Item 1.01. Entry into a Material Definitive Agreement.
On October 12, 2020, Sorrento Therapeutics, Inc. (the "Company") entered into a
license agreement (the "License Agreement") with Personalized Stem Cells, Inc.
("PSC"). Pursuant to the License Agreement, among other things, PSC granted the
Company an exclusive license and right under certain patents, certain know-how
and other intellectual property to fully utilize, exploit and commercialize
certain products and services using allogeneic adipose-derived stem cells for or
in respect of human health, including the diagnosis and treatment and/or cure of
any human disease or disorder (excluding commercial sales for the diagnosis,
treatment and/or cure of SARS-CoV-2 or other respiratory diseases in the
People's Republic of China) worldwide (excluding the People's Republic of China
for products directed at COVID-19 or other respiratory diseases). PSC also
agreed to transfer certain cell lines composed of stromal vascular cells, master
cell banks and finished final drug lots (the "Product Materials") to the
Company. The Company agreed to grant PSC rights to use data derived by the
Company from a certain Phase 1 COVID-19 study for PSC's own programs that are
not competitive with the businesses or activities of the Company, and for PSC to
sublicense such data to third parties for research, development and regulatory
purposes.
As consideration for the license under the License Agreement, the Company has
agreed to pay PSC an upfront license fee of $3.5 million in cash.
The Company also agreed to pay PSC (i) a milestone payment upon the issuance of
a regulatory approval, and (ii) certain milestone payments upon PSC's
manufacture and delivery of the Product Materials to the Company.
The Company will also pay royalties in the low-single digit percentages of
annual net sales of licensed products and services by the Company and a share of
any sublicense revenue received by the Company from sublicensees.
The foregoing summary of the License Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the License
Agreement. A copy of the License Agreement will be filed with the Securities and
Exchange Commission (the "SEC") as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ending December 31, 2020 (the "Form 10-K") or via
an amendment to this Current Report on Form 8-K. Certain terms of the License
Agreement have been omitted from this Current Report on Form 8-K and will be
omitted from the version of the License Agreement to be filed as an exhibit to
the Form 10-K or via an amendment to this Current Report on Form 8-K pursuant to
Item 601(b)(10) of Regulation S-K because such terms are both (i) not material
and (ii) would likely cause competitive harm to the Company if publicly
disclosed.
The representations, warranties and covenants contained in the License Agreement
were made only for purposes of such agreement and as of specific dates, were
solely for the benefit of the parties to the License Agreement, and may be
subject to limitations agreed upon by the contracting parties. Accordingly, the
License Agreement is incorporated herein by reference only to provide investors
with information regarding the terms of the License Agreement, and not to
provide investors with any other factual information regarding the Company or
its business, and should be read in conjunction with the disclosures in the
Company's periodic reports and other filings with the SEC.
Item 8.01. Other Events.
On October 12, 2020, the Company issued a press release announcing its entry
into the License Agreement. A copy of the press release is filed herewith as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release, dated October 12, 2020
104 Cover Page Interactive Data File, formatted in Inline Extensible
Business Reporting Language (iXBRL).
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