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Item 1.01
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Entry into a Material Definitive Agreement.
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On September 21, 2016, Nektar Therapeutics,
a Delaware corporation (“Nektar”), entered into a Clinical Trial Collaboration Agreement (the “Agreement”)
with Bristol-Myers Squibb Company, a Delaware corporation (“BMS”), pursuant to which Nektar and BMS will collaborate
to conduct Phase 1/2 clinical trials evaluating Nektar’s IL-2-based CD122-biased agonist, known as NKTR-214, and BMS’s
human monoclonal antibody that binds PD-1, known as Nivolumab, as a potential combination treatment regimen in five tumor types
and seven potential indications, and such other clinical trials evaluating the combined therapy as may be mutually agreed upon
by the parties (each, a “Combined Therapy Trial”).
Under the Agreement, BMS will be responsible
for 50% of all out-of-pocket costs reasonably incurred in connection with third party contract research organizations, laboratories,
clinical sites and institutional review boards. Each party will otherwise be responsible for its own internal costs, including
internal personnel costs, incurred in connection with each Combined Therapy Trial. Nektar and BMS will use commercially reasonable
efforts to manufacture and supply its compound for each Combined Therapy Trial and will bear the costs related thereto. The parties
will form a joint development committee to oversee clinical trial design, regulatory strategy, and other activities necessary to
conduct and support the Combined Therapy Trials. Nektar will act as sponsor of each Combined Therapy Trial.
Ownership of, and global commercial rights
to, NKTR-214 remain solely with Nektar under the Agreement. If Nektar wishes to license the right to commercialize NKTR-214 in
one of certain major market territories prior to September 30, 2018 (the “Exclusivity Expiration Date”), Nektar must
first negotiate with BMS, for a period of three months (the “Negotiation Period”), to grant an exclusive license to
develop and commercialize NKTR-214 in any of these major market territories. If BMS and Nektar do not reach an agreement for an
exclusive license within the Negotiation Period, Nektar will be free to license any right to NKTR-214 to other parties in any territory
worldwide except that in the event that Nektar receives a license offer from a third party during a period of 90 calendar days
after the end of the Negotiation Period, Nektar will provide BMS ten business days to match the terms of such third-party offer.
After the Exclusivity Expiration Date, Nektar is free to license NKTR-214 without any further obligation to BMS.
Each party grants to the other party a non-exclusive,
worldwide (subject to certain exceptions in the case of the license granted by BMS), non-transferable and royalty-free research
and development license to such licensing party’s patent rights, technology and regulatory documentation to use its compound
solely to the extent necessary to discharge its obligations under the Agreement with respect to the conduct of the Combined Therapy
Trials.
The Agreement also contains certain reciprocal
exclusivity provisions that run until the Exclusivity Expiration Date. Nektar agrees not to conduct any preclinical or clinical
research with, or grant rights under its proprietary intellectual property or relevant investigational new drug applications to,
certain restricted third parties regarding an anti-PD-1 antagonist or anti-PD-L1 antagonist together with the NKTR-214 (a “Restricted
NKTR-214 Combination”), and BMS agrees not to conduct any preclinical or clinical research with certain restricted third
parties regarding Nivolumab together with an IL2-based CD122 agonist (a “Restricted Nivolumab Combination”). Nektar
and BMS remain free to conduct any preclinical or clinical research—involving a Restricted NKTR-214 Combination in the case
of Nektar and a Restricted Nivolumab Combination in the case of BMS—on their own or in collaboration with academic or other
non-profit entities.
Subject to termination rights for breach,
bankruptcy or a material safety issue/clinical hold, the term of the Agreement will continue in effect until completion by all
centers or institutions participating in the Combined Therapy Trials, the delivery of study data to both parties and the completion
of any then agreed upon protocol, statistical analysis and bioanalysis plan. In the event a third party merges with or acquires
Nektar, Nektar is free to assign or transfer the Agreement without the consent of BMS.
The foregoing summary does not purport to
be complete and is qualified in its entirety by reference to the Agreement, a copy of which will be filed as an exhibit to Nektar’s
Quarterly Report on Form 10-Q for the period ended September 30, 2016.