Item 1.01. Entry into a Material Definitive Agreement.
On January 11, 2021, BeiGene Switzerland GmbH, a wholly-owned indirect
subsidiary of BeiGene, Ltd. (collectively, "BeiGene" or the "Company"), entered
into a Collaboration and License Agreement (the "Collaboration and License
Agreement") with Novartis Pharma AG ("Novartis"), pursuant to which BeiGene will
grant Novartis the right to develop, manufacture and commercialize BeiGene's
anti-PD-1 antibody tislelizumab in the United States, Canada, Mexico, member
countries of the European Union, United Kingdom, Norway, Switzerland, Iceland,
Liechtenstein, Russia, and Japan (the "Licensed Territory").
Under the Collaboration and License Agreement, BeiGene will receive an upfront
cash payment of $650 million from Novartis. Additionally, BeiGene is eligible to
receive up to $1.3 billion upon the achievement of regulatory milestones, $250
million upon the achievement of sales milestones, and tiered royalties based on
percentages of annual net sales of tislelizumab in the Licensed Territory
ranging from the high-teens to high-twenties, with customary reductions in
specified circumstances. Royalties are payable on a country-by-country basis
from the time of the first commercial sale until the latest of the expiration of
the last valid patent claim, the expiration of regulatory exclusivity, or 10
years after the first commercial sale of tislelizumab in the country of sale.
Under the Collaboration and License Agreement, BeiGene and Novartis have agreed
to jointly develop tislelizumab in the Licensed Territory, with Novartis
responsible for regulatory submissions after a transition period and for
commercialization upon regulatory approvals. In addition, both companies may
conduct clinical trials to explore potential combinations of tislelizumab with
other cancer treatments. BeiGene will be responsible for funding the ongoing
clinical trials of tislelizumab, and Novartis has agreed to fund any new
registrational, bridging, or post-marketing studies in the Licensed Territory.
Subject to specified conditions, BeiGene and Novartis have agreed to jointly
fund other new clinical trials in the Licensed Territory agreed by the parties,
provided that each party will be responsible for funding clinical trials
evaluating tislelizumab in combination with its own- or third-party cancer
treatments. BeiGene will initially be responsible for supplying tislelizumab to
Novartis, with Novartis having the right to conduct manufacturing for its use in
the Licensed Territory after successful transfer of the manufacturing process.
In addition, BeiGene has an option to co-detail the product in the United
States, Canada and Mexico, on an indication-by-indication basis, funded in part
by Novartis. Each party retains the worldwide right to commercialize its
propriety products in combination with tislelizumab.
The Collaboration and License Agreement contains customary representations,
warranties and covenants by BeiGene and Novartis. Unless earlier terminated, the
agreement will expire on a country-by-country basis upon the expiration of the
royalty term in such country. The Collaboration and License Agreement will
expire in its entirety upon the expiration of all applicable royalty terms under
the agreement in all countries in the Licensed Territory. BeiGene may terminate
the agreement in its entirety upon written notice (i) if Novartis challenges the
licensed BeiGene patents, or (ii) if Novartis files a biologics license
application for its anti-PD-1 antibody, spartalizumab, in the Licensed
Territory, and BeiGene does not elect to include spartalizumab as a licensed
product under the Collaboration and License Agreement or Novartis does not
divest the product candidate, in which case Novartis would pay BeiGene a
specified termination fee. The agreement may be terminated by Novartis upon 120
days' prior written notice if delivered before first commercial sale or 180
days' prior written notice if delivered following first commercial sale of
tislelizumab in the Licensed Territory, or by either party upon the other
party's bankruptcy or uncured material breach.
The transaction contemplated under the Collaboration and License Agreement is
expected to close in the first quarter of 2021, subject to expiration or early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act.
* * *
The foregoing summary description of the Collaboration and License Agreement
does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Collaboration and License Agreement, which the Company
intends to file as an exhibit to a subsequent periodic report or on an amendment
to this Current Report on Form 8-K.
* * *
The representations and warranties and other statements in the Collaboration and
License Agreement (1) speak only as to the date on which they were made, and may
be modified or qualified by confidential schedules or other disclosures,
agreements or understandings among the parties, which the parties believe are
not required by the securities laws to be publicly disclosed, and (2) may be
subject to a different materiality standard than the standard that is applicable
to disclosures to investors. Moreover, it was advised that information
concerning the subject matter of the representations and warranties and other
statements made in the Collaboration and License Agreement would likely change
after the execution date of such agreement, and subsequent information may or
may not be fully reflected in the Company's public disclosures. Accordingly,
investors should not rely upon representations and warranties and other
statements in the Collaboration and License Agreement as factual
characterizations of the actual state of affairs of the Company. Investors
should instead look to disclosures contained in the Company's reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
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Item 7.01. Regulation FD Disclosure.
On January 11, 2021, the Company issued a press release announcing the
above-described transaction. A copy of the press release is furnished as Exhibit
99.1 to this Current Report on Form 8-K and shall not be deemed to be "filed"
for purposes of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such filing or this
Current Report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release issued on January 11, 2021, furnished herewith.
104 The cover page from this Current Report on Form 8-K, formatted in Inline
XBRL.
Forward Looking Statements
This Current Report on Form 8-K and the materials furnished herewith contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and other federal securities laws, including
statements regarding the further advancement of, and anticipated clinical
development, regulatory milestones, and commercialization of tislelizumab; the
parties' commitments and the potential benefits of the collaboration, and the
conditions to closing and expected timing for the closing of the transaction.
Actual results may differ materially from those indicated in the forward-looking
statements as a result of various important factors, including the possibility
that the closing conditions set forth in the Collaboration and License
Agreement, including, those related to antitrust clearance, will not be met and
that the parties will be unable to consummate the proposed transaction; the
possibility that BeiGene will not realize the expected benefits of the
transaction; the possibility that BeiGene or Novartis will fail to fully perform
their respective obligations under the Collaboration and License Agreement;
BeiGene's ability to demonstrate the efficacy and safety of its drug candidates;
the clinical results for its drug candidates, which may not support further
development or marketing approval; actions of regulatory agencies, which may
affect the initiation, timing and progress of clinical trials and marketing
approval; BeiGene's ability to achieve commercial success for its marketed
products and drug candidates, if approved; BeiGene's ability to obtain and
maintain protection of intellectual property for its technology and drugs;
BeiGene's reliance on third parties to conduct drug development, manufacturing
and other services; BeiGene's limited operating history and BeiGene's ability to
obtain additional funding for operations and to complete the development and
commercialization of its drug candidates; and the impact of the COVID-19
pandemic on the Company's clinical development, commercial and other operations,
as well as those risks more fully discussed in the section entitled "Risk
Factors" in BeiGene's most recent quarterly report on Form 10-Q, as well as
discussions of potential risks, uncertainties, and other important factors in
BeiGene's subsequent filings with the U.S. Securities and Exchange Commission.
BeiGene cautions you not to place undue reliance on any forward-looking
statements, which speak only as of the date they are made. BeiGene disclaims any
obligation to publicly update or revise any such statements to reflect any
change in expectations or in events, conditions or circumstances on which any
such statements may be based, or that may affect the likelihood that actual
results will differ from those set forth in the forward-looking statements.
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