Table of Contents
AveXis, Inc.
Notes to Consolidated Financial Statements (Continued)
5. Collaboration and License Agreements (Continued)
of
the additional common shares that were granted. NCH's anti-dilution protection right expired on May 29, 2015 upon achievement by the Company of a $100,000,000 market capitalization.
On
April 23, 2015 (unaudited), the Nationwide License was again amended to further extend the filing deadline for a registration statement to December 31, 2015 in exchange
for a $100,000 payment by the Company to NCH. Such amount is included in research and development expense for the nine months ended September 30, 2015 (unaudited).
The
Nationwide License commenced on the Effective Date and terminates on the earliest of (a) the last to expire of the licensed patents or (b) 10 years from the
date of first commercial sale of the Product Candidate (see Note 20). The 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 an 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 breach of the agreement (see Note 20).
REGENXBIO Inc. License
On March 21, 2014, the Company entered into a License Agreement (the "ReGenX License") with ReGenX Biosciences, LLC,
predecessor to REGENXBIO Inc. ("ReGenX"). Under the terms of the agreement, ReGenX granted the Company an exclusive, non-transferable, worldwide license to utilize ReGenX'S proprietary
adeno-associated virus ("AAV") gene delivery platform for the treatment of SMA, by in vivo gene therapy, using ReGenX'S AAV9 gene delivery vector.
As
consideration for the ReGenX License, the Company agreed to make a $2,000,000 up-front payment (the "ReGenX Up-front Payment"). $1,000,000 of such amount paid in March 2014 and the
remaining $1,000,000 paid by June 30, 2014. Additionally, the Company agreed to pay potential future milestones aggregating $12,250,000, and a mid-single to low-double digit royalty on net
sales, if any, of the Company's Product Candidate, subject to reduction in specified circumstances; and lower mid-double digit percentages of any sublicense fees the Company receives from sublicenses
of the licensed intellectual property rights.
The
Company also agreed to pay an annual maintenance fee on each anniversary of the effective date of the ReGenX License.
The
rights granted to the Company under the ReGenX License represent distinct components that need to be combined with other licensed intellectual property and know how in order to
complete the clinical development of AVXS-101. Additionally, the Company did not acquire any employees or
manufacturing capabilities in connection with the ReGenX License. As a result, the Company accounted for the ReGenX License as an asset acquisition.
The
ReGenX License term continues until the last valid patent claim expires or lapses in all countries of the world. Additionally, the Company may terminate the ReGenX License at any
time upon a specified period notice and ReGenX may terminate upon the breach or insolvency of the Company, if we are greater than a specified number of days late in paying money due under the
agreement or if the Company, its affiliates, or sublicensees challenges the ReGenX patents subject to the ReGenX License. Either party may terminate the ReGenX License for material breach if such
breach is not cured within a specified number of days.
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