On March 1, 2024, C4 Therapeutics, Inc. ("C4T") reported to have entered into a Research Collaboration and License Agreement ("License Agreement") with Merck KGaA, Darmstadt, Germany ("MKDG"), which operates its healthcare business as EMD Serono in the U.S. and Canada, to exclusively discover two targeted protein degraders against critical oncogenic proteins that C4T has progressed within its internal discovery pipeline (Filing, C4 Therapeutics, MAR 1, 2024, View Source [SID1234641009]).
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Pursuant to the terms of the License Agreement, C4T grants MKDG a worldwide, exclusive license under certain of C4T’s intellectual property rights to discover two targeted protein degraders against critical oncogenic proteins. MKDG is responsible for all development, regulatory approval, manufacturing and commercialization costs. Under the terms of the License Agreement, MKDG has agreed to make an upfront cash payment of $16.0 million and will fund C4T’s discovery research efforts. C4T is eligible to receive approximately $740 million in aggregate in discovery, regulatory, and commercial milestone payments across the collaboration, plus tiered royalties on net sales. Royalties payable from MKDG to C4T range from mid-single digit to low-double digit percent, subject to reductions under certain circumstances as described in the License Agreement.
Under the License Agreement, the royalty term for all contemplated royalties shall terminate on a product-by-product and country-by-country basis on the latest of (i) the ten (10) year anniversary of the first commercial sale of such product in such country, and (ii) the expiration of the last-to-expire licensed patent that covers such product in such country.
The License Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature. The License Agreement became effective upon signing and will continue until all of MKDG’s applicable payment obligations under the License Agreement have been performed or have expired, or the agreement is earlier terminated. Under the terms of the License Agreement, each of C4T and MKDG has the right to terminate the License Agreement for material breach by, or insolvency of, the other party. MKDG may also terminate the License Agreement in its entirety, or on a product-by-product or country-by-country basis, for convenience upon sixty (60) days’ notice.
The foregoing description of the License Agreement is only a summary and is qualified in its entirety by reference to the License Agreement, a copy of which C4T intends to file as an exhibit to C4T’s Quarterly Report on Form 10-Q for the period ending March 31, 2024.