May 2010, $CLVS entered into an exclusive worldwide license agreement with Avila Therapeutics, Inc. (now Celgene Avilomics Research Inc., part of Celgene Corporation $CELG) to discover, develop and commercialize a covalent inhibitor of mutant forms of the EGFR gene product. As a result of the collaboration contemplated by the agreement, rociletinib was identified as the lead inhibitor candidate.

Responsible: for all nonclinical, clinical, regulatory and other activities necessary to develop and commercialize rociletinib.

Upfront payment: $2.0MM upon execution of the license agreement

Milestone 1: $4.0MM in 1Q12 upon acceptance by the FDA of IND

Milestone 2: $5.0MM in 1Q14 upon initiation of the Phase II study

Milestone 3: $12.0MM upon acceptance of NDA and MAA FDA and EMA

Commercial

  • Tiered royalties at percentage rates ranging from mid-single digits to low teens based on annual net sales achieved
  • An additional aggregate of $98.0MM in development and regulatory milestone payments if certain clinical study objectives, regulatory filings, acceptances and approvals are achieved (including $15.0MM upon the first approval of an NDA and $15.0MM upon the first approval of an MAA)
  • Required to pay up to an aggregate of $120.0MM in sales milestone payments if certain annual sales targets are achieved, annual sales targets of $500.0MM and above.

Other

  • Full sublicensing rights under the agreement, subject to sharing equally with $CELG any upfront payments from any sublicensing arrangements relating to Japan, or Japan and any one or more of China, South Korea and Taiwan, referred to as an Asian Partnership
  • Subject to paying royalties on sales in Asia equal to the greater of the royalty rates contained in license agreement or 50% of the royalties received from Asian Partnership
  • Agreement to remain in effect until the expiration of all royalty and sublicense revenue obligations to $CELG, determined on a productbyproduct and countrybycountry basis, unless elect to terminate agreement earlier