8.       Related-Party Transactions

Relationship with Johnson & Johnson Innovative Medicine

Collaboration Agreement

On January 30, 2019, the Company entered into a Collaboration Agreement with Johnson & Johnson Innovative Medicine for the research, development and commercialization of gene therapies for the treatment of IRDs. Under the agreement, Johnson & Johnson Innovative Medicine paid the Company a non-refundable upfront fee of $100.0 million. Johnson & Johnson Innovative Medicine and the Company agreed to collaborate to develop the Company’s clinical programs in retinitis pigmentosa and two genetic forms of achromatopsia and Johnson & Johnson Innovative Medicine had the exclusive right to commercialize these three product candidates (“Clinical IRD Product Candidates”) globally.

Pursuant to the Collaboration Agreement, the Company and Johnson & Johnson Innovative Medicine also agreed on a research collaboration to develop a pipeline of preclinical inherited retinal disease gene therapy candidates (“Research IRD Product Candidates”). The parties agreed to select and prioritize the Research IRD Product Candidates and Johnson & Johnson Innovative Medicine had the right to opt-in for a fee for each of the specified targets (each an “Option Target”) to obtain certain development, manufacturing and commercialization rights for the Research IRD Product Candidates.

Unless terminated earlier under certain termination clauses, the Collaboration Agreement was to continue in effect, on a product-by-product and country-by-country basis, until such time as the royalty terms expired in such country. The Company had determined enforceable rights existed in the Collaboration Agreement as the termination clauses were substantive termination penalties by way of the non-refundable upfront fee and the reversion of any licensed intellectual property granted to Johnson & Johnson Innovative Medicine upon the termination of the agreement.

Under the Collaboration Agreement, the Company and Johnson & Johnson Innovative Medicine were jointly developing Clinical IRD Product Candidates to permit Johnson & Johnson Innovative Medicine to commercialize such Clinical IRD Product Candidates under an exclusive license from the Company. In general, the Company had the primary responsibility to develop each Clinical IRD Product Candidate in accordance with the development plan for each Clinical IRD Product Candidate, including where applicable, conducting any necessary research in order to submit the applicable regulatory filings to regulatory authorities. The Company agreed to manufacture these products in its GMP manufacturing facilities for both clinical and commercial supply. Johnson & Johnson Innovative Medicine agreed to pay 100% of the clinical and commercialization costs of the products and the Company was eligible to receive untiered 20% royalties on net sales of products and additional development and commercialization milestones up to $340.0 million.  The Company received a milestone payment of $30.0 million in December 2021. In connection with entering into the Asset Purchase Agreement, the Company entered into a Termination Agreement with Johnson & Johnson Innovative Medicine terminating the Collaboration Agreement.

Asset Purchase and Related Agreements

On December 20, 2023, the Company entered into the Asset Purchase Agreement with Johnson & Johnson Innovative Medicine pursuant to which the Company sold and assigned to Johnson & Johnson Innovative Medicine,

and Johnson & Johnson Innovative Medicine purchased and assumed, the UCLB RPGR License Agreement relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets as described in the Asset Purchase Agreement. Simultaneously, the Company and Johnson & Johnson Innovative Medicine also entered into a Supply Agreement pursuant to which the Company agreed to manufacture and supply the RPGR Product for Johnson & Johnson Innovative Medicine. Under the Supply Agreement, MeiraGTx UK II, together with its affiliates, will manufacture commercial supply of the RPGR Product for Johnson & Johnson Innovative Medicine for an initial term of four years, with Johnson & Johnson Innovative Medicine having an option to extend the Supply Agreement for a fifth year upon written notification. Johnson & Johnson Innovative Medicine may terminate the Supply Agreement for convenience upon 90 days’ written notice with payment of a termination fee. Under the Asset Purchase Agreement, Johnson & Johnson Innovative Medicine paid the Company a non-refundable upfront fee of $65.0 million in December 2023 and the Company is eligible to receive fees from commercial supply of the RPGR Product and in addition, milestones of up to $350.0 million,  as follows: (i) a milestone payment of $50.0 million in connection with the achievement of the initiation of the extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product, which milestone was achieved during the first quarter of 2024; (ii) $10.0 million upon completion of certain specified development services for the drug substance for the RPGR Product; (iii) $5.0 million upon completion of certain specified development services for the drug product for the RPGR Product; (iv) $175.0 million upon the first commercial sale of an RPGR Product in the United States; (v) $75.0 million upon the first commercial sale of an RPGR Product in at least one of the United Kingdom, France, Germany, Spain and Italy; (vi) $25.0 million upon completion of the transfer of certain manufacturing technology for drug substance and drug product from the Company to Johnson & Johnson Innovative Medicine; and (vii) $10.0 million upon regulatory approval of a Johnson & Johnson Innovative Medicine -selected manufacturing facility in each of the United States and European Union for commercial manufacture of the RPGR Product. Johnson & Johnson Innovative Medicine is also responsible for any royalty or milestone amounts that become payable on the RPGR Product under the UCLB RPGR License Agreement.

