UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 7, 2018

 

IMMUNOMEDICS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

(973) 605-8200

Registrant’s telephone number, including area code

 

 

(Former name or former address if changed since last report,)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 

Item 1.01                                           Entry into a Material Definitive Agreement.

 

On January 7, 2018, Immunomedics, Inc. (the “Company”), entered into a funding agreement (the “Funding Agreement”) with RPI Finance Trust, a Delaware statutory trust (“RPI”). Pursuant to the Funding Agreement, the Company issued to RPI the right to receive certain royalty amounts, subject to certain reductions, based on the net sales of the antibody-drug conjugate IMMU-132 (sacituzumab govitecan) (the “Products”), for each calendar quarter during the term of the Funding Agreement (“Revenue Participation Right”), in exchange for $175,000,000 in cash (the “Purchase Price”). Specifically, the royalty rate commences at 4.15 percent on net annual sales of up to $2 billion, declining step-wise based on sales tiers to 1.75 percent on net global annual sales exceeding $6 billion.

 

In addition, after the seventh anniversary of the First Commercial Sale (as defined in the Funding Agreement) in the United States and following a change of control of the Company, the Company shall have the option (“Call Option”) to repurchase fifty percent (50%) of the Revenue Participation Right from RPI, at the net present value (calculated using a 5% discount rate) of the projected  royalty payments based upon the then projected sales of the Product.

 

On December 23, 2017 the Company disclosed to the U.S. government that certain subject inventions (as defined in 37 C.F.R. Section 401.14(a)(2)) relating to the Product were made under National Institutes of Health or any successor agency thereto (“NIH”) grant numbers CA072324, CA114802 and CA171388 and that the Company was electing to retain title in such subject inventions.  Pursuant to the Funding Agreement, in the event the NIH issues a formal written request to the Company to convey title to NIH to any patent right set forth in the Funding Agreement, RPI shall have the right to terminate the Funding Agreement and, if RPI exercises such right, the Company shall refund the Purchase Price to RPI. If NIH has not issued such formal written request to the Company prior to May 7, 2018, the Company shall have the right to demand RPI irrevocably (i) waive its right to terminate the Funding Agreement or (ii) terminate the Funding Agreement and, if RPI exercises such right to terminate, the Company shall refund the Purchase Price to RPI; however, such termination and refund of the Purchase Price shall have no impact on the proceeds received by the Company in the Financing (as defined below).

 

On January 7, 2018, in connection with the Funding Agreement, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with RPI, pursuant to which the Company, in a private placement, agreed to issue and sell to RPI 4,373,178 shares (the “Shares”) of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”), at a price of $17.15 per share for gross proceeds to the Company of $75,000,000 before deducting fees and expenses (the “Financing”).

 

The Shares were offered and will be issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), set forth under Section 4(a)(2) of the Securities Act relating to sales by an issuer not involving any public offering and in reliance on similar exemptions under applicable state laws. RPI represented that it is an accredited investor and that it is acquiring the Shares for investment purposes only and not with a view to any resale, distribution or other disposition of such securities in violation of the United States federal securities laws. Neither this Current Report on Form 8-K, nor the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy the securities described herein.

 

The Company expects to use the proceeds from the Purchase Price and Financing towards working capital and general corporate purposes, including the continued development and commercialization of its lead product candidate, IMMU-132.

 

The foregoing descriptions of the Funding Agreement and the Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of Funding Agreement and the Purchase Agreement, which will be filed as exhibits to the Company’s next quarterly report on Form 10-Q.

 

2

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference in response to this Item 3.02.

 

Item 9.01                                           Financial Statements and Exhibits.

 

(d)                                 The following exhibits are being filed herewith:

 

Exhibit No.		Exhibit
99.1		Immumonedics, Inc. Press Release, dated January 8, 2018.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

		IMMUNOMEDICS, INC.
Date: January 8, 2018	By:	/s/ Michael R. Garone
		Name: Michael R. Garone
		Title: Vice President, Finance and Chief Financial Officer

 

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Exhibit 99.1

 

NEWS RELEASE

 

 

IMMUNOMEDICS AND ROYALTY PHARMA ANNOUNCE ROYALTY
FUNDING AND STOCK PURCHASE AGREEMENTS TOTALLING $250
MILLION

 

Royalty Pharma acquires Royalty Rights on Global Net Sales of Sacituzumab Govitecan (IMMU-132) Across All Indications for $175 Million

 

Royalty Pharma Acquires $75 Million of Immunomedics Common Stock at $17.15 per share, a More Than 15% Premium over 15-Day Moving Average

 

Royalty Rate of 4.15% is Subject to Tiered Sales-Based Step-Downs reaching 1.75% on Annual Sales exceeding $6 Billion

 

Agreement Enables Investments into Further Build Out of Clinical, Commercial and Manufacturing Infrastructure and Execution of Aggressive Clinical Development Plan

 

Morris Plains, N.J. and New York, N.Y. January 8, 2018 — Immunomedics, Inc., (NASDAQ: IMMU) (“Immunomedics” or the “Company”) and Royalty Pharma today announced that Immunomedics has agreed to sell tiered, sales-based royalty rights on global net sales of sacituzumab govitecan to Royalty Pharma for $175 million. Royalty Pharma has also purchased $75 million in common stock of Immunomedics, at $17.15 per share, which represents a more than 15% premium over the stock’s 15-day trailing average closing price.

