As previously disclosed, on June 24, 2021, Prothena Corporation plc ("Prothena") reported that Bristol Myers Squibb ("BMS") exercised its option under the terms of the ongoing global neuroscience research and development collaboration (the "Master Collaboration Agreement") to enter into an exclusive U.S. license for PRX005, and, on July 30, 2021, Prothena entered into a U.S. License Agreement (the "Tau U.S. License Agreement") granting BMS the exclusive license to develop, manufacture and commercialize antibody products in the United States targeting tau ("Tau Collaboration Products") for any and all uses or purposes with respect to any human or animal disease, disorder or condition (Filing, 8-K, Prothena, JUL 10, 2023, View Source [SID1234633143]).
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On July 5, 2023 and pursuant to the option exercised by BMS under the Master Collaboration Agreement, Prothena and BMS entered into a Global License Agreement (the "Tau Global License Agreement") granting BMS the exclusive license to develop, manufacture and commercialize Tau Collaboration Products globally for any and all uses or purposes with respect to any human or animal disease, disorder or condition. The Tau Global License Agreement supersedes and replaces the Tau U.S. License Agreement in its entirety.
The Tau Global License Agreement includes an exercise fee payable to Prothena of $55 million. The Tau Global License Agreement replaces the regulatory and sales milestones under the Tau U.S. License Agreement, and increases the amounts payable under such milestones from up to $465 million to up to $562.5 million. The tiered royalties on net sales remain the same, and such exercise fees, milestones and royalty payments are subject to certain reductions as specified in the Tau Global License Agreement. In addition, Prothena will be eligible to receive reimbursement of certain chemistry, manufacturing and control (CMC) related expenses incurred by Prothena under the Master Collaboration Agreement, not to exceed $15 million.
Under the Tau Global License Agreement, BMS will continue to pay royalties on a product-by-product and country-by-country basis, until the latest of (i) expiration of certain patents covering the Tau Collaboration Products in such country of sale, (ii) expiration of any applicable regulatory exclusivity in such country of sale, and (iii) an agreed period of time after the first commercial sale of the Tau Collaboration Products in such country of sale (the "Royalty Term").
The term of the Tau Global License Agreement will continue on a product-by-product and country-by-country basis until the expiration of all Royalty Terms with respect to all Tau Collaboration Products. Either party is entitled to terminate the Tau Global License Agreement for material breach, bankruptcy or safety reasons. Prothena is entitled to terminate the Tau Global License Agreement for a failure by BMS to exercise due diligence with respect to its global rights for the Tau Collaboration Products under the Master Collaboration Agreement, and for certain patent challenges by BMS. The Tau Global License Agreement imposes certain post-termination rights and obligations on the parties, which vary based on the reasons giving rise to the termination.
The foregoing description of the Tau Global License Agreement is not a complete description thereof, and is qualified in its entirety by reference to the actual agreement that will be filed with the Securities and Exchange Commission (the "SEC") as an exhibit to Prothena’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2023.
The foregoing descriptions of (i) the Master Collaboration Agreement and (ii) the Tau U.S. License Agreement are not complete descriptions thereof, and are qualified in their entirety by reference to the actual agreements that are filed with the SEC as Exhibits 10.8 and 10.10, respectively, to Prothena’s Annual Report on Form 10-K filed February 28, 2023.