Item 1.02. Termination of a Material Definitive Agreement.
On June 27, 2022, Aadi Bioscience, Inc. (the "Company") received written notice
from EOC Pharma (Hong Kong) Limited ("EOC") that EOC has elected to terminate
the License Agreement, dated December 8, 2020, by and between the Company and
EOC (the "EOC License Agreement"), effective immediately. On April 14, 2022, EOC
delivered a notice, which alleged certain material breaches by the Company under
the EOC License Agreement, and which suggested if such alleged breaches were not
cured within the cure period under the EOC License Agreement, EOC may terminate
the EOC License Agreement. However, the Company disagreed with, and continues to
dispute, EOC's allegations of material breach and does not believe that EOC had
a right to terminate the EOC License Agreement for material breach, and
accordingly believes that the termination of the EOC License Agreement is a
termination for convenience.
Under the EOC License Agreement, the Company provided EOC with the exclusive
right to develop and commercialize FYARRO in Greater China, including the
Republic of China, Hong Kong, Macau and Taiwan (collectively, the "EOC
Territory"). As specified in the EOC License Agreement, the Company had granted
EOC the right to develop and commercialize the same compounds licensed to the
Company by Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene
Corporation, now Bristol Myers Squibb Company, under which the Company obtained
exclusive rights to develop, manufacture, and commercialize FYARRO, previously
called ABI-009, nab-sirolimus, in the EOC Territory and, subject to
certain restrictions, to collaborate with others for such development and
commercialization. In accordance with the terms of the EOC License Agreement,
the Company received a $14.0 million non-refundable upfront payment in January
2021 as consideration for the rights and licenses granted to EOC by the Company
for the further development and commercialization of FYARRO in the EOC
Territory, and a $1.0 million non-refundable milestone payment in November 2021
upon achievement of the U.S. Food and Drug Administration approval for FYARRO.
In addition, EOC was obligated to pay up to an additional $257.0 million of
non-refundable milestone payments upon the achievement of certain development,
regulatory and commercial milestones, as well as royalties to the Company on net
sales of licensed products in the EOC Territory.
The foregoing description of the EOC License Agreement is a summary only and is
qualified in its entirety by reference to the terms of the EOC License
Agreement, a copy of which was filed as Exhibit 10.18 to the Company's Quarterly
Report on Form 10-Q (File No. 001-38560) filed with the Securities and Exchange
Commission on November 10, 2021, and is incorporated by reference herein.
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