Item 1.01 Entry into a Material
Definitive Agreement.
On March 16, 2021, Edesa Biotech, Inc., through its subsidiary
Edesa Biotech Research, Inc. (“Edesa”), entered into an
exclusive license agreement with Dr. Saul Yedgar
(“Licensor”). Pursuant to the license agreement,
Edesa obtained
additional global rights to a pharmaceutical product that forms the basis
of Edesa’s EB01 and EB02 drug candidates. Previously, Edesa
entered into an exclusive license agreement with Yissum Research
Development Company to sublicense the pharmaceutical product for use in topical
dermatology and certain gastrointestinal indications. As a result
of the license agreement entered into with Licensor, Edesa
now holds exclusive global rights to the pharmaceutical product for all fields of
use in humans and animals.
Under the license agreement, Edesa obtained exclusive rights
throughout the world to certain know-how, patents and data relating
to the pharmaceutical product. Edesa will use the exclusive rights
to develop and commercialize the product for therapeutic,
prophylactic and diagnostic uses in all applications except for
topical dermal applications and anorectal applications (the
“Field”). Unless earlier terminated, the term of the
license agreement will expire on a country by country basis on the
later of (i) the date of expiry of the last valid licensed patent
in such country; or (ii) the date that is fifteen (15) years after
the first commercial sale of a product in such
country.
Pursuant to the license agreement, Edesa is exclusively
responsible, at its expense, for the development of the product in
the Field. Edesa is required to use its commercially reasonable
efforts to develop and commercialize the product in the Field in
accordance with the terms of a development plan established by the
parties.
In
exchange for the exclusive rights to develop and commercialize the
product in the Field, Edesa is committed to payments of various
amounts to Licensor upon
meeting certain milestones outlined in the license agreement up to
an aggregate amount of approximately $69.2 million. In addition, if
Edesa fails to file an investigational new drug application or
foreign equivalent (“IND”) for the product within the
Field within a certain period of time following the date of the
agreement, Edesa is required to remit to Licensor a fixed
license fee for each full calendar year following such period
within which such requirement to file an IND remains
unfulfilled.
Edesa also has a commitment to pay Licensor
a royalty based on net sales of the
product in countries where Edesa, or an affiliate, directly
commercializes the product and a percentage of sublicensing revenue
received by Edesa and its affiliates in the countries where the
company does not directly commercialize the
product.
The license agreement provides that Licensor
shall remain the exclusive owner of
the licensed technology and that Edesa is responsible for
preparing, filing, prosecuting and maintaining the patents on the
licensed technology in Licensor’s
name. Notwithstanding the foregoing,
Edesa will be the exclusive owner of all patents and other
intellectual property that is made by or on behalf of Edesa after
the date of the agreement, including all improvements to the
licensed technology.
If Edesa defaults or fails to perform any of the terms, covenants,
provisions or its obligations under the license agreement,
Licensor
has the option to terminate the
license agreement, subject to providing Edesa an opportunity to
cure such default. Edesa has the right to terminate the agreement
if it determines that the development and commercialization of the
product is no longer commercially viable.
Subject to certain exceptions, Edesa has undertaken to
indemnify Licensor
against any liability, including
product liability, damage, loss or expense derived from the use,
development, manufacture, marketing, sale or sublicensing of the
licensed product and technology.
The foregoing description of the agreement with Licensor
contained herein does not purport to
be complete and is qualified in its entirety by reference to the
agreement, which is attached hereto as Exhibits 10.1 and
incorporated herein by reference.