Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Charles Duncan from JMP Securities. Please proceed.
Charles Duncan – JMP Securities
Hi, guys. Nice job in the quarter.
John, I had a quick question with regard to – perhaps the royalties on some of the products that are in development. Can you identify some products that are in development that you may get royalties on, and I had heard that one of the Alzheimer's drugs that you have in development, the payments to you don't only depend on the Queen patent. Can you give us some additional insights on that?
John McLaughlin
Sure. And you are correct. So the focus on two of the products that are in development, there is a bunch, but to focus on two, there are antibodies for the treatment of Alzheimer's disease, both of them are in Phase III. One is under license to Wyatt – now it is Wyatt J&J. You may have seen last week the two companies announced the formation of a joint venture. J&J invested about – a little over $1 billion at a premium to land stock – actually Wyatt stock to get – something more than 50% of the joint venture, which includes the Alzheimer anti-body and I think our vaccine plus they also committed to about an initial $500 million in clinical development for the product.
The second one, which you see is actually the one that I think that your – the second part of your question refers to is an antibody being developed by Lilly, and to the point in your question, for some of the antibodies, PDL provided not only a patent license, but also provided humanization services that as they helped – they assisted in the humanization of the antibody, providing know-how. And in the instance of that license, there are payments that stem from the patent license granted. At the time of expiration of the patent license, there is a step down royalty for payment for use of the know-how, which continues for a couple of years thereafter.
Charles Duncan – JMP Securities
Is that step down on the order of – say, does it go to a tenth of the original payment, or is it some larger fraction thereof?
John McLaughlin
Yes, I can't get into the details of that particular license. But as a rule of thumb, when you see these kinds of licenses and these structures are reasonably common. Typically, you see a step down on the range of kind of a third a quarter, someplace in there, but I'm not commenting on that specific license.
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