Item 1.01
Entry into a Material Definitive Agreement.
On July 16, 2019, Aridis Pharmaceuticals, Inc. (the Company) entered into an Option Agreement for Exclusive Product and Platform Technology License (the Option Agreement) with Serum International BV, a company incorporated in the Netherlands (together with its affiliates, SIBV).
Pursuant to the Option Agreement, SIBV made a fee payment on July 26, 2019 to the Company in an amount of $5 million (which fee shall be reimbursed to SIBV if for any reason the License Agreement (as defined below) is not executed by August 31, 2019). SIBV is also obligated to pay a $10 million fee to the Company within 5 days of execution of the License Agreement.
Additionally, in connection with the Option Agreement, the Company and SIBV entered into a subscription agreement, dated July 19, 2019 (the Subscription Agreement). Pursuant to the Subscription Agreement on July 26, 2019, SIBV purchased 801,820 shares of restricted Company common stock at a purchase price of approximately $12.47 per share, for an aggregate purchase price of $10 million.
Pursuant to the Option Agreement, SIBV received an option to enter into an Exclusive Product and Platform Technology License Agreement (the License Agreement) with the Company, which option may be exercised by executing the complete and final License Agreement with the Company. The parties have agreed to use their best commercially reasonable efforts to execute the License Agreement as soon as possible, but not later than August 31, 2019.
As of the effective date of the License Agreement (the Effective Date), the Company shall grant to SIBV an exclusive license to make, have made, import, use and have used, and sell and have sold Aridis products related to AR-301, AR-105, and AR-101 (Aridis Products) in (a) the country of India, and (b) all other countries of the world except the USA, Canada, EU Territory, UK, China, Australia, New Zealand, and Japan (the Limited Territory) for a term of 20 years (the Term). The Company shall also grant to SIBV an exclusive license to develop, make, have made, import, use and have used, and sell and have sold, up to five (5) approved Development Products (as such term is defined in the Option Agreement) in all countries of the world except China (the Worldwide Territory), during the Term. The Company also agrees to grant the right for SIBV to have the Company perform Candidate Development (as such term is defined in the Option Agreement) for the development of up to five (5) Development Products. The Company shall also grant to SIBV an exclusive license to develop, make, have made, import, use and have used, and sell and have sold the AR-201 product in the Worldwide Territory during the Term.
Additionally, in certain circumstances, SIBV and the Company will agree to commit to negotiate in good faith to extend the rights to be granted in the License Agreement to include an exclusive license to make, have made, import, use and have used, and sell and have sold, certain Aridis Products in the European Union during the Term. Such an obligation upon Aridis to negotiate such rights is preconditioned upon the demonstration of certain milestones by SIBV, including its obtaining, under certain funding programs, sufficient financial support to cover all requisite
clinical development and manufacturing development costs, under terms which allow distribution of Aridis Products at commercially reasonable prices and without materially hindering distribution of Aridis Products in any other territories.
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