Item 1.01. Entry into a Material Definitive Agreement
Biological E CpG 1018 Adjuvant Supply Agreement
On
Under the Bio E Supply Agreement, Bio E has committed to purchase, and the
Company has agreed to manufacture and supply, specified quantities of the
Company's CpG 1018 adjuvant for use in Bio E's commercialization of its CORBEVAX
vaccine ("Bio E Product") with specified delivery dates in 2021 and the first
quarter of 2022. However, the specified quantities of CpG 1018 adjuvant for
delivery, and the timing for delivery, in 2021 are subject to modification by
the
Purchase orders submitted by Bio E under the Bio E Supply Agreement and accepted by Company are non-cancellable by Bio E, except to the extent that the Company can cancel its corresponding order placed with its contract manufacturer of CpG 1018 adjuvant without incurring any cost as a result of such cancellation.
Pricing for CpG 1018 adjuvant delivered in 2021 and 2022 is set forth in the Bio
E Supply Agreement and is variable depending on (i) the ultimate destination
country of Bio E Product incorporating such CpG 1018 adjuvant and (ii) whether
Bio E Product incorporating such CpG 1018 adjuvant is sold in private markets in
the ultimate destination country or is sold to the
For a specified portion of the quantity of CpG 1018 adjuvant to be delivered under the Bio E Supply Agreement in 2021, Bio E is obligated to pay the purchase price of such portion upon delivery of such CpG 1018 adjuvant to Bio E. For all other CpG 1018 adjuvant to be delivered under the Bio E Supply Agreement, Bio E is obligated to pay a specified percentage of the purchase price of the quantity of CpG 1018 adjuvant set forth in a purchase order submitted by Bio E and accepted by the Company upon the Company's acceptance of such purchase order, and the remainder of the purchase price upon the Company's delivery of such CpG 1018 adjuvant.
Unless earlier terminated, the Bio E Supply Agreement will expire on
CpG 1018 Collaborations
The Company continues to actively pursue opportunities to collaborate with other organizations on the development of COVID-19 vaccines and other vaccines that utilize the Company's CpG 1018 adjuvant, including its existing collaborations.
There are risks and uncertainties inherent in vaccine research and development, including the timing of completing development, the timing of and results of clinical trials, whether a vaccine will be approved for use, the extent of competition, and whether a vaccine can be successfully commercialized. As a result, the Company's collaborative efforts with respect to the development of a potential COVID-19 vaccine or other vaccines utilizing CpG 1018 may not be successful. In addition, the Company's collaborators have primary responsibility for the development, conduct of clinical trials, and for seeking and obtaining regulatory approval, of a potential vaccine for COVID-19 or other indications containing CpG 1018. Some of the Company's collaborators are also evaluating one or more third party adjuvants as part of their development efforts. The Company has limited or no control over its collaborators' decisions, including their choice of adjuvants and/or the amount and timing of resources that any of these collaborators will dedicate to such activities. If a collaborator fails to conduct collaborative activities successfully or determines to proceed with one or more adjuvants other than CpG 1018, the development of a vaccine utilizing CpG 1018 will be delayed and may not occur at all.
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The Company and its contract manufacturer have taken measures to support pandemic-level production of CpG 1018, as necessary to support existing and any future collaborations. However, if the Company is unable to maintain its existing supplier for CpG 1018, it would have to establish an alternate qualified manufacturing capability, which could result in significant additional operating costs and delays in developing and commercializing any potential adjuvanted vaccines by the Company's third-party collaborators. There can be no assurance that the Company or other third parties will be able to produce CpG 1018 at a cost, quantity and quality sufficient to support the Company's existing or any future collaborations.
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