LOXO ONCOLOGY,INC. (NASDAQ:LOXO) Files An 8-K Entry into a Material Definitive Agreement

LOXO ONCOLOGY,INC. (NASDAQ:LOXO) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

License, Development and Commercialization Agreement

On November14, 2017, Loxo Oncology,Inc. (the “Company” or “Loxo Oncology”) entered into a License, Development and Commercialization Agreement (the “Agreement”) with Bayer Consumer Care AG (“Bayer”) to which the Company and Bayer will collaborate to develop and commercialize larotrectinib and LOXO-195, Loxo Oncology’s franchise of highly selective TRK inhibitors for patients with TRK fusion cancers. to the Agreement, Loxo Oncology has granted co-exclusive development and commercialization licenses to Bayer for both larotrectinib and LOXO-195.

In addition to an upfront cash payment of $400.0 million, Loxo Oncology is eligible to receive $450.0 million in milestone payments upon larotrectinib regulatory approvals and first commercial sale events in certain major markets and an additional $200.0 million in milestone payments upon LOXO-195 regulatory approvals and first commercial sale events in certain major markets.

Loxo Oncology will lead global development activities and regulatory activities in the United States. Bayer will lead regulatory activities outside the United States and global commercial activities. Globally, Loxo Oncology will be responsible for 50% of development costs. In the United States, where Loxo Oncology and Bayer will co-promote the products, Loxo Oncology will be responsible for 50% of the commercial costs and receive 50% of the profits. Bayer will pay Loxo Oncology a $25.0 million milestone upon achieving a certain U.S. net sales threshold. Loxo Oncology will have the right to opt-out of the U.S. co-promotion, in which case Loxo Oncology would receive a royalty in the low thirties percent range on U.S. net sales, which is meant to approximate the economics of the 50/50 profit split.

Outside of the United States, where Bayer will commercialize, Bayer will pay Loxo Oncology tiered, double digit royalties on net sales, and sales milestones totaling $475.0 million. Bayer will book revenues worldwide.

The Agreement also includes a standstill provision that prevents Bayer from acquiring five percent or more of Loxo Oncology’s voting securities.

The Agreement will terminate as to a product or country upon the expiration of the royalty term applicable to such product in such country. The Agreement may be terminated by either party for material breach or bankruptcy. In addition, Bayer may terminate the Agreement after the fourth anniversary of the effective date upon written notice to Loxo Oncology, or in the event that Loxo Oncology receives a “complete response letter” from the U.S. Food and Drug Agency with respect to larotrectinib, or if Loxo Oncology does not receive marketing approval for larotrectinib by December31, 2018.

Loxo Oncology expects to file the Agreement as an exhibit to its Annual Report on Form10-K for the year ended December31, 2017 and intends to seek confidential treatment for certain terms and provisions of the Agreement. The foregoing description is qualified in its entirety by reference to the text of the Agreement when filed.

Loxo Oncology issued a press release on November14, 2017 announcing the Agreement, a copy of which is attached to this Current Report on Form8-K as Exhibit99.1.

Forward-Looking Statements

To the extent that statements contained in this Current Report on Form8-K are not descriptions of historical facts regarding Loxo Oncology,Inc., they are forward-looking statements reflecting the current beliefs and expectations of management made to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including Loxo Oncology’s expectations regarding the ability of Loxo Oncology to advance its research and development pipeline, including its discovery and preclinical pipeline in clinical trials; Loxo Oncology’s expectations regarding its ability to co-develop and co-commercialize larotrectinib or any other product candidate; the receipt of the upfront payment from Bayer; Loxo Oncology’s expectations regarding its ability to realize substantial potential downstream value and profits from its alliance with Bayer; and the potential of Loxo

Oncology’s product candidates to significantly impact cancer treatment and the clinical outcome of patients with cancer. Such forward-looking statements involve substantial risks and uncertainties that could cause Loxo Oncology’s clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the preclinical and clinical development process; the risks and uncertainties of the regulatory approval process; Loxo Oncology’s dependence on its collaboration partners, including Bayer, for the funding of its partnered programs; Loxo Oncology’s ability to raise additional capital to support the development of its unpartnered programs; Loxo Oncology’s dependence on the development and marketing efforts of its partners for the commercial success of its partnered product candidates; Loxo Oncology’s reliance on third parties to conduct certain preclinical studies and all of its clinical trials; Loxo Oncology’s reliance on single source third-party contract manufacturing organizations to manufacture and supply its product candidates; Loxo Oncology’s ability to validate, develop and obtain regulatory approval for companion diagnostics; Loxo Oncology’s ability to achieve market acceptance and commercial success of its product candidates once regulatory approval is achieved; Loxo Oncology’s ability to discover, develop and commercialize additional product candidates; the ability of competitors to discover, develop or commercialize competing products more quickly or more successfully; risk of third party claims alleging infringement of patents and proprietary rights or seeking to invalidate Loxo Oncology’s patents or proprietary rights; and the ability of Loxo Oncology’s proprietary rights to protect its technologies and product candidates. Loxo Oncology undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Loxo Oncology’s business in general, see Loxo Oncology’s Quarterly Report on Form10-Q for the fiscal quarter ended September30, 2017, filed with the Securities and Exchange Commission on November2, 2017.

Item 9.01 Financial Statements and Exhibits.


Loxo Oncology, Inc. Exhibit
EX-99.1 2 a17-26492_1ex99d1.htm EX-99.1 Exhibit 99.1 Loxo Oncology Announces Global Development and Commercialization Partnership with Bayer for Larotrectinib and LOXO-195   — Up to $1.55B in Upfront,…
To view the full exhibit click here


Loxo Oncology, Inc. is a United States-based biopharmaceutical company. The Company is engaged in developing selective medicines for patients with genetically defined cancers. Its pipeline focuses on cancers that are dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer. Its pipeline includes LOXO-101, LOXO-195, Rearranged During Transfection (RET) Program and Fibroblast Growth Factor Receptor (FGFR) program. LOXO-101 is a selective inhibitor of tropomyosin receptor kinases (TRK) for the treatment of patients with soft tissue sarcoma. LOXO-195 is a selective TRK inhibitor capable of addressing potential mechanisms of acquired resistance that may emerge in patients receiving LOXO-101 or multikinase inhibitors with anti-TRK activity. It has designed a series of RET inhibitors that optimize on-target potency for RET gene fusions, mutations and clinically-identified resistance mutations. It is designing FGFR1-sparing FGFR inhibitor.

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