Execution Version
Exhibit 10.19
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
MANUFACTURING RIGHTS AGREEMENT
This MANUFACTURING RIGHTS AGREEMENT (this “Agreement”), effective as of the Effective Date, is entered into by and between Vaxcyte, Inc., a Delaware corporation (“Vaxcyte”) and Sutro Biopharma, Inc., a Delaware corporation (“Sutro”) (each of Vaxcyte and Sutro, a “Party,” and collectively, the “Parties”).
WHEREAS, Vaxcyte and Sutro have entered into (i) that certain Amended and Restated SutroVax Agreement, dated October 12, 2015, as amended (the “License Agreement”), (ii) that certain Supply Agreement, dated May 29, 2018, as amended (the “Supply Agreement”), and (iii) that certain Key Process Transfer Terms regarding [***] (the “[***] Term Sheet,” and collectively with the License Agreement and the Supply Agreement, the “Existing Agreements”);
WHEREAS, Vaxcyte and Sutro have entered into that certain letter agreement regarding an Option on Extract Rights, dated December 19, 2022 (the “Option Agreement”), pursuant to which Vaxcyte purchased from Sutro an option to obtain certain exclusive rights to manufacture Extract for use in the research, development, use, sale, offering for sale, export, import, commercialization or other exploitation of Vaccine Compositions, as more fully set forth therein;
WHEREAS, Vaxcyte has notified Sutro pursuant to Section 4 of the Option Agreement that Vaxcyte elected to exercise such option, and has paid the Initial Exercise Price as of the Effective Date, and Vaxcyte has paid, or will pay, the Delayed Exercise Price (as defined in the Option Agreement) in accordance with the terms of the Option Agreement; and
WHEREAS, Sutro wishes to grant to Vaxcyte, and Vaxcyte wishes to receive from Sutro, the rights contemplated by such exercised option, as more fully set forth herein and on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
DEFINITIONS
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GRANTS OF RIGHTS
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regulatory matters
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TECHNOLOGY TRANSFER
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INTELLECTUAL PROPERTY
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CONFIDENTIALITY
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AUDITS
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PAYMENTS
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EMPLOYEE MATTERS
REPRESENTATIONS and WARRANTIES; CERTAIN COVENANTS
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INDEMNIFICATION; DISCLAIMERS; LIMITATION OF LIABILITY
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term; TERMINATION
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Communication and Dispute Resolution
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MISCELLANEOUS
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If to Vaxcyte:
Vaxcyte, Inc.
825 Industrial Road, Suite 300
San Carlos, California 94070
Attn: Grant Pickering, Chief Executive Officer
(with a copy to Mikhail Eydelman, General Counsel)
Email: [***]
(with a copy to [***])
If to Sutro:
Sutro Biopharma, Inc.
111 Oyster Point Boulevard
South San Francisco, California 94080
Attn: General Counsel
Email: [***]
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* * * * *
[End of page left intentionally blank]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first written above.
VAXCYTE, INC.
By: /s/ Grant E. Pickering_____
Name: Grant E. Pickering
Title: Chief Executive Officer
SUTRO BIOPHARMA, INC.
By: /s/ William J. Newell _____
Name: William J. Newell
Title: Chief Executive Officer
[Signature Page to Manufacturing Rights Agreement]
Schedule 1
Tech Transfer Information
[***]
Schedule 2
Amendments to the License Agreement
The Parties acknowledge and agree that the License Agreement is hereby, as of the Effective Date of the Manufacturing Rights Agreement, amended as follows:
1.5 “Extract” means any extract derived from strains of E. coli and (i) supplied to Vaxcyte or its Affiliates by or on behalf of Sutro pursuant to this Agreement, the Supply Agreement, the [***] Letter Agreement or any subsequent written agreement between the Parties or their respective Affiliates, or (ii) made by or on behalf of Vaxcyte or its Affiliates pursuant to the Manufacturing Rights Agreement. For clarity, Extract includes [***] (as defined in the Manufacturing Rights Agreement).
