Item 1.01
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Entry into a Material Definitive Agreement.
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As previously disclosed, Agenus Inc. and its wholly-owned
subsidiary, Agenus Switzerland Inc. (formerly known as 4-Antibody AG) (together, Agenus), are parties to a License, Development and Commercialization Agreement with Incyte Corporation and a wholly-owned subsidiary thereof (together,
Incyte) dated January 9, 2015 (the Collaboration Agreement). Pursuant to the terms of the Collaboration Agreement, the parties have been developing antibodies directed at seven checkpoint targets: GITR, OX40, TIM-3, LAG-3 and
three undisclosed targets. The programs targeting GITR, OX40 and two of the undisclosed targets were profit-share programs, with the parties sharing all costs and profits on a 50:50 basis. The programs targeting TIM-3, LAG-3 and one of the
undisclosed targets were royalty-bearing programs, with Incyte paying all costs and Agenus eligible to receive milestones and royalties generally ranging from 6-12%.
On February 14, 2017, the parties amended the Collaboration Agreement by entering into a First Amendment to License, Development and Commercialization
Agreement (the Amendment). Pursuant to the terms of the Amendment, the GITR and OX40 programs immediately converted from profit-share programs to royalty-bearing programs with Agenus now eligible to receive a flat 15% royalty on global
net sales should any candidates from either of these two programs be approved. Incyte is now responsible for global development and commercialization and all associated costs for these programs. In addition, the profit-share programs relating to the
two undisclosed targets were removed from the collaboration, with one reverting to Incyte and one to Agenus. Should any of those programs be successfully developed by a party, the other party will be eligible to receive the same milestone payments
as the royalty-bearing programs and royalties at a 15% rate on global net sales. The terms for the remaining three royalty-bearing programs targeting TIM-3, LAG-3 and one undisclosed target remain unchanged, with Incyte being responsible for global
development and commercialization and all associated costs. The Amendment gives Incyte exclusive rights and all decision-making authority for manufacturing, development, and commercialization with respect to all royalty-bearing programs.
In connection with the Amendment, Incyte paid Agenus $20.0 million in accelerated milestones related to the clinical development of the antibody candidates
targeting GITR and OX40. Agenus is now eligible to receive up to an additional $510.0 million in future potential development, regulatory and commercial milestones across all programs in the collaboration.
On February 14, 2017, Agenus Inc. and Incyte Corporation also entered into a Stock Purchase Agreement (the Stock Purchase Agreement and together
with the Amendment, the Agreements), pursuant to which Incyte purchased 10 million shares of Agenus common stock (the Shares) at a purchase price of $6.00 per share. Incyte now owns approximately 18.1% of the
outstanding shares of Agenus. Under the Stock Purchase Agreement, Incyte has agreed not to dispose of any of the Shares for a period of 12 months and to vote the Shares in accordance with the recommendations of the Agenus board of directors in
connection with certain equity incentive plan or compensation matters for a period of 18 months, and Agenus has agreed to certain registration rights with respect to the Shares. Under the Amendment, the parties also revised the existing standstill
provision to permit Incytes acquisition of the Shares, but Incyte is precluded from acquiring any additional shares of Agenus voting stock until December 31, 2019.
The foregoing descriptions of the Agreements do not purport to be complete and are qualified in their entirety by reference to the text of the Agreements,
which will be filed as exhibits to Agenus Quarterly Report on Form 10-Q for the quarter ending March 31, 2017.
On February 14, 2017, Agenus and
Incyte issued a joint press release relating to the Agreements. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.