Revenue Recognition under the Johnson & Johnson Innovative Medicine Agreements

Collaboration Agreement

The Company evaluated the potential performance obligations in the Collaboration Agreement pursuant to ASC 606, which included the exclusive license to Clinical IRD Product Candidates, the research, development and manufacturing services (“the services”), and the participation in various joint committees and determined that none of the performance obligations by themselves were distinct. Goods and services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. The services, when combined with the licenses, represent a bundle and should be accounted for as a single performance obligation due to the relevance of the services to the value of the early-stage license and the potential for the intellectual property to be significantly modified during the services period. The Company also evaluated whether or not the right to purchase exclusive option rights for specified Research IRD Product Candidates represents future performance obligations and concluded that these represent a separate buyer decision at market rates, rather than a material right performance obligation. As such, these options were excluded from the initial allocation of transaction price and the Company would have accounted for these options as separate contracts when and if Johnson & Johnson Innovative Medicine had elected to exercise the options.

Under ASC 606, the Company recognized collaboration revenue using the cost-to-cost input method, which it believes best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the combined performance obligation by the potential product candidate. Under this method, revenue is being recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. Under ASC 606, the estimated transaction price includes variable consideration subject to constraints. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when any uncertainty associated with the variable consideration is resolved. The estimate of the Company’s measure of progress and estimate of variable consideration included in the transaction price was updated at each reporting date as a change in estimate. The amount related to the unsatisfied portion was recognized as that portion was satisfied over time.

Under ASC 606 the Company accounts for (i) the licenses it conveyed with respect to the Clinical IRD Product Candidates and (ii) its obligations to perform services as a single performance obligation under the Collaboration Agreement with Johnson & Johnson Innovative Medicine on a product candidate basis. Johnson & Johnson Innovative Medicine’s right to purchase exclusive options to obtain certain development, manufacturing and commercialization rights were accounted for separately as they did not represent material rights, based on the criteria of ASC 606. Upon the exercise of any purchased option by Johnson & Johnson Innovative Medicine, the contract promises associated with an Option Target would have used a separate cost-to-cost model for purposes of revenue recognition under ASC 606.

In 2019, the Company received a $100.0 million non-refundable upfront fee from Johnson & Johnson Innovative Medicine and during the year ended December 31, 2021, the Company received a $30.0 million milestone payment. The Company allocated these amounts plus other variable consideration not subject to constraint to each identified performance obligation using a combination of methods allowable under ASC 606. The Company applies the practical expedient in Topic 606 and does not include disclosures regarding amounts for variable consideration allocated to wholly-unsatisfied performance obligations or wholly-unsatisfied distinct goods that form part of a single performance obligation, if any. This variable consideration includes expected reimbursement of research and development costs.

Asset Purchase and Related Agreements

The agreements entered into in December 2023 were executed at the same time and were negotiated with a single commercial objective; therefore, the contracts were combined and accounted for as a single contract. These agreements were accounted for as a termination of the existing Collaboration Agreement and the creation of a new contract where the transaction price includes the remaining deferred revenue – related party from the terminated agreement of $30.6 million, the fixed upfront payment of $65.0 million under the Asset Purchase Agreement, and an aggregate of $1.8 million estimated variable consideration for transition services, offset by a credit of $5.1 million for pre-funded inventory, totaling $92.3 million. The transaction price was allocated to four performance obligations on a relative SSP basis, subject to certain exceptions for discounts and variable consideration. As the SSPs are not directly observable for any of the distinct goods and services, the SSPs were estimated based on a valuation. The total transaction price of $92.3 million was allocated to the performance obligations with respect to SSPs as follows: process performance qualification (“PPQ”) services in the amount of $2.9 million, material rights representing the commercial supply of RPGR Product and an in-substance contract renewal option in the amount of $6.9 million, manufacturing technology transfer in the amount of $28.7 million, and the sale of nonfinancial assets representing the sale and transfer of all the Company’s right, title, and interest in the intellectual property related to the RPGR Product and the assignment of the UCLB RPGR License Agreement to Johnson & Johnson Innovative Medicine in the amount of $53.8 million.

