Note 3 — Revenue

GSK Collaboration and License Agreement

Revenue represents recognized income from the GSK Collaboration and License agreement, whereby GSK funds the development of, and has an option to obtain an exclusive license to, our NY-ESO SPEAR T-cells. In addition, GSK has the right to nominate four additional target peptides, excluding those where the Company has already initiated development of a SPEAR T-cell candidate. The Company received an upfront payment of $42 million (£25 million) in June 2014 and has achieved various development milestones totaling $22 million (£14 million).  No milestones were achieved during the three and six months ended June 30, 2016. The Company is entitled to further milestone payments based on the achievement of specified development and commercialization milestones by either the Company or GSK.

The revenue recognized to date relates to the upfront fee and development milestones payments received, which are being recognized in revenue over the period in which the Company is delivering services under the GSK Collaboration and License Agreement.  The Company recognized revenue of $328,000 and $2,783,000 in the three months ended June 30, 2016 and 2015, respectively and $3,246,000 and $5,511,000 in the six months ended June 30, 2016 and 2015, respectively.

We regularly review and monitor the progress of the GSK Collaboration and License Agreement to determine the period over which to recognize revenue. In the three months ended June 30, 2016, the estimate of the period over which the Company will deliver services under the GSK Collaboration and License Agreement was increased.  This change in estimate resulted in a decrease in revenue of $2,785,000 in the three months ended June 30, 2016 and will result in a decrease in revenue of $672,000 and $1,344,000 in the six months ended December 31, 2016 and the year ended December 31, 2017, respectively, and an increase in revenue of $1,793,000, $1,187,000 and $1,642,000 in the years ended December 31, 2018, 2019 and 2020, respectively, compared to the revenue that would have been recognized based on previous estimates.