Asset purchase agreements	9 Months Ended
Asset purchase agreements	Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]
Asset purchase agreements	Asset purchase agreements Regeneron Asset Purchase Agreement In January 2024, the Company and Regeneron entered into an asset purchase agreement for the Regeneron Transaction. The assets consisted of property, plant and equipment and prepaid expenses. As consideration for the Asset Sale, Regeneron agreed to pay the Company an upfront payment of $5.0 million and contingent consideration based on regulatory approval and sales-based royalties. Regeneron assumed certain programs, infrastructure and personnel costs related to the programs purchased. In accordance with Topic 360, Property, Plant, and Equipment, the Company determined that as of the signing of the asset purchase agreement in January 2024, the criterion to classify the assets to be sold to Regeneron as assets held for sale was met. The $17.8 million of property, plant and equipment and prepaid expenses to be sold to Regeneron were classified as assets held for sale on the Company’s condensed consolidated balance sheets as of March 31, 2024. As noted above, the Company received an upfront payment of $5.0 million upon closing of the Regeneron Transaction, which occurred on April 1, 2024. Moreover, the termination of the Company’s existing Collaboration Agreement with Regeneron (as described in Note 11) was negotiated concurrently with the asset purchase agreement and as such, the Company derecognized $7.8 million of deferred revenue associated with the Regeneron Collaboration Agreement as part of the Asset Sale. The cash received by the Company combined with the derecognition of the remaining deferred revenue totals $12.8 million and represents the approximate combined fair value of the assets sold to Regeneron under the asset purchase agreement. As such, in the first quarter of 2024, the Company recorded an impairment loss of $5.0 million, disclosed as the “loss on assets held for sale to Regeneron” on the condensed consolidated statements of operations and comprehensive loss. This represents the excess of the carrying value of the assets to be transferred to Regeneron at the time the held for sale criteria was met. This is presented as loss on assets held for sale on the condensed consolidated statements of operations and comprehensive loss. Upon the closing of the Regeneron Transaction on April 1, 2024 and the receipt of the $5.0 million upfront payment, the Company derecognized the assets held for sale and the deferred revenue discussed above from its condensed consolidated balance sheets. In connection with the Asset Sale, the Company entered into transition services agreements with Regeneron, under which the Company provides certain services to Regeneron to help facilitate an orderly transition of the business following the Asset Sale. In return for these services, Regeneron is required to pay certain agreed upon fees to reimburse the Company for costs incurred, without markup. As of September 30, 2024, $5.0 million of receivables associated with these transition services agreements are included within receivables and other current assets on the Company’s condensed consolidated balance sheets. Income for services provided by the Company to Regeneron is included within other income, net within the condensed consolidated statements of operations and comprehensive loss. Reimbursement for costs incurred, without markup, are netted against operating expenses on the condensed consolidated statements of operations and comprehensive loss. Novo Asset Purchase Agreement In June 2024, the Company announced the completion of the Novo Transaction. As consideration, Novo paid the Company upfront consideration of $38.0 million, plus up to an additional $2.0 million that will be held back by Novo for 12 months and may be used to settle certain indemnification claims. No assets on the Company’s condensed consolidated balance sheet were identified to be transferred to Novo as part of the transaction. The termination of the Company’s existing Collaboration and License Agreement with Novo (as described in Note 11) was negotiated concurrently with the asset purchase agreement and as such, the Company derecognized $11.0 million of deferred revenue associated with the Company’s Novo Collaboration Agreement as part of the megaTAL Sale. In connection with the megaTAL Sale, the Company entered into a transition service agreement with Novo under which the Company will provide certain services to Novo to help facilitate an orderly transition of the business following the sale. Consideration for these services was included in the initial purchase price and as such, $1.0 million, which represents the fair market value of the services to be performed, is deferred from the gain on the sale and will be recognized over the six month term of the transition services agreement. The balance of deferred transition service income is included within accrued expenses and other current liabilities on the condensed consolidated balance sheets. The $38.0 million cash consideration received by the Company (less the $1.0 million received for transition services to be provided by the Company) combined with the derecognition of the deferred revenue totals $48.0 million and represents the gain on the sale of asset to Novo. This is disclosed as the “gain on sale to Novo Nordisk”, on the condensed consolidated statements of operations and comprehensive loss. As the Company has elected to use the loss recovery approach to account for contingent consideration receivable, the $2.0 million cash consideration held back by Novo will not be recognized until it is probable to be received.

2seventy bio, Inc. 10-Q