Item 1.01 Entry Into a Material Definitive Agreement.
Equity Purchase Agreement and Registration Rights Agreement
On June 18, 2019, Arcturus Therapeutics Holdings Inc. (the “Company”) entered into an Equity Purchase Agreement (the “Agreement”) with Ultragenyx Pharmaceutical Inc. (“Ultragenyx”). Pursuant to the terms of the Agreement, the Company sold an aggregate of 2,400,000 shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”) at a price of $10.00 per share to Ultragenyx on June 19, 2019. Pursuant to the Agreement, the Company also granted Ultragenyx a two year option (the “Option”) to purchase up to 600,000 additional shares of Common Stock at a price of $16.00 per share.
Pursuant to the terms of the Agreement, until the later of (i) the first anniversary of the closing date or (ii) the date on which Ultragenyx beneficially owns less than 8.0% of the total voting power of the Company, at each annual stockholders meeting or any stockholders meeting at which members of the board of directors (the “Board”) are to be elected, the Company must nominate one director designated by Ultragenyx (the “Ultragenyx Designee”). Additionally, the Ultragenyx Designee is required to be appointed to all Board committees (subject to applicable Nasdaq rules). Ultragenyx also has the right to have a designee attend Board meetings as anon-voting observer.
Pursuant to the Agreement, Ultagenyx agreed to customary standstill provisions and restrictions on transfer of the Shares. The standstill provisions and transfer restrictions last until June 19, 2021, and expire earlier upon the occurrence of certain events set forth in the Equity Purchase Agreement.
The Agreement contains customary representations, warranties, and indemnification obligations of the parties.
In connection with the Agreement, the Company and Ultragenyx entered into a Registration Rights Agreement (the “Registration Rights Agreement”). The Registration Rights Agreement requires the Company to register the sale of the Shares within 180 days of June 18, 2019, and also provides Ultragenyx with certain “piggy-back” registration rights with respect to registration statements that the Company may file.
Copies of the Agreement and the Registration Rights Agreement are filed as Exhibits 10.1 and 4.1 to this Current Report on Form8-K, respectively, and are incorporated herein by reference. The foregoing descriptions of the terms of the Agreement and the Registration Rights Agreement are qualified in their entirety by reference to such exhibits.
Collaboration Agreement
On June 18, 2019, the Company and Ultragenyx entered into a Third Amendment (the “Amendment”) to the Research Collaboration and License Agreement, dated October 26, 2015, as amended on October 17, 2017 and April 20, 2018. The Amendment expands the collaboration between the Company and Ultragenyx to cover additional nucleic acid modalities including mRNA, DNA, siRNA therapeutics. The Amendment also expands the existing intellectual property license to cover manufacturing patents and know-how. The Amendment provides Ultragenyx with the right to identify a total of ten rare disease targets to be reserved for future collaborative development with the Company, which expands this program from 8 to 10 total reserved rare disease targets. The Amendment also clarifies certain obligations of the Company and Ultragenyx with respect to manufacturing cooperation and data sharing.
The Amendment also eliminated certain target exercise payments, exclusivity extension fees and optimization milestone payments that were previously required to be paid by Ultragenyx to exercise options and extend reserve target exclusivity. In connection with the Amendment, Ultragenyx will make a one-time payment to the Company of $6,000,000. Finally, the Amendment narrowed the terms under which a royalty or milestone payment that may be required to be paid by Ultragenyx could be reduced based on the Company’s and third parties’ intellectual property coverage over a developed product.
A copy of the Amendment is filed as Exhibit 10.2 to this Current Report on Form8-K and is incorporated herein by reference, and the foregoing description of the terms of the Amendment is qualified in its entirety by reference to such exhibit.
Indemnification Agreement
The information set forth in the second paragraph of Item 5.02 of this Current Report on Form8-K is hereby incorporated by reference into this Item 1.01 in its entirety.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form8-K is hereby incorporated by reference into this Item 3.02 in its entirety.