1.3A “CMO” means any Third Party contract manufacturing organization.
1.22 “Sutro Know-How” means all information and materials pertaining to the Extracts or Vaccine Compositions, or the manufacture, use or, in the case of Vaccine Compositions, development thereof, as the case may be, that are owned or controlled by Sutro or (subject to Section 15.2) its Affiliates at any time during the Term of this Agreement, including (i) practices, protocols, methods, techniques, specifications, formulae, standard operating procedures, analytical methods, material and vendor lists, (ii) analytical, quality control and stability data, batch records, and other chemistry, manufacturing and control (CMC) data, (iii) regulatory documentation, and (iv) tangible materials and reagents; in each case as and to the extent reasonably necessary or useful for Vaxcyte to exercise the rights granted to it under this Agreement, the Manufacturing Rights Agreement (during the Term thereof) or any other written agreement between the Parties or their respective Affiliates (during the Term thereof). Notwithstanding the foregoing, in no event shall Sutro Know-How include any information or materials of Sutro’s Third Party collaborators or sublicensees, except for such information or materials pertaining to the Sutro Platform which Sutro has the right to provide to Vaxcyte in accordance with this Agreement.
(d) In the event Sutro engages one or more CMOs to manufacture one or more Extract(s) for Sutro, its Affiliates or others (each such Extract, an “Available Extract”), Sutro shall promptly notify Vaxcyte.
3.3 [Intentionally left blank]
(a) Subject to the terms of this Agreement, Sutro hereby grants to Vaxcyte an exclusive, royalty-bearing license (subject to Section 6), under the Sutro Patents, [***] IP, Sutro Know-How and Sutro’s ownership interest in and to any Jointly-Owned IP, with the right to grant and authorize sublicenses in accordance with Section 4.3 (only with respect to the rights granted under the following sub-clause (i)), solely to (i) research, develop, use, sell, offer for sale, export, import or otherwise exploit Vaccine Compositions, and (ii) to manufacture, itself or through any CMO established or approved by Sutro pursuant to Section 3.2, both cGMP grade and non-cGMP grade Vaccine Compositions from Extracts (x) obtained from Sutro or any CMO established or approved by Sutro as described in Section 3.1, or (y) manufactured by or for Vaxcyte pursuant to Section 15.3(a) or pursuant to the Manufacturing Rights Agreement, in each case in the Territory during the Term in accordance with the terms of the Agreement. For clarity, to the extent a CMO established in accordance with Section 3.2 above utilizes Sutro Patents or Sutro Know-how solely to supply Vaccine Composition to Vaxcyte in accordance with Section 3.2, such arrangement shall not be deemed a sublicense by Vaxcyte. In addition, it is understood and agreed that:
(A) If components of a Vaccine Composition (such as an adjuvant) can be used for purposes other than a Vaccine Composition, the exclusive license under this Section 4.1 shall not be deemed to restrict Sutro from using, licensing or otherwise exploiting such components for such other purposes (i.e., purposes other than to induce an immune response specific to a Vaccine Antigen to treat or prevent the disease against which such Vaccine Antigen is directed by means of such specific immune response); and
(B) If a Vaccine Composition or component thereof can be used for purposes other than those permitted under Section 1.32, such use shall not be deemed licensed under this Section 4.1, but a third party’s use or administration of a composition for such an unpermitted use shall not cause such composition to cease being a Vaccine Composition, provided that Vaxcyte uses diligent efforts to prevent such unpermitted use.
(b) For clarity, without limiting the license granted in Section 15.3, the license granted in Section 4.1(a) does not include the right to manufacture Extracts, and Vaxcyte shall use the Extracts supplied to it by Sutro or a CMO authorized by Sutro, or manufactured by Vaxcyte or an Approved CMO pursuant to the Manufacturing Rights Agreement, solely to express Vaccine Compositions in the Territory solely for use in conjunction with the exercise, and within the scope, of the license granted in Section 4.1(a) (or as otherwise permitted pursuant to the Manufacturing Rights Agreement or any subsequent written agreement between the Parties).
