| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 10, 2021, Apellis Pharmaceuticals, Inc. (“Company”) and Apellis Switzerland GmbH entered into an amended and restated commercial supply agreement (the “Supply Agreement”) with NOF Corporation (“NOF”) to supply the Company with activated polyethylene glycol derivative (“PEG”), which is a component of pegcetacoplan. The Supply Agreement has an effective date of February 12, 2021.
Under the Supply Agreement, NOF’s affiliate, NOF America Corporation, will supply PEG to the Company on a non-exclusive basis. NOF agreed to manufacture and deliver PEG to the Company in accordance with purchase orders issued by the Company pursuant to the Agreement. The Company may purchase PEG or any polyethyleneglycol derivative from other third-party suppliers. Notwithstanding the foregoing, the Company agrees to purchase at least the minimum purchase obligation, which will be based on the Company’s 24-month rolling forecasts as set forth in the Supply Agreement. In the event the Company fails to meet the minimum purchase obligation, the Company will pay NOF the amount equal to a specified percentage of the remaining quantity of the minimum purchase obligation for the relevant time period, in addition to any payments due for all outstanding firm orders. The Company may eliminate the minimum purchase obligation on or before October 1 of the preceding calendar year by paying a specified percentage of the then-applicable supply price of the remaining minimum purchase obligation for the remainder of the term.
Unless earlier terminated, the term of the Supply Agreement continues through December 31, 2025. Either party may terminate the Supply Agreement upon an uncured material breach by the other party, upon the other party’s insolvency or bankruptcy or for convenience upon twenty-four (24) months prior written notice. The Company may terminate the Supply Agreement for safety, efficacy or regulatory issues. If the Supply Agreement is terminated by NOF for convenience or by the Company for NOF’s breach, the Company has no minimum purchase obligations and any agreement to buy out such minimum purchase obligations shall be of no force or effect.
The Supply Agreement also includes customary provisions relating to, among others, delivery, inspection procedures, warranties, quality, storage, handling and transport, intellectual property, confidentiality and indemnification. The foregoing description of the Supply Agreement does not purport to be complete and is qualified in its entirety by reference to the Supply Agreement, which the Company intends to file with the Securities and Exchange Commission as an exhibit to its Quarterly Report on Form 10-Q for the period ending March 31, 2021.
