Note 3 — Licenses/Supplier Agreements

ATX-04

In February 2026, Avenue entered into a license agreement with Duke University ("Duke"), pursuant to which Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to ATX-04 for the treatment of lysosomal storage diseases.

Under the ATX-04 License, Avenue made upfront payments totaling approximately $19,000 to Duke and has an obligation to make development, regulatory, and commercial milestone payments totaling approximately $15.6 million upon the achievement of certain milestones. In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04.

Beginning with calendar year 2028 and until the first regulatory approval, Avenue is obligated to make minimum annual royalty payments. In the event the ATX-04 License is terminated, minimum royalty obligations will cease, and Avenue will only be responsible for amounts due up to the termination date. 

IV Tramadol License

Effective as of February 17, 2015, Fortress transferred the Revogenex license and all other rights and obligations under the IV Tramadol License Agreement to the Company, pursuant to the terms of the Founders Agreement. In connection with the terms of the IV Tramadol License Agreement, Fortress purchased an exclusive license to IV tramadol for the U.S. market from Revogenex, a privately held company in Dublin, Ireland, for $2.0 million and paid an additional $1.0 million following the Company’s submission of its NDA for IV Tramadol. In addition, under the terms of the agreement, Revogenex is eligible to receive an additional milestone payment totaling $3.0 million upon the approval of IV tramadol from the U.S. Food and Drug Administration (“FDA”) as well as royalty payments on net sales of the product ranging in the high single digits to low double digits.

On October 29, 2018, the Company and Zaklady Farmaceutyczne Polpharma (“Polpharma”) extended the term of their exclusive supply agreement for drug product of IV tramadol to eight years from the date of the launch of the product. In addition, under the terms of the amended agreement, Polpharma is eligible to receive a milestone payment totaling $2.0 million upon the approval of IV tramadol from the FDA, as well as a low single digit royalty on net sales of the product for five years after launch.

AJ201 Termination

In February 2023, the Company entered into a license agreement with AnnJi Pharmaceutical Co. Ltd. (“AnnJi”), whereby Avenue obtained an exclusive license (the “AnnJi License Agreement”) for exclusive rights to intellectual property related to AJ201, a clinical-stage product candidate. Under the AnnJi License Agreement, the Company made an upfront payment of $3.0 million, issued shares of Avenue stock in two tranches, and agreed to certain development, regulatory, and commercial milestone payments, as well as royalties on net sales.

On April 24, 2025, the Company and AnnJi entered into a License Termination and Program Transfer Agreement (the “Termination and Transfer Agreement”), pursuant to which: (i) the AnnJi License Agreement and related agreements were terminated with immediate effect; (ii) the parties dismissed all pending dispute resolution proceedings and provided mutual releases of claims; (iii) Avenue transferred to AnnJi all of its rights, title and interest to and under the assets arising under the AnnJi License Agreement and otherwise related to AJ201 and (iv) Avenue agreed not to, for 48 months following the date of the Termination and Transfer Agreement, develop, commercialize, manufacture or sell any product competing with AJ201 in the US, Canada, the European Union, Great Britain or Israel. Under the Termination and Transfer Agreement, Avenue repurchased all shares previously issued to AnnJi for nominal consideration and paid approximately $0.2 million as consideration for legal expenses, which was accounted for as consideration payable to a customer and recorded as a reduction of revenue.

Under the Termination and Transfer Agreement, AnnJi agreed to pay the Company $1.6 million (net of withholding taxes), which was received in 2025. The Company recognized $1.4 million as other revenue during the quarter ended June 30, 2025, representing the consideration for the transfer of rights less the consideration for legal expenses.

The Company remains eligible to receive development and regulatory milestones relating to AJ201 of up to $5.0 million, commercial milestones of up to $17.0 million, a 1.75% royalty on future net sales of AJ201, and certain sublicense income subject to specified caps and conditions. Such amounts are considered variable consideration and are constrained until the achievement of the specified milestones. The Termination and Transfer Agreement also contains customary representations and warranties and provision related to confidentiality and indemnification.