Item 1.01 Entry into a Material Definitive Agreement
On May 8, 2020, ChemoCentryx, Inc. (the “Company”) entered into a Product Agreement (the “Product Agreement”) with Patheon Pharmaceuticals Inc. (“Patheon”), which was made pursuant to a Master Manufacturing Services Agreement between the Company and Patheon, dated March 18, 2020 (the “Master Agreement”).
Under the Master Agreement and the Product Agreement, Patheon has agreed to manufacture and supply avacopan drug product.
The Company’s obligation to purchase avacopan drug product is subject to certain binding forecast periods. The Company has also committed to purchasing from Patheon a substantial portion of the Company’s requirements for avacopan drug product during the period from May 8, 2020 to December 31, 2022, subject to certain volume limitations. Following such initial period, and every two years thereafter, the Company and Patheon shall evaluate and negotiate in good faith a new commitment for the Company’s requirements for avacopan drug product.
The Product Agreement has an initial term that expires on December 31, 2026, which will automatically extend for successivetwo-year renewal terms unless a notice of nonrenewal is delivered at least twelve months before the expiration of the initial term or then current renewal term, as applicable. The Master Agreement has an initial term that expires on March 18, 2023, which will automatically extend for successive three-year renewal terms for as long as the Product Agreement or any other product agreement under the Master Agreement remains in effect.
The Master Agreement and the Product Agreement may be terminated by either party following an uncured material breach by the other party within 45 days of written notice of such material breach, or in the event the other party becomes insolvent or subject to bankruptcy proceedings. In addition, the Company may terminate the Master Agreement or the Product Agreement upon occurrence of certain regulatory events or actions, including if the Company fails to obtain regulatory approval for avacopan or if such approval is withdrawn. The Company may also terminate the Master Agreement or the Product Agreement for convenience upon six months’ prior written notice, subject to certain termination fees.
The Master Agreement contains representations, warranties and indemnity obligations customary for agreements of this type, and the Product Agreement establishes certain pricing for avacopan drug product that may be adjusted as set forth in the Master Agreement.
The foregoing description of the terms of the Master Agreement and the Product Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Master Agreement and the Product Agreement, which will be filed with the Company’s Quarterly Report on Form10-Q for the quarter ending on June 30, 2020. The Company intends to redact certain confidential portions of the Master Agreement because such confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.
