SEC Filings

10-K
AUDENTES THERAPEUTICS, INC. filed this Form 10-K on 03/13/2017
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AUDENTES THERAPEUTICS, INC.

Notes to Consolidated Financial Statements — Continued

 

University of Pennsylvania. The Company will also owe REGENXBIO (i) an annual maintenance fee; (ii) up to $7.6 million in combined development and regulatory milestone fees per licensed product; (iii) mid-single digit to low teens royalty percentages on net sales of licensed products sold by the Company, its affiliates and sublicensees and (iv) a low twenties percentage of certain sublicense fees received by the Company from sublicensees for the licensed products and certain fees received from the sale or transfer of specified rights related to a licensed product.

Under the agreement, the Company is obligated to diligently use commercially reasonable efforts to develop, commercialize, market, promote and sell licensed products. The Company is also obligated to achieve certain development milestones, including submission to the FDA and subsequent effectiveness of an IND application, or acceptance by the European Medicines Agency of an equivalent application, within a specified time period, which the Company may extend for a specified number of extensions upon the payment of certain fees.

The agreement will continue on a country-by-country and licensed product-by-licensed product basis and expire upon the later of the expiration, lapse, abandonment or invalidation of the last claim of the licensed patent rights to expire, lapse or become abandoned or unenforceable in such country, or ten years after first commercial sale of such licensed product in such country. The Company may terminate the agreement upon prior written notice. REGENXBIO may terminate the agreement immediately in case of the Company’s bankruptcy, or other similar events, if the Company is late in paying money due under the agreement and does not pay in full within a specified number of days after receiving written notice, or if the Company or its affiliates commence any action against REGENXBIO or its licensors to declare or render any claim of the licensed patent rights invalid or unenforceable. Either party may terminate the agreement for material breach that is not cured within a specified number of days.

REGENXBIO License Agreement (CPVT)

Also in November 2015, the Company entered into a third license agreement with REGENXBIO. Under the agreement, REGENXBIO granted the Company an exclusive worldwide license under certain patent rights to make, have made, use, import, sell and offer for sale licensed products for the treatment of CPVT in humans using AAV9. Within a specified time and upon written notice, the Company may elect to substitute for, or add to, CPVT certain other inherited arrhythmias.

As consideration for the licensed rights, the Company paid REGENXBIO an upfront fee of $1.0 million. For each additional indication, the Company may elect to pursue under the licensed rights, the Company agreed to pay REGENXBIO a fee of $0.5 million upon such election. The Company will also owe REGENXBIO (i) an annual maintenance fee for each covered indication; (ii) up to $8.8 million in combined development and regulatory milestone fees for each indication and each licensed product; (iii) up to $45.0 million in combined commercial milestone fees based on various annual aggregate net sales thresholds; (iv) mid-single digit to low teens royalty percentages on net sales of licensed products sold by the Company, its affiliates and sublicensees and (v) a low twenties percentage of any sublicense fees received by the Company from sublicensees for the licensed products and certain fees it received from the sale or transfer of specified rights related to a licensed product.

Under the agreement, the Company is obligated to use commercially reasonable efforts to develop, commercialize, market, promote and sell licensed products for each indication. It is also obligated to achieve certain development milestones for each indication, including submission to the FDA and subsequent effectiveness of an IND application, or acceptance by the European Medicines Agency of an equivalent application, within a specified time period, which it may extend for additional time and for a specified number of extensions upon the payment of certain fees.

The agreement will continue on a country-by-country and licensed product-by-licensed product basis and expire upon the later of the expiration, lapse, abandonment or invalidation of the last claim of the licensed patent rights to expire, lapse or become abandoned or unenforceable in such country, or ten years after first commercial sale of such licensed product in such country. The Company may terminate the agreement in its entirety or for each elected disease indication upon prior written notice. REGENXBIO may terminate the agreement immediately in case of the Company’s bankruptcy, or other similar events, if the Company is late in paying money due under the agreement and does not pay in full within a specified number of days after receiving written notice, or if the

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