Item 1.01 Entry into a Material Definitive Agreement.
On December 31, 2018, Dicerna Pharmaceuticals, Inc. (the “Company”) and Boehringer Ingelheim International GmbH, a wholly-owned subsidiary of C.H. Boehringer Sohn AG & Co. KG (“BI”) entered into an Additional Target Agreement (the “ATA”). In October 2018, BI exercised its option under a Collaborative Research and License Agreement between the Company and BI, dated October 27, 2017 (the “Original Agreement”) to add the development of product candidates targeting an additional gene (the “Additional Target”) to the development activities governed by the Original Agreement.
The ATA provides a research work plan for the Additional Target. The ATA also amends the Original Agreement to provide BI with the option to add the development of product candidates targeting a further additional gene to the Original Agreement (the “Second Option”) for a three-year period, and to provide for the delivery of a replacement product candidate by the Company to BI in the event that a product candidate under the Original Agreement or the ATA fails at certain stages ofpre-clinical or clinical development.
Under the terms of the ATA, in accordance with the terms of the Original Agreement, BI will pay the Company anon-refundable upfront payment (the “Option Payment”) of $5.0 million to exercise its initial option for development related to the Additional Target. Under the terms of the ATA, during the term of the research program, BI will reimburse the Company for certain expenses. The Company is eligible to receive up to $170.0 million in potential development and commercial milestones related to the Additional Target. The Company is also eligible to receive tiered royalty payments on potential global net sales, subject to certain adjustments, in themid-single digits. Other than as set forth in the ATA, development of the Additional Target will be subject to the terms of the Original Agreement.
Under the ATA, if BI elects, in its sole discretion, to exercise the Second Option, the parties would agree to a research work plan and budget for the additional gene and negotiate development and commercialization milestones and royalty payments to the Company. BI would make another option fee payment to the Company of $5.0 million.
The foregoing summary of the material terms of the ATA is qualified in its entirety by reference to the ATA and the Original Agreement. The Company will seek confidential treatment from the Securities and Exchange Commission for portions of the ATA, and, subject to such confidential treatment, the ATA will be filed as an exhibit to the Company’s Annual Report on Form10-K for the year ended December 31, 2018.
Item 2.02 Results of Operations and Financial Condition.
The Company had cash, cash equivalents, andheld-to-maturity investments of approximately $302.6 million as of December 31, 2018. This does not include $94.5 million of expected near-term net receipts from: (i) the Company’s expected receipt of the Option Payment, in the amount of $5.0 million; (ii) the Company’s expected receipt of an upfront payment in the amount of $100.0 million from the Company’s recent collaboration with Eli Lilly and Company (“Lilly”), as disclosed in the Company’s Current Report on Form8-K filed on October 29, 2018; and (iii) the Company’s expected final payment to Alnylam Pharmaceuticals, Inc. (“Alnylam”) in the amount of $10.5 million pursuant to a Confidential Settlement Agreement and General Release attached as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2018, filed on August 8, 2018. The Company believes that its current cash, cash-equivalents andheld-to-maturity investments, in addition to the Option Payment and the expected upfront payment from Lilly, and reduced by the cash payment to Alnylam, will be sufficient to fund the execution of its current clinical and operating plan beyond 2020. This estimate assumes no new funding from additional collaboration agreements or from external financing events and no significant unanticipated changes in costs and expenses.
The information in this Item 2.02 is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 or 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein shall not be incorporated by reference into any of the Company’s filings with the United States Securities and Exchange Commission, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
