Item 1.01.
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Entry into a Material Definitive Agreement.
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Amended and Restated
Ex-US
Commercialization Agreement
On February 28, 2018, Foundation Medicine, Inc., a
Delaware corporation (the Company), entered into an Amended and Restated
Ex-US
Commercialization Agreement (the Agreement) with F.
Hoffmann-La
Roche Ltd (Roche). The Agreement amends and restates that certain
Ex-US
Commercialization Agreement, effective as of April 7, 2015, as
amended, between the Company and Roche, and sets forth the terms and conditions of the parties respective obligations with respect to the commercialization of the Companys clinical diagnostic testing commercial products worldwide,
excluding the United States and any other countries excluded pursuant to the terms of the Agreement (the Territory).
Pursuant
to the Agreement, Roche has the exclusive right in the Territory to commercialize the Companys existing clinical diagnostic testing commercial products (FoundationOne
®
, FoundationOne
®
Heme, FoundationACT
®
, and FoundationOne CDx
TM
);
any clinical diagnostic testing commercial products developed under the Immunotherapy, ctDNA or CDx Testing Development Platforms (each as defined in the Collaboration Agreement, dated as of
January 11, 2015, as amended, by and between the Company on the one hand and Roche and
Hoffmann-La
Roche Inc. on the other hand); and any other products upon mutual agreement (collectively, the
Products). Roche also holds a right of first negotiation with respect to the commercialization in the Territory of any of the Companys future clinical diagnostic products, excluding
in vitro
diagnostic kit
products, companion diagnostic products developed by the Company for third parties, and standalone data or molecular information products.
In connection with Roches commercial launch of a given Product in a country or region in the Territory, Roche must, among other things,
establish and maintain a dedicated sales force (which is prohibited from promoting, and may not be directly compensated by the sale of, oncology therapeutics), provide marketing messaging with respect to such Product that is consistent with
FMIs messaging relating to such Product in the United States, appoint a dedicated medical science liaison, and provide customer support for such Product. In the event that Roche fails to satisfy its commercial launch requirements set forth in
the Agreement for a given Product, then, after a specified cure period, the Company will have the right to terminate Roches exclusive commercialization rights in such country. The Company is responsible for preparing and submitting
applications for regulatory approvals for the Products (other than FoundationOne CDx) in the Territory, and Roche has agreed to reasonably assist FMI with such applications.
Pursuant to the Agreement, the parties have established the process by which FoundationOne CDx will replace FoundationOne in each country in
the Territory in which the Company determines to commercially launch FoundationOne CDx. The Company controls the regulatory strategy and all regulatory filings relating to FoundationOne CDx. In addition, the Company may, at its election, designate
Roche as its local regulatory partner in any country in the Territory to assist with such FoundationOne CDx filings. In any regulated markets in the Territory in which Roche serves as the Companys regulatory partner for such filings, Roche is
required to establish a firewall to protect third party proprietary information received in connection with such filings, and the Company has the right to audit Roches compliance with such firewall obligations.
In the event that Roche fails to commercially launch FoundationOne CDx in a given country based on the timeline established by the Company
pursuant to the terms of the Agreement, then Roche will have a specified cure period, after which it will pay the Company an agreed upon penalty payment and, if such failure continues for an additional specified cure period after such payment, the
Company will have the right to terminate Roches exclusive commercialization rights in such country. In addition, if Roche fails to satisfy any of its other commercialization obligations with respect to FoundationOne CDx, after a specified cure
period, the Company will have the right to terminate Roches exclusive commercialization rights in such country.
Roche will pay the
Company agreed upon royalties and commercial milestone payments for the sale of the Products. In addition, Roche has agreed to pay certain costs associated with the regulatory filings for FoundationOne CDx. Further, if Roche does not meet agreed
upon minimum revenue requirements for FoundationOne, FoundationOneHeme, FoundationACT, or FoundationOne CDx
tests in three consecutive years in a given country in the Territory, then the Company
has the right to terminate Roches exclusive commercialization rights in such country.
The initial term of the Agreement expires on April 7, 2020 and may be extended by Roche for
additional
two-year
periods. Roche has the right to terminate the Agreement, either in whole or on a
country-by-country
or
Product-by-Product
basis, without cause, upon six months prior written notice after the initial term. In addition, either party may terminate the Agreement in the event
of the other partys material breach of its obligations under the Agreement.
The foregoing description of the Agreement and the
transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, a redacted copy of which will be filed as an exhibit to the Companys reports filed under the
Securities Exchange Act of 1934, as amended (the Exchange Act), and upon filing will be incorporated herein by reference. The Company intends to submit a FOIA Confidential Treatment Request to the United States Securities and Exchange
Commission pursuant to Rule
24b-2
under the Exchange Act, requesting that it be permitted to redact certain portions of the Agreement. The omitted material will be included in the request for confidential
treatment.