License and Collaboration Agreement
On July 14, 2020, we entered into a License Agreement with Ji Xing, pursuant to which we granted to Ji Xing an exclusive license to develop and
commercialize CK-274 in the greater China region. Under the terms of the License Agreement, we received from Ji Xing an upfront payment of $25.0 million. We may be eligible to receive from Ji Xing
milestone payments totaling up to $200.0 million for the achievement of certain development and commercial milestone events in connection to CK-274 in the field of obstructive hypertrophic cardiomyopathy,
or oHCM, and/or non-obstructive hypertrophic cardiomyopathy, or nHCM, and other indications. In addition, Ji Xing will pay us tiered royalties in the low-to-high teens range on the net sales of CK-274 in the greater China region, subject to certain reductions for generic competition, patent expiration
and payments for licenses to third party patents. The License Agreement, unless terminated earlier, will continue on a market-by-market basis until
expiration of the relevant royalty term.
Funding Agreement
On July 14, 2020, we entered into a Funding Agreement, or the Funding Agreement, with an affiliate of RTW. Pursuant to the Funding Agreement, RTW
has committed to provide up to $90.0 million, or the Funding Commitment, to fund our development and commercialization of CK-274 in nHCM and oHCM. Half of the Funding Commitment will be available, at our
option, if certain clinical trial milestones of CK-274 for oHCM are achieved by January 14, 2023, and the other $45.0 million of the Funding Commitment will be available, at our option, if certain
clinical trial milestones of CK-274 for nHCM are achieved by January 14, 2024. If we develop CK-274 in another indication, we will negotiate an additional funding
commitment from RTW to fund our development and commercialization of CK-274 in such other indication (other than oHCM or nHCM).
In exchange for the Funding Commitment and upon receipt of such funding from RTW, we have agreed to make payments to RTW equal to 2%, if RTW funds
$45.0 million of the Funding Commitment, or 4%, if RTW funds the full $90.0 million of the Funding Commitment, in each case in respect of net sales of CK-274 by us and any of our licensees in the
United States, the European Union, Switzerland, the United Kingdom and certain other countries in Europe, collectively referred to as the CK-274 Territory. In addition, should we exercise our option pursuant
to the Funding Agreement, such agreement contains certain covenants applicable to us, including among other things, development and commercialization diligence obligations in connection to the CK-274, use of
proceeds, reporting and encumbrances.
The Funding Agreement contains customary conditions to disbursement, which may include the consent of our
senior secured lenders at the time of disbursement.
Royalty Purchase Agreement
On July 14, 2020, we entered into a Royalty Purchase Agreement, or the Royalty Purchase Agreement, with RTW, pursuant to which we will sell our
right to receive certain payments on the net sales of products containing the compound mavacamten, a cardiac myosin inhibitor, or the Mavacamten Royalty, under the Research Collaboration Agreement, or as amended, the Collaboration Agreement,
dated August 24, 2012, between us and MyoKardia, Inc., or MyoKardia, to RTW for an one-time payment of $85.0 million. The purchase price will be paid to us at closing, which is expected to
occur on or before October 12, 2020 or such later date as may be agreed by the parties. The closing of the transaction contemplated by the Royalty Purchase Agreement is subject to customary closing conditions, including the parties obtaining
the consent of MyoKardia to the sale of the Mavacamten Royalty to RTW, as well as obtaining the consent of our senior secured lenders.