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.
The 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 Amended and Restated Nationwide License 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.
REGENXBIO Inc. License
On March 21, 2014, the Company entered into a License Agreement (the “REGENXBIO SMA License”) with ReGenX Biosciences, LLC (“ReGenX”), predecessor to REGENXBIO Inc. (“REGENXBIO”). 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 REGENXBIO SMA License, the Company paid an up-front fee of $2.0 million during the year ended December 31, 2014 which was recorded in research and development expenses. Additionally, the Company agreed to pay potential future milestones of up to $12.25 million in the aggregate (as later amended as described below), and a mid-single to low-double digit royalty on net sales, if any, of the Company’s Product Candidate using AAV9, 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 rights granted to the Company under the REGENXBIO SMA 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 REGENXBIO SMA License. As a result, the Company accounted for the REGENXBIO SMA License as an asset acquisition.
The REGENXBIO SMA License term continues until the last valid patent claim expires or lapses in all countries of the world. Additionally, the Company may terminate the REGENXBIO SMA License at any time upon a specified notice period and REGENXBIO SMA may terminate upon the breach or insolvency of the Company, if we are greater than a specified number of days late (after notice and cure periods) in paying money due under the REGENXBIO SMA License or if the Company, its affiliates, or sublicensees challenges the REGENXBIO SMA patents subject to the REGENXBIO SMA License. Either party may terminate the REGENXBIO SMA License for material breach if such breach is not cured within a specified number of days.
On January 8, 2018, the Company entered into an amendment to the REGENXBIO SMA License. Under the terms of the amendment, REGENXBIO granted the Company an exclusive, worldwide commercial license, with rights to sublicense, to any recombinant AAV vector in REGENXBIO’s intellectual property portfolio during the term of the license agreement for the treatment of SMA in humans by in vivo gene therapy.
As consideration for the amendment, the Company paid or is required to pay additional fees of $80 million upon entry into the amendment, $30 million on the first anniversary of the effective date of the amendment and $30 million on the second anniversary of the effective date of the amendment. In addition, pursuant to the amendment, the Company agreed to pay up to $120 million in the aggregate of potential future sales-based milestone payments for all REGENXBIO SMA licensed products. The Company also agreed to pay a mid‑single digit to low double-digit royalty percentages on net sales of REGENXBIO SMA licensed products using AAV9 and a low-double digit royalty percentage on net sales of any product candidate developed by the Company for the treatment of SMA using an AAV vector other than AAV9, in each case subject to a reduction in specified circumstances.