Item 1.01. Entry into a Material Definitive Agreement.
On June 6, 2018, ChemoCentryx, Inc. (the Company) and Vifor Fresenius Medical Care Renal Pharma Ltd. (together with its
affiliates, Vifor) expanded their global commercial alliance to provide Vifor with commercialization rights in China, in exchange for upfront cash payments to the Company totaling $21.5 million, as set forth below.
On June 6, 2018, the Company and Vifor entered into an amendment (the Amendment) to the Collaboration and License Agreement,
dated December 22, 2016, by and between the Company and Vifor, pursuant to which ChemoCentryx granted Vifor an exclusive license to commercialize the Companys proprietary CCR2 inhibitor known as CCX140 in certain countries outside the
United States (the CCX140 Agreement). Pursuant to the Amendment, the timing for exercise of Vifors option to expand the countries covered by the license to include China was accelerated to commence on June 6, 2018. In
consideration for the acceleration of the timing for Vifor to elect to expand the countries covered by the license, Vifor is required to pay the Company an $11.5 million
non-refundable
payment within ten
(10) business days after the effective date of the Amendment.
In addition, on June 6, 2018, the Company and Vifor entered into
letter agreements (the Letter Agreements) pursuant to which Vifors rights to commercialize CCX140 and avacopan were expanded to include China under the CCX140 Agreement and the Collaboration and License Agreement, dated May 9,
2016, as amended, between the Company and Vifor, pursuant to which the Company granted Vifor exclusive rights to commercialize avacopan in certain countries outside the United States (the Avacopan Agreement). In consideration for such
expansion of Vifors rights to include China, Vifor is required to pay the Company an aggregate
non-refundable
payment of $10.0 million within ten (10) business days after the effective date of
the Letter Agreements.
The Company will retain all rights to commercialize CCX140 and avacopan in the United States and Vifor will have
rights to commercialize CCX140 and avacopan in all other countries (the Vifor Territories). Vifors rights under the CCX140 Agreement and the Avacopan Agreement, as amended, would remain exclusive for the term of such agreements.
Both parties rights under the CCX140 Agreement and the Avacopan Agreement, as amended, would include the right to grant sublicenses. The Company retains control of all ongoing and future development of CCX140 and avacopan, other than
country-specific development in the Vifor Territories.
Vifor is obligated to pay the Company tiered royalties between the teens and
mid-twenties
based on potential future net sales of products in the Vifor Territories. Vifors royalty obligations are subject to standard provisions for royalty offsets to the extent Vifor is required to
obtain any rights from third parties to commercialize the applicable products, or in the event of loss of exclusivity or generic competition.
The foregoing descriptions of the Amendment and the Letter Agreements do not purport to be complete and are qualified in their entirety by
reference to the Amendment and the Letter Agreements, copies of which the Company intends to file with its Quarterly Report on Form
10-Q
for the quarter ending June 30, 2018.
Forward-Looking Statements
This Current
Report on Form
8-K
contains forward-looking statements as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements in this Current Report on Form
8-K
that are not purely historical are forward-looking statements. Such forward-looking statements include, among other things, the receipt of royalty payments on potential future net sales of products in the Vifor
Territories. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, risks and uncertainties in the Companys business, including those risks described in
the Companys periodic reports it files with the SEC. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results
could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents the Company files
with the SEC available at
www.sec.gov
, including without limitation the Companys Annual Report on
Form 10-K
for the year ended December 31, 2017 filed on March 12, 2018.