Item 1.01. |
Entry into a Material Definitive Agreement. |
Share Purchase Agreement
On May 11, 2022, Cullinan Oncology, Inc. (the “Company”), Taiho Pharmaceutical Co., Ltd. (“Taiho”) and Cullinan Pearl Corp. (“Pearl”), a subsidiary of the Company, entered into a Share Purchase Agreement (the “Purchase Agreement”) pursuant to which Taiho will acquire all of the Company’s equity interest in Pearl, and Pearl will become a wholly-owned subsidiary of Taiho (the “Acquisition”). In connection with the Acquisition, Taiho will make an upfront payment to the Company of $275 million and the Company may receive up to an additional $130 million upon the achievement of certain regulatory milestones related to Pearl’s lead program known as CLN-081 or TAS6417, an Epidermal Growth Factor Receptor inhibitor (the “Lead Program”).
The parties to the Purchase Agreement have each made customary representations, warranties and covenants. The parties have also agreed to cooperate with each other and use reasonable best efforts to make all filings and obtain all consents, approvals and authorizations of all governmental entities to the extent required by law in connection with the execution, delivery and performance of the Purchase Agreement and the consummation of the transactions contemplated thereby, subject to specified limitations. The Purchase Agreement also contains indemnification obligations of the Company, on the one hand, and Taiho, on the other hand, subject to certain limitations. Consummation of the Acquisition is subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and execution and delivery of the Co-Development Agreement (as defined below), as well as other customary closing conditions and deliverables. The Purchase Agreement may be terminated by either party under certain circumstances, including if the Acquisition is not consummated by June 30, 2022.
Co-Development Agreement
In connection with the consummation of the Acquisition, the Company will enter into a Co-Development Agreement (the “Co-Development Agreement”) with Taiho Oncology, Inc., an affiliate of Taiho (“Taiho Oncology”). Under the Co-Development Agreement, the Company and Taiho Oncology will co-develop the Lead Program and the Company will retain the option to co-promote the Lead Program in the U.S. together with Taiho Oncology. Taiho will commercialize the Lead Program in territories outside of the U.S. Taiho and the Company will share the future clinical development costs of the Lead Program for the U.S. and U.S. commercialization costs equally, and each will receive 50% of the profits from potential U.S. sales.
Either party can terminate the Co-Development Agreement in the event of material breach of the other party and the Company can terminate the Co-Development Agreement for convenience upon six months’ prior notice after completion of certain development activities, provided that the Company would continue to share development costs related to any clinical study that had been initiated prior to termination.
The foregoing descriptions of the Purchase Agreement and the Co-Development Agreement are only summaries of the material terms thereof, and do not purport to be complete. The descriptions are qualified in their entirety by reference to the Purchase Agreement and the Co-Development Agreement, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.