Item 1.01 Entry into a Material Definitive Agreement.
Exclusive License and Collaboration Agreement with Janssen Pharmaceuticals, Inc.
On March 31, 2021, Cidara Therapeutics, Inc. (“Company”) and Janssen Pharmaceuticals, Inc. (“Janssen”) entered into an exclusive license and collaboration agreement (the “Collaboration Agreement”) to develop and commercialize one or more Antiviral Conjugates, or AVCs, based on the Company’s Cloudbreak® antiviral platform, for the prevention and treatment of influenza, including the Company’s influenza AVC development candidates CD388 and CD377 (“Products”).
Condition to Effectiveness. The effectiveness of the Collaboration Agreement, including the effectiveness of the terms and conditions described below, is subject to the expiration or earlier termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. If the Collaboration Agreement has not become effective within 180 days after the date of its execution by the parties, then either party may terminate the Collaboration Agreement upon written notice to the other party.
Collaboration. The Company and Janssen will collaborate in the research, preclinical development and early clinical development of CD388 or another mutually-agreed influenza AVC development candidate (in each case, the “Development Candidate”) under a mutually-agreed research and development plan (“Research Plan”) with the objective of advancing such Development Candidate through the completion of mutually-agreed Phase 1 clinical trials and the first Phase 2 clinical trial (the “Phase 2 Study”). Unless otherwise agreed by the parties, the Company will be responsible for performing, or having performed, all IND-enabling studies and clinical trials under the Research Plan, and the Company will be the IND holder for the Research Plan clinical trials. Both parties will be responsible for conducting certain specified chemistry, manufacturing and controls development activities under the Research Plan. Janssen will be solely responsible, and reimburse the Company, for internal FTE and out-of-pocket costs incurred by the Company in performing Research Plan activities in accordance with a mutually-agreed budget. In addition, upon the effectiveness of the Collaboration Agreement, Janssen will also reimburse the Company for certain costs incurred by the Company in independently performing certain research and development activities from the execution of the Collaboration Agreement until its effectiveness.
Within 90 days after delivery by the Company to Janssen of results of the Phase 2 Study and all then-available data from other clinical trials of the Development Candidate conducted under the Research Plan (the “Election Period”), Janssen will be obligated to notify the Company of Janssen’s election to proceed with further clinical development of Products (such notice, an “Election to Proceed Notice”). If Janssen fails to deliver an Election to Proceed Notice prior to expiration of the Election Period, the Company will have the right to terminate the Collaboration Agreement upon written notice to Janssen. If Janssen provides an Election to Proceed Notice prior to expiration of the Election Period, then the parties will continue any then-ongoing Research Plan activities to completion, and Janssen will otherwise be solely responsible for the development, manufacture and commercialization of Products, at Janssen’s sole expense.
Licenses. Upon the effectiveness of the Collaboration Agreement, the Company will grant Janssen an exclusive, worldwide, royalty-bearing license to develop, register and commercialize Products, subject to the Company’s retained right to conduct Research Plan activities as described above. In addition, the Company will grant Janssen an exclusive right of first negotiation until December 31, 2021, to negotiate and enter into a separate definitive agreement pursuant to which the parties would collaborate in the research and development of AVCs for the treatment or prevention of respiratory syncytial virus.
Non-Compete Covenant. The Company will covenant that, except for the performance of Research Plan activities, from the effectiveness of the Collaboration Agreement until the fifth anniversary of the completion of all Research Plan activities and the Company’s delivery to Janssen of all Research Plan deliverables, the Company and its affiliates will not directly or indirectly (including through any third-party contractor or through or in collaboration with any third-party licensee) develop, file any IND or application for marketing approval for, or commercialize any AVC that binds influenza or influenza viral proteins at therapeutic levels, except that the Company has the right to conduct limited internal research of such AVCs for the purposes of generating data to support patent filings and improving and further developing the Company’s AVC technology more broadly. The Company’s non-compete covenant described above will not apply to any AVC that demonstrates high specificity for a virus other than the influenza virus and does not possess significant activity against the influenza virus.
Financial Terms. Upon the effectiveness of the Collaboration Agreement, Janssen will be obligated to pay the Company an upfront payment of $27 million. The Company will be entitled to reimbursement by Janssen of up to $58 million in research and development costs incurred in conducting Research Plan activities. The Company will also be entitled to receive up to an additional $695 million in development, regulatory and commercial milestone payments, as well as royalties on tiers of annual net sales of Products at rates from the mid-single digits to the high-single digits.
Co-Detailing Option. Janssen will grant the Company the option, exercisable as set forth below, to co-detail with Janssen in the U.S. the first Product to receive U.S. marketing approval. Janssen will provide the top-line results for the first pivotal clinical
