| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 20, 2018, XOMA Corporation, through its wholly-owned subsidiary, XOMA (US) LLC (the “Company”), entered into a Royalty Purchase Agreement (the “Royalty Purchase Agreement”) with Agenus Inc., and certain of its affiliates (collectively, “Agenus”). Pursuant to the terms of the Royalty Purchase Agreement, the Company purchased from Agenus the right to receivelow- tomid-single digit royalties from Incyte Europe Sarl (“Incyte”) (net of certain royalties payable by Agenus to a third party) and 10% of all future developmental, regulatory and sales milestones on sales of six Incyte immuno-oncology assets, with the exception of an expected near-term milestone associated with the entry of INCAGN2390(anti-TIM-3) into the clinic. In addition, the Company purchased from Agenus the right to receive low single digit royalties from Merck Sharp & Dohme Corp. (“Merck”) and 10% of all future developmental, regulatory and sales milestones on sales of an undisclosed Merck immuno-oncology product currently in clinical development. Pursuant to the Royalty Purchase Agreement, the Company is eligible to receive up to $59.5 million in potential development, regulatory and commercial milestones.
Under the terms of the Royalty Purchase Agreement, the Company paid Agenus $15 million (the “Closing Amount”). The Company has financed $7.5 million of the Closing Amount by drawing a term loan under its Loan and Security Agreement with Silicon Valley Bank dated May 7, 2018, previously filed as an exhibit to the Company’s Quarterly Report on Form10-Q for the three-month period ending June 30, 2018.
The Royalty Purchase Agreement contains customary representations, warranties, covenants and indemnities. The Royalty Purchase Agreement will terminate six (6) months following receipt by the Company of all royalty payments to which it is entitled thereunder.
The transaction closed on September 20, 2018.
The foregoing description of the Royalty Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Royalty Purchase Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form10-Q for the period ending September 30, 2018. Certain terms of the Royalty Purchase Agreement have been omitted from thisForm 8-K and will be omitted from the version to be filed as an exhibit to theForm 10-Q pursuant to a Confidential Treatment Request that the Company plans to submit to the Securities and Exchange Commission at the time of the filing of theForm 10-Q. On September 21, 2018, the Company issued a press release attached hereto as Exhibit 99.1
| Item 2.01 | Completion or Acquisition or Disposition of Assets. |
The information included under Item 1.01 of this Current Report on Form8-K is incorporated by reference herein.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation underan Off-Balance Sheet Arrangement of a Registrant. |
The information included under Item 1.01 of this Current Report on Form8-K is incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
