|12 Months Ended|
Dec. 31, 2018
15. SUBSEQUENT EVENT
In January 2019, we entered into an exclusive commercialization license agreement with Grifols to commercialize fostamatinib for the treatment, palliation, or prevention of human diseases, including chronic or persistent ITP, AIHA, and IgAN in Europe and Turkey. Pursuant to the terms of the license agreement, Grifols received exclusive rights to commercialize, and non-exclusive rights to develop, fostamatinib in Europe and Turkey. Grifols also received an exclusive option to expand the territory under its exclusive and non-exclusive licenses to include the Middle East, North Africa and Russia (including Commonwealth of Independent States). The parties’ collaboration is governed through a joint governance committee.
We are responsible for performing and funding certain development activities for fostamatinib for ITP and AIHA in Europe and Turkey and Grifols is responsible for all other development activities for fostamatinib in such territory. We will retain the global rights to fostamatinib outside the Grifols territories and those rights previously granted to Kissei (in Japan, China, Taiwan and the Republic of Korea). We remain responsible for the manufacture and supply of fostamatinib disodium hexahydrate for all development and commercialization activities under the agreement. In connection with the agreement, we will enter into a supply agreement with Grifols pursuant to which we will supply Grifols with filled and finished product for use under the license agreement.
Under the terms of the agreement, we received an upfront cash payment of $30.0 million and will be eligible to receive regulatory and commercial milestones of up to $297.5 million, which includes a $17.5 million payment for EMA approval of fostamatinib for the first indication, currently anticipated to be for the treatment of chronic ITP, and a $2.5 million creditable advance royalty payment due upon EMA approval of fostamatinib in the first indication. We will also receive tiered royalty payments ranging from the mid-teens to 30% of net sales of fostamatinib in Europe and Turkey.
The commercialization license agreement may be terminated for cause by either party based on regulatory reasons, uncured material breach by the other party, bankruptcy of the other party or for safety reasons. We may terminate the agreement if Grifols challenges or opposes any patent covered by the agreement. After the first MAA approval of fostamatinib in Europe and Turkey, Grifols may terminate the agreement upon 18 months’ prior written notice following the second anniversary of the first MAA approval of fostamatinib in Europe and Turkey. Grifols will also have the right to terminate the agreement for our material breach of the supply agreement. If, by the second anniversary of the effective date of the commercialization license agreement, the EMA has not approved the MAA for fostamatinib for ITP, Grifols will have the right to terminate such agreement in its entirety within six months after such second anniversary by providing us with at 60 days’ written notice, and in such event only, we are required to refund to Grifols $25.0 million of the upfront payment. Upon termination by either party, all licenses granted to Grifols will automatically terminate. In the case we are in acquisition discussions with a competing company selling plasma products and Grifols has not provided its consent to an assignment or transfer of the commercialization license agreement to such company in the event such an acquisition were to occur, in accordance with a certain process, then the agreement terminates if such an acquisition occurs, and we or the acquiring party shall pay Grifols a one-time payment of $60.0 million.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/presentationRef