Item 1.01 Entry into a Material Definitive Agreement
On July 25, 2019, Verastem, Inc. (the Company) entered into a license and collaboration agreement (the Agreement) with Sanofi, under which the Company granted exclusive rights to Sanofi to develop and commercialize products containing duvelisib in Russia, the Commonwealth of Independent States, Turkey, the Middle East and Africa (collectively the Territory) for the treatment, prevention, palliation or diagnosis of any oncology indication in humans or animals.
Under the terms of the Agreement, Sanofi receives an exclusive right to develop and commercialize products containing duvelisib in the Territory under mutually agreed development and commercialization plans at its own cost and expense. Sanofi also receives certain limited manufacturing rights, in the event that the Company is unable to manufacture or supply sufficient quantities of products containing duvelisib to Sanofi during the term of the Agreement. The Company retains all rights to duvelisib outside of the Territory, except for those territories previously and exclusively licensed to other partners.
Sanofi is required to pay the Company an upfront, non-refundable payment of $5 million by August 8, 2019. The Company is also entitled to receive aggregate payments of up to $42 million if certain regulatory and commercial milestones are successfully achieved. Sanofi is obligated to pay the Company double-digit royalties on net sales of products containing duvelisib in the Territory, subject to reduction in certain circumstances. The Company and Sanofi have made customary representations and warranties and have agreed to certain customary covenants, including confidentiality and indemnification.
Unless earlier terminated by either party, the Agreement will expire upon the fulfillment of Sanofis royalty obligations to the Company for the sale of any products containing duvelisib in the Territory, which royalty obligations expire, on a product-by-product and country-by-country basis, upon the last to occur, in each specific country, of (a) expiration of valid patent claims covering such product, (b) expiration of regulatory exclusivity for such product, or (c) 10 years from the first commercial sale of such product in such country. Sanofi may terminate the Agreement on a product-by-product or on a country-by-country basis at any time with 180 days written notice. Either party may terminate the Agreement in its entirety with 60 days written notice for the other partys material breach if such party fails to cure the breach. Subject to certain limitations, the Company may terminate the Agreement immediately if Sanofi challenges any patent covering a product or compound licensed by the Company to Sanofi under the Agreement. The Company also has the right to terminate Sanofis rights to products containing duvelisib in any specific country if Sanofi fails to use certain efforts to develop and commercialize products containing duvelisib in such country. Either party may terminate the Agreement in its entirety upon certain insolvency events involving the other party.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Agreement, which will be filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019.