Under the terms of the License Agreement, the parties have agreed to establish a joint steering committee (comprised of two persons appointed by each of Licensor and Strongbridge Ireland) in order to, among other things, provide each party with visibility into the other party’s commercialization and development activities with respect to Macrilen in their respective territories, oversee and guide Licensor’s activities in carrying out the PIP, review and approve certain matters related to the PIP, and coordinate with respect to the finalization of each party’s supply chain for Macrilen in its respective territory and the transition of manufacturing responsibility of Macrilen in the Territory from Licensor to Strongbridge Ireland.

to the terms of the License Agreement, Strongbridge Ireland and Licensor will work together, through the joint steering committee, to procure a full supply chain of Macrilen for the United States to enable the launch of Macrilen as soon as reasonably possible after the effective date of the License Agreement. While Licensor is not required to assign, transfer or novate any of its outstanding CMO contracts to Strongbridge Ireland, the parties will have a joint option to do so, and have agreed to co-operate and work in good faith during the transition period following the effective date of the License Agreement with regards to supply arrangements and the procurement of raw materials necessary for the manufacture of Macrilen in the Territory. To the extent that Strongbridge Ireland does not take responsibility for and management of supply of Macrilen by the date that is twelve months from the effective date of the License Agreement, then the parties will enter into a supply agreement to govern such supply arrangements between the parties (the “Supply Agreement”), and subject to the terms of the Supply Agreement, Licensor will have no further obligations under certain sections of the License Agreement that relate to interim supply arrangements.

The License Agreement will remain in full force and effect in each country in the Territory until the later of (i)the expiration of all valid patent rights related to Macrilen in such country, (ii)the expiration of any regulatory marketing exclusivity period or other statutory designation that provides exclusivity for the commercialization of Macrilen in such country, and (iii)10 years following the first commercial sale of Macrilen in the Territory (the “Royalty Term”). At the expiration of the Royalty Term in each country of the Territory, the licenses granted to Strongbridge Ireland will become perpetual, irrevocable, fully paid up and royalty free in such country.

The License Agreement may be terminated effective immediately by Strongbridge Ireland if there is reasonable good faith grounds to believe there is a safety concern related to Macrilen or in the case of withdrawal of regulatory approval for Macrilen in the United States that Strongbridge Ireland believes will be permanent, and may also be terminated by Strongbridge Ireland upon 270 days’ prior written notice to Licensor for any reason or no reason.

Either party may terminate the License Agreement upon giving 90 days’ written notice to the other party on the occurrence of a material breach by such other party, which breach is incapable of remedy or, if capable of remedy, has not been remedied within such 90 day notice period; provided that the License Agreement will be terminated only in the country of the Territory affected by the breach.

Amendment to Term Loan Agreement with CRG Servicing LLC

On January16, 2018 (the “Loan Amendment Effective Date”), the Company and its subsidiaries, Strongbridge U.S.Inc., Strongbridge Ireland, Cortendo AB (publ) and Cortendo CaymanLtd., entered into an amendment (the “Loan Amendment”) to the Term Loan Agreement, dated as of July14, 2017 (the “Term Loan Agreement”), with CRG ServicingLLC (“CRG”), as administrative agent and collateral agent, and the lenders named therein (the “Lenders”).

The primary purpose of the Loan Amendment is to increase the total potential borrowing under the Term Loan Agreement from $50 million to $100 million. The Loan Amendment provides for (i)an additional disbursement of $45.0 million (the “Second Tranche”) to the Company on the Loan Amendment Effective Date, and (ii)an additional disbursement of $5.0 million (the “Fourth Tranche”) to the Company at its election, contingent upon the Company’s achievement of certain revenue milestones and a market capitalization condition on or before December31, 2018, as described in the Loan Amendment. The Company continues to be eligible to borrow up to an additional $10.0 million (the “Third Tranche”) contingent upon its achievement of certain revenue milestones on or before June30, 2018, as previously provided in the Term Loan Agreement; provided,

however, that under the Term Loan Agreement, as amended, the Third Tranche is now subject to a market capitalization condition, as described in the Loan Amendment.

The term of the Term Loan Agreement, as amended, remains six years, although the interest-only period has been extended by six months to December31, 2020. The Company has retained the option to extend the interest-only period to six years based upon the achievement of certain milestones on or prior to December 31, 2020.

As a condition to the Second Tranche under the Term Loan Agreement, as amended, the Company issued to the Lenders on the Loan Amendment Effective Date warrants (the “Warrants”) to purchase an aggregate of 1,248,250 of its ordinary shares, at an exercise price of $10.00 per share. If the Company borrows the Third Tranche, it must issue to the Lenders, or their designees, one or more additional warrants to purchase a number of the Company’s ordinary shares equal to an aggregate of 0.20% of its ordinary shares outstanding following such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to 110% of the closing price of the Company’s ordinary shares on the date immediately preceding the Third Tranche disbursement date. If the Company borrows the Fourth Tranche, it must issue to the Lenders, or their designees, one or more additional warrants to purchase a number of the Company’s ordinary shares equal to an aggregate of 0.25% of its ordinary shares outstanding following such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to 140% of the 10-day volume weighted average price (VWAP) per ordinary share for the consecutive 10-day trading period ending on the trading day prior to the Fourth Tranche disbursement date. Each of these warrants will be exercisable at any time prior to seven years following its issue date and will contain customary provisions for assumption or exchange upon a change of control or a sale of all or substantially all of the Company’s assets.

The Company used a portion of the proceeds from the Second Tranche to fund its acquisition of the exclusive license to the intellectual property rights related to Macrilen as well as for general corporate purposes and working capital.

The foregoing description of the License Agreement, Loan Amendment and the Warrants are not complete and are qualified in their entirety by reference to the full text of the License Agreement, the Loan Amendment and the Warrants, which will be filed as exhibits to the Company’s Annual Report on Form10-K for the fiscal year ended December31, 2017.

Neither the License Agreement, the Loan Amendment nor the Warrants is intended to be a source of factual, business or operational information about the Company or its subsidiaries. The representations, warranties and covenants contained in the License Agreement, Loan Amendment and Warrants were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the parties, including being qualified by disclosures for the purpose of allocating contractual risk between the parties instead of establishing matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties.

Item 7.01 Regulation FD Disclosure.

On January17, 2018, the Company issued a press release regarding its entry into the License Agreement, the Loan Amendment and the Warrants, a copy of which is attached as Exhibit99.1 to this Current Report on Form8-K.

The information contained in the press release is being furnished to the Commission and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Strongbridge Biopharma plc Exhibit
EX-99.1 2 a18-3340_1ex99d1.htm EX-99.1 Exhibit 99.1     Strongbridge Biopharma plc Announces Acquisition of the U.S. and Canadian Rights to MACRILEN™ (macimorelin) from Aeterna Zentaris   ~ MACRILEN is the First and Only FDA-Approved Oral Drug Indicated For the Diagnosis of Adult Growth Hormone Deficiency,…
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About STRONGBRIDGE BIOPHARMA plc (NASDAQ:SBBP)

Strongbridge Biopharma plc, formerly Cortendo plc, is a development-stage biopharmaceutical company. The Company is engaged in advancing its product candidates through clinical development. The Company is focused on the development, in-licensing, acquisition and eventual commercialization of several complementary products and product candidates within franchises that target rare diseases. Its principal focus is to build its rare endocrine franchise, which includes product candidates for the treatment of endogenous Cushing’s syndrome and acromegaly. Its product candidate, COR-003 (levoketoconazole), is a cortisol synthesis inhibitor, indicated for the treatment of endogenous Cushing’s syndrome. It is conducting SONICS, a pivotal Phase III clinical trial for COR-003. Its product candidate, COR-005 (veldotide), is a multi-receptor targeted somatostatin analog (SSA) in Phase II clinical development for the treatment of acromegaly patients. Its product candidate also includes BP-2002.