| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 6, 2021 (the “Effective Date”), Aerie Pharmaceuticals Ireland, Ltd. (“Aerie”), a subsidiary of Aerie Pharmaceuticals, Inc. (the “Company”), entered into a Collaboration and License Agreement (the “Agreement”) with Santen SA (“Santen”), which expands the scope of the existing Collaboration and License Agreement between Aerie and Santen Pharmaceutical Co., Ltd. entered into on October 28, 2020. Pursuant to the Agreement, Aerie granted to Santen the exclusive right to develop, manufacture, market and commercialize Rhopressa® (named Rhokiinsa® in Europe) and Rocklatan® (named Roclanda® in Europe) (collectively, the “Licensed Products”) in China, India, Europe, the Middle East, the Commonwealth of Independent States, Africa, parts of Latin America and the Oceania countries (such jurisdictions collectively, the “Territories”). Aerie will also transfer any marketing approvals issued in Aerie’s name in the Territories as of or prior to the Effective Date to Santen or its affiliates. Under the Agreement, Aerie granted Santen a first right of refusal to commercialize the Licensed Products in Canada.
Under the Agreement, Santen must pay Aerie an upfront payment of $88.0 million (“Upfront Payment”) and various development and regulatory milestones of up to $15.5 million and sales milestones of up to $60.0 million. Aerie will also be entitled to a supplemental upfront payment of $2.0 million payable by Santen on the latest to occur of (i) the Effective Date, (ii) the receipt by Santen of written evidence of the European Medicines Agency’s (“EMA”) approval of Aerie’s request to file certain variations to the marketing approval of Roclanda® and (iii) Aerie completing the filing of the variations noted in clause (ii) with the EMA within thirty days of the Effective Date. In addition, Santen will pay Aerie a royalty in excess of 25% of the Licensed Products’ net sales in the Territories, excluding China and India, and in excess of 20% of the Licensed Products’ net sales in China and India, except for net sales resulting from the commercial sale of certain Licensed Products that are manufactured by or on behalf of Santen in China and India. Amounts will be payable based on quarterly net sales multiplied by the applicable fixed percentage. Such consideration will consist of the cost of products supplied to Santen from Aerie and a royalty for Aerie’s intellectual property.
Santen will be responsible for sales, marketing and pricing decisions relating to the Licensed Products. Santen is also responsible for all development and commercialization costs and activities related to the Licensed Products in the Territories, except for a post-marketing clinical study to be conducted by Aerie in Europe for Roclanda®. Aerie will be responsible for the manufacture and supply of the Licensed Products utilizing its manufacturing plant in Athlone, Ireland. After the expiration of the royalty term, which is the later of (i) the expiration of the last to expire valid patent claim covering the Licensed Products and (ii) 12 years from the date of the first commercial sale of each Licensed Product under an NDA approval, marketing authorization or the equivalent, Santen will have the sole responsibility to manufacture and supply such Licensed Products.
The term of the Agreement commences on the Effective Date and continues on a country-by-country and product-by-product basis in the Territory until the expiration of the obligation to make payments under the Agreement with respect to each Licensed Product in each country or region. The Agreement may be terminated by either Aerie or Santen upon the other party’s material breach, bankruptcy or insolvency. Aerie may also terminate the Agreement upon a patent challenge by Santen or on a country-by-country basis upon a breach by Santen of its obligation to develop, obtain marketing approval of and commercialize the Licensed Products in certain of the Territories. Santen may terminate the Agreement in its discretion if Santen reasonably determines that the Licensed Products are not commercially viable in the Territory (effective upon 180 days’ prior written notice). In addition, in the event that patents are issued that may prevent the commercialization of the Licensed Products during the three-year period following marketing authorization of Rhopressa® in China, Santen would have the right to terminate the Agreement with respect to China only and require Aerie’s repayment of $8.0 million of the Upfront Payment. In the event of termination, the Licensed Products in the applicable Territories will revert to Aerie.
The above description of the Agreement is a summary only and is subject to, and qualified entirely by, the Agreement, which the Company intends to file as an exhibit to its Annual Report on Form 10-K for the year ending December 31, 2021.
