| Item 1.01 | Entry Into a Material Definitive Agreement. |
On July 18, 2022 (the “Effective Date”), Verve Therapeutics, Inc. (“Verve” or the “Company”) entered into a Strategic Collaboration and License Agreement (the “Collaboration Agreement”) with Vertex Pharmaceuticals Incorporated (“Vertex”) for an exclusive, four-year worldwide research collaboration focused on developing in vivo gene editing candidates toward an undisclosed target for the treatment of a single liver disease. Additionally, on the Effective Date, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Vertex, pursuant to which the Company agreed to sell and issue shares of its common stock to Vertex.
Strategic License and Collaboration Agreement
Pursuant to the Collaboration Agreement, Verve will be responsible for discovery, research and certain preclinical development of novel in vivo gene editing development candidates for the target of interest. Verve’s research activities will be focused on (i) identifying and engineering specific gene editing systems and in vivo delivery systems directed to the target and (ii) evaluating and optimizing development candidates to achieve criteria specified in the Collaboration Agreement. Vertex will reimburse Verve’s research expenses consistent with an agreed-upon budget. The research term has an initial term of four years and may be extended by Vertex for up to one additional year.
Vertex will be solely responsible for subsequent development, manufacturing and commercialization of any product candidate resulting from Verve’s research efforts. Verve received an upfront payment from Vertex of $25 million on July 20, 2022. Verve is eligible to receive (i) success payments of up to $22 million for each product candidate (up to a maximum of $66 million) that achieves the applicable development criteria and (ii) up to an aggregate of $340 million in development and commercial milestone payments. Verve is also eligible to receive tiered single-digit royalties on net sales, subject to specified reductions. Such royalty payments will terminate on a country-by-country and product-by-product basis upon the later to occur of (i) the expiration of the last to expire valid claim under the patent rights covering such product in such country, (ii) the period of regulatory exclusivity associated with such product in such country or (iii) ten years after the first commercial sale of such product in such country.
Prior to the first patient dosing of the first Phase 1 clinical trial for the first product candidate developed under the Collaboration Agreement, Verve also has the right to opt-in to a profit share arrangement pursuant to which Vertex and Verve would share the costs and net profits for all product candidates emerging from the collaboration. If Verve exercises its opt-in right, in lieu of milestones and royalties, Verve will be obligated to pay for a specified percentage of the development and commercialization costs, and it will have the right to receive a specified percentage of the profits from any sales of any product candidates advanced under the collaboration. At the time Verve exercises the option, it may elect a profit/cost share of up to 40% (with Vertex retaining a minimum of 60%). In order to exercise its opt-in right, Verve is required to pay a fee ranging from $25-70 million, depending on the profit/cost percentage elected by Verve and the licensed technology of Verve included in the most advanced product candidate at the time Verve exercises its opt-in right. Under all profit share scenarios, Vertex will control the worldwide development and commercialization of any product candidates resulting from the collaboration.
The Collaboration Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature. Verve and Vertex each have the right to terminate the agreement for material breach by, or insolvency of, the other party following notice, and if applicable, a cure period. Vertex may also terminate the Collaboration Agreement in its entirety for convenience upon 90 days’ notice.
The foregoing description of the terms of the Collaboration Agreement is qualified in its entirety by reference to the full text of the Collaboration Agreement, a copy of which Verve intends to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending September 30, 2022.
Stock Purchase Agreement
On the Effective Date, in connection with the execution of the Collaboration Agreement, Verve and Vertex also entered into the Stock Purchase Agreement for the sale and issuance of 1,519,756 shares of Verve’s common stock, par value $0.001 per share (the “Shares”) to Vertex at a price of $23.03 per share, which is equal to the five-day volume-weighted average share price as of July 15, 2022, for an aggregate purchase price of $35.0 million. The sale of the Shares closed on July 20, 2022.