During the first quarter of 2024, the Company received a $50.0 million milestone payment in connection with the achievement of the initiation of the extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product. The milestone payment was allocated to the four performance obligations on the same basis noted above increasing the value of each performance obligation as follows: PPQ services in the amount of $1.6 million, material rights representing the commercial supply of RPGR Product and an in-substance contract renewal option in the amount of $3.8 million, manufacturing technology transfer in the amount of $15.6 million, and the sale of nonfinancial assets representing the sale and transfer of all the Company’s right, title, and interest in the intellectual property related to the RPGR Product and the assignment of the UCLB RPGR License Agreement to Johnson & Johnson Innovative Medicine in the amount of $29.0 million.

The transaction price allocated to PPQ services will be recognized over time using an inputs method measure of progress. The transaction price allocated to the material right for the commercial supply of RPGR Product will be recorded as deferred revenue until Johnson & Johnson Innovative Medicine exercises its option to purchase supply and the Company transfers control of such supply to Johnson & Johnson Innovative Medicine. The transaction price allocated to the in-substance renewal option (material right) will be recorded as deferred revenue until Johnson & Johnson Innovative Medicine exercises the option and the Company transfers control of the underlying goods or services to Johnson & Johnson Innovative Medicine. The Company will account for the exercise of the in-substance

renewal option (material right) as a continuation of the existing contract (i.e., a change in the transaction price). The transaction price allocated to the technology transfer will be recognized over time using an inputs method measure of progress. The Company will recognize a gain for the difference between the carrying amount of the nonfinancial assets and the consideration allocated to that unit of account when control of the nonfinancial assets transfers in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets.

During the six-month period ended June 30, 2024, the Company recognized a gain of $29.0 million related to the sale of nonfinancial assets which is included in other income in the condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2024, the aggregate transaction price allocated to unsatisfied performance obligations was $57.3 million which the Company expects to recognize over an estimated period of approximately 3.5 years.

A summary of the deferred revenue recognition is as follows (in thousands):

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During the three-month period ended June 30, 2024, the Company recognized $0.3 million of deferred revenue – related party as service revenue in connection with PPQ services under the Asset Purchase Agreement and related agreements. During the three-month period ended June 30, 2023, the Company recognized $3.5 million of deferred revenue – related party in connection with the Collaboration Agreement as license revenue.

During the six-month period ended June 30, 2024, the Company recognized $1.0 million of deferred revenue – related party as service revenue in connection with PPQ services under the Asset Purchase Agreement and related agreements. During the six-month period ended June 30, 2023, the Company recognized $6.9 million of deferred revenue – related party in connection with the Collaboration Agreement as license revenue.

The Company also recognized $1.3 million during the three-month period ended June 30, 2024 related to transition services the Company provided to Johnson & Johnson Innovative Medicine and $21.8 million during the three-month period ended June 30, 2023, related to the reimbursement of research and development expenses under the Collaboration Agreement, which were recorded as an offset to research and development expenses.

The Company also recognized $1.6 million during the six-month period ended June 30, 2024 related to transition services the Company provided to Johnson & Johnson Innovative Medicine and $44.4 million during the six-month period ended June 30, 2023, related to the reimbursement of research and development expenses under the Collaboration Agreement, which were recorded as an offset to research and development expenses.

Private Placement

On February 27, 2019, in connection with a private placement, the Company issued 2,898,550 ordinary shares to JJDC, the investment arm of Johnson & Johnson and owner of Johnson & Johnson Innovative Medicine, on the same terms and conditions as the other investors in the offering. After the offering, JJDC became a related party. On November 9, 2022, the Company entered into a securities purchase agreement with JJDC, pursuant to which the Company, in a private placement, agreed to issue and sell to JJDC an aggregate of 3,742,514 ordinary shares at a purchase price of $6.68 per share, for gross proceeds of approximately $25.0 million.

Debt Financing

On August 2, 2022 the Company, as borrower, and Meira UK II and Meira Ireland, as guarantors (the “Subsidiary Guarantors”), entered into a senior secured financing arrangement (the “Financing Agreement”) by and among the Company, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and Perceptive Credit Holdings III, LP, as administrative agent and lender (“Perceptive”). On December 19, 2022, the Financing Agreement was converted to a notes purchase agreement and guaranty (the “Notes Purchase Agreement”) between the same parties and under substantially the same terms and conditions as the Financing Agreement, subject to certain customary note constitution terms. Perceptive Advisors, LLC, an affiliate of Perceptive, is a greater than 10% holder of the ordinary shares of the Company. Additionally, Ellen Hukkelhoven, Ph.D., a director of the Company, is an employee of Perceptive Advisors, LLC. Refer to the discussion in Note 10 for further information related to the accounting for the debt financing.