| Item 1.01 | Entry Into a Material Definitive Agreement. |
Collaboration and License Agreement
On December 13, 2022, Wave Life Sciences USA, Inc. and Wave Life Sciences UK Limited (collectively, “Wave”), each direct, wholly-owned subsidiaries of Wave Life Sciences Ltd. (the “Company”) entered into a Collaboration and License Agreement (the “Collaboration Agreement”) with GlaxoSmithKline Intellectual Property (No. 3) (“GSK”). Pursuant to the Collaboration Agreement, Wave and GSK have agreed to collaborate on the research, development, and commercialization of oligonucleotide therapeutics, including WVE-006. The collaboration has an initial four-year research term and combines Wave’s proprietary discovery and drug development platform, PRISMTM, with GSK’s unique insights from human genetics and its global development and commercial capabilities.
Under the terms of the agreement, Wave will receive an upfront payment of $170 million, which includes a cash payment of $120 million and a $50 million equity investment, when the Collaboration Agreement takes effect (described under “Equity Investment” in this Item 1.01 below). Wave will also receive research support funding in respect of its target validation activities under the collaboration. In addition, assuming WVE-006 and GSK’s eight collaboration programs achieve initiation, development, launch, and commercialization milestones, Wave would be eligible to receive up to $3.3 billion in cash milestone payments, which are described in the following two paragraphs.
GSK will receive the exclusive global license to WVE-006, Wave’s preclinical, first-in-class A-to-I(G) RNA editing candidate for alpha-1 antitrypsin deficiency, with development and commercialization responsibilities transferring to GSK after Wave completes the first-in-patient study. Wave will be responsible for preclinical, regulatory, manufacturing, and clinical activities for WVE-006 through the initial Phase 1/2 study, at Wave’s sole cost. Thereafter, GSK will be responsible for advancing WVE-006 through pivotal studies, registration, and global commercialization at GSK’s sole cost. For the WVE-006 program, Wave would be eligible to receive up to $225 million in development and launch milestone payments and up to $300 million in commercialization milestone payments, as well as double-digit tiered royalties as a percentage of net sales up to the high teens.
Under the research component, Wave will have the right to advance up to three collaboration programs (or more with GSK’s consent) and GSK will have the right to advance up to eight collaboration programs, respectively, using Wave’s PRISMTM platform and targets informed by GSK’s novel insights over the initial four-year research term. The collaboration includes options to extend the research term for up to three additional years, which would increase the number of programs available to both parties. Wave will lead all preclinical research for GSK and Wave collaboration programs up to IND-enabling studies. Wave will lead IND-enabling studies, clinical development and commercialization for Wave collaboration programs. GSK collaboration programs will transfer to GSK for IND-enabling studies, clinical development, and commercialization. Assuming GSK advances eight programs under the collaboration that achieve initiation, development, launch and commercial milestones, Wave would be eligible to receive up to $1.2 billion in initiation, development, and launch milestones and up to $1.6 billion in commercialization milestones, as well as tiered royalties as a percentage of net sales into the low-teens. Assuming Wave advances its collaboration programs through the achievement of pre-determined milestones, GSK would be eligible to receive royalty payments and commercial milestones from Wave.
Under the Collaboration Agreement, each party grants to the other party certain licenses to the collaboration products resulting from the parties’ respective collaboration programs as well as specific intellectual property licenses to enable the other party to perform its obligations and exercise its rights under the Collaboration Agreement, including license grants to enable each party to conduct research, development, and commercialization activities pursuant to the terms of the Collaboration Agreement. The parties’ exclusivity obligations to each other are limited on a target-by-target basis with regard to targets in the collaboration.
Subject to customary closing conditions, including the expiration or early termination of the applicable pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), the Collaboration Agreement is expected to take effect during the first quarter of 2023 and, unless terminated earlier, will continue until the date on which: (i) with respect to a validation target, the date on which such validation target is not advanced into a collaboration program; or (ii) with respect to a collaboration target, the royalty term has expired for all collaboration products directed to the applicable collaboration target.
The Collaboration Agreement contains customary termination provisions, including certain termination rights for convenience, breach, and others, including on a target/program basis or of the Collaboration Agreement in its entirety.
