Pharmacopeia GSK Product Development and Commercialization Agreement
From the March 31, 2006 10-Q:
GSK has an exclusive option, exercisable at defined points during the development process for each program (up to the point of clinical proof of concept), to license that program for a specified payment amount.
Upon licensing a program, GSK is obligated to conduct preclinical development and/or clinical trials and commercialize pharmaceutical products resulting from such licensed programs on a worldwide basis
If GSK does not exercise its option to license a program, the Company will retain all rights to that program and may continue to develop the program and commercialize any products resulting from the program, or it may elect to cease progressing the program and/or seek other partners for the further development and commercialization.
Under the terms of the GSK Agreement, the Company will receive up to $15.0 million in cash payments from GSK, including $5.0 million received in April 2006.
Up to the remaining $10.0 million will be payable to the Company upon its fulfillment of certain conditions related to the initial discovery activities to be conducted by the Company.
The Company’s role in the alliance is to (i) identify and (ii) advance molecules in chosen therapeutic programs into development candidates and (iii) subject to certain provisions in the agreement, further develop the candidates to clinical “proof of concept” (a demonstration of efficacy in man).
In addition the cash payments above, the Company is entitled to receive success-based milestone payments from GSK for each drug development program pursued under the alliance and the potential for double-digit royalties upon the successful commercialization by GSK of any product resulting therefrom.
The Company and GSK each have the right to terminate the GSK Agreement in its sole discretion under certain specified circumstances at any time during the term of the GSK Agreement. If the Company exercises its discretionary termination right at any time during the first five years of the term, under certain circumstances, it could be required to refund to GSK a portion of the up to $15.0 million referred to above.
In connection with the GSK Agreement, the Company issued two warrants to GSK for the purchase of common stock at a 25% premium.
Revenue will be recognized on a proportional performance basis as work progresses.
GSK has an exclusive option, exercisable at defined points during the development process for each program (up to the point of clinical proof of concept), to license that program for a specified payment amount.
Upon licensing a program, GSK is obligated to conduct preclinical development and/or clinical trials and commercialize pharmaceutical products resulting from such licensed programs on a worldwide basis
If GSK does not exercise its option to license a program, the Company will retain all rights to that program and may continue to develop the program and commercialize any products resulting from the program, or it may elect to cease progressing the program and/or seek other partners for the further development and commercialization.
Under the terms of the GSK Agreement, the Company will receive up to $15.0 million in cash payments from GSK, including $5.0 million received in April 2006.
Up to the remaining $10.0 million will be payable to the Company upon its fulfillment of certain conditions related to the initial discovery activities to be conducted by the Company.
The Company’s role in the alliance is to (i) identify and (ii) advance molecules in chosen therapeutic programs into development candidates and (iii) subject to certain provisions in the agreement, further develop the candidates to clinical “proof of concept” (a demonstration of efficacy in man).
In addition the cash payments above, the Company is entitled to receive success-based milestone payments from GSK for each drug development program pursued under the alliance and the potential for double-digit royalties upon the successful commercialization by GSK of any product resulting therefrom.
The Company and GSK each have the right to terminate the GSK Agreement in its sole discretion under certain specified circumstances at any time during the term of the GSK Agreement. If the Company exercises its discretionary termination right at any time during the first five years of the term, under certain circumstances, it could be required to refund to GSK a portion of the up to $15.0 million referred to above.
In connection with the GSK Agreement, the Company issued two warrants to GSK for the purchase of common stock at a 25% premium.
Revenue will be recognized on a proportional performance basis as work progresses.
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