Further to the Company’s immediate report dated April 12, 2015 (Reference No. 2015-01-076381) regarding negotiations between the Company and a global pharmaceutical company (the “Pharmaceutical Company“), with respect to the execution of a Research, Option and Licensing Agreement, the Company is pleased to announce that on April 15, 2015 the agreement was signed between the companies. The agreement is for the development of a designated accordion pill with a marketed, proprietary drug of the Pharmaceutical Company (the “Agreement’s Product“). To the Company’s best knowledge, the Pharmaceutical Company is one of the world’s top 20 pharmaceutical companies, in terms of market cap.
Under the agreement, the Company will conduct activities for the development of the collaboration product, pursuant to an agreed upon research plan, which activities shall be funded by the Pharmaceutical Company subject to achievement of certain research plan milestones. The Pharmaceutical Company was granted an option to obtain an exclusive, worldwide, royalty bearing license under the Company’s technology, as implemented in the Agreement’s Product, for the current approved indication of the proprietary drug. The agreement includes a mechanism, pursuant to which, to the extent the Company is not precluded from doing so, at the request of the Pharmaceutical Company the parties shall negotiate in good faith the expansion of the license field, for additional indications, and the terms and conditions thereof. As of the exercise of the option, the Pharmaceutical Company shall be responsible for, and bear all costs associated with, pre-clinical and clinical activities required for the purpose of obtaining regulatory approvals for the Agreement’s Product, and for the manufacturing and commercialization thereof. Without derogating from the generality of the foregoing, the Pharmaceutical Company undertook to consider in good faith the engagement of the Company as a manufacturer of commercial supply of the Agreement’s Product.
Under the agreement, the Company shall be entitled to the following consideration:
- US$ 250,000 within 15 days from the execution of the agreement, on account of the funding of the research plan, and an additional aggregate amount of up to $670,000 on account of achievement of research plan milestones;
- US$ 8,000,000 in consideration for the exercise of the option;
- Several payments in an aggregate amount of US$ 39,000,000 upon the achievement of milestones related to the development of the Agreement’s Product, regulatory filings for the purpose of obtaining regulatory approvals, and reaching first commercial sales in the US and Europe;
- Royalties in a low single-digit rate on net sales, provided that the aggregate annual royalties shall not exceed US$ 25,000,000, and the aggregate amount of royalties payable under the agreement shall not exceed US$ 100,000,000.
The agreement further includes provisions with respect to regulatory collaboration, confidentiality, title and maintenance of intellectual property owned by the parties and developed under the agreement, liability, indemnification and insurance. Pursuant to the agreement, the Company’s know-how and intellectual property existing as of the date of the agreement and new know-how and intellectual property developed by the parties under the agreement in connection with the accordion pill, and which is not specifically related to the Agreement’s Product, will be owned by the Company and may be used by the Company for its products and for purposes of additional collaborations, subject to the limits of the license.