4.2 No Other Uses. Vaxcyte covenants not to use the Extract except for use in conjunction with the exercise, and within the scope, of the license granted in Section 4.1(a) (or as otherwise permitted pursuant to the Manufacturing Rights Agreement or any other subsequent written agreement between the Parties). Without limiting the foregoing, Vaxcyte shall not [***].
8.2 Mutual Termination for Breach. If either Party materially breaches any of the material terms, conditions or agreements contained in this Agreement to be kept, observed or performed by it, the other Party may terminate this Agreement, at its option and without prejudice to any of its other legal or equitable rights or remedies, by giving the Party who committed the breach [***] prior written notice, unless the notified Party shall have cured the breach within such [***] period, subject to Section 14.5; provided, that notwithstanding the foregoing, if the Manufacturing Rights Agreement is in effect, Sutro shall not have the right to terminate this Agreement pursuant to this Section 8.2 or otherwise with respect to any provisions of this Agreement, or any breach by Vaxcyte thereof, relating to (a) confidentiality (including Section 10), (b) use of Extract, [***], Sutro Core Know-How or other materials or intellectual property outside of the Vaccine Field, or (c) Section 4.1(b), except, in each case of the foregoing clauses (a)-(c), in the event that [***].
(b) [Intentionally left blank]
14.1 Each Party will appoint an individual employed by it to serve as its “Principal Contact” for purposes of this Agreement. Either Party may from time to time replace its Principal Contact with a different employee, but unless required due to the termination of the Principal Contact’s employment or events beyond the applicable Party’s control, neither Party will replace its Principal Contact without at least [***] prior notice to the other Party. The Principal Contacts shall communicate with each other regularly during the Term as the Parties may agree or as the Principal Contacts shall mutually determine to be useful.
14.2 The Parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Principal Contacts and by mutual consent of the Parties. In situations in which that does not occur, any disputes, controversies, claims or differences arising out of or in connection with this Agreement or the breach, termination or validity thereof, and any question of the arbitral tribunal’s jurisdiction or the existence, scope or validity of these arbitration provisions or the arbitrability of any claim (each a “Dispute”) shall initially be referred for review by delivery of a written notice (a “Dispute
Notice”) by either Party’s Principal Contact to each of the Parties’ respective Senior Managements (as defined below). Such Senior Managements shall discuss the Dispute, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be useful. As used herein, Sutro’s “Senior Management” means [***], and Vaxcyte’s “Senior Management” means [***].
14.3 If the Senior Managements are not able to resolve such Dispute referred to them under Section 14.2 within [***] from the date of delivery of the Dispute Notice, then subject to Section 14.4 and Section 14.5, such Dispute shall be resolved, at the request of any Party, by final and binding arbitration as follows:
(a) The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures in effect at the time (the “Rules”), except as modified herein.
(b) The seat of arbitration shall be San Francisco, California.
(c) The Parties shall select a mutually agreeable arbitrator who has no affiliation or pre-existing relationship with either Party. If the Parties cannot agree on an arbitrator within [***] referred in Section 14.3, either Party may request JAMS to appoint an arbitrator on behalf of the Parties in accordance with the Rules.
(d) The arbitrator may decide any issue as to whether, or as to the extent to which, any Dispute is subject to the arbitration and other dispute resolution provisions in this Agreement.
(e) The arbitrator must base the award on the provisions of this Agreement and applicable law and must render the award in a writing which must include an explanation of the reasons for such award.
(f) Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction over any Party or any of its assets.
(g) The arbitrator’s fees and expenses shall be shared equally by the Parties, unless the arbitrator in the award assesses such fees and expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. Each Party shall bear and pay its own expenses incurred in connection with any Dispute resolution under this Section 14.3.
(h) Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of the arbitrator hereunder or pending the arbitrator’s decision of the dispute subject to arbitration. Without prejudice to such provisional remedies that may be granted by a court, the arbitrator shall have full authority to grant
provisional remedies, to order a Party to request that a court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect orders to that effect.
