| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 26, 2019, Savara Inc. (the “Company”), through its wholly-owned subsidiary, Savara ApS, and GEMABIOTECH SAU, a corporation organized under the laws of Argentina (“GEMA”), entered into a Manufacture and Supply Agreement (the “Agreement”) pursuant to which GEMA will supply the active pharmaceutical ingredient for the Company’s Molgradex product (the “API”). The Agreement supersedes the Supply and License Agreement between Savara ApS (as assignee of Serendex ApS) and GEMA dated December 10, 2012, as amended on February 22, 2016 and September 20, 2017.
Under the Agreement, GEMA shall manufacture and supply the API exclusively for the Company for commercial sale and continue to supply the API to the Company for clinical studies and research and development activities. Pursuant to the terms of the Agreement, GEMA agreed to undertake the actions required to comply with the requirements of the U.S. Food & Drug Administration (the “FDA”) and other similar regulatory authorities and obtain the approvals necessary to manufacture and supply the API to the Company for commercial sale. Additionally, GEMA transferred and assigned to the Company all right, title and interest in and to the master cell bank and working cell bank necessary to produce the API.
As consideration for the rights granted by GEMA, the Company is required to pay GEMA an agreed upon price per vial of 1 gram of the API. Additionally, the Company is obligated to make milestone payments to GEMA upon (i) the effective date of the Agreement, (ii) completion of certain developmental activities, (iii) successful completion of an audit by the FDA, and (iv) marketing approval of a product containing the API. If the Company successfully commercializes a product containing the API in a country, it must pay GEMA a single digit percentage royalty on annual net sales. The Company is obligated to make such royalty payments until the earlier of (i) 10 years after the first receipt of marketing approval for the product in that country or (ii) the date a biosimilar of such product is first sold in that country.
The term of the Agreement continues until the twentieth anniversary of the date of receipt of marketing approval for a product containing the API in any country and may be extended for additional twelve-month terms by the agreement of both parties. The Company may terminate the Agreement immediately if (i) products containing the API will not be sold or will be withdrawn from the market, (ii) the FDA or other regulatory authority withdraws marketing approval for or fails to approve products incorporating the API, (iii) three or more batches of API supplied in any six month period fail to conform to specifications, (iv) GEMA receives notice of deficiencies in its manufacturing and fails to adequately respond, or (v) GEMA fails to achieve compliance with the requirements of the FDA and other regulatory authorities necessary to manufacture and supply the API to the Company for commercial sale.
The Agreement also contains customary representations, warranties, mutual indemnities, limitations of liability and confidentiality provisions.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which the Company plans to file with its Form10-Q for the quarter ended March 31, 2019.
