Item 1.01 Entry into a Material Definitive Agreement.
On March 9, 2018, AveXis, Inc. (the
Company
) entered into a license agreement (the
Agreement
) with Généthon, acting in its own name and for its own behalf as well as in the name and on behalf of Centre National de la Recherche Scientifique (collectively,
Licensor
), pursuant to which the Licensor granted the Company an exclusive, worldwide license to certain patents for
in vivo
gene replacement therapy delivery of the survival motor neuron (
SMN
) gene using the recombinant adeno-associated virus serotype 9 (
AAV9
) vector into the central nervous system for the treatment of spinal muscular atrophy (
SMA
). The Agreement expands the Companys intellectual property portfolio and, together with the Companys existing license agreements, provides the Company with broader freedom to operate for the gene therapy delivery of the SMN gene using AAV9 into the central nervous system both intravenously and intrathecally for the treatment of SMA in the United States, Europe and Japan. The patent rights exclusively in-licensed include recently allowed and pending United States patents that are expected to expire in 2028, as well as allowed and pending patents in Europe, Canada, China and Japan. The Company has the right to sublicense the licensed patents subject to certain conditions as specified in the Agreement.
Under the terms of the Agreement, the Company has paid or is required to pay:
·
an initial fee of $4.0 million;
·
ongoing annual management fees of $25,000;
·
up to $11.0 million in milestone fees for licensed products;
·
mid-single digit royalties of net sales on licensed products, subject to reduction in certain circumstances due to royalty stacking provisions; and
·
a mid-teens percentage of any sublicense fees the Company receives from sublicensees for the licensed intellectual property rights.
With the addition of the royalties described above and after giving effect to the royalty stacking provisions, the Company continues to anticipate net royalties in the low- to mid-teens related to all of its license agreements.
The Company is required to use reasonable efforts to develop and commercialize licensed products under the Agreement for the treatment of SMA in the European Union, particularly in France, and the United States.
The Agreement will terminate on the expiration of the royalty term on a licensed product-by-licensed product and country-by-country basis with respect to such licensed product in such country. Either party may terminate the Agreement for breach if such breach is not cured within a specified number of days, or if the other party becomes insolvent.
A copy of the Agreement will be filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ending March 31, 2018. The Company intends to seek confidential treatment for certain portions of the Agreement.