UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 29, 2022, the registrant had
Table of Contents
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Page |
PART I. |
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FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements (Unaudited) |
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3 |
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4 |
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6 |
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8 |
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10 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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43 |
Item 3. |
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54 |
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Item 4. |
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PART II. |
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Item 1. |
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Item 1A. |
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Item 2. |
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55 |
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Item 3. |
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55 |
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Item 4. |
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55 |
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Item 5. |
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55 |
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Item 6. |
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56 |
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58 |
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2
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Balance Sheets
(in thousands, except shares and per share amounts)
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June 30, |
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December 31, |
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2022 |
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2021 |
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(Unaudited) |
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(1) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Investment in equity securities |
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Receivable from licensing and collaboration agreements |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Intangible assets, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Redeemable Convertible Noncontrolling Interests and Stockholders’ Deficit |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued compensation and benefits |
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Accrued research and development liabilities |
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Accrued professional services |
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Operating lease liabilities, current portion |
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Deferred revenue, current portion |
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— |
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Other accrued liabilities |
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Total current liabilities |
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2029 Notes, net |
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2027 Notes, net |
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Term loan, net |
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Operating lease liabilities, net of current portion |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 9) |
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Stockholders’ deficit: |
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Undesignated preferred stock, $ |
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— |
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Common stock, $ |
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Treasury stock, at cost; |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total BridgeBio stockholders’ deficit |
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( |
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Noncontrolling interests |
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Total stockholders’ deficit |
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Total liabilities, redeemable convertible noncontrolling interests and |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except shares and per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue: |
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License and services revenue |
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$ |
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$ |
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$ |
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$ |
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Product sales |
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— |
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Total revenue |
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Operating costs and expenses: |
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Cost of license revenue and products sold |
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Research and development |
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Selling, general and administrative |
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Restructuring, impairment and related charges |
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— |
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— |
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Total operating costs and expenses |
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Loss from operations |
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Other income (expense), net: |
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Interest income |
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Interest expense |
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( |
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Gain from sale of priority review voucher, net |
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— |
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Other income (expense), net |
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Total other income (expense), net |
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Net loss |
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( |
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( |
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Net loss (income) attributable to redeemable convertible |
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( |
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Net loss attributable to common stockholders |
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$ |
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$ |
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$ |
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$ |
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Net loss per share attributable to common stockholders |
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$ |
( |
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$ |
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$ |
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$ |
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Weighted-average shares used in computing net loss |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive income (loss): |
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Unrealized gains (losses) on available-for-sale securities |
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( |
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( |
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( |
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Comprehensive loss |
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( |
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( |
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( |
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( |
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Comprehensive loss (income) attributable to redeemable |
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( |
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( |
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Comprehensive loss attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Redeemable Convertible Noncontrolling Interests and Stockholders’ Equity (Deficit)
(Unaudited)
(in thousands, except shares and per share amounts)
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Six Months Ended June 30, 2022 |
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Redeemable |
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Accumulated |
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Total |
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Convertible |
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Additional |
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Other |
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BridgeBio |
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Noncontrol- |
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Total |
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Noncontrolling |
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Common Stock |
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Treasury Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Stockholders' |
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ling |
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Stockholders’ |
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Interests |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Deficit |
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Interests |
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Deficit |
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Balances as of December 31, 2021 (2) |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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Issuance of shares under equity |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock under ESPP |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchase of shares to satisfy tax withholding |
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— |
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( |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Transfers from (to) noncontrolling |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Unrealized losses on available-for-sale |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Net loss |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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( |
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Balances as of March 31, 2022 |
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( |
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( |
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( |
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( |
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( |
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( |
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Issuance of shares under equity |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchase of shares to satisfy tax |
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— |
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( |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Issuance of noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Transfers from (to) noncontrolling |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Unrealized losses on available-for-sale |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Net income (loss) |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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Balances as of June 30, 2022 |
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$ |
( |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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6
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Six Months Ended June 30, 2021 |
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Total |
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Redeemable |
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Accumulated |
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BridgeBio |
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Total |
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Convertible |
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Additional |
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Other |
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Stockholders' |
|
|
Noncontrol- |
|
|
Stockholders’ |
|
|||||||||||
|
|
Noncontrolling |
|
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Equity |
|
|
ling |
|
|
Equity |
|
|||||||||||||||||
|
|
Interests |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Deficit |
|
|
(Deficit) |
|
|
Interests |
|
|
(Deficit) |
|
|||||||||||
Balances as of December 31, 2020 (2) |
|
$ |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Cumulative effect of ASU 2020-06 adoption |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Issuance of shares under equity |
|
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Stock-based compensation |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Purchase of capped calls |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of common stock |
|
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Issuance of common stock under ESPP |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Repurchase of shares to satisfy tax |
|
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Repurchase of Eidos noncontrolling interests |
|
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Issuance of noncontrolling interests |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Transfers from (to) noncontrolling |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Unrealized losses on available-for-sale |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
( |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances as of March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
Issuance of shares under equity |
|
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Stock-based compensation |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchase of common stock |
|
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Repurchase of common stock to satisfy tax |
|
|
— |
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Fair value of PellePharm noncontrolling interest on consolidation |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of noncontrolling interests |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Transfers from (to) noncontrolling |
|
|
( |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
||
Unrealized gains on available-for-sale |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Net loss |
|
|
( |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances as of June 30, 2021 |
|
$ |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Net loss from investment in equity securities |
|
|
|
|
|
— |
|
|
Gain from sale of priority review voucher, excluding transaction costs |
|
|
( |
) |
|
|
— |
|
Gain from recognition of receivable from licensing and collaboration agreement |
|
|
( |
) |
|
|
— |
|
Fair value of shares issued under a license agreement |
|
|
|
|
|
— |
|
|
Accretion of debt |
|
|
|
|
|
|
||
Fair value adjustment of warrants |
|
|
|
|
|
— |
|
|
Loss on sale of certain assets |
|
|
|
|
|
— |
|
|
Impairment of long-lived assets |
|
|
|
|
|
|
||
LEO call option income |
|
|
— |
|
|
|
( |
) |
Other noncash adjustments |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
— |
|
|
|
( |
) |
Receivable from licensing and collaboration agreements |
|
|
|
|
|
( |
) |
|
Receivable from a related party |
|
|
— |
|
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Other assets |
|
|
|
|
|
( |
) |
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued compensation and benefits |
|
|
( |
) |
|
|
( |
) |
Accrued research and development liabilities |
|
|
|
|
|
|
||
Accrued professional services |
|
|
( |
) |
|
|
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
— |
|
|
Other accrued and other long-term liabilities |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities |
|
|
( |
) |
|
|
( |
) |
Maturities of marketable securities |
|
|
|
|
|
|
||
Purchases of investment in equity securities |
|
|
( |
) |
|
|
( |
) |
Sales of investment in equity securities |
|
|
|
|
|
— |
|
|
Increase in cash and cash equivalents from consolidation of PellePharm |
|
|
— |
|
|
|
|
|
Proceeds from sale of priority review voucher |
|
|
|
|
|
— |
|
|
Proceeds from sale of certain assets |
|
|
|
|
|
— |
|
|
Payment for an intangible asset |
|
|
( |
) |
|
|
— |
|
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
Financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of 2029 Notes |
|
|
— |
|
|
|
|
|
Issuance costs and discounts associated with issuance of 2029 Notes |
|
|
— |
|
|
|
( |
) |
Issuance costs associated with term loan |
|
|
( |
) |
|
|
— |
|
Purchase of capped calls |
|
|
— |
|
|
|
( |
) |
Repurchases of common stock |
|
|
— |
|
|
|
( |
) |
Transactions with noncontrolling interests |
|
|
— |
|
|
|
|
|
Repurchase of Eidos noncontrolling interest, including direct transaction costs |
|
|
— |
|
|
|
( |
) |
Proceeds from term loan |
|
|
— |
|
|
|
|
|
Repayment of term loan |
|
|
( |
) |
|
|
( |
) |
Proceeds from BridgeBio common stock issuances under ESPP |
|
|
|
|
|
|
||
Repurchase of shares to satisfy tax withholding |
|
|
( |
) |
|
|
( |
) |
Proceeds from stock option exercises, net of repurchases |
|
|
|
|
|
|
||
Net cash provided by (used in) financing activities |
|
|
( |
) |
|
|
|
|
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
|
|
Six Months Ended June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Supplemental Disclosures of Noncash Investing and Financing Information: |
|
|
|
|
|
|
||
Payment-in-kind interest added to principal of term loan |
|
$ |
|
|
$ |
— |
|
|
Net noncash portion of repurchase of Eidos noncontrolling interests |
|
$ |
— |
|
|
$ |
|
|
Direct transaction costs in the repurchase of Eidos recorded in “Additional paid-in capital” |
|
$ |
— |
|
|
$ |
|
|
Noncash contribution by a noncontrolling interest |
|
$ |
— |
|
|
$ |
|
|
Recognized intangible asset recorded in “Accrued research and development liabilities” |
|
$ |
— |
|
|
$ |
|
|
Leasehold improvements paid by landlord |
|
$ |
— |
|
|
$ |
|
|
Unpaid property and equipment |
|
$ |
|
|
$ |
|
||
Transfers from noncontrolling interests (Note 6) |
|
$ |
|
|
$ |
|
||
Reconciliation of Cash, Cash Equivalents and Restricted Cash: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash — Included in “Prepaid expenses and other current assets” |
|
|
|
|
|
|
||
Restricted cash — Included in “Other assets” |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash at end of period shown in the |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
BridgeBio Pharma, Inc. (“BridgeBio” or the “Company”) is a commercial-stage biopharmaceutical company founded to discover, create, test and deliver transformative medicines to treat patients who suffer from genetic diseases and cancers with clear genetic drivers. BridgeBio’s pipeline of development programs ranges from early science to advanced clinical trials. BridgeBio was founded in 2015 and its team of experienced drug discoverers, developers and innovators are committed to applying advances in genetic medicine to help patients as quickly as possible.
Since inception, BridgeBio has either created wholly-owned subsidiaries or has made investments in certain controlled entities, including partially-owned subsidiaries for which BridgeBio has a majority voting interest, and variable interest entities (“VIEs”) for which BridgeBio is the primary beneficiary (collectively, “we”, “our”, “us”). BridgeBio is headquartered in Palo Alto, California.
Basis of Presentation and Principles of Consolidation
The condensed consolidated financial statements include the accounts of BridgeBio Pharma, Inc. and its wholly-owned subsidiaries and controlled entities, substantially all of which are denominated in U.S. dollars. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net loss attributable to noncontrolling interests in our condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties.
In determining whether an entity is considered a controlled entity, we applied the VIE and Voting Interest Entity (“VOE”) models. We assess whether we are the primary beneficiary of a VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities that do not qualify as a VIE are assessed for consolidation under the VOE model. Under the VOE model, BridgeBio consolidates the entity if it determines that it has a controlling financial interest in the entity through its ownership of greater than
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC.
The condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of our financial position, our results of operations and comprehensive loss, stockholders’ equity (deficit) and our cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim periods.
Reclassifications
Certain reclassifications have been made to the condensed consolidated statement of cash flows for the six months ended June 30, 2021 to conform to the current year’s presentation. These reclassifications had no net effect on cash flows from operating, financing and investing activities as previously reported.
10
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Restricted Cash
Our restricted cash balance relates to cash and cash equivalents that we have pledged as collateral under certain lease agreements and letters of credit.
Collaborative Arrangements
We enter into collaboration arrangements with partners, under which we may grant licenses to further develop, manufacture and commercialize one of our drug compounds and or/products. We may also perform research, development, manufacturing, commercialization, and supply activities under our collaboration agreements. Consideration under these arrangements may include, upfront payments, development and regulatory milestones, expense reimbursements, royalties based on net sales of commercial products, and commercial sales milestone payments.
When we enter into collaboration agreements, we assess whether the arrangements fall within the scope of Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements (“ASC 808”) based on whether the arrangements involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of ASC 808, we assess whether the payments between us and our partner fall within the scope of other accounting literature. If we conclude that payments from the partner to us represent consideration from a customer, such as license fees, contract manufacturing, and research and development activities, we account for those payments within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”). However, if we conclude that our partner is not a customer for certain activities and associated payments, such as for certain collaborative research, development, manufacturing, and commercial activities, we record such payments as a reduction of research and development expense or selling, general and administrative expense, based on where we present the underlying expense. Additionally, if we reimburse our collaboration partners for these activities, we record such reimbursements as research and development expense or selling, general and administrative expense, depending upon the nature of the underlying expense.
If our collaborative arrangement provides for the sharing of profits and losses with our partner for commercialization activities, the treatment of our share in the profit-sharing structure depends on who the selling party is. If we are the selling party and the deemed principal, we record our collaboration partner’s share of profits as an addition to selling, general and administrative expenses and our collaboration partner’s share of loss as a reduction in selling, general and administrative expenses. If our partner is the selling party and the deemed principal, we record our share of profits as collaboration revenue and our share of losses as an addition to selling, general and administrative expenses.
Revenue Recognition
For elements or transactions that we determine should be accounted for under ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy our performance obligation. We apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to the customer.
At inception of the arrangement, we assess the promised goods or services to identify the performance obligations within the contract. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation, on a relative standalone selling price basis, when (or as) the performance obligation is satisfied, either at a point in time or over time. If the performance obligation is satisfied over time, we recognize revenue based on the use of an output or input method. As part of the accounting for these arrangements, we develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key assumptions may include forecasted revenue or costs, development timelines, discount rates and probabilities of clinical and regulatory success.
11
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
License Grant: For arrangements that include a grant of a license to our intellectual property, we consider whether the license grant is distinct from the other performance obligations included in the arrangement. Generally, we would conclude that the license is distinct if the customer is able to benefit from the license with the resources available to it. For licenses that are distinct, we recognize revenues from nonrefundable, upfront license fees and other consideration allocated to the license when the license term has begun and we have provided all necessary information regarding the underlying intellectual property to the customer, which generally occurs at or near the inception of the arrangement. For licenses that are bundled with other promises, we determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we use judgment in determining the appropriate method of measuring progress for purposes of recognizing revenue from the up-front license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
Development and Regulatory Milestone Payments: At the inception of each arrangement that includes development and regulatory milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. We generally include these milestone payments when they are achieved because there is considerable uncertainty in the research and development processes that trigger these payments under our agreements. Similarly, we include approval milestone payments in the transaction price once the product is approved by the applicable regulatory agency. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis.
Sales-based Milestone Payments and Royalties: For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, we will determine whether the license is deemed to be the predominant item to which the royalties or sales-based milestones relate and if such is the case, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Product Supply Services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. We will assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations and recognized when the future goods or services related to the option are provided or the option expires.
Research and Development Services: For arrangements that include research and development services, we will recognize revenue over time using an input method, representing the transfer of goods or services as we perform activities over the term of the agreement.
Sales of Nonfinancial Assets
We generally account for sales of nonfinancial assets that are outside the scope of our ordinary activities under ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). Pursuant to ASC 610-20, we apply the guidance in ASC 606 to determine if a contract exists, identify the distinct nonfinancial assets, and determine when control transfers and, therefore, when to derecognize the nonfinancial asset. Additionally, we apply the measurement principles of ASC 606 to determine the amount of consideration, if any, to include in the calculation of the gain or loss for the nonfinancial asset.
Restructuring, Impairment and Related Charges
Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances, including restructuring and exit activities, indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Employee severance costs are generally recognized when payments are probable and amounts are reasonably estimable. Other exit-related costs are recognized as incurred.
12
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Risks and Uncertainties
In March 2020, the World Health Organization declared the outbreak of SARS-CoV-2, the novel strain of coronavirus that causes Coronavirus disease 19 (“COVID-19”), a global pandemic. Since then, healthcare providers and hospitals have focused significant amounts of resources on fighting the virus and its variants, and we have experienced delays in or temporary suspension of the enrollment of patients in our subsidiaries’ ongoing clinical trials. Additionally, we may experience delays in certain ongoing key program activities, including commencement of planned clinical trials, as well as non-clinical experiments and Investigational New Drug Application-enabling good laboratory practice toxicology studies. The exact timing of delays and their overall impact on our business are currently unknown and we are monitoring the ongoing COVID-19 pandemic as it continues to evolve. While certain measures have been relaxed in certain parts of the world as increasing numbers of people have received COVID-19 vaccines, others have remained in place with some areas continuing to experience renewed outbreaks and surges in infection rates. The extent to which such measures are removed or new measures are put in place will depend upon how the pandemic evolves, as well as the distribution of available vaccines, the rates at which they are administered and the emergence of new variants of the virus. We are continuing to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state, or local authorities or that we determine are in the best interests of public health and safety and that of our patient community, employees, partners, suppliers, and stockholders. We cannot predict the effects that such actions, or the impact of COVID-19 on global business operations and economic conditions, may have on our business or strategy, including the effects on our ongoing and planned clinical development activities and prospects or on our financial and operating results.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to:
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ from those estimates or assumptions.
13
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation:
|
|
June 30, 2022 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Agency discount notes |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury notes |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Investment in equity securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
LianBio Warrant |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
Liability |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Embedded derivative |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
|
|
December 31, 2021 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury notes |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Supranational debt securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Investment in equity securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
LianBio Warrant |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
Liability |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Embedded derivative |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
There were
There are uncertainties on the fair value measurement of the instrument classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.
Marketable Securities
The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.
14
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Investment in Equity Securities
As of June 30, 2022 and December 31, 2021, we have an investment in LianBio whose fair value amounted to $
The LianBio shares were subject to a lock-up agreement, which restricted our ability to sell the securities through April 2022. There are no restrictions on our ability to sell the other investment in equity securities, which had a fair value of $
We classify our investment in equity securities, which are currently equity securities of publicly held companies, within Level 1 as the fair values of these equity securities are derived from observable inputs such as quoted prices in active markets.
Total realized and unrealized gains and losses associated with investment in equity securities during the periods presented consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net realized losses recognized on investment |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Net unrealized losses recognized on investment |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total net losses included in “Other income |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LianBio Warrant
As of June 30, 2022 and December 31, 2021, our subsidiary, QED Therapeutics, Inc. (“QED”), held a warrant which entitles QED to purchase shares of LianBio (the “LianBio Warrant”, see Note 7). We classify the LianBio Warrant, which pertains to an equity security of a publicly held company, within Level 1 as the fair value of this equity security is derived from observable inputs such as quoted prices in an active market.
Notes
The fair values of our 2.25% convertible senior notes due 2029 (the “2029 Notes”) and our 2.50% convertible senior notes due 2027 (the “2027 Notes”) (collectively, the “Notes”, see Note 10), which differ from their respective carrying values, are determined by prices for the Notes observed in market trading. The market for trading of the Notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. As of June 30, 2022, the estimated fair value of our 2029 Notes and 2027 Notes, which have aggregate face values of $
Term Loan
The fair value of our outstanding term loan (see Note 10) is estimated using the net present value of the payments, discounted at an interest rate that is consistent with a market interest rate, which is a Level 2 input. The estimated fair value of our outstanding term loan as of June 30, 2022 was $
15
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
LEO Call Option Liability
As of June 30, 2022 and December 31, 2021, we no longer recognized the LEO call option that we previously carried as a liability in our condensed consolidated balance sheet. In November 2018, LEO Pharma (“LEO”) was granted an exclusive, irrevocable option to acquire our subsidiary, PellePharm, Inc. (“PellePharm”). The LEO call option was exercisable by LEO on or before the occurrence of certain events relating to PellePharm’s clinical development programs and no later than July 30, 2021. We accounted for the LEO call option as a current liability because we were obligated to sell our shares in PellePharm to LEO at a pre-determined price, if the option were to be exercised. We remeasured the LEO call option to fair value at each subsequent balance sheet date, using unobservable inputs that were classified as Level 3 inputs, until the LEO call option either was exercised, terminated or had expired. On March 30, 2021, LEO provided a notice of termination of the LEO call option effective April 15, 2021. As a result, and based on the facts and circumstances that existed as of March 31, 2021, we evaluated that the likelihood of LEO exercising said option was remote and we remeasured the LEO call option liability to
Cash equivalents consist primarily of amounts invested in money market instruments, such as money market funds and repurchase agreements collateralized with securities issued by the U.S. government or its agencies. Our marketable securities consist of high investment grade fixed income securities that are primarily invested in commercial paper, corporate bonds, and U.S. government securities.
Cash equivalents and marketable securities classified as available-for-sale consisted of the following:
|
|
June 30, 2022 |
|
|||||||||||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated Fair |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Agency discount notes |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total cash equivalents |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury notes |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Commercial paper |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total cash equivalents and |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
December 31, 2021 |
|
|||||||||||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated Fair |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total cash equivalents |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasury notes |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Commercial paper |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Supranational debt securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total cash equivalents and |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
There have been
16
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
From the date of BridgeBio’s initial investment until June 22, 2018, the Eidos Therapeutics, Inc. (“Eidos”) IPO closing date, Eidos was determined to be a VIE and BridgeBio consolidated Eidos as the primary beneficiary. Subsequent to the Eidos IPO, BridgeBio determined that Eidos was no longer a VIE due to Eidos having sufficient equity at risk to finance its activities without additional subordinated financial support. From June 22, 2018 through January 26, 2021, BridgeBio determined that it held greater than
On October 5, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Eidos, Globe Merger Sub I, Inc. (“Merger Sub”) and Globe Merger Sub II, Inc. (the two latter companies being our indirect wholly-owned subsidiaries), providing for, in a series of merger transactions (the “Merger Transactions”), the acquisition by us of all of the outstanding shares of common stock of Eidos (the “Eidos Common Stock”) other than shares of Eidos Common Stock that (i) were owned by Eidos as treasury stock, (ii) were owned by us and our subsidiaries and, in each case, not owned on behalf of third parties and (iii) were subject to an Eidos Restricted Share Award (as defined below). Under the Merger Agreement, the stockholders of Eidos had the right to receive, at their election, either
On January 19, 2021, the stockholders of each of BridgeBio and Eidos voted to approve all proposals related to the Merger Transactions and on
Through the closing of the Merger Transactions, we incurred transaction costs aggregating $
Upon closing and completion of the Merger Transactions with Eidos, Eidos became our wholly-owned subsidiary. Eidos’ common stock ceased to trade on The Nasdaq Global Select Market (“Nasdaq”) prior to the opening of business on January 26, 2021 and Eidos’ Certification and Notice of Termination of Registration under Section 12(g) of the Exchange Act was filed with the SEC on February 5, 2021.
As of June 30, 2022 and December 31, 2021, we had both redeemable convertible noncontrolling interests and noncontrolling interests in consolidated partially-owned entities, for which BridgeBio is the primary beneficiary under the VIE model. These balances are reported as separate components outside stockholders’ deficit in “Redeemable convertible noncontrolling interests” and as part of stockholders’ deficit in “Noncontrolling interests” in the condensed consolidated balance sheets.
17
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We adjust the carrying value of noncontrolling interests to reflect the book value attributable to noncontrolling shareholders of consolidated partially-owned entities when there is a change in the ownership during the respective reporting period and such adjustments are recorded to additional paid-in capital. For the three and six months ended June 30, 2022, the adjustments in the aggregate amounted to $
In October 2019, our subsidiary, BridgeBio Pharma LLC (“BBP LLC”), entered into an exclusivity agreement with LianBio, pursuant to which BBP LLC received equity in LianBio representing a
There were
On November 1, 2021, LianBio completed its IPO. Upon completion of the LianBio IPO, BBP LLC’s ownership in LianBio was reduced to approximately
Pursuant to a License Agreement entered into in October 2019 between QED and LianBio, QED also received warrants which entitled QED to purchase
In October 2021, the warrants held by QED to purchase shares of one of the subsidiaries of LianBio were converted into the LianBio Warrant, which entitles QED to purchase
The following table summarizes our recognized intangible assets as a result of the arrangements described in the following sections:
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||||||
|
Weighted-average |
|
Amount |
|
|
Weighted-average |
|
Amount |
|
||
|
|
|
(in thousands) |
|
|
|
|
(in thousands) |
|
||
Gross amount |
|
$ |
|
|
|
$ |
|
||||
Less accumulated amortization |
|
|
|
( |
) |
|
|
|
|
( |
) |
Net book value |
|
|
$ |
|
|
|
|
$ |
|
||
18
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Amortization expense recorded as part of cost of license revenue and products sold for the three and six months ended June 30, 2022 was $
Novartis License Agreement
In January 2018, QED entered into a License Agreement with Novartis International Pharmaceutical, Inc. (“Novartis”), pursuant to which QED acquired certain intellectual property rights, including patents and know-how, related to infigratinib for the treatment of patients with FGFR-driven diseases. If certain substantial milestones are met, QED could be required to pay up to $
Asset Purchase Agreement with Alexion
In June 2018, our subsidiary Origin Biosciences, Inc. (“Origin”) entered into an Asset Purchase Agreement (the “Origin-Alexion APA”) with Alexion Pharma Holding Unlimited Company (“Alexion”) to acquire intellectual property rights, including patent rights, know-how, and contracts, related to the ALXN1101 molecule. Pursuant to the Origin-Alexion APA, Origin could be required to pay up to $
In connection with the Asset Purchase Agreement entered into between Origin and Sentynl Therapeutics, Inc. (“Sentynl”) in March 2022 (the “Origin-Sentynl APA”, see Note 12), Sentynl assumed the obligation to pay sales-based milestone payments and royalties to Alexion that occur subsequent to the closing of the Origin-Sentynl APA when they become due. Origin will continue to be responsible for a regulatory-based milestone payment of up to $
Diagnostics Agreement with Foundation Medicine
In November 2018, QED and Foundation Medicine, Inc. (“FMI”) entered into a companion diagnostics agreement relating to QED’s drug discovery and development initiatives. Pursuant to the agreement, QED could be required to pay $
19
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
9. Commitments and Contingencies
Milestone Compensation Arrangements
We have performance-based milestone compensation arrangements with certain employees and consultants, whose vesting is contingent upon meeting various milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole discretion. We also have performance-based milestone compensation arrangements with certain employees and consultants as part of the 2020 Stock and Equity Award Exchange Program (the “Exchange Program”, see Note 15). The compensation arrangements under the Exchange Program are to be settled in the form of equity only. Performance-based milestone awards that are settled in the form of equity are satisfied in the form of fully-vested restricted stock awards (“RSAs”). We accrue for such contingent compensation when the related milestone is probable of achievement and is recorded in “Accrued compensation and benefits” for the current portion and in “Other long-term liabilities” for the noncurrent portion in the condensed consolidated balance sheets. There is
|
|
Potential Fixed Monetary |
|
|
Accrued |
|
||
Settlement Type |
|
(in thousands) |
|
|||||
Cash |
|
$ |
|
|
$ |
|
||
Stock (2) |
|
|
|
|
|
|
||
Cash or stock at our sole discretion |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Other Research and Development and Commercial Agreements
We may also enter into contracts in the normal course of business with contract research organizations for clinical trials, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies, supplies, and other services and products for commercial and operating purposes. These contracts generally provide for termination on notice with potential termination charges. As of June 30, 2022 we have accrued for certain fees that we have incurred related to reprioritization of our research and development projects of approximately $
Indemnification
In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, lessors, business partners, board members, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us, our negligence or willful misconduct, violations of law, or intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon us to provide indemnification under such agreements, and thus, there are no claims that we are aware of that could have a material effect on our condensed consolidated financial statements.
We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors. To date, we have not incurred any material costs and have not accrued any material liabilities in the condensed consolidated financial statements as a result of these provisions.
Contingencies
From time to time, we may become involved in legal proceedings arising in the ordinary course of business. We are not currently a party to any material legal proceedings.
20
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Notes
2029 Notes
On January 28, 2021, we issued an aggregate of $
We received net proceeds from the 2021 Note Offering of approximately $
A holder of 2029 Notes may convert all or any portion of its 2029 Notes at its option at any time prior to the close of business on the business day immediately preceding November 1, 2028 in multiples of $
On or after November 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2029 Notes at any time, regardless of the foregoing.
The conversion rate will initially be
The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Notes in connection with such a corporate event. The maximum number of shares issuable should there be an increase in the conversion rate is
21
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We may not redeem the 2029 Notes prior to February 6, 2026. We may redeem for cash all or any portion of the 2029 Notes, at our option, on a redemption date occurring on or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date, under certain circumstances. No sinking fund is provided for the Notes. If we undergo a fundamental change (as defined in the 2029 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to
In connection with the issuance of the 2029 Notes, we incurred approximately $
2027 Notes
On March 9, 2020, we issued an aggregate principal amount of $
We received net proceeds from the 2020 Note Offering of approximately $
A holder of 2027 Notes may convert all or any portion of its 2027 Notes at its option at any time prior to the close of business on the business day immediately preceding December 15, 2026 in multiples of $
22
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On or after December 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2027 Notes at any time, regardless of the foregoing.
The conversion rate will initially be
The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event. The maximum number of shares issuable should there be an increase in the conversion rate is
We may not redeem the 2027 Notes prior to the maturity date, and no sinking fund is provided for the 2027 Notes. If we undergo a fundamental change (as defined in the 2027 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to
In accounting for the issuance of the 2027 Notes in 2020 under ASC 470-20, Debt: Debt with Conversion and Other Options, we separately accounted for the liability and equity components of the 2027 Notes by allocating the proceeds between the liability component and the embedded conversion options, or equity component, due to our ability to settle the 2027 Notes in cash, BridgeBio common stock, or a combination of cash and BridgeBio common stock at our option. Effective January 1, 2021, we early adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), and, as a result, we no longer separately account for the liability and equity components of the 2027 Notes, and, instead, account for our 2027 Notes wholly as debt.
In connection with the issuance of the 2027 Notes, we incurred approximately $
Additional Information Related to the Notes
The outstanding Notes’ balances consisted of the following:
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||||||||||
|
2029 Notes |
|
|
2027 Notes |
|
|
2029 Notes |
|
|
2027 Notes |
|
||||
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Principal |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Unamortized debt discount and issuance costs |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net carrying amount |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
23
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table sets forth the total interest expense recognized and effective interest rates related to the Notes for the periods presented:
|
|
Three Months Ended June 30, 2022 |
|
|
Six Months Ended June 30, 2022 |
|
||||||||||||||||||
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||||||||
Contractual interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest and amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Effective interest rate |
|
|
% |
|
|
% |
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
|
|
Three Months Ended June 30, 2021 |
|
|
Six Months Ended June 30, 2021 |
|
||||||||||||||||||
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||||||||
Contractual interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest and amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Effective interest rate |
|
|
% |
|
|
% |
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
As of June 30, 2022, interest payable on the 2029 and 2027 Notes amounted to $
Future minimum payments under the Notes as of June 30, 2022 are as follows:
|
|
2029 Notes |
|
|
2027 Notes |
|
|
Total |
|
|||
|
|
(in thousands) |
|
|||||||||
Remainder of 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Year ending December 31: |
|
|
|
|
|
|
|
|
|
|||
2023 |
|
|
|
|
|
|
|
|
|
|||
2024 |
|
|
|
|
|
|
|
|
|
|||
2025 |
|
|
|
|
|
|
|
|
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
Total future payments |
|
|
|
|
|
|
|
|
|
|||
Less amounts representing interest |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total principal amount |
|
$ |
|
|
$ |
|
|
$ |
|
|||
24
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Capped Call and Share Repurchase Transactions with Respect to the Notes
On each of January 25, 2021 and March 4, 2020, concurrently with the pricing of the 2029 Notes and 2027 Notes, respectively, we entered into separate privately negotiated capped call transactions (the “2021 Capped Call Transactions” and the “2020 Capped Call Transactions”, respectively, together the “Capped Call Transactions”) with certain financial institutions (the “Capped Call Counterparties”). We used approximately $
These Capped Call instruments meet the conditions outlined in ASC 815-40, Derivatives and Hedging, to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. We recorded a reduction to additional paid-in capital of approximately $
Additionally, we used approximately $
Term Loans
Loan and Security Agreement
In November 2021, we entered into a Loan and Security Agreement (the “Loan Agreement,” and as amended by the First Amendment (as defined below), the “Amended Loan Agreement”), by and among (i) U.S. Bank National Association, in its capacity as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”), (ii) certain lenders (the “Lenders”), (iii) BridgeBio, as a borrower, and (iv) certain subsidiaries of BridgeBio, as guarantors (the “Guarantors”). In May 2022, we entered into the First Amendment to the Loan Agreement (the “First Amendment”), as further described below.
Pursuant to the terms and conditions of the Loan Agreement, the Lenders agreed to extend term loans to us in an aggregate principal amount of up to $
As security for our obligations under the Loan Agreement, each of BridgeBio and the Guarantors granted the Collateral Agent, for the benefit of the Lenders, a continuing security interest in substantially all of the assets of BridgeBio and the Guarantors (including all equity interests owned or hereafter acquired by BridgeBio and the Guarantors), subject to certain customary exceptions. Upon exceeding certain investment and disposition thresholds, additional subsidiaries of BridgeBio will be required to join as guarantors.
25
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Any outstanding principal on the Term Loan Advances will accrue interest at a fixed rate equal to
We may prepay the outstanding principal amount of the Term Loan Advances at any time (in whole, but not in part), plus accrued and unpaid interest and a prepayment premium ranging from
At the Lenders’ election, we are also required to make mandatory prepayments upon the occurrence of certain prepayment events related to the repurchase or redemption of pledged collateral, entry into certain royalty transactions, disposition of other assets or subsidiaries, and entry into licensing and other monetization transactions (all such events “prepayment events”), which could be
Subject to the mandatory prepayment requirements for certain prepayment events, the Loan Agreement contains customary affirmative and limited negative covenants which, among other things, limit our ability to (i) incur additional indebtedness, (ii) pay dividends or make certain distributions, (iii) dispose of our assets, grant liens, license or encumber our assets or (iv) fundamentally alter the nature of our business. BridgeBio and the Guarantors have broad ability to license our intellectual property, dispose of other assets and enter into monetization and royalty transactions, subject in each case to the requirement to make a mandatory prepayment described above. The Loan Agreement provides that BridgeBio and the Guarantors may, subject to certain limitations, (x) repurchase the BridgeBio’s equity interest and the equity interest of any of its subsidiaries, (y) enter into any joint ventures or similar investments, and (z) make other investments and acquisitions. Subject to the mandatory prepayment requirement described above, portfolio companies owned by BridgeBio that are not parties to the Loan Agreement are, subject to certain exceptions, not subject to any covenants or limitations under the Loan Agreement.
The Loan Agreement also contains customary events of default, including among other things, our failure to make any principal or interest payments when due, the occurrence of certain bankruptcy or insolvency events or the breach of the covenants under the Loan Agreement. Upon the occurrence of an event of default, the Lenders may, among other things, accelerate our obligations under the Loan Agreement.
We received net proceeds from the Tranche 1 Advance of $
In May 2022, we entered into the First Amendment, which, among other things:
In June 2022, the receipt of an upfront payment under the Navire-BMS License Agreement, which is further described in Note 11, triggered certain mandatory prepayment provisions of the Amended Loan Agreement. As a result, we paid $
Pursuant to the terms of the Loan Agreement and the Amended Loan Agreement, we exercised our option to convert accrued interest into principal via PIK amounting to $
26
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The balances of our borrowing under the Amended Loan Agreement consisted of the following:
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
|
||
|
|
(in thousands) |
|
|
|||||
Principal value of term loans |
|
$ |
|
|
$ |
|
|
||
PIK added to principal |
|
|
|
|
|
— |
|
|
|
Debt discount, issuance costs and |
|
|
( |
) |
|
|
( |
) |
|
Term loan, net |
|
$ |
|
|
$ |
|
|
||
For the three and six months ended June 30, 2022, we recognized interest expense related to the Amended Loan Agreement of $
Future minimum payments under the Amended Loan Agreement as of June 30, 2022 are as follows:
|
|
Amount |
|
|
|
|
(in thousands) |
|
|
Remainder of 2022 |
|
$ |
|
|
Year Ending December 31: |
|
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Total future payments |
|
|
|
|
Less amounts representing interest |
|
|
( |
) |
Less exit fee |
|
|
( |
) |
Total principal amount of term loan payments, including PIK exercises |
|
$ |
|
|
The amounts in the table above do not take into account our option to exercise future interest payments via PIK. Total future interest payments throughout the term of the Amended Loan Agreement could increase should we decide to exercise such option.
Hercules Loan and Security Agreement
We had a Loan and Security Agreement, as amended from time to time, with Hercules Capital, Inc. (“Hercules”) (the “Hercules Term Loan”) under which we borrowed principal amounts of $
In January 2021, we executed the Fifth Amendment to the Loan and Security Agreement primarily to allow us to issue our 2029 Notes and to enter into the related 2021 Capped Call and share repurchase transactions.
27
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In April 2021, we executed the Sixth Amendment to the Loan and Security Agreement (the “Amended Hercules Term Loan”), which, among other things:
The Amended Hercules Term Loan was prepaid in full in November 2021 using a portion of the net proceeds from the Tranche 1 Advance under the Loan Agreement mentioned above.
For the three and six months ended June 30, 2021, we recognized interest expense related to the Amended Hercules Term Loan of $
Silicon Valley Bank and Hercules Loan Agreement
Eidos entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) and Hercules Capital, Inc. (the “SVB and Hercules Loan Agreement”), under which Eidos borrowed a principal amount of $
The Tranche A Loan was prepaid in full in April 2021 for $
License Development and Commercialization Agreement with BMS
On May 12, 2022, BridgeBio and our subsidiary, Navire Pharma, Inc. (“Navire”), entered into an exclusive license development and commercialization agreement with Bristol-Myers Squibb Company (“BMS”) (the “Navire-BMS License Agreement”), pursuant to which Navire granted BMS exclusive rights to develop and commercialize Navire’s product candidate, BBP-398, in all indications worldwide, except for the People’s Republic of China, Macau, Hong Kong, Taiwan, Thailand, Singapore, and South Korea (the “Asia Region”). The development and commercialization of BBP-398 within the Asia Region is governed under the Navire-LianBio License Agreement (as discussed below). The Navire-BMS License Agreement expands an earlier agreement between Navire and BMS that was executed in July 2021 to study BBP-398 in a combination therapy trial to treat advanced solid tumors with KRAS mutations (the “2021 Navire-BMS Agreement”). The Navire-BMS License Agreement does not alter the terms of the 2021 Navire-BMS Agreement.
Under the terms of the Navire-BMS License Agreement, Navire was entitled to receive a non-refundable, upfront payment of $
28
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We determined that the Navire-BMS License Agreement falls within the scope of ASC 606 as BMS is a customer in this arrangement, and we identified the following performance obligations in the agreement:
We determined that the performance obligations outlined above are capable of being distinct and distinct with the context of the contract given such rights and activities are independent of each other. The license can be used by BMS without the research and development services. Similarly, those services provide a distinct benefit to BMS within the context of the contract, separate from the license, as the services could be provided by BMS or another third party without our assistance. Options for additional goods or services were not considered material rights, and as such not performance obligations, at the inception of the Navire-BMS License Agreement as the additional goods or services were not offered at a discount.
As of June 30, 2022, we determined the transaction price for the Navire-BMS License Agreement to be $
We allocated the transaction price of $
The SSP for the license was determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred. The SSP for the ongoing research and development services were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts.
We are recognizing revenue for each of the two performance obligations as follows:
For the three and six months ended June 30, 2022, we recognized an aggregate of $
29
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
License and Collaboration Agreement with Helsinn
On March 29, 2021, QED entered into a license and collaboration agreement with Helsinn Healthcare S.A. (“HHC”) and Helsinn Therapeutics (U.S.), Inc. (“HTU”, and collectively with HHC, “Helsinn”) (the “QED-Helsinn License and Collaboration Agreement”), pursuant to which QED granted to HHC exclusive licenses to develop, manufacture and commercialize QED’s product candidate, infigratinib, in oncology and all other indications except achondroplasia or any other skeletal dysplasias, worldwide, except for the People’s Republic of China, Hong Kong and Macau (“Greater China”), and under which QED received a co-exclusive license to co-commercialize infigratinib in the United States in the licensed indications. Under this agreement, Helsinn is likewise entitled to a right of first negotiation with respect to specific territories subject to the occurrence of a contingent event. As part of this agreement, QED was also required to transfer inventory within the transitional period, as described in the QED-Helsinn License and Collaboration Agreement. The QED-Helsinn License and Collaboration Agreement became effective on April 16, 2021. Under the terms of the QED-Helsinn License and Collaboration Agreement, QED was eligible to receive payments totaling up to approximately $
On February 28, 2022, QED and Helsinn amended the QED-Helsinn License and Collaboration Agreement (the “Amended QED-Helsinn License and Collaboration Agreement”) effective as of March 1, 2022. Under the terms of the Amended QED-Helsinn License and Collaboration Agreement, Helsinn will gain an exclusive license to commercialize infigratinib in the U.S. and will be responsible for developing, manufacturing and commercializing infigratinib in oncology indications except for achondroplasia or any other skeletal dysplasias worldwide, outside of Greater China. QED will retain all rights to develop, manufacture and commercialize infigratinib in skeletal dysplasia, including achondroplasia.
Pursuant to the Amended QED-Helsinn License and Collaboration Agreement, QED will no longer share in the commercialization of infigratinib in the licensed indications in the United States or be responsible for any global development costs for infigratinib in the licensed indications.
Additionally, under the Amended QED-Helsinn License and Collaboration Agreement, QED is eligible to receive regulatory and sales-based milestone payments of up to $
The Amended QED-Helsinn License and Collaboration Agreement also provides for a transitional period, which is expected to end in August 2022, for which QED has been contracted to assist in research and development and commercialization activities. The costs related to QED’s contracted activities incurred during the transitional period are fully reimbursed by Helsinn and will be paid to QED subsequent to the transitional period.
Both the QED-Helsinn License and Collaboration Agreement and the Amended QED-Helsinn License and Collaboration Agreement are considered to be within the scope of ASC 808 as the parties are active participants and are exposed to the significant risks and rewards of the collaborative activity, and partially within the scope of ASC 606 for the units of account where Helsinn is identified as a customer. For the units of account in the collaboration arrangement that do not represent a vendor-customer relationship, including the performance of collaborative research and development and commercialization services, we determined that ASC 606 is not appropriate to apply by analogy and applied a reasonable and rational accounting policy election that faithfully depicts the transfer of services to the collaboration partner over the estimated performance period. Reimbursement payments from Helsinn associated with the collaborative research and development and commercialization services are recognized as the related expense is incurred and classified as an offset to the underlying expense and excluded from the transaction price.
We evaluated the terms of the QED-Helsinn License and Collaboration Agreement and identified Helsinn as a customer with the following two distinct performance obligations: (1) exclusive licenses to develop, manufacture, and commercialize the underlying product, and (2) transfer of inventory within the transitional supply period. The Amended QED-Helsinn License and Collaboration Agreement did not give rise to any additional performance obligations.
30
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We consider the future potential regulatory milestones to be a variable consideration fully constrained as of June 30, 2022. We constrain variable consideration to the extent that it is probable that it will not result in a significant revenue reversal when the uncertainty associated with the variable consideration is subsequently resolved. We recognize consideration related to sales-based milestone and royalties when the subsequent sales occur pursuant to the royalty exception under ASC 606 because the license is the predominant item to which the royalties or sales-based milestone relate. We began to receive royalties for net sales of the licensed products sold in the United States upon the effective date of the Amended QED-Helsinn License and Collaboration Agreement.
We determined the initial transaction price at inception of the QED-Helsinn License and Collaboration Agreement to be $
We allocated the $
During the three and six months ended June 30, 2021, we recognized $
For the unit of account that is within the scope of ASC 808 relating to collaborative research and development services, pursuant to the QED-Helsinn License and Collaboration Agreement, we have recognized Helsinn’s share of research and development expenses of and $
31
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Following the FDA approval of TRUSELTIQ (infigratinib) in May 2021, we were the principal selling party of this product in the United States and recognized product sales in the condensed consolidated statement of operations. Commencing in January 2022, we sold the remaining transitional supply of TRUSELTIQ to Helsinn, and Helsinn became the principal selling party. Accordingly, beginning in 2022, we no longer recognized product sales associated with TRUSELTIQ, although we continued to share profits and losses on a
As of June 30, 2022, we also recognized a receivable from Helsinn of $
License Agreement with LianBio
In August 2020, Navire entered into an exclusive license agreement with LianBio (the “Navire-LianBio License Agreement”). Pursuant to the Navire-LianBio License Agreement, Navire granted to LianBio an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize SHP2 inhibitor BBP-398 (“BBP-398”), for tumors driven by RAS and receptor tyrosine kinase mutations. Under the terms of the Navire-LianBio License Agreement, LianBio will receive commercial rights in China and selected Asian markets and participate in clinical development activities for BBP-398. In consideration for the rights granted to LianBio, we received a nonrefundable $
Sale of Priority Review Voucher
In May 2022, we announced that we entered into a definitive agreement to sell our PRV for $
32
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Asset Purchase Agreement with Sentynl
On March 4, 2022, Origin and Sentynl entered into the Origin-Sentynl APA, pursuant to which Sentynl acquired global rights to NULIBRY, as well as certain specified assets of Origin, and will be responsible for the ongoing development and commercialization of NULIBRY in the United States and developing, manufacturing and commercializing fosdenopterin globally. The transaction closed on March 31, 2022 (the “Closing Date”). Under terms of the Origin-Sentynl APA, Origin received an upfront payment of $
We accounted for this transaction under ASC 610-20. Upon the Closing Date, we recognized a loss on sale of $
Origin’s sale of the assets covered in the Origin-Sentynl APA was not subject to the limitation on our ability to dispose of assets under the terms of the Loan Agreement (see Note 10).
Operating and Finance Leases
We have operating leases for our corporate headquarters, office spaces and laboratory facilities. One of our office space leases has a finance lease component representing lessor provided furniture and office equipment. Our finance lease, which is presented as part of “Property and equipment, net” in our condensed consolidated balance sheets, is not material.
Certain leases include renewal options at our election and we include the renewal options when we are reasonably certain that the renewal option will be exercised. The lease liabilities were measured using a weighted-average discount rate based on the most recent borrowing rate as of the calculation of the respective lease liability, adjusted for the remaining lease term and aggregate amount of the lease.
The components of lease cost are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Straight line operating lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance lease costs |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Variable lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Supplemental cash flow information related to leases are as follows:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
|
|
(in thousands) |
|
|||||
Cash paid for amounts included in the measurement of |
|
|
|
|
|
|
||
Operating cash flows for operating leases |
|
$ |
|
|
$ |
|
||
Operating cash flows for finance lease |
|
|
|
|
|
|
||
Operating lease right-of-use assets obtained in exchange |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
33
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Supplemental information related to the remaining lease term and discount rate are as follows:
|
|
June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
Finance lease |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
|
|
|
|
||
Operating leases |
|
|
% |
|
|
% |
||
Finance lease |
|
|
% |
|
|
% |
||
|
|
|
|
|
|
|
||
As of June 30, 2022, future minimum lease payments for our noncancelable operating leases are as follows. Future minimum lease payments under our finance lease are not material.
|
|
Amount |
|
|
|
|
|
(in thousands) |
|||
Remainder of 2022 |
|
$ |
|
|
|
Year ending December 31: |
|
|
|
|
|
2023 |
|
|
|
|
|
2024 |
|
|
|
|
|
2025 |
|
|
|
|
|
2026 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
Total future minimum lease payments |
|
|
|
|
|
Imputed interest |
|
|
( |
) |
|
Total |
|
$ |
|
|
|
|
|
|
|
|
|
Reported as of June 30, 2022 |
|
|
|
|
|
Operating lease liabilities, current portion |
|
$ |
|
|
|
Operating lease liabilities, net of current portion |
|
|
|
|
|
Total operating lease liabilities |
|
$ |
|
|
|
We recognized an impairment loss for certain of our asset groups estimated using a discounted cash flow model (income approach) for the six months ended June 30, 2021 of $
Manufacturing Agreement
In December 2019, we entered into a manufacturing agreement with a vendor to secure clinical and commercial scale manufacturing capacity for the manufacture of batches of active pharmaceutical ingredients for product candidates of certain subsidiaries of BridgeBio. Unless terminated as allowed within the manufacturing agreement, the agreement would have expired
34
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We recorded a construction-in-progress asset of $
In March 2022, we mutually agreed with the vendor to terminate the manufacturing agreement. The termination agreement was formalized effective May 2022. Under the termination agreement, we will pay the $
2021 Share Repurchase Program
In May 2021, our Board of Directors authorized and approved a stock repurchase program pursuant to which we may purchase up to $
2020 Shelf Registration
In July 2020, we filed a shelf registration statement on Form S-3 (the “2020 Shelf”) with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also simultaneously entered into an Open Market Sale AgreementSM with Jefferies LLC and SVB Leerink LLC (collectively, the “Sales Agents”), to provide for the offering, issuance and sale by us of up to an aggregate of $
Under each of the legal entity’s equity plans, we recorded stock-based compensation in the following expense categories in our condensed consolidated statements of operations for employees and non-employees:
|
|
Three Months Ended June 30, 2022 |
|
|
Six Months Ended June 30, 2022 |
|
||||||||||||||||||
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Restructuring, impairment and related charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
35
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended June 30, 2021 |
|
|
Six Months Ended June 30, 2021 |
|
||||||||||||||||||
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
|
BridgeBio |
|
|
Other |
|
|
Total |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
We have recorded and $
Equity-Based Awards of BridgeBio
As of June 30, 2022,
2020 Stock and Equity Award Exchange Program (Exchange Program)
On April 22, 2020, we completed our 2020 Stock and Equity Award Exchange Program (the “Exchange Program”) for certain subsidiaries, which was an opportunity for eligible controlled entities’ employees and consultants to exchange their subsidiary equity (including common stock, vested and unvested stock options and RSAs) for BridgeBio equity (including common stock, vested and unvested stock options and RSAs) and/or performance-based milestone awards tied to the achievement of certain development and regulatory milestones. The Exchange Program aligns our incentive compensation structure for employees and consultants across the BridgeBio group of companies to be consistent with the achievement of our overall corporate goals. In connection with the Exchange Program, we issued awards of BridgeBio equity under the then 2019 Amended and Restated Stock Option and Incentive Plan (the “2019 A&R Plan”), which was amended and restated into the 2021 A&R Plan mentioned above, to
On November 18, 2020, we completed a stock and equity award under our Exchange Program for a subsidiary. We issued awards of BridgeBio equity under the then 2019 A&R Plan to
We evaluated the exchange of the controlled entities’ outstanding common stock and equity awards for BridgeBio awards as a modification under ASC 718, Share Based Payments. Under ASC 718, a modification is a change in the terms or conditions of a stock-based compensation award. In assessing the accounting treatment, we consider the fair value, vesting conditions and classification as an equity or liability award of the controlled entity equity before the exchange, compared to the BridgeBio equity received as part of the exchange to determine whether modification accounting must be applied. When applying modification accounting, we considered the type of modification to determine the appropriate stock-based compensation cost to be recognized on April 22 and November 18, 2020, (each the “Modification Date”), and subsequent to the Modification Date.
36
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
We considered the total shares of common stock and equity awards, whether vested or unvested, held by each participant in each controlled entity as the unit of account. The controlled entity’s common stock and equity awards in each unit of account was exchanged for a combination of BridgeBio’s common stock, time-based vesting equity awards and/or performance-based milestone awards. Other than the exchange of the controlled entity equity awards for performance-based milestone awards, all other exchanged BridgeBio equity awards retained the original vesting conditions. As a result, there was no incremental stock-based compensation expense resulting from the exchange of time-based equity awards.
At the completion of the Exchange Program, we determined $
For the three and six months ended June 30, 2021, we recognized $
Performance-based Milestone Awards
Apart from the Exchange Program discussed above, we have performance-based milestone compensation arrangements with certain employees and consultants whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole discretion, upon achievement of each contingent milestone. Upon achievement of a contingent milestone and if such performance-based milestone awards are settled in the form of equity, these are satisfied in the form of fully-vested RSAs. We recognize such contingent stock-based compensation expense when the milestone is probable of achievement. For the three and six months ended June 30, 2021, we recognized $
37
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Stock Option Grants of BridgeBio
The following table summarizes BridgeBio’s stock option activity under the Plans for the six months ended June 30, 2022:
|
Options |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||||||
Outstanding as of December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
||||
Eidos Awards Exchange |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|||||
Exercised |
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Eidos Awards Exchange |
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exchange Program |
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Cancelled |
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Regular equity program |
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Eidos Awards Exchange |
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exchange Program |
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Outstanding as of June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Eidos Awards Exchange |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exercisable as of June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular equity program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
||||
Eidos Awards Exchange |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Exchange Program |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
The options granted to employees and non-employees are exercisable at the price of BridgeBio’s common stock at the respective grant dates. The options granted have a service condition and generally vest over a period of
The weighted-average grant date fair value of options granted during the six months ended June 30, 2022 was $
The aggregate intrinsic value of options outstanding and exercisable as of June 30, 2022 in the table above are calculated based on the difference between the exercise price and the current fair value of BridgeBio common stock. The total intrinsic value of options exercised for the six months ended June 30, 2022 was $
For the three and six months ended June 30, 2022, we recognized stock-based compensation expense of $
38
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Restricted Stock Units (RSUs) of BridgeBio
The following table summarizes BridgeBio’s RSU activity under the Plans for the six months ended June 30, 2022:
|
|
Unvested |
|
|
Weighted- |
|
||
Balance as of December 31, 2021 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Cancelled |
|
|
( |
) |
|
$ |
|
|
Balance as of June 30, 2022 |
|
|
|
|
$ |
|
||
For the three and six months ended June 30, 2022, we recognized stock-based compensation expense of $
Restricted Stock Awards (RSAs) of BridgeBio
The following table summarizes our RSA activity under the Plans for the six months ended June 30, 2022:
|
|
Unvested |
|
|
Weighted- |
|
||
Balance as of December 31, 2021 |
|
|
|
|
$ |
|
||
Vested — Regular equity program |
|
|
( |
) |
|
$ |
|
|
Cancelled — Regular equity program |
|