Item 1.01. Entry into a Material Definitive Agreement.
Amendment No. 1 to Amended and Restated Royalty Purchase Agreement and First Put Option Exercise Agreement
On June 17, 2024, PTC Therapeutics, Inc. (the “Company”), Royalty Pharma Investments 2019 ICAV (“RPI”), and, for the limited purposes set forth in the Purchase Agreement (as defined below), Royalty Pharma plc, entered into an Amendment No. 1 to Amended and Restated Royalty Purchase Agreement and First Put Option Exercise Agreement (the “Amendment”), which amends that certain Amended and Restated Royalty Purchase Agreement dated as of October 18, 2023 (the “Purchase Agreement”).
Under the Purchase Agreement, the Company sold to RPI a certain portion of the Company’s right to receive sales-based royalty payments on worldwide net sales of Roche’s Evrysdi® (risdiplam) product and any other product developed pursuant to the License and Collaboration Agreement, dated as of November 23, 2011, by and among the Company, F. Hoffman-La Roche Ltd., Hoffman-La Roche Inc. (together with F. Hoffman-La Roche Ltd, “Roche”), and, for the limited purposes set forth therein, the Spinal Muscular Atrophy Foundation (such payments, the “Royalty”). The Purchase Agreement provided, among other things, the Company with five $100.0 million put options pursuant to which the Company could sell to RPI, after the closing of the Purchase Agreement and before December 31, 2025, its retained portion of the Royalty in exchange for total cash consideration of up to $500.0 million, less royalties received through the applicable put closing date in respect of the put portion of the Royalty for net sales occurring on or after October 1, 2023.
The Amendment modifies the size and number of put options available to be exercised by the Company under the Purchase Agreement, without changing the total cash consideration payable to the Company or the total amount of the Royalty to be sold to RPI in connection with the exercise of all the put options. The Amendment also removes from the Purchase Agreement the call options previously held by RPI to purchase up to 9.5112% of the Royalty. The Amendment provides that the Company has the option to sell its retained portions of the Royalty to RPI in up to four tranches for the following payments: (1) $250.0 million for the first tranche in exchange for 9.5112% of the Royalty, which increases to 16.6667% after the 2020 Assigned Royalty Cap (as defined in the Purchase Agreement) has been met, (2) $100.0 million for the second tranche in exchange for 3.8045% of the Royalty, which increases to 6.6667% after the 2020 Assigned Royalty Cap has been met, (3) $100.0 million for the third tranche in exchange for 3.8045% of the Royalty, which increases to 6.6667% after the 2020 Assigned Royalty Cap has been met, and (4) $50.0 million for the fourth tranche in exchange for 1.9021% of the Royalty, which increases to 3.3332% after the 2020 Assigned Royalty Cap has been met, in each case less royalties received through the applicable put closing date in respect of the put portion of the Royalty for net sales occurring on or after October 1, 2023. In connection with the closing of the Amendment, the Company exercised its put option to sell the first tranche to RPI, resulting in the Company receiving $250.0 million in cash consideration, less royalties received through June 17, 2024 in respect of the put portion of the Royalty for net sales occurring on or after October 1, 2023, in exchange for 9.5112% of the Royalty with respect to net sales arising after April 1, 2024, which increases to 16.6667% of the Royalty after the 2020 Assigned Royalty Cap has been met. As of the closing of the first tranche, the Company retains 9.5111% of the Royalty, which increases to 16.6666% after the 2020 Assigned Royalty Cap has been met.
The foregoing description of the material terms of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2024.
Amendment and Restatement of Hopewell Lease
In connection with the disposition of certain assets related to early-stage gene therapy programs, on June 17, 2024, the Company and Hopewell Campus Owner, LLC, as successor-in-interest to Bristol-Myers Squibb Company (the “Landlord”), entered into an amendment and restatement of the lease of office, production and laboratory space at a facility located in Hopewell Township, New Jersey filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Lease”). The amendments to the Lease significantly reduce the space and corresponding rent subject to the Lease.
As a result of the amendments to the Lease, the Company no longer considers the Lease to be material.
