| Item 1.01 | Entry Into a Material Definitive Agreement. |
On December 13, 2018, Proteostasis Therapeutics, Inc. (the “Company”) entered into a Technology Transfer and License Agreement (the “Agreement”) with Genentech, Inc. (“Genentech”). Pursuant to the Agreement, the Company will grant to Genentech a worldwide, exclusive license for technology and materials relating to potential therapeutic small molecule modulators of an undisclosed target within the proteostasis network, which consists of more than 1,000 proteins organized into pathways that can be regulated or targeted by drugs (the “Rights”). Genentech is also entitled to sublicense the Rights. The Rights do not include cystic fibrosis transmembrane conductance regulator (CFTR) modulators and are unrelated to the Company’s investigational medicines or other ongoing research programs in cystic fibrosis.
In connection with the Agreement, the Company is eligible to receive an upfront payment and milestone payments in aggregate of approximately $100 million, subject to certain conditions being met in the case of the upfront payment and upon the achievement of specified development, regulatory and commercial milestones in the case of the milestone payments. In addition, Genentech is obligated to pay the Company tiered royalties in the low single-digits based on net sales of products covered by the licenses granted under the Agreement. The royalty term shall terminate on aproduct-by-product andcountry-by-country basis on the latest of (i) the ten (10) year anniversary of the first commercial sale of such product in such country, and (ii) the expiration of thelast-to-expire licensed patent that covers such product in such country.
Either the Company or Genentech may terminate the Agreement for any material breach of the Agreement by the other party, if such breach is not cured within sixty (60) days of notice of such breach; provided, however, that if Genentech commits the breach and it solely relates to a product, the Company may only exclude such product from the scope of the license and the Company may not terminate the entire Agreement. Genentech may terminate the Agreement (i) in its entirety, in its sole discretion, upon thirty (30) days’ notice to the Company or (ii) in whole or in part upon the Company’s bankruptcy, insolvency, dissolution or winding up and any such event has continued for sixty (60) days undismissed, unbonded and undischarged.
The foregoing description of the terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which the Company intends to file in redacted form with the Securities and Exchange Commission as an exhibit to its Annual Report on Form10-K for the year ending December 31, 2018.
| Item 7.01 | Regulation FD Disclosures. |
On December 17, 2018, the Company issued a press release announcing its entry into the Agreement with Genentech. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form8-K.
The information in Item 7.01 of this Current Report on Form8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) or otherwise subject to the liability of that section, nor shall such information be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
