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Item 1.01
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Entry into a Material Definitive Agreement
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Commercial Supply Agreement
On February 27, 2018 (the “Effective Date”), Radius Health, Inc. (“Radius”) entered into a Scale-Up and Commercial Supply Agreement (the “Supply Agreement”) with 3M Company (“3M Company”) and 3M Innovative Properties Company (“3M IPC” and collectively with 3M Company, “3M”). Pursuant to the Supply Agreement, 3M agreed to exclusively manufacture Phase 3 and global commercial supplies of an abaloparatide-coated transdermal patch product (“Product”) and associated applicator devices (“Applicator”) for Radius. Radius and 3M previously entered into a Development and Clinical Supplies Agreement (the “Development Agreement”), dated June 19, 2009, as amended, pursuant to which Product and Applicator were developed.
Under the Supply Agreement, 3M will manufacture Product and Applicator for Radius according to agreed-upon specifications in sufficient quantities to meet Radius’ projected supply requirements. 3M will manufacture commercial supplies of Product at unit prices that decrease with an increase in the quantity ordered. Radius will pay 3M a mid-to-low single digit royalty on worldwide net sales of Product and reimburse 3M for certain capital expenditures incurred to establish commercial supply of Product. Radius is responsible for providing, at its expense, supplies of its proprietary drug substance, abaloparatide, to be used in manufacturing Product. During the term of the Supply Agreement, 3M and Radius have agreed to work exclusively with each other with respect to the delivery of abaloparatide, parathyroid hormone (“PTH”), and/or PTH related proteins via active transdermal, intradermal, or microneedle technology.
The initial term of the Supply Agreement began on the Effective Date and will continue for five years after the first commercial sale of Product. The Supply Agreement then automatically renews for successive three-year terms, unless earlier terminated pursuant to its terms, or upon either party’s notice of termination to the other 24 months prior to the end of the then-current term. The Supply Agreement may be terminated by either party upon an uncured material breach of its terms by the other party, or due to the other party’s bankruptcy, insolvency, or dissolution. Radius may terminate the Supply Agreement upon the occurrence of certain events, including for certain clinical, technical, or commercial reasons impacting Product, if Radius is unable to obtain U.S. regulatory approval for Product within a certain time period, or if Radius ceases development or commercialization of Product. 3M may terminate the Supply Agreement upon the occurrence of certain events, including if there are certain safety issues related to Product, if Radius is unable to obtain U.S. regulatory approval for Product within a certain time period, or if Radius fails to order Product for a certain period of time after commercial launch of the Product in the U.S. Upon certain events of termination, 3M is required to transfer the manufacturing processes for Product and Applicator to Radius or a mutually agreeable third party and continue supplying Product and Applicator for a period of time pursuant to Radius’ projected supply requirements.
The Supply Agreement also includes customary provisions relating to, among others, delivery, inspection procedures, warranties, quality management, regulatory and other approvals, patient complaints, intellectual property rights, indemnification, and confidentiality. The foregoing description of the Supply Agreement does not purport to be complete and is qualified in its entirety by reference to the Supply Agreement, a copy of which Radius intends to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2018.
Amendment to Development Agreement
On February 27, 2018, Radius entered into a Sixth Amendment (the “Amendment”) to the Development Agreement. Pursuant to the Amendment, the parties agreed to extend the initial term of the Development Agreement until June 19, 2019. The Development Agreement then automatically renews for additional one-year terms, unless earlier terminated pursuant to its terms, or until the earliest of (i) the expiration or termination of the Supply Agreement, (ii) the mutual written agreement of the parties, or (iii) prior written notice by either party to the other party at least ninety days prior to the end of the then-current term of the Development Agreement that such party declines to extend the term.
The Amendment also amends and restates the intellectual property provisions of the Development Agreement to be consistent with the intellectual property provisions of the Supply Agreement.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which Radius intends to file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2018.