On December 21, 2022, ProQR Therapeutics N.V. (“ProQR”), acting through ProQR Therapeutics VIII B.V. (“ProQR VIII” and together with ProQR, the “Company”), entered into an Amended and Restated Research and Collaboration Agreement (as amended and restated, the “Collaboration Agreement”) with Eli Lilly and Company (“Lilly”). This agreement amended and restated the Company’s existing collaboration agreement with Lilly that was entered into in September 2021, to allow the parties to continue and expand their work on the discovery, development and commercialization of potential new medicines for genetic disorders in the liver and nervous system. Under the terms of the Collaboration Agreement, the Company and Lilly will seek to continue to use the Company’s proprietary Axiomer® RNA editing platform to progress new drug targets toward clinical development and commercialization.

Through the expanded collaboration, the parties intend to explore further applications of the Axiomer platform and progress additional drug targets, and Lilly grants the Company access to approved uses of certain Lilly technology. Under the Collaboration Agreement, the Company will grant Lilly certain exclusive and non-exclusive licenses, with the right to grant sublicenses through multiple tiers during a specified time period, to support the parties’ activities and to enable Lilly to develop, manufacture and commercialize products derived from or containing compounds developed pursuant to such agreement. The Collaboration Agreement contemplates collaboration on an increased number of targets, and Lilly can exercise an option to further increase the total number of targets.

The Company retains all rights not granted to Lilly. Under the Collaboration Agreement, Lilly will grant the Company certain non-exclusive licenses, with the right to grant approved sublicenses through multiple tiers during a specified time period, to certain Lilly technology to enable the Company to develop, manufacture and commercialize products approved by Lilly using such Lilly technology. Lilly has rights during a specified time period to engage in exclusive negotiations with the Company with respect to certain Company products.

Under the Collaboration Agreement, Lilly is eligible to receive tiered royalties of up to low-single digit percentage on product sales for products covering licensed Lilly technology on a country-by-country and product-by-product basis until the latest to occur of: (i) the expiration or abandonment of the last-to-expire valid claim in such country covering such product, (ii) the expiration of all data or regulatory exclusivity periods for such product in such country, or (iii) a specified anniversary of the first commercial sale of such product in such country. Pursuant to the terms of the Collaboration Agreement, Lilly will pay the Company a one-time, non-refundable, non-creditable upfront payment of $50.0 million as consideration for the rights granted by the Company and $10.0 million for the options granted by the Company (in addition to the $20.0 million upfront fee paid under the original collaboration), with Lilly also making an additional $15.0 million equity investment in the Company pursuant to a share purchase agreement between the parties (the “Share Purchase Agreement”). Lilly will have the ability to exercise an option to further expand the partnership for a consideration of $50.0 million.

Under the Collaboration Agreement, the Company is also eligible to receive up to approximately $3.75 billion for development, regulatory and commercialization milestones, as well as tiered royalties of up to mid-single digit percentage on product sales on a country-by-country and product-by-product basis until the latest to occur of: (i) the expiration or abandonment of the last-to-expire valid claim in such country covering such product, (ii) the expiration of all data or regulatory exclusivity periods for such product in such country, or (iii) a specified anniversary of the first commercial sale of such product in such country, subject to certain royalty step-down provisions set forth in the Collaboration Agreement. The Collaboration Agreement includes a specified research term for the parties to perform research and development activities, subject to a one-time option, exercisable by Lilly at its sole discretion, to extend the term. Unless terminated earlier, the Collaboration Agreement will continue on a product-by-product basis until Lilly or the Company has no royalty payment obligations with respect to such product, and, with respect to certain sublicenses granted by the Company until the sublicense expires or terminates.

The Collaboration Agreement may be terminated in its entirety or on a program-by-program basis at any time without cause by Lilly following a specified notice period (except with respect to Company products). The Collaboration Agreement may also be terminated by either party under certain other circumstances, including an uncured material breach of the other party or if a party challenges or opposes any patent owned by the other party and covered by the Collaboration Agreement. If the Collaboration Agreement is terminated with respect to one or more programs, depending on the stage of development, certain rights in the terminated programs revert to the Company, in accordance with the terms of the Collaboration Agreement.

The Collaboration Agreement includes various representations, warranties, covenants, indemnities and other customary provisions.