Item 1.01. Entry into a Material Definitive Agreement
License and Collaboration Agreement
On May 10, 2019 (the Effective Date), Onconova Therapeutics, Inc. (the Company) entered into a License and Collaboration Agreement (the License Agreement) with HanX Biopharmaceuticals, Inc. (HanX). Under the terms of the License Agreement, the Company granted HanX an exclusive, royalty-bearing license, with the right to sublicense, under certain Company patent rights and know-how to develop and commercialize any pharmaceutical product (the Product) containing rigosertib in all uses of rigosertib or the Product in humans therapeutics uses (the Field) in the Peoples Republic of China, Hong Kong, Macau and Taiwan (the Territory). The Company retains the right to develop and commercialize pharmaceutical products containing rigosertib worldwide except for (i) in the Field in the Territory (ii) for Latin America, for which Pint Pharma acquired rights to commercialize in March 2018 and (iii) for Japan and Korea, for which SymBio acquired rights to develop and commercialize in July 2011. The parties have also agreed to negotiate in good faith a supply and quality agreement under which the Company will supply HanX with rigosertib and the Product and, subject to certain conditions, HanX also has the right to manufacture and supply rigosertib and Product for use and sale in the Territory, either by itself or through its affiliates or third party contract manufacturers.
HanX has agreed to make an upfront payment of $2,000,000 in cash and upfront equity investments of approximately $2,000,000 in the Companys common stock as described below, and will set aside $2,000,000 or equivalent local currency funds dedicated to research and development expense funding for the Product in the Territory. In addition, the Company is eligible to receive up to $45.5 million in regulatory, development and sales-based milestone payments as well as tiered royalties up to double digits based on net aggregate net sales in the Territory.
The License Agreement is subject to customary closing conditions. The License Agreement also contains customary provisions for termination by either party in the event of breach of the License Agreement by the other party, subject to a cure period, or bankruptcy of the other party. In the event the full upfront payment and the full upfront equity investments are not received by the Company or its designee within 60 days from the Effective Date, the License Agreement and all rights and licenses granted to HanX thereunder will automatically terminate, unless otherwise expressly waived in writing by the Company. HanX may terminate the License Agreement in whole (but not in part) at any time upon 45 days prior written notice. The Securities Purchase Agreements (defined below) will terminate upon the termination of the License Agreement.
Securities Purchase Agreements
In connection with the License Agreement, on May 10, 2019, the Company entered into a Securities Purchase Agreement with each of HanX and Abundant New Investments Ltd. (Abundant), an affiliate of HanX (each, a Securities Purchase Agreement and together, the Securities Purchase Agreements).
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Under the HanX Securities Purchase Agreement, HanX has agreed to purchase 207,040 shares of the Companys common stock at a purchase price of $4.83 per share for a total purchase price of $1,000,003.20, which purchase will close (the HanX Closing) no later than 60 days from the Effective Date, provided that, among other conditions, HanX has received the necessary approvals of, and registrations and filings with, the applicable governmental authorities of the Peoples Republic of China, in connection with the outbound direct investment by HanX in the Company and related currency exchange from Chinese
renminbi
into the United States dollars (such approvals, the ODI Approvals), and has completed the requisite currency conversion.
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Under the Abundant Securities Purchase Agreement, Abundant has agreed to: (i) purchase 103,520 shares of the Companys common stock at a purchase price of $4.83 per share for a total purchase price of $500,001.60 within two trading days of the Effective Date (the Abundant Initial Closing); and (ii) purchase 103,520 shares of the Companys common stock at a purchase price of $4.83 per share for a total purchase price of $500,001.60, which purchase will close (the Abundant Subsequent Closing) no later than 60 days after the Abundant Initial Closing, provided that, among
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other conditions, Abundant has received the ODI Approvals and completed the requisite currency conversion.
HanX and Abundant have agreed that the shares they have agreed to purchase under their respective Securities Purchase Agreement will be subject to lock-up restrictions for one year from the date of the HanX Closing and the Abundant Initial Closing, respectively, (each, a Strategic Lock-Up Period), and certain additional lock-up provisions as applicable.
HanX and Abundant are entitled to registration rights if they hold Registrable Securities (as defined in the Securities Purchase Agreement) upon the expiration of their respective Strategic Lock-Up Period, and the Company has agreed to use its reasonable best efforts to register such Registrable Securities on a registration statement on Form S-3 (or another appropriate form of registration statement if the Company is not eligible to use Form S-3), to cause such registration statement be declared effective by the Securities and Exchange Commission, and to maintain the effectiveness of such registration statement until HanX or Abundant as applicable no longer holds any Registrable Securities.
The foregoing description of the License Agreement and the Securities Purchase Agreements (the Agreements) does not purport to be complete and is qualified in its entirety by the Agreements, copies of which the Company intends to file as exhibits to Companys Quarterly Report on Form 10-Q for the quarter ending June 30, 2019.
Item 8.01. Other Events.
On May 13, 2019, the Company issued a press release with respect to entering into the Agreements described under Item 1.01 of this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
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Exhibit
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99.1
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Press release dated May 13, 2019
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