| Item 1.02 | Termination of a Material Definitive Agreement. |
On June 3, 2022, Acceleron Pharma Inc., or Acceleron, a wholly-owned subsidiary of Merck & Co., Inc, notified Fulcrum Therapeutics, Inc., or Fulcrum, of its termination for convenience, effective 120 days after Fulcrum’s receipt of the notice, of that certain Collaboration and License Agreement, entered into as of December 20, 2019, by and between Fulcrum and Acceleron, or the Agreement, to identify biological targets to modulate specific pathways associated with a targeted indication within the pulmonary disease space.
Under the terms of the Agreement, Fulcrum granted Acceleron an exclusive worldwide license under certain intellectual property rights to make, have made, use, sell, have sold, import, export, distribute and have distributed, market, have marketed, promote, have promoted, or otherwise exploit molecules and products directed against or expressing certain biological targets identified by Fulcrum for the treatment, prophylaxis, or diagnosis of a targeted indication within the pulmonary disease space. Under the Agreement, Fulcrum received a non-refundable $10.0 million upfront payment, and was entitled to research milestone payments of up to $18.5 million in the aggregate upon first achievement of specified research milestones, $2.0 million of which has been achieved to date and is non-refundable, as well as development milestone payments of up to $135.0 million in the aggregate, and up to $67.5 million in the aggregate upon the second achievement of specified clinical and regulatory milestones. Fulcrum would also have been entitled to sales-based milestone payments of up to $145.0 million in the aggregate for the first product, and up to $72.5 million in the aggregate for the second product, as well as tiered royalties ranging from a mid single-digit percentage to a low double-digit percentage.
As of the termination date, the Agreement will be terminated in its entirety, following which Fulcrum will not be entitled to receive any further milestone payments or royalties. As of the termination date, Fulcrum will have no further obligations to develop or to fund development under the Agreement.
