| Item 1.01. | Entry into a Material Definitive Agreement. |
On January 9, 2022, Stoke Therapeutics, Inc., a Delaware corporation (the “Company”) entered into a License and Collaboration Agreement (the “Agreement”) with Acadia Pharmaceuticals Inc. (“Acadia”) for the discovery, development and commercialization of novel RNA-based medicines for the treatment of severe and rare genetic neurodevelopmental disease of the central nervous system (“CNS”). The Agreement focuses on the targets SYNGAP1, MECP2 (Rett syndrome), and an undisclosed neurodevelopmental target of mutual interest. In connection with each target, the parties will collaborate to identify potential treatments for further development and commercialization as licensed products. With respect to SYNGAP1, the parties have agreed to co-develop and co-commercialize licensed products for such target globally, and in connection therewith the Company granted to Acadia worldwide, co-exclusive (with the Company) licenses for such licensed products. With respect to MECP2 and the neurodevelopmental target, the Company granted to Acadia worldwide, exclusive licenses to develop and commercialize licensed products for such targets.
Pursuant to the Agreement, Acadia will pay the Company an upfront payment in the amount of $60,000,000. Acadia will fund the research to identify potential licensed products for MECP2 and the neurodevelopmental target, and the parties will equally fund the research to identify potential licensed products for SYNGAP1. The Company is eligible to receive up to $907,500,000 in potential total milestone payments based upon the achievement of certain development, regulatory, first commercial sales and sales milestone events across the programs for the three targets, assuming each milestone were achieved at least once. With respect to licensed products for MECP2 and the neurodevelopmental target, the Company is also eligible to receive tiered royalties at percentages ranging from the mid-single digits to the mid-teens on future net sales by Acadia of licensed products worldwide. Royalties payable under the Agreement are subject to standard royalty reductions. For SYNGAP1 licensed products that the parties are co-developing and co-commercializing, the Company will be responsible for 50% of the development and commercialization costs and will receive 50% of the profits from global commercialization.
With respect to each SYNGAP1 licensed product being co-developed or co-commercialized, the Agreement will remain in effect, unless earlier terminated, until the parties have agreed to permanently abandon the further development and commercialization of such licensed product. With respect to licensed products for MECP2 and the neurodevelopmental target, the Agreement will remain in effect, unless earlier terminated, until the expiration, on a country-by-country and licensed product-by-licensed product basis, of the applicable royalty term, at which point the license for such licensed product shall become fully paid-up, royalty-free, perpetual and irrevocable in such country.
The Agreement also contains customary provisions for termination by Acadia for convenience and by either party for cause, including for material breach (subject to cure). The Company has standard reversion rights in connection with certain early termination events.
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 full text of the Agreement, a copy of which will be filed with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending March 30, 2022.
| Item 2.02. | Results of Operations and Financial Condition |
On January 10, 2022, the Company plans to present certain preliminary financial and operating information in connection with a presentation (the “Presentation”) at the J.P. Morgan Healthcare Conference, including that the Company expects to report that it had cash, cash equivalents, marketable securities and restricted cash of approximately $220.4 million, and approximately 36.9 million shares of common stock outstanding, as of December 31, 2021.
The Company’s audited financial statements for the fiscal year ended December 31, 2021, are not yet available. Accordingly, the preliminary financial information included in the Presentation is an estimate subject to the completion of the Company’s financial closing procedures and any adjustments that may result from the completion of the audit of the Company’s financial statements. The preliminary financial information may differ materially from the actual results that will be reflected in the Company’s audited financial statements when they are completed and publicly disclosed.
The information in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1924, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth by specific reference in such a filing.
