JAGUAR HEALTH,INC. (NASDAQ: JAGX) Files An 8-K Termination of a Material Definitive AgreementItem 9.01 Termination of a Material Definitive Agreement.
On December4, 2018, Napo Pharmaceuticals,Inc. (“Napo”), a wholly-owned subsidiary of Jaguar Health,Inc. (the “Company”), entered into the Suspension, Settlement and Termination Agreement (the “Termination Agreement”) with SmartPharma, LLC (“SmartPharma”) and the Company, as guarantor, to which the parties mutually agreed to suspend and then terminate the Strategic Marketing Alliance Agreement, dated April4, 2016, between Napo and SmartPharma (the “Alliance Agreement”).
Under the Alliance Agreement, SmartPharma performed certain marketing and commercialization activities (collectively, the “SP Services”) with respect to Mytesi, the Company’s first-in-class anti-secretory agent approved by the U.S. Food and Drug Administration for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy, in consideration for the receipt of a specified percentage of net sales ranging in the low double digits but in no instance exceeding 20% of net sales, depending on the amount of such sales. In the event of termination, Napo would be required to pay SmartPharma a termination fee equal to a certain percentage of net sales generated within a specified period after the termination date.
As a result of the Company’s previously announced appointment of Robert J. Griffing as chief commercialization officer of Napo, the parties mutually agreed to enter into the Termination Agreement. to the terms of the Termination Agreement, upon SmartPharma’s receipt of the payment due to SmartPharma for October2018 sales as set forth in ArticleIV of the Alliance Agreement (the “OctoberPayment”), (i)the Alliance Agreement will be suspended by the parties retroactive as of October31, 2018 (the “Effective Date”), (ii)the Alliance Agreement will remain in suspension from the Effective Date until the earlier of (A)January8, 2019 or (B)the date SmartPharma receives a one-time lump sum payment in the amount of $250,000 (the “Buyout Fee”), (iii)after the Effective Date, SmartPharma will not be obligated to perform any of the SP Services and (iv)after Napo makes the OctoberPayment and the Buyout Fee, all payment obligations under ArticleIV of the Alliance Agreement will be deemed satisfied and the Alliance Agreement will automatically terminate.
All payment obligations under the Termination Agreement are guaranteed by the Company. To the extent that the Buyout Fee is not made on or before January8, 2019, the Alliance Agreement will be reinstated and will remain in full force and effect, subject to certain amendments, including (i)the deletion of SmartPharma’s obligation to perform SP Services and Napo’s right to terminate the Alliance Agreement and (ii)the extension of Napo’s obligation to pay remuneration to SmartPharma in accordance with the terms of the ArticleIV of the Alliance Agreement until the end of the renewal term of the Alliance Agreement in October2021.
The Termination Agreement is filed as Exhibit10.1 to this Current Report on Form8-K, and such document is incorporated herein by reference. The foregoing is only a brief description of the material terms of the Amendment, 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 such exhibit.
Item 9.01 Financial Statements and Exhibits