Item 1.01. Entry into a Material Definitive Agreement.
On December 23, 2021, Novavax, Inc. (the "Company") entered into an amendment
(the "Amendment") to its collaboration and license agreement (the "Collaboration
and License Agreement") with SK bioscience Co., Ltd. ("SK bioscience"), dated
February 12, 2021, under which SK bioscience was granted an exclusive license to
develop, manufacture and commercialize NVX-CoV2373, the Company's vaccine
candidate for the SARS-CoV-2 virus (the "Vaccine Product") in the Republic of
Korea, including the anticipated sale of 40 million doses to the government of
the Republic of Korea, under an advance purchase agreement (the "First Korean
APA"). On December 23, 2021, the Company also entered into Statement of Work No.
1 (the "Statement of Work") to the Collaboration and License Agreement.
Pursuant to the Amendment, the Company granted to SK bioscience a non-exclusive
license to also distribute, offer for sale and sell the Vaccine Product to the
governments of Thailand and Vietnam, including their local representatives. SK
bioscience may enter into a second advance purchase agreement (the "Second
Korean APA") of up to an additional five million doses of the Vaccine Product to
the Korean government in 2022. SK bioscience will pay a tiered royalty in the
low to middle double-digit range on the sale of the Vaccine Product to the
Korean government under the Second Korean APA and certain doses of the Vaccine
Product to the Korean government under the First Korean APA, to the governments
of Thailand and Vietnam, and to other non-government purchasers, net of certain
agreed costs.
SK bioscience agreed to reserve and use additional capacity of an SK bioscience
manufacturing facility for the manufacture of the protein antigen component (the
"Collaboration Antigen Product") of the Vaccine Product through 2022, with an
exclusive option valid for a certain given period for the Company to negotiate
the extension of such capacity into 2023. In addition, SK bioscience agreed to
purchase sufficient doses of the Company's Matrix-M™ adjuvant to manufacture, in
addition to the 40 million doses of finished Vaccine Product under the First
Korean APA, the additional doses of finished Vaccine Product that SK bioscience
may sell to the governments of the Republic of Korea, Thailand, and Vietnam
pursuant to the advance purchase agreements.
Pursuant to the Statement of Work, the Company agreed to pay SK bioscience a low
double digit fee incentive on the sale of Vaccine Product manufactured using
Collaboration Antigen Product.
The Amendment provides that the Collaboration and License Agreement will expire
upon the later of (i) February 12, 2041, (ii) the completion of both parties'
duties and obligations under the Collaboration and License Agreement and any
advance purchase agreements with the governments of Korea, Thailand, and
Vietnam, or (iii) the day that the World Health Organization declares that there
is no longer a COVID-19 pandemic; provided, however, that the non-exclusive
license to distribute, offer for sale, and sell the Vaccine Product to the
governments of Thailand and Vietnam shall expire on February 12, 2026, or
earlier on March 31, 2022 with respect to either Thailand or Vietnam, or both
countries, if SK bioscience has not executed an advance purchase agreement with
such country(ies) by March 31, 2022. However, in the event SK bioscience sells a
competing vaccine product for the prevention of COVID-19 in Korea, the exclusive
license will convert to a non-exclusive license solely to allow SK bio to sell
to the government of the Republic of Korea and will expire on the later of
February 12, 2024 or the first anniversary of such sale, and in the event SK
bioscience sells a competing vaccine product for the prevention of COVID-19 in
Thailand or Vietnam, the non-exclusive license will expire on the earlier of the
first anniversary of such sale or February 12, 2026.
The foregoing description of the material terms of the Amendment does not
purport to be complete and is qualified in its entirety by reference to the
Amendment, which will be filed with the Securities and Exchange Commission as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2021.
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