ImmunoGen,Inc. (NASDAQ:IMGN) Files An 8-K Entry into a Material Definitive AgreementITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On August28, 2017,ImmunoGen,Inc. (also referred to as “we”, “our”, “us”, or “ImmunoGen”) and Jazz Pharmaceuticals Ireland Limited (“Jazz”), a subsidiary of Jazz Pharmaceuticals plc, entered into a Collaboration and Option Agreement (the “Option Agreement”), to which we granted Jazz options to develop and commercialize, on an exclusive, worldwide basis, IMGN779,IMGN632, and a third antibody-drug conjugate (“ADC”) from our early research and development pipeline to be designated by Jazz within the first seven years of the Option Agreement term. Each of the foregoing three products is referred to herein as a “Collaboration Product.” Jazz is entitled to exercise its option with respect to each Collaboration Product during specified periods set forth in the Option Agreement. Each Collaboration Product for which Jazz has exercised its option is referred to herein as a “Licensed Product.” We have the right to co-commercialize with Jazz a single Licensed Product (except under certain limited circumstances under which we may be entitled to co-commercialize two Licensed Products), to be designated by us, in the United States.
Under the terms of the Option Agreement, we are entitled to receive a non-refundable $75 million upfront option fee. Jazz has also agreed to provide up to $100 million in development funding over seven years to support development of the Collaboration Products. Jazz has the right to opt out of a Collaboration Product under the Option Agreement upon prior notice to us, which would result in a pro-rata reduction of its obligation to provide development funding. We are obligated to use a specified level of efforts to advance the development of the Collaboration Products, and we are responsible for all development costs with respect to the Collaboration Products in excess of Jazz’s development funding.
Jazz may exercise its option with respect to each Collaboration Product at any time prior to a pivotal study or any time prior to a biologics license application (BLA) upon payment of an option exercise fee of mid-double digit millions or low triple digit millions, respectively. The option exercise fee for IMGN632 is subject to certain adjustments depending on the indication(s)for which initial regulatory approval of this product is based. The option exercise fee would be reduced with respect to the Licensed Product designated by us for co-commercialization if Jazz exercised its option for that Licensed Product at the later stage of development. After any option exercise by Jazz, we will share equally with Jazz the costs associated with developing and obtaining regulatory approvals of each Licensed Product in the United States and the European Union, and Jazz will be solely responsible for such costs with respect to all other territories worldwide.
We are also entitled to receive milestone payments upon US and EU regulatory approvals for each Licensed Product, plus tiered royalties as a percentage of commercial sales which, depending on sales levels and the stage of development at the time of Jazz’s option exercise, range from the mid- to high-single digits in the lowest tier, to low 10’s to low 20’s in the highest tier. With respect to the Licensed Product designated by us for co-commercialization, in lieu of receiving a milestone payment based on receiving regulatory approval in the United States, or royalties on sales in the United States, we will share equally with Jazz the activities, costs, and profits associated with commercialization in the United States.
