| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 15, 2022 (the “Effective Date”), Invivyd, Inc. (the “Company”) entered into a Master Services Agreement with Population Health Partners, L.P. (“PHP”), pursuant to which PHP agreed to provide services and create deliverables for the Company as agreed between the Company and PHP and set forth in one or more work orders under such agreement (the “MSA”). The term of the MSA commenced on the Effective Date and will continue for a period of one year, unless terminated earlier in accordance with its terms. On the Effective Date, the Company and PHP entered into the first work order under the MSA (the “Work Order”), pursuant to which PHP agreed to advise and counsel the Company regarding clinical development and regulatory matters with respect to the Company’s product candidates, including NVD200. The Work Order is effective for six months from the Effective Date and may be extended by written agreement of the Company and PHP. The MSA contains customary confidentiality provisions and representations and warranties of the parties, as well as mutual non-solicitation of certain employees during the term of the MSA and for a period of one year thereafter.
As compensation for the services and deliverables under the Work Order, the Company shall pay PHP a cash fee of $500,000 per month during the term of the Work Order for an aggregate fee of $3,000,000 (the “Aggregate Fee”). In the event that (i) the Company terminates the Work Order for any reason other than material breach by PHP or (ii) PHP terminates the Work Order due to material breach by the Company, in each case, pursuant to the terms of the MSA, then the Company would be required to pay PHP the balance of the Aggregate Fee as of the date the Work Order is terminated. The cash fee is subject to change if the parties extend the term of the Work Order in accordance with the terms thereof.
In addition to the cash compensation, on the Effective Date, the Company issued a warrant to purchase shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) to PHP (the “Warrant”). The exercise price of the Warrant is $3.48 per share of Common Stock, which is equal to the Nasdaq Official Closing Price of a share of Common Stock on the trading day immediately prior to the Effective Date. The Warrant is exercisable for up to an aggregate of 6,824,712 shares of Common Stock, and vests in three separate tranches as follows:
| | • | | 3,591,954 shares of Common Stock underlying the Warrant vests if the Company’s Market Capitalization (as defined below) equals or exceeds $758,517,511.00 by November 15, 2028; |
| | • | | 1,795,977 shares of Common Stock underlying the Warrant vests if the Company’s Market Capitalization equals or exceeds $1,137,776,266.00 by November 15, 2029; and |
| | • | | 1,436,781 shares of Common Stock underlying the Warrant vests if the Company’s Market Capitalization equals or exceeds $1,517,035,022.00 by November 15, 2030. |
For purposes of the Warrant, the term “Market Capitalization” means, with respect to a particular trading day, the total value of the outstanding shares of Common Stock on such date, calculated by multiplying the Company’s volume weighted average price for the ten (10) trading days immediately preceding such date by the Company’s total number of outstanding shares of Common Stock as reflected in (i) the Company’s most recent periodic or annual report filed with the U.S. Securities and Exchange Commission (“SEC”) (e.g., Annual Report on Form 10-K or Quarterly Report on Form 10-Q), as the case may be, (ii) a more recent public announcement by the Company or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
The Warrant is exercisable for ten years from the Effective Date with respect to the vested portion(s) of the Warrant. The Warrant may be exercised by cash exercise or, at the election of PHP, by means of “cashless exercise” pursuant to a formula set forth in the Warrant. The Company has also granted PHP certain “piggyback” registration rights requiring the Company to register any shares of Common Stock underlying the Warrant for resale with the SEC, subject to the Company’s existing obligations under that certain Second Amended and Restated Investors’ Rights Agreement, dated April 16, 2021, by and among the Company and the investors party thereto.