(i) In addition to monetary damages, the arbitrator shall be empowered to award equitable relief, including, but not limited to an injunction and specific performance of any obligation under this Agreement.
(j) The arbitration and this arbitration agreement shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.).
(k) Any arbitration hereunder shall be confidential and, except as may be required by law or to pursue a legal right, the Parties agree not to disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties.
14.4 Notwithstanding Section 14.3, any dispute, controversy or claim relating to the scope, validity, enforceability or infringement of any Patent or trademark may be brought in any court of competent jurisdiction.
14.5 In the event a Party disputes in good faith whether it is in breach of this Agreement and so notifies the other Party in writing prior to the expiration of the applicable cure period set forth in Section 8.4 above, the cure period shall be tolled from the date of such notice. Promptly following the initiation of a proceeding under Section 14.3 above with respect to such dispute, the arbitrator shall make a determination as to whether there is a good faith dispute as to the existence of a material breach of this Agreement. If the arbitrator determines that there is no good faith dispute by the breaching Party as to the existence of a material breach of this Agreement, then the Agreement shall be deemed terminated, unless the breach is cured within the remainder (if any) of the cure period set forth in Section 8.4 (after giving effect to the tolling of such cure period up to the date of such determination). If the arbitrator determines that there is a good faith dispute as to the existence of a material breach of this Agreement, the non-breaching Party shall not have the right to terminate this Agreement unless and until it has been finally determined in accordance with Section 14.3 above that a breach actually occurred, and the breaching Party fails to cure such breach within [***] after such final determination (or such longer period as the arbitrator may specify).
Schedule 3
Amendments to the Supply Agreement
Subject to the terms and conditions of the Agreement, the Supply Agreement is hereby, as of the Effective Date of the Manufacturing Rights Agreement, amended as follows:
1. All references in the Supply Agreement to “SutroVax” are replaced with “Vaxcyte.”
2. Section 2.18 of the Supply Agreement is hereby restated in its entirety as follows:
2.18 Sutro Core Know-How. Notwithstanding anything herein to the contrary, except as set forth in Section 15.3 of the License Agreement, the [***] Letter Agreement, the Manufacturing Rights Agreement or any other subsequent written agreement between the Parties or their Affiliates, in no event shall Vaxcyte, its Affiliates or Sublicensees have the right to access any Sutro Core Know-How (as defined in the License Agreement), whether directly from Sutro or its Affiliates or through a CMO or otherwise. Without limiting the foregoing, in the event any item of Sutro Core Know-How is delivered to Vaxcyte, its Affiliates and/or its Sublicensees (except as set forth in, or in connection with, Section 15.3 of the License Agreement, the [***] Letter Agreement, the Manufacturing Rights Agreement or any other subsequent written agreement between the Parties or their Affiliates), Vaxcyte, its Affiliates and Sublicensees shall immediately return such item to Sutro. For purposes of this Agreement, (a) the “[***] Letter Agreement” [***], and (b) the “Manufacturing Rights Agreement” means that certain Manufacturing Rights Agreement, entered into by and between Vaxcyte and Sutro.
3. Section 2.20 of the Supply Agreement is hereby restated in its entirety as follows:
2.20 Vaxcyte agrees to purchase all its requirements of Extract from Sutro in accordance with this Agreement, except to the extent Vaxcyte is allowed to (1) purchase Extract from (a) Alternate Suppliers engaged by Sutro in accordance with Section 2.15 of this Agreement; (b) a CMO engaged or established and authorized by Sutro under Section 3.1(d) of the License Agreement; (c) a CMO authorized by Sutro under Section 3.1(e) of the License Agreement; or (d) [***] pursuant to the [***] Letter Agreement, or (2) manufacture and supply (itself or through an Approved CMO (as defined in the Manufacturing Rights Agreement)) Extract in accordance with the Manufacturing Rights Agreement. Manufacturing of Extracts in breach of this Section 2.20 shall be deemed a material breach of this Agreement and the License Agreement by Vaxcyte.
Schedule 4
Amendments to the [***] Term Sheet
[***]