Item 1.01. Entry into a Material Definitive Agreement.
On April 9, 2020, Pulmatrix, Inc. (the "Company" or "Pulmatrix") entered into a
Collaboration and License Agreement (the "Agreement") with Sensory Cloud, Inc.
("Sensory Cloud"). Under the terms of the Agreement, the Company has granted
Sensory Cloud an exclusive, worldwide, royalty bearing license to PUR 003 and
PUR 006, the Company's proprietary aerosol salt solution for delivery or
administration to or through the nasal passages also known as NasoCalm, as well
as related patents and know-how, for use in the field (the "Licensed Product").
For purposes of the Agreement, the field means the formulation and
commercialization of over-the-counter products for the prophylaxis, prevention
and treatment of upper and lower respiratory disease that are delivered or
administered to or through the nasal passages. The license granted to Sensory
Cloud does not cover the development or commercialization of any prescription
products.
The Licensed Products are expected to include an emergency response product for
the reduction of pathogenic risk and transmissibility of contagions, including
with respect to COVID 19 (the "Emergency Product"). Pulmatrix has the right to
terminate the Agreement in the event that Sensory Cloud has not, within six
months after April 9, 2020, met certain regulatory and funding milestones
related to rapid development and commercialization of the Emergency Product, as
set forth in the Agreement.
Under the terms of the Agreement, Sensory Cloud may develop other
over-the-counter Licensed Products that contain other active pharmaceutical
ingredients or therapeutic agents and combine the Licensed Product with one or
more of Sensory Cloud's proprietary delivery devices. In addition, Pulmatrix has
granted Sensory Cloud an exclusive right of first refusal to any new
over-the-counter products in the field that may be developed by Pulmatrix.
During the term of the Agreement, neither party may alone or with, through or
for the benefit of any third party, with respect to any Licensed Product in the
field, pursue any research, development or commercialization activities
specifically directed to development or commercialization of any Licensed
Product.
Pulmatrix shall be entitled to royalties on net sales of Licensed Product in
each country in which there is a valid claim of a patent within the licensed
intellectual property covering the Licensed Product. Pulmatrix' rights to
receive such royalties commences upon the first commercial sale of a Licensed
Product in any such country and terminates upon the expiration of the last valid
claim in such territory. The royalty rates are as follows: (1) 7% of net sales
during calendar year 2020, (2) 14% of net sales during calendar year 2021, and
(3) 17% of net sales during calendar year 2022 and each calendar year thereafter
during the royalty term. In addition, Pulmatrix shall be entitled to receive a
milestone payment of $1,000,000 following the achievement of aggregate net sales
of all Licensed Products of $20,000,000.
The Agreement shall terminate at such time that Pulmatrix would no longer be
entitled to royalties because there are no longer any valid claims of a patent
within the licensed intellectual property covering any Licensed Product. Upon
there being no more such royalty payments owed by Sensory Cloud for a Licensed
Product, the licenses granted by Pulmatrix to Sensory Cloud shall become
fully-paid up, royalty free, perpetual, irrevocable and non-exclusive licenses
to such Licensed Product. The Agreement may also be terminated earlier by
Sensory Cloud for convenience and by Sensory Cloud or Pulmatrix for material
breach or upon the bankruptcy or insolvency of the other party.
The description of terms and conditions of the Agreement set forth herein do not
purport to be complete and are qualified in their entirety by the full text of
the Agreement, which are attached hereto as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1* Collaboration and License Agreement by and between Pulmatrix, Inc.
and Sensory Cloud, Inc., dated as of April 9, 2020.
* Certain portions of this exhibit have been redacted pursuant to Item
601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material
and (ii) would likely cause competitive harm to the Company if publicly
disclosed. The Company agrees to furnish supplementally an unredacted copy of
the exhibit to the SEC upon its request.
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