016 2017 $7,300 K depending on the achievement of milestone events. Rent and services 753 762 The Group will also pay running mid-single-digit royalties on future net sales. Total 753 762 GENSIGHT BIOLOGICS – 2017 Registration Document– 209