manufacturing, and commercialization rights concerning our proprietary Nrf2 activator product platform originally licensed to AbbVie with respect to the territories set forth below. Pursuant to
the Amended AbbVie Agreement, the license agreement, dated as of September 21, 2010, which we entered into with AbbVie (the License Agreement), and the collaboration agreement, dated as of December 9, 2011, which we entered into with
AbbVie (the Collaboration Agreement), have been amended. Except as otherwise set forth in the Amended AbbVie Agreement, the other provisions of the License Agreement and the Collaboration Agreement have been terminated. Under the Amended AbbVie
Agreement, certain licenses granted to AbbVie will continue, for which AbbVie has granted exclusive sublicenses to us under AbbVies continuing licenses, resulting in our reacquiring worldwide rights to bardoxolone, excluding certain Asian
countries that we previously licensed to KKC, and worldwide rights to omaveloxolone and the other second-generation Nrf2 activators (the Second-Generation Activators), in each case that we had licensed to AbbVie under the License Agreement and the
Collaboration Agreement.
In exchange for such
rights, we will pay AbbVie $330 million, of which $75 million is payable on December 8, 2019, $150 million is payable on June 30, 2020, and $105 million is payable on November 30, 2021. If we raise cash proceeds of
$200 million or more in one or more equity offerings, we are required to prepay AbbVie $25 million, which prepayment will reduce the amount payable to AbbVie on November 30, 2021, from $105 million to $80 million. We also
will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and an identified list of existing
Second-Generation Activators (the Existing AIMs).
As part of the Amended AbbVie Agreement, AbbVie has agreed not to clinically develop or acquire certain Nrf1 or Nrf2 activators for a
period of time after entering into the Amended AbbVie Agreement; thereafter, for another period of time, AbbVie has agreed not to clinically develop or acquire certain Nrf1 or Nrf2 activators for certain restricted indications. We have agreed not to
license or otherwise transfer our rights to develop or commercialize bardoxolone, omaveloxolone, or the Existing AIMS for a period of 18 months after entering into the Amended AbbVie Agreement; thereafter through month 36, we have the right to
transfer or license such rights for bardoxolone, in one or more transactions, but only if we receive, in the aggregate, prior to the earlier of one year after the transaction was entered into or the end of the
36-month period, less than a certain amount of cash payments.
After the $330 million has been paid to AbbVie, the licenses granted to AbbVie, and the sublicenses granted to us with respect to
omaveloxolone and the Second-Generation Activators, will be terminated, with all rights reverting to us, and, if (or when) 18 months has elapsed since the execution of the Amended AbbVie Agreement, the licenses granted to AbbVie, and the sublicenses
granted to us with respect to bardoxolone, also will be terminated, with all rights reverting to us.
First Amendment to Amended and Restated Loan and Security Agreement
In October 2019, we entered into the First Amendment to Amended and Restated Loan and Security Agreement (the Amendment) with Oxford
Finance LLC, as the collateral agent and lender (Oxford), Silicon Valley Bank, as a lender (together with Oxford, the Lenders), which amended the Amended and Restated Loan and Security Agreement, dated June 14, 2018, entered into among us and
the Lenders (the Loan Agreement). Under the terms of the Loan Agreement, we borrowed $80 million (the Term A Loan) from the Lenders and had the right to borrow an additional $45 million (the Term B Loan, and together with the Term A Loan,
the Term Loans) within 30 days after the achievement of the first Trial Milestone Date, but no later than December 31, 2019. The Trial Milestone Date means the earlier of the date that we achieve (i) positive topline
registrational data of bardoxolone in CKD caused by Alport syndrome (the ongoing CARDINAL trial) or (ii) positive topline registrational data of omaveloxolone in FA (the ongoing MOXIe trial). With the announcement of positive data from MOXIe,
the Trial Milestone Date has been achieved.
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