 

This $250 million funding provides Immunomedics the resources to support the Company’s next phase of growth as it focuses on developing sacituzumab govitecan in metastatic triple negative breast cancer (TNBC), advanced urothelial cancer and other indications of high medical need and on further building its clinical, medical affairs, commercial and manufacturing infrastructure. The royalty rate commences at 4.15 percent on net annual sales of up to $2 billion, declining step-wise based on sales tiers to 1.75 percent on net global annual sales exceeding $6 billion. This transaction will provide sufficient cash to fund operations into 2020.

 

“The investment by Royalty Pharma supports our stated strategy at Immunomedics of becoming a fully integrated biopharmaceutical company and a recognized leader in the field of antibody-drug conjugates,” commented Michael Pehl, President and Chief Executive Officer of Immunomedics. “This agreement extends our runway beyond the approval and initial commercialization of sacituzumab govitecan for metastatic TNBC and provides us with the necessary resources for a full clinical and commercial infrastructure. Royalty Pharma has a strong track record of identifying outstanding products, and we look forward to working with them as we continue to advance sacituzumab govitecan and other drugs in our pipeline to improve the outcomes of patients with hard to treat cancers.”

 

 

~ more ~

 

 

“Sacituzumab govitecan is one of the most exciting targeted therapies currently in development in oncology. It holds great potential to fulfil the unmet medical need for patients with metastatic TNBC, and we believe for other tumors affecting many patients,” remarked Pablo Legorreta, Founder & Chief Executive Officer of Royalty Pharma. “We are excited to join forces with Immunomedics in this mutually beneficial transaction to further advance sacituzumab govitecan into multiple indications with currently limited treatment options to positively impact patients, investors and stakeholders.”

 

“The Board over the past several months has been exploring a multitude of opportunities that provide us with the requisite financial resources to execute on our business priorities,” said Dr. Behzad Aghazadeh, Chairman of the Board of Immunomedics. “The agreement with Royalty Pharma announced today certainly meets that criteria, while importantly, also maintains the strategic flexibility of the Company, as we continue to explore opportunities to maximize shareholder value.”

 

Please refer to the current report on Form 8-K to be filed today for a further description of the terms of the transaction agreements, including certain call rights and termination rights of the parties as described therein.

 

DLA Piper LLP (US) served as legal advisor to Immunomedics and Goodwin Procter LLP acted as legal advisors to Royalty Pharma on the transaction.

 

About Immunomedics

 

Immunomedics is a clinical-stage biopharmaceutical company developing monoclonal antibody-based products for the targeted treatment of cancer, autoimmune disorders and other serious diseases. Immunomedics’ most advanced product candidate is sacituzumab govitecan (IMMU-132), an antibody-drug conjugate that has received Breakthrough Therapy Designation from the FDA for the treatment of patients with metastatic triple-negative breast cancer who have failed at least two prior therapies for metastatic disease. Immunomedics’ primary goal is to bring sacituzumab govitecan to market for the benefit of patients and the creation of stockholder value. For additional information on the Company, please visit its website at https://immunomedics.com/. The information on its website does not, however, form a part of this press release.

 

About Royalty Pharma

 

Founded in 1996, Royalty Pharma is the industry leader in acquiring revenue-producing intellectual property, with over $15 billion in royalty assets. Royalty Pharma funds innovation in life sciences both directly and indirectly: directly when it partners with life sciences companies to co-develop and co-fund products in late-stage clinical trials, and indirectly when it acquires existing royalty interests from the original innovators (academic institutions, research hospitals, foundations and inventors). The company’s portfolio includes royalty interests in over 40 approved products including AbbVie’s Humira, AbbVie and J&J’s Imbruvica, Biogen’s Tecfidera, Vertex’s Kalydeco and Orkambi, J&J’s Remicade, Merck’s Januvia, Gilead’s Atripla and Truvada, Pfizer’s Lyrica, and Astellas and Pfizer’s Xtandi. Royalty Pharma is also a leading investor in pre-approval royalties, having committed over $850 million to direct R&D funding in

 

 

exchange for royalties, and having invested over $4 billion in royalties on pre-approval products since 2011.

 

Immunomedics’ cautionary note regarding forward-looking statements

 

This release, in addition to historical information, may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements, including statements regarding clinical trials (including the funding therefor, anticipated patient enrollment, trial outcomes, timing or associated costs), regulatory applications and related timelines, out-licensing arrangements, forecasts of future operating results, potential collaborations, and capital raising activities, timing for bringing any product candidate to market, involve significant risks and uncertainties and actual results could differ materially from those expressed or implied herein. Factors that could cause such differences include, but are not limited to, the Company’s dependence on business collaborations or availability of required financing from capital markets, or other sources on acceptable terms, if at all, in order to further develop our products and finance our operations, new product development (including clinical trials outcome and regulatory requirements/actions), the risk that we or any of our collaborators may be unable to secure regulatory approval of and market our drug candidates, risks associated with the outcome of pending litigation and competitive risks to marketed products, and the Company’s ability to repay its outstanding indebtedness, if and when required, as well as the risks discussed in the Company’s filings with the Securities and Exchange Commission. The Company is not under any obligation, and the Company expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Immunomedics Contacts:

 

Investor:

Dr. Chau Cheng

Senior Director, Investor Relations & Corporate Secretary

(973) 605-8200, extension 123

[email protected]

 

Media:

Dan Zacchei / Josh Hochberg

Sloane & Company

212-486-9500

[email protected]

[email protected]

 

Royalty Pharma Contacts:

Alexander v. Perfall

Vice President, Investor Relations & Public Affairs

(212) 883-2298,

[email protected]