Item 1.01. Entry into a Material Definitive Agreement.
Research Collaboration and Exclusive License Agreement with Eli Lilly and Company
On December 18, 2018, Aduro Biotech, Inc. (“Aduro” or the “Company”) entered into a research collaboration and exclusive license agreement (the “Collaboration Agreement”) with Eli Lilly and Company (“Lilly”) for Aduro’s cGAS-STING Pathway Inhibitor program for the research and development of novel immunotherapies for autoimmune and other inflammatory diseases. Pursuant to the Collaboration Agreement, Aduro granted an exclusive and worldwide license under certain intellectual property rights controlled by Aduro to research, develop, manufacture and commercialize certain cGAS-STING products for the treatment of autoimmune and other inflammatory diseases. The license granted is sublicensable during a specified time period.
Under the terms of the Collaboration Agreement, Aduro will receive an upfront payment of $12 million and will be eligible for development and commercial milestones of up to approximately $620 million per product. Lilly is also obligated to pay Aduro tiered royalty payments at percentages in the single tolow-double digits based on annual net sales of the licensed products. Lilly must pay such royalties on aproduct-by-product andcountry-by-country basis until the latest to occur of (i) the expiration of thelast-to-expire valid claim of certain patents, (ii) the expiration of the data exclusivity period in such country or (iii) a specified anniversary of the first commercial sale of such product in such country. Aduro will be reimbursed for up to a certain amount of research funding spent during the research term. In addition, Aduro has the option toco-fund the clinical development of each product in exchange for an increase in royalty payments and a reduction in certain milestone payments to the extent relevant to suchco-funded product. Lilly will be responsible for all costs of global commercialization.
The Collaboration Agreement will remain in effect until the expiration of all payment obligations and may be terminated by Lilly following a specified notice period, or by either party in the event of an uncured material breach of the other party or bankruptcy of the other party.
The foregoing description is qualified in its entirety by reference to the Collaboration Agreement, a copy of which will be filed as an exhibit to Aduro’s Annual Report on Form10-K for the year ending December 31, 2018. Aduro intends to seek confidential treatment for certain portions of the Collaboration Agreement.
Item 7.01. Regulation FD Disclosure.
On December 18, 2018, Aduro and Lilly issued a joint press release announcing their entry into the Collaboration Agreement. The full text of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Forward-Looking Statements
This Current Report on Form8-K contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Company’s intentions or current expectations concerning, among other things, the potential for its technology, including, without limitation the potential for its cGAS-STING Pathway Inhibitor program for the treatment of autoimmune and other inflammatory diseases, the potential benefits from the Collaboration Agreement, the receipt of any potential development or commercial milestones or royalties and the Company’s ability to advance its drug development programs on its own or with its collaborators. In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “continue,” “anticipate,” “intend,” “could,” “project,” “expect”
