Schrodinger Inc.
11/12/2024 | Press release | Distributed by Public on 11/12/2024 08:44
Material Agreement Form 8 K
Item 1.01. Entry into a Material Definitive Agreement.
On November 11, 2024, Schrödinger, Inc. (the "Company") entered into a research collaboration and license agreement (the "Agreement") with Novartis Pharma AG ("Novartis"), pursuant to which, following expiration of the Hart-Scott-Rodino Act waiting period (the "Effective Date"), the Company and Novartis will collaborate on the discovery, research and pre-clinical development of small molecule compounds for targets in certain specified therapeutic areas.
Research and Development. Under the Agreement, during a research term, the Company will be responsible, together with Novartis, for the discovery of small molecule compounds directed against specified targets ("Collaboration Targets") pursuant to mutually agreed research plans (the "Project Plans"). Under the Agreement, the Company and Novartis have agreed to pursue multiple initial Project Plans (the "Initial Project Plans"). The Agreement also includes mechanisms pursuant to which Novartis may, subject to specified conditions, add additional Project Plans (the "Additional Project Plans").
The research term for each Project Plan will generally extend for four years or such earlier time as a development candidate is designated (a "Development Candidate") for such Project Plan or the Project Plan is terminated. The parties may mutually agree to extend the research term for any Project Plan.
After the identification of a Development Candidate in any Project Plan, Novartis will be solely responsible for the further pre-clinical and clinical development, manufacturing and commercialization of products containing all compounds resulting from such Project Plan ("Collaboration Products").
Financial Terms. Under the terms of the Agreement, Novartis agreed to pay to the Company an initial upfront fee of $150 million following the Effective Date. The Company also is entitled to receive up to $2.272 billion in total milestones across the Initial Project Plans. Such milestones consist of up to $892 million in discovery and development milestones and up to $1.38 billion in commercial milestones. The Company will also be entitled to receive additional milestones in the event Additional Project Plans are added to the Agreement.
The Company is also entitled to a tiered percentage royalty on annual global net sales of Collaboration Products ranging from mid-single digits to low-double digits, subject to certain specified reductions and customary royalty terms.
Exclusivity. On a Collaboration Target-by-Collaboration Target basis, during a specified period and subject to specified exceptions, the Company is prohibited from researching, developing, manufacturing, modifying, improving or commercializing, itself or with a third party, any small molecule directed against such Collaboration Target.
Term and Termination. Unless earlier terminated, the Agreement will expire (1) on a Collaboration Product-by-Collaboration Product and country-by-country basis on the expiration of the applicable royalty term for such Collaboration Product in such country, (2) on a Collaboration Target-by-Collaboration Target basis upon the expiration of all royalty terms for all Collaboration Products directed against such Collaboration Target and (3) in its entirety upon expiration of all payment obligations under the Agreement with respect to all Collaboration Products. The Agreement contains customary termination provisions, including by either party upon an uncured material breach or upon the occurrence of certain events of insolvency. Additionally, Novartis may terminate the Agreement, in its entirety or on a Collaboration Target-by-Collaboration Target basis, for convenience or for safety reasons; provided that certain customary rights and obligations will survive termination.
The foregoing description of certain terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which the Company intends to file as an exhibit to its Annual Report on Form 10-K for the fiscal year ending December 31, 2024.
1