Item 1.01 Entry into a Material Definitive Agreement.
As disclosed in a Form 8-K filed December 20, 2022, on December 19, 2022, Vaxcyte, Inc. (“Vaxcyte”) entered into an option grant agreement (the “Option Agreement”) with Sutro Biopharma, Inc. (“Sutro,” and together with Vaxcyte, the “Companies”), pursuant to which Vaxcyte acquired from Sutro (i) authorization to enter into an agreement with an independent alternate contract manufacturing organization (“CMO”) to directly source Sutro’s cell-free extract (“Extract”), allowing Vaxcyte to have direct oversight over financial and operational aspects of the relationship with the CMO; and (ii) a right, but not an obligation, to obtain certain exclusive rights to internally manufacture and/or source Extract from certain CMOs and the right to independently develop and make improvements to Extract (including the right to make improvements to the Extract manufacturing process as well as cell lines) for use in connection with the exploitation of certain vaccine compositions (the “Option”). Pursuant to the Option Agreement, the Companies agreed to negotiate the terms and conditions of a form of definitive agreement to become effective in the event Vaxcyte exercises the Option (such form, the “Form Definitive Agreement”), and Vaxcyte agreed to pay Sutro $5.0 million in cash within five business days after the Companies mutually agreed in writing upon the Form Definitive Agreement. On September 28, 2023, the Companies mutually agreed in writing upon the Form Definitive Agreement to become effective in the event that Vaxcyte exercises the Option.
Pursuant to the Option Agreement, the Companies also agreed to amend certain terms of the license agreement between the Companies, dated August 1, 2014, as amended and restated on October 12, 2015, and amended again on May 9, 2018 and May 29, 2018 (as amended, the “Sutro License Agreement”), with such amendment to become effective immediately upon the Companies’ mutual agreement upon the Form Definitive Agreement (the “2023 Amendment”). Concurrent with the Companies’ mutual agreement upon the Form Definitive Agreement on September 28, 2023, the Companies entered into the 2023 Amendment. The 2023 Amendment amended certain terms of the Sutro License Agreement, including with respect to (i) royalty reduction provisions applicable in the event of expiration of relevant patent claims, which would result in lower royalties payable by Vaxcyte to Sutro under certain circumstances, (ii) the ownership, prosecution, maintenance and enforcement of certain intellectual property rights licensed or arising under the Sutro License Agreement (including as agreed to be amended in the Option Agreement), and (iii) the timing and form for financial reporting of royalty payment calculations.
The foregoing is a summary description of certain terms of the 2023 Amendment and does not purport to be complete, and it is qualified in its entirety by reference to the full text of the 2023 Amendment, which will be filed as an exhibit to Vaxcyte’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
