Table of Contents
Notes to Consolidated Financial Statements (Continued)
20. Subsequent Events (unaudited)
Subsequent events have been evaluated through the date these consolidated financial statements were submitted within the Company's Registration Statement on Form S-1 to the
United States Securities and Exchange Commission.
October 14, 2015, the Company and NCH entered into an amendment to the Nationwide License. The amendment permits the Company to submit to the FDA
for the transfer of the IND and associated regulatory filing to the Company and for the Company to become the sponsor of such IND. Contemporaneous with the execution of this amendment, the Company and
NCH submitted the requisite documents to the FDA to initiate the transfer process. On November 6, 2015, the FDA approved the Company's sponsorship of such IND.
January 13, 2016 (the "Amended and Restated Nationwide License Effective Date"), the Company and NCH amended and restated the Nationwide License (the "Amended and Restated
Nationwide License") in its entirety. The Amended and Restated Nationwide License grants the Company an exclusive, non-transferable (except to a transfer to an affiliate or in other specified
circumstances), sublicensable, worldwide license to certain patents held by NCH for the therapy and treatment of SMA.
acknowledged that, as of the date of the Amended and Restated Nationwide License, the Company had fulfilled its requirement to spend not less than $9,400,000 for the development of
the Product Candidate in whole. The Royalty Option expired upon the effectiveness of the Amended and Restated Nationwide Agreement. Accordingly, NCH no longer has the right to sell the Up-front
Shares issued upon the Effective Date of the original NCH License back to the Company under any circumstances.
the first commercial sale of the Product Candidate, the Company shall pay a low single digit royalty on net sales, if any, of the Product Candidate during the term of the
Nationwide License, subject to certain annual minimums. In addition, the Company must pay NCH a portion of sublicensing revenue received from its sublicense of the rights to the licensed technology at
percentages between low-double digits and low-teens.
Amended and Restated Nationwide License commenced on the Amended and Restated Nationwide License Effective Date and terminates upon the expiration of the royalty term for the
Product Candidate in each country in which it is sold. The Amended and Restated Nationwide License can also be terminated (i) by the Company for convenience at any time after the first
anniversary of the Effective Date upon six months prior written notice, (ii) by either party in the event of a material uncured breach upon thirty days written notice, (iii) by NCH upon
the bankruptcy/insolvency of the Company, and (iv) by NCH if it is sued by the Company for anything other than a suit brought in response to any suit brought by NCH regarding the validity or
enforceability of the NCH patents.
Employment Agreement with Dr. Brian Kaspar
January 2016, the Company entered into an employment agreement with its chief scientific officer, Dr. Brian Kaspar. The agreement provides for an
annual salary, discretionary bonus as determined by the Company's Board of Directors and severance benefits payable in the event of the termination of employment by the Company without cause or by the
employee for good reason, as defined in the agreement. Upon the effectiveness of Dr. Kaspar's employment agreement, all of his unvested shares granted pursuant to the restricted stock purchase
agreement vested in full. As a result of the vesting in full of the remainder of this award in January 2016 the Company anticipates incurring a material charge to research and development
expense in the first quarter of 2016.