On November 17, 2024, HCW Biologics Inc. (the "Company") entered into an exclusive, worldwide License, Research, and Co-Development Agreement (the "License Agreement") with WY Biotech Co., Ltd. (the "Licensee") for one of the Company’s preclinical, proprietary molecules (the "Licensed Molecule"). Under the terms of the License Agreement, the Company will receive an upfront fee of $7.0 million, to be paid in two tranches (Filing, 8-K, HCW Biologics, NOV 17, 2024, View Source [SID1234648468]). Within 90 days after the effective date of the License Agreement, which may be extended by an additional 30 days, if required, the Licensee will pay the Company $4.0 million; and within 30 days of completing the technology transfer to the Licensee, the Company will receive $3.0 million. All payments under the License Agreement will be made in U.S. Dollars.
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Upon the completion of a Phase 1 clinical trial in any jurisdiction, the Company has an "Opt-In Right," which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of the Licensed Molecule in the Opt-In Territory. The "Opt-In Territory" is North America, South America, and Central America. Upon the completion of the exercise of the Opt-In Right, the Company will be responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the Licensed Molecule in the Opt-In Territory.
The Licensee will pay the Company milestone payments as the Licensed Molecule advances through clinical trials and the first marketing approval is granted for the first territory in which the Licensee retains exclusive rights. Upon commercialization, the Company will receive double-digit royalties on a product-by-product basis in each jurisdiction in which the Licensee retains exclusive rights, subject to adjustment in the event the Company exercises the Opt-In Right. In addition, the Company will share a substantial portion of the net proceeds from any future transactions entered into by the Licensee, involving an exclusive license for the Licensed Molecule, an assignment of the License Agreement or the sale of the Licensee’s business that would permit the buyer to assume exclusive rights under the License Agreement, excluding transactions in the Greater China market. The Company and the Licensee have expressed their intent to work cooperatively with respect to the Licensed Molecule in the development stage, with a global focus for clinical development and partnering. The License Agreement contains various representations, warranties, affirmative and negative covenants, events of default and related remedies as well as other customary provisions.
The foregoing summary of the terms of the License Agreement does not purport to be complete.