Calithera Biosciences, Inc. (NASDAQ:CALA) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

Collaboration and License Agreement with Incyte
Corporation

On January27, 2017, Calithera Biosciences, Inc. (Calithera)
entered into a collaboration and license agreement (the
Collaboration Agreement) with Incyte Corporation (Incyte).

Under the terms of the Collaboration Agreement, Calithera granted
Incyte an exclusive, worldwide license to develop and
commercialize small molecule arginase inhibitors, including
CB-1158, which is currently in phase 1 clinical trials, for
hematology and oncology indications. The parties will collaborate
on and co-fund the development of the licensed products for
hematology and oncology indications, with Incyte bearing 70% and
Calithera bearing 30% of global development costs. Calithera will
have the right to conduct certain clinical development under the
collaboration, including combination studies of a licensed
product with a proprietary compound of Calithera. The parties
will share profits and losses in the U.S., with 60% to Incyte and
40% to Calithera, and Calithera will have the right to co-detail
licensed products in the U.S, and Incyte will pay Calithera
tiered royalties ranging from the low to mid-double digits on net
sales of licensed products outside the U.S. Calithera may opt out
of its co-funding obligation, in which case the U.S. profit
sharing will no longer be in effect, and Incyte will pay
Calithera tiered royalties ranging from the low to mid-double
digits on net sales of licensed products both in the U.S. and
outside the U.S., and additional royalties to reimburse Calithera
for previously incurred development costs.

Calithera retains rights to certain arginase inhibitors that are
not part of the collaboration for specific orphan indications
outside of hematology and oncology, subject to Incytes rights to
negotiate a license for any such programs under specified
circumstances if Calithera elects to out-license them.

Incyte will pay Calithera an upfront license fee of $45 million
and potential development, regulatory and sales milestone
payments of over $430 million if the profit share is in effect,
or $750 million if the profit share terminates.

The Collaboration Agreement will continue on a product-by-product
and country-by-country basis for so long as Incyte is developing
or commercializing products in the U.S. (if the parties are
sharing profits in the U.S.) and until Incyte has no further
royalty payment obligations, unless earlier terminated according
to the terms of the Collaboration Agreement. The Collaboration
Agreement may be terminated in its entirety or on a
product-by-product and/or a country-by-country basis by Incyte
for convenience. The Collaboration Agreement may also be
terminated by Incyte for Calitheras uncured material breach, by
Calithera for certain uncured material breaches of Incyte and by
either party for bankruptcy or patent challenge. If the
Collaboration Agreement is terminated with respect to one or more
products or countries, all rights in the terminated products and
countries revert to Calithera.

The foregoing description of the terms of the Collaboration
Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Collaboration
Agreement, a copy of which will be filed with the Securities and
Exchange Commission as an exhibit to Calitheras Quarterly Report
on Form 10-Q for the quarter ended March31, 2017. Calithera
intends to request confidential treatment for certain terms of
the Collaboration Agreement, which will be filed separately with
the Securities and Exchange Commission.

Stock Purchase Agreement with Incyte Corporation

In addition, on January27, 2017, the Company entered into a stock
purchase agreement (the Stock Purchase Agreement) with Incyte for
the purchase of 1,720,430 shares (the Shares) of the Companys
common stock, par value $0.0001 per share (the Common Stock) at a
price of $4.65 per share, resulting in gross proceeds of
approximately $8.0 million. The Company expects to use the net
proceeds from the sale of the Shares for working capital and
general corporate purposes, which may include, among other
things, funding research and development, clinical trials, vendor
payables, potential regulatory submissions, hiring additional
personnel and capital expenditures. The closing of the sale and
issuance of the Shares occurred on January30, 2017.

Under the Purchase Agreement, Incyte has certain rights to
participate in future stock issuances. Incyte will have this
participation right until the earlier of (i)January27, 2019 or
(ii)expiration of the Term (as defined in the Collaboration
Agreement). Incyte has also agreed not to sell or otherwise
transfer any of the Shares for a period ending 180 days after the
closing date of the sale of the Shares, subject to customary
exceptions.

The Shares were offered to a prospectus dated November9, 2015 and
a final prospectus supplement dated January30, 2017 (the
Prospectus Supplement) to the Companys effective shelf
registration statement on FormS-3 (Registration No.333-207905).
The legal opinion of Cooley LLP relating to the Shares is filed
as Exhibit5.1 to this Current Report on Form8-K.

The foregoing is only a brief description of the Stock Purchase
Agreement, does not purport to be a complete description of the
rights and obligations of the parties thereunder and is qualified
in its entirety by reference to the form of Stock Purchase
Agreement filed as Exhibit10.1 to this Current Report on Form8-K
and incorporated by reference herein.

The Company discussed on its conference call held on January30,
2017 that, based upon preliminary estimates and information
currently available, the Company expects to report cash, cash
equivalents and short-term investments as of December31, 2016 of
approximately $51.8 million. The Company has not yet completed
its financial close procedures for the year ended December31,
2016. This estimate of the Companys cash, cash equivalents and
short-term investments as of December31, 2016 is preliminary, has
not been audited and is subject to change upon completion of the
Companys financial close procedures. This estimate is not a
comprehensive statement of the Companys financial results for the
year ended December31, 2016, and the Companys actual results may
differ materially from this estimate as a result of the
completion of the Companys financial close procedures, final
adjustments and other developments arising between now and the
time that the Companys financial results for this period are
finalized.

The information in Item2.02 of this Current Report on Form 8-K
shall not be deemed to be filed for purposes of Section18 of the
Securities Exchange Act of 1934, as amended. The information
contained herein shall not be incorporated by reference into any
filing with the SEC made by the Company, whether made before or
after the date hereof, regardless of any general incorporation
language in such filing.

On January30, 2017, the Company and Incyte issued a press release
relating to the Collaboration Agreement and Stock Purchase
Agreement.A copy of the press release is furnished herewith as
Exhibit99.1.

(d) Exhibits.

Forward-Looking Statements

This Current Report on Form8-K contains forward-looking
statements based upon the Companys current expectations.
Forward-looking statements involve risks and uncertainties, and
include, but are not limited to, all statements relating to the
development, regulatory and sales milestone payments in
connection with the Collaboration Agreement and how the
anticipated net proceeds from the offering (the Offering) will be
used as disclosed in Item1.01 hereof. Item2.02 of this Current
Report also contains forward-looking statements, including,
without limitation, statements relating to the Companys cash
position as of December31, 2016. These forward-looking statements
are based upon the Companys current expectations. Actual results
could differ materially from these forward-looking statements as
a result of certain factors, including, without limitation, risks
related to changes in estimated cash position based on the
completion of financial closing procedures and the audit of the
Companys financial statements, and other risks detailed in the
Companys filings with the Securities and Exchange Commission.
Regardless of the Offering, the Company will continue to need
additional funding and may be unable to raise capital when
needed, which would force the Company to delay, reduce or
eliminate its product candidate development programs. You should
not place undue reliance on these forward-looking statements,
which apply only as of the date of this Current Report on
Form8-K. The Companys Quarterly Report on Form10-Q filed with the
Securities and Exchange Commission on November9, 2016 contains
under the heading, Risk Factors, a more comprehensive description
of these and other risks to which the Company is subject. The
Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in its
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are
based.

About Calithera Biosciences, Inc. (NASDAQ:CALA)

Calithera Biosciences, Inc. is a clinical-stage pharmaceutical company. The Company focuses on discovering and developing small molecule drugs directed against tumor and immune cell targets that control key metabolic pathways in the tumor microenvironment. It is engaged in developing agents that take advantage of the metabolic requirements of tumor cells and cancer-fighting immune cells, such as cytotoxic T-cells. Its lead product candidate, CB-839, is a critical enzyme in tumor cells. Its other product candidate, CB-1158, which is an enzyme that depletes the amino acid arginine, a key metabolic nutrient for T-cells. Its lead preclinical program in tumor immunology is directed at developing inhibitors of the enzyme arginase and may provide a therapeutic agent for the target. CB-839 is a selective, reversible and orally bioavailable inhibitor of human glutaminase. Hexokinase is an enzyme in the pathway that allows cancer cells to convert glucose to energy to fuel cancer cell growth.

Calithera Biosciences, Inc. (NASDAQ:CALA) Recent Trading Information

Calithera Biosciences, Inc. (NASDAQ:CALA) closed its last trading session up +2.15 at 6.75 with 10,422,314 shares trading hands.