On April 11, 2024, Precision BioSciences, Inc. (the "Company") reported to have received written notice from Prevail Therapeutics Inc. ("Prevail"), a wholly-owned subsidiary of Eli Lilly and Company, of Prevail’s termination of the Amended and Restated Development and License Agreement, dated June 30, 2023, between Prevail and the Company (the "Agreement") (Press release, Precision Biosciences, APR 11, 2024, View Source [SID1234642468]). Prevail’s notice informed the Company that Prevail was exercising its right pursuant to Section 15.3.2 of the Agreement to terminate the Agreement in its entirety without cause upon 90 days’ prior written notice to the Company. The termination will be effective on July 10, 2024.
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Pursuant to the terms of the Agreement, Precision and Prevail agreed to collaborate and develop the Company’s ARCUS nucleases for the research and development of potential in vivo therapies for three initial genetic disorder targets, including Duchenne muscular dystrophy ("DMD") in muscle, a liver directed target ("PBGENE-LLY2") and a central nervous system directed target ("PBGENE-LLY3" and together with DMD and PBGENE-LLY2, the "Programs"). Under the original agreement with Eli Lilly and Company signed November 19, 2020, Precision received $135 million in upfront investment consisting of $100 million upfront and $35 million from Lilly’s purchase of 125,406 shares of the Company’s common stock (on a post-reverse stock split basis). The Agreement was amended and restated in June 2023 with Prevail assuming and funding preclinical research and investigational new drug application-enabling activities, which had previously been conducted by the Company at its expense, as well as assuming responsibility for the manufacturing of initial clinical trial material for the first licensed product. Upon the achievement of various milestones, the Company would have been entitled to receive milestone payments of up to an aggregate of $390 million to $395 million per licensed product as well as nomination fees for additional targets and certain research funding. If licensed products resulting from the collaboration were approved and sold, Prevail would have also been required to pay tiered royalties ranging from the mid-single digit percentages to the low-teens percentages on world-wide net sales of the licensed products, subject to customary potential reductions. Prevail’s exercise of its termination right is contemporaneous with achievement of defined preclinical activities on the collaboration for the Programs, at which time Prevail would have taken over all remaining development activities for the Programs.
In connection with the termination, the Company has exercised its reversion option (the "Reversion Option") under the Agreement to regain control over development of the Programs and plans to explore opportunities to further develop the Programs. As a result, Prevail is required upon Precision’s request and to the extent permitted by law or terms of third party agreements, to assign and transfer to the Company all right, title and interest in and to all materials, preclinical and clinical data, safety data and all other supporting data in Prevail’s control related to the terminated products for the continued development and commercialization of such products.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text of the Agreement, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 6, 2023, and is incorporated herein by reference.