Geron Corp (GERN), Janssen Pharma Enter Exclusive Licensing Agreement
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Geron Corp (Nasdaq: GERN) disclosed the following in a U.S. SEC filing on Monday:
Item 1.01 Entry into a Material Definitive Agreement.
On September 15, 2016 (the “Execution Date”), Geron Corporation (“Geron” or the “Company”) and Janssen Pharmaceuticals, Inc. (“Janssen Pharmaceuticals”), entered into a license agreement (the “License Agreement”) granting Janssen Pharmaceuticals exclusive worldwide rights (the “Exclusive License”) under Geron’s proprietary patents and related know-how for the development and commercialization of products based on specialized oligonucleotide backbone chemistry, as well as novel amidates for ribonucleic acid interference, or RNAi, for the prevention, treatment and/or diagnosis of any and all human disorders, excluding cancers originating from the blood or bone marrow, and products whose predominant or primary mechanism of action is telomerase inhibition.
In addition to the Exclusive License, Geron has granted to Janssen Pharmaceuticals a non-exclusive, worldwide license (the “Non-Exclusive License”) under Geron patent rights covering the synthesis of monomers, which are the building blocks of oligonucleotides, necessary for the research, development and commercialization of the oligonucleotides. The patent rights under the Non-Exclusive License are also licensed exclusively to Janssen Biotech, Inc., or Janssen Biotech, under the Collaboration and License Agreement, or CLA, executed by Janssen Biotech and Geron on November 13, 2014 for the imetelstat program, and the License Agreement expressly excludes, and is subject to, the rights and licenses granted to Janssen Biotech under the CLA.
Janssen Pharmaceuticals is required to use reasonable efforts to perform research, development and commercialization activities to obtain at least one licensed product to be researched, developed and commercialized under the License Agreement, at Janssen Pharmaceutical’s sole cost.
Upon the execution of the License Agreement, Janssen Pharmaceuticals owes to Geron a non-refundable upfront payment of $5 million. In addition, Geron will be eligible to receive up to $75 million in development and regulatory milestone payments, as well as royalties in the low single digit percentage range on aggregate worldwide net sales of each licensed product. Earned royalties will be subject to royalty stacking in the event that Janssen Pharmaceuticals is obligated to make royalty payments to any third party having patent claims covering a licensed product as a composition of matter.
Under the terms of the License Agreement, Geron remains responsible for prosecution and maintenance of the patent rights under the Exclusive License, with reasonable input provided by Janssen Pharmaceuticals. The costs of prosecution and maintenance of patent rights under the Exclusive License will be shared 50/50 by the parties. Ownership of any intellectual property developed under the License Agreement will be determined in accordance with U.S. patent laws. Geron remains responsible for prosecuting and maintaining the patent rights under the Non-Exclusive License, as set forth in the CLA.
The License Agreement contains customary representations, warranties and covenants by Geron and Janssen Pharmaceuticals. Each of Geron and Janssen Pharmaceuticals is required to indemnify the other against all claims relating to the indemnifying party’s negligence or willful misconduct, failure to comply with its obligations under the License Agreement, breaches of warranties, or violations of law, except to the extent resulting from negligence or breach by the indemnified party. Janssen Pharmaceuticals is also responsible for indemnifying Geron against any claims arising from the development, commercialization or manufacture of any licensed product under the License Agreement, except to the extent resulting from negligence or breach by Geron.
The License Agreement will remain in effect until the expiration of the last-to-expire licensed patent right, unless terminated earlier. It may be terminated by either Geron or Janssen Pharmaceuticals in the event of uncured material breach or insolvency proceeding by the other party. Janssen Pharmaceuticals also may terminate the License Agreement at will upon prior written notice to Geron. In the event of early termination, all licenses to Janssen Pharmaceuticals would terminate.
The foregoing description of the License Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the complete text of the License Agreement, which will be filed with the Securities and Exchange Commission (the “SEC”) as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2016.
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