On February 9, 2024, Shattuck Labs, Inc. ("Shattuck") reported to have entered into a collaboration and license agreement (the "Collaboration Agreement") with Ono Pharmaceutical Co., Ltd ("Ono"), effective February 13, 2024, pursuant to which Shattuck and Ono will collaborate in the research and preclinical development of certain prespecified compounds directed toward a pair of targets selected by Ono from Shattuck’s pipeline of bifunctional fusion proteins (the "Development Compounds") (Filing, 8-K, Shattuck Labs, FEB 9, 2024, View Source [SID1234640046]). Shattuck is primarily responsible for carrying out the research activities in accordance with a mutually agreed upon research plan (the "Research Plan"), subject to the oversight of a joint research committee consisting of representatives from both Shattuck and Ono. Pursuant to the Collaboration Agreement, Shattuck granted to Ono an exclusive option (the "Option") to obtain an exclusive, sublicensable license to research, develop, manufacture and commercialize multiple products resulting from the Development Compounds in any therapeutic area worldwide. The option period will extend from the effective date of the Collaboration Agreement until 90 days after Shattuck delivers its final report pursuant to the Research Plan, and following any exercise of the Option, Ono will be responsible for further development and commercialization of the Development Compounds.
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In connection with entering into the Collaboration Agreement and conducting the Research Plan, Shattuck is entitled to receive up to $9 million consisting of an initial upfront payment and additional amounts payable upon the achievement of certain milestones specified in the Research Plan. Additionally, Ono has agreed to pay for all of Shattuck’s costs and expenses incurred in conducting the Research Plan.
In the event Ono exercises the Option for the Development Compounds, Shattuck is entitled to receive licensing, clinical and regulatory, and commercial milestone payments of up to $217.5 million upon the exercise of the Option, the achievement of certain specified clinical and regulatory milestones and commercial milestones and, in addition, a tiered percentage royalty on global net sales ranging from mid-single digits to low double digits. Royalties are payable by Ono on a licensed product-by-licensed product and country-by-country basis for a maximum of ten years after the first commercial sale of such licensed product in such country.
During the term of the Collaboration Agreement, Shattuck and Ono are prohibited from commercializing products anywhere in the world with the same mechanism of action as the Development Compounds.
The Collaboration Agreement may be terminated by mutual agreement of Shattuck and Ono or by either Shattuck or Ono upon an uncured material breach of the Collaboration Agreement or the insolvency of the other party. Ono may terminate the Collaboration Agreement at any time upon 90 days’ written notice to Shattuck. If Ono exercises such termination right, Ono will pay all of Shattuck’s costs up through the date of termination. In addition, after the conditions to exercise the Option have been met, Shattuck may terminate the Collaboration Agreement if Ono discontinues its development or commercialization efforts and other conditions are met.
The foregoing description of the Collaboration Agreement does not purport to be complete and is qualified in its entirety by reference to the Collaboration Agreement. Shattuck intends to file the Collaboration Agreement as an exhibit to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.