8-KMaterial Agreements

VERTEX PHARMACEUTICALS INC / MA 8-K Report, Material Agreement (Jun 17, 2011)

Filed June 17, 2011For Securities:VRTX

Summary

Vertex Pharmaceuticals Inc. (VRTX) has entered into a material definitive agreement, specifically a license and collaboration agreement with Alios Biopharma, Inc. This partnership focuses on the research, development, and commercialization of two pre-clinical stage nucleotide analogues, ALS-2200 and ALS-2158, which target the hepatitis C polymerase. Vertex has secured exclusive worldwide rights to these compounds and gains an option for additional discoveries from Alios' ongoing research program. This strategic move involves a significant financial commitment from Vertex, including a $60 million up-front payment to Alios. The agreement outlines substantial potential milestone payments, totaling up to $715 million for research and development and up to $750 million for commercial milestones, in addition to tiered royalties on net sales. Vertex will bear all development and commercialization costs and will provide research funding to Alios for the discovery of new nucleotide analogues. This collaboration underscores Vertex's commitment to expanding its pipeline in the hepatitis C therapeutic area.

Key Highlights

  • 1Vertex Pharmaceuticals entered into a license and collaboration agreement with Alios Biopharma, Inc. on June 13, 2011.
  • 2The agreement grants Vertex exclusive worldwide rights to two pre-clinical hepatitis C compounds: ALS-2200 and ALS-2158.
  • 3Vertex paid an upfront fee of $60 million to Alios.
  • 4Alios is eligible to receive up to $715 million in research and development milestone payments.
  • 5Alios may also receive up to $750 million in commercial milestone payments, plus tiered royalties on net sales.
  • 6Vertex will be responsible for all development and commercialization costs.
  • 7Vertex will fund Alios' research program for the discovery of additional nucleotide analogues targeting hepatitis C polymerase.

Frequently Asked Questions

The agreement focuses on the research, development, and commercialization of two pre-clinical stage nucleotide analogues, ALS-2200 and ALS-2158, discovered by Alios. These compounds target the hepatitis C polymerase, indicating Vertex's strategic expansion into hepatitis C therapeutics.

Alios received a $60 million up-front payment from Vertex. They are also eligible for substantial milestone payments, potentially up to $715 million for R&D milestones and up to $750 million for commercial milestones, along with tiered royalties on future net sales of any approved drugs resulting from this collaboration.

Vertex has assumed exclusive worldwide rights to ALS-2200 and ALS-2158 and has an option for future compounds. They are responsible for all costs associated with the development and commercialization of these compounds. Additionally, Vertex will provide research funding to Alios for their ongoing discovery program.

Vertex can terminate the agreement with 30 days' notice if both ALS-2200 and ALS-2158 experience a technical failure and development ceases. They also have the option to terminate with 60 days' notice at any time after completing specified Phase 2a clinical trials. Termination is also possible for material breach by either party, subject to cure provisions.