Item 1.01 Entry into a Material Definitive Agreement.
On October 15, 2019, Blueprint Medicines Corporation (the “Company”) entered into a license agreement (the “Agreement”) with Clementia Pharmaceuticals, Inc. (“Clementia”), a wholly-owned subsidiary of Ipsen S.A. Under the Agreement, the Company granted an exclusive, worldwide, royalty-bearing license to Clementia to develop and commercialize BLU-782, the Company’s oral, highly selective investigational ALK2 inhibitor in Phase 1 clinical development for the treatment of fibrodysplasia ossificans progressiva (“FOP”), as well as specified other compounds related to the BLU-782 program (the “Licensed Products”).
Subject to the terms of the Agreement, the Company will be eligible to receive up to $535.0 million in upfront, milestone and other payments, including an upfront cash payment of $25.0 million and up to $510.0 million in other payments and potential development, regulatory and sales-based milestone payments for Licensed Products. In addition, Clementia is obligated to pay to the Company royalties on aggregate annual worldwide net sales of Licensed Products at tiered percentage rates ranging from the low- to mid-teens, subject to adjustment in specified circumstances under the Agreement, and to purchase specified manufacturing inventory from the Company.
Under the terms of the Agreement, the Company will be responsible for specified activities during a transition period, including the completion of all activities necessary for database lock for its ongoing Phase 1 clinical trial in healthy volunteers, and Clementia will be responsible for conducting all other development and commercialization activities related to the Licensed Products, including the design, timing and conduct of any Phase 2 clinical trial evaluating BLU-782 for the treatment of FOP.
During the term of the Agreement, the Company has agreed not to exploit any compound covered by the licensed patents for the treatment of FOP or multiple osteochondromas (“MO”). In addition, with respect to any small molecule compound not covered by the licensed patents, the Company has agreed not to research, develop or manufacture any small molecule compound for the treatment of FOP or MO for a period of five years from the effective date of the Agreement and not to commercialize any small molecule compound for the treatment of FOP or MO for a period of seven years from the effective date of the Agreement.
Unless earlier terminated in accordance with the terms of the Agreement, the Agreement will expire on a country-by-country, Licensed Product-by-Licensed Product basis on the date when no royalty payments are or will become due. Clementia may terminate the Agreement at any time on or after the second anniversary of the effective date of the Agreement upon at least 12 months’ prior written notice to the Company, which cannot be delivered before the first anniversary of the effective date of the Agreement. Either party may terminate the Agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. In certain termination circumstances, the Company is entitled to retain specified licenses to be able to continue to exploit the Licensed Products.
The foregoing description of the material terms of the Agreement is qualified in its entirety by reference to the complete text of the Agreement, which the Company intends to file, with confidential terms redacted, with the SEC as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019.
Item 7.01 Regulation FD Disclosure.
On October 16, 2019, the Company issued a press release regarding the Agreement, a copy of which is being furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Form 8-K”). The information in this Item 7.01 and Exhibit 99.1 attached hereto 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 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
Based on its current operating plans, the Company expects that its cash, cash equivalents and investments of $667.3 million as of June 30, 2019, together with the $25.0 million upfront cash payment but excluding any potential option fees, milestone payments or other payments under its existing collaborations or the Agreement, will be sufficient to enable it to fund its operating expenses and capital expenditure requirements into the second half of 2021.
