SCHRÖDINGER, INC. Item 1.01 Entry into a Material Definitive Agreement.
On
Research and Development. Under the Agreement, during a limited research term, the Company will be responsible, at its own cost and expense, for the discovery of small molecule compounds (other than protein-degrader compounds) directed to five specified biological targets ("Licensed Collaboration Compounds") pursuant to a mutually agreed research plan for each such target. The initial specified targets include HIF-2 alpha and SOS1/KRAS, which the Company refers to as its SDGR4 program and SDGR5 program, respectively. Once the Company has discovered or identified a Licensed Collaboration Compound for a target that meets specified, mutually-agreed criteria (as determined by the collaboration's joint steering committee) or upon Bristol Myers Squibb's selection of a Licensed Collaboration Compound as a development candidate (a "Development Candidate"), Bristol Myers Squibb will be solely responsible for the further pre-clinical and clinical development,
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manufacturing and commercialization of such Development Candidate at its own
cost and expense. The research term will end on the earlier of four years or
until the Company has delivered a Development Candidate for each specified
target. The Company may elect to extend the research term for a limited period
of time to deliver a Development Candidate for a given target. In addition, the
parties may mutually agree to extend the initial research term for an additional
year. Under the Agreement, Bristol Myers Squibb has agreed to use commercially
reasonable efforts to develop, seek and obtain regulatory approval for, and
commercialize at least one product that contains a Licensed Collaboration
Compound (a "Licensed Collaboration Product") for each target in each of
Exclusive License. Pursuant to the Agreement, for a given target, the Company granted to Bristol Myers Squibb an exclusive license, with the right to grant sublicenses, under certain patent rights, know-how and materials controlled by the Company to clinically develop, manufacture, use, sell, offer for sale, export and import and otherwise exploit, and have others do the same, any compound, molecule or product for such target throughout the world.
Intellectual Property. Under the terms of the Agreement, each party will own the entire right, title and interest in and to all know-how and patent rights first made or invented solely by the employees or consultants of such party in the course of the collaboration; provided that Bristol Myers Squibb has agreed to assign to the Company all of its rights, title and interest in any know-how and patent rights in any inventions that relate to the Company's physics-based computational, software platform. The parties will jointly own all rights, title and interests in and to all know-how and patent rights first made or invented jointly by employees or consultants of the parties in the course of the collaboration.
Bristol Myers Squibb has the right but not the obligation to file, prosecute, maintain and defend any product-specific patents licensed by the Company to Bristol Myers Squibb under the Agreement. Bristol Myers Squibb will be required to bear the full cost and expenses of filing, prosecuting, maintaining and defending any such patents it chooses to file, prosecute, maintain or defend. If Bristol Myers Squibb determines not to prosecute or defend any such patent, the Company may do so at its own expense.
Financial Terms. Under the terms of the Agreement, Bristol Myers Squibb agreed
to pay to the Company an initial upfront fee payment of
The Company is also entitled to a tiered percentage royalty on annual global net sales of Licensed Collaboration Products ranging from mid-single digits to low-double digits, subject to certain specified reductions. Royalties are payable by Bristol Myers Squibb on a Licensed Collaboration Product-by-Licensed Collaboration Product and country-by-country basis until the later of the expiration of the last valid claim of certain specified patent rights covering the Licensed Collaboration Product in such country, expiration of all applicable regulatory exclusivities in such country for such Licensed Collaboration Product and the tenth anniversary of the first commercial sale of such Licensed Collaboration Product in such country.
Degrader Compounds. The Agreement excludes any activities relating to protein-degrader compounds ("Degrader Compounds"). However, under the terms of the Agreement, for a limited period of time after the execution of the Agreement, the Company and Bristol Myers Squibb agree to negotiate a separate definitive agreement pursuant to which the Company will agree to license to Bristol Myers Squibb the right to conduct research, development and commercialization activities with respect to Degrader Compounds for the targets under the Agreement. The terms of such separate agreement relating to Degrader Compounds, including separate financial terms due to the Company in the event a Degrader Compound is developed and commercialized by Bristol Myers Squibb, are intended to be consistent with certain, limited terms and conditions for the Degrader Compounds described in the Agreement and such other terms and conditions as the Company and Bristol Myers Squibb may mutually agree.
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Exclusivity. On a target-by-target basis, during the term of the Agreement for a given target, the Company is prohibited from clinically developing or commercializing, itself or with a third party, any nucleic acid, antibody, biologic, compound, small molecule or other molecule, or any product that contains the foregoing, that specifically modulates as its primary mechanism of action such target, or is designed to specifically modulate such target. Such prohibition encompasses both the initial specified targets listed as of the effective date of the Agreement and those targets on the reserved target list for the limited substitution period.
Termination. Unless earlier terminated, the Agreement will expire on a Licensed Collaboration Product-by-Licensed Collaboration Product and country-by-country basis on the expiration of the applicable royalty term for such Licensed Collaboration Product in such country and in its entirety upon expiration of the last royalty term for the last Licensed Collaboration Product. Either party may terminate the Agreement earlier upon an uncured material breach of the Agreement by the other party on a target-by-target basis, or upon the occurrence of certain events of insolvency of the other party. Additionally, Bristol Myers Squibb may terminate the agreement for any or no reason, in its entirety or on a target-by-target basis, upon specified written notice to Company. Bristol Myers Squibb may also terminate the Agreement on a target-by-target basis for safety reasons. The Company may terminate the Agreement on a target-by-target basis to the extent Bristol Myers Squibb commences or participates in challenging certain patents licensed by the Company to Bristol Myers Squibb under the Agreement.
In the event that Bristol Myers Squibb terminates the Agreement at will, or if the Company terminates for a breach, insolvency or patent challenge by Bristol Myers Squibb, the Company is entitled to certain reversionary rights with respect to certain compounds and products for the applicable terminated target(s).
In the event that Bristol Myers Squibb has the right to terminate the Agreement, in whole or with respect to a particular target, upon the Company's uncured material breach or an event of insolvency with respect to the Company, then in lieu of so terminating, Bristol Myers Squibb has the right to elect to the have the Agreement continue in full force and effect; provided that all royalties and milestones thereafter payable by Bristol Myers Squibb to the Company with respect to such applicable target(s) shall be reduced by 50%.
The foregoing description of certain terms of the Agreement does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Agreement, a copy of which the Company intends to file as an exhibit to its
Annual Report on Form 10-K for the fiscal year ending
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