Item 5.02 Entry into Material Definitive Agreement.
On January 6, 2023, CymaBay Therapeutics, Inc. ("CymaBay") entered into a
Collaboration and License Agreement (the "Agreement") with Kaken Pharmaceutical
Co., Ltd., a company organized under the laws of Japan ("Kaken"). Pursuant to
the Agreement, CymaBay granted Kaken an exclusive license to commercialize
seladelpar (the "Licensed Product") for the prevention or treatment of primary
biliary cholangitis ("PBC") in Japan.
Pursuant to the terms of the Agreement, Kaken will bear the cost of, and be
responsible for, among other things, conducting the clinical studies and other
developmental activities for the Licensed Product in PBC in Japan as well as
preparing and filing applications for regulatory approval in Japan and
commercializing the Licensed Product in Japan. Kaken is obligated to use
commercially reasonable efforts to develop, obtain regulatory approval for, and
commercialize, the Licensed Product in Japan, including obtaining pricing
approval for the Licensed Product in Japan. CymaBay is obligated to supply to
Kaken, its requirements of Licensed Product for clinical and commercial use in
Japan, which obligation may be terminated upon specified circumstances and
technology transfer.
In consideration of the license and other rights granted by CymaBay, Kaken will
pay CymaBay, within 30 days of the effective date of the Agreement, a
¥4.5 billion (approximately $34.0 million at current exchange rates) upfront
cash payment and is obligated to pay potential milestone payments to CymaBay
totaling up to ¥17.0 billion (approximately $128.4 million at current exchange
rates) for the achievement of certain regulatory and sales milestones. In
addition, during the Royalty Term (as defined below), while CymaBay supplies
Licensed Product to Kaken, Kaken will make payments to CymaBay for each unit of
Licensed Product that CymaBay supplies at a percentage of the Japanese National
Health Insurance price of the Licensed Product that equates to 20+% royalties.
If CymaBay is not supplying product to Kaken during the Royalty Term, a 20+%
royalty payment will be payable to CymaBay by Kaken based on Kaken net sales of
Licensed Product in Japan. After the Royalty Term, if CymaBay is supplying
Licensed Product to Kaken, CymaBay will receive payments for each unit of
Licensed Product based on a percentage of the Japanese National Health Insurance
price of the Licensed Product that is lower than during the Royalty Term.
The "Royalty Term" means the period ending on the latest to occur of (a) the
expiration of the last valid claim of the royalty patents covering such Licensed
Product in Japan, (b) the expiration of regulatory exclusivity for such Licensed
Product in Japan, and (c) 10 years after the first commercial sale of such
Licensed Product in Japan.
The Agreement is effective until the date upon which (a) the Royalty Term has
expired in Japan for the final Licensed Product, or (b) the Agreement is earlier
terminated (the "Initial Term"). After the Initial Term (except in the case of
early termination), the Agreement will be automatically renewed for 2-year
periods, unless either party has given the other Party a written notice not to
renew the Agreement no later than 12 months prior to the expiration of the
Initial Term or any subsequent renewal term, in which case the Agreement shall
expire (and thus terminate) at the end of the then-existing term or, if
applicable, shall earlier terminate upon an early termination.
The Agreement may be early terminated by either party for material breach, upon
a party's insolvency or bankruptcy or upon a challenge by one party of any
patents of the other party, and Kaken may terminate in specified situations,
including for a safety concern, clinical failure or termination of an underlying
in-license to CymaBay from Janssen Pharmaceutica NV, or at its convenience with
specified prior notice. Upon an intentional or willful material breach of the
Agreement by CymaBay, Kaken also has an alternative remedy for material breach
of the Agreement that results in a reduction in the payments otherwise payable
to CymaBay under the Agreement. Upon early termination, (i) license rights
granted under the Agreement terminate, (ii) to the extent permitted by
applicable law, Kaken is obligated to transfer to CymaBay copies of, and its
entire right, title and interest in, all regulatory materials in Japan (subject
to a royalty if such termination is by Kaken for CymaBay's uncured material
breach) and (iii) Kaken will automatically grant to CymaBay, with immediate
effect, a non-exclusive, fully paid up, royalty-free license under the Kaken
program intellectual property solely for the exploitation of Licensed Products.
Pursuant to the Agreement, the parties agreed to establish a joint steering
committee to provide strategic oversight of the parties' activities under the
Agreement. The Agreement also contains customary representations, warranties and
covenants by both parties, as well as customary provisions relating to
indemnification, confidentiality, intellectual property and other matters.
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The foregoing description of the Agreement does not purport to be complete and
is qualified in its entirety by the full text of the Agreement, a copy of which
will be filed as an exhibit to CymaBay's next Annual Report on Form 10-K to be
filed with the Securities and Exchange Commission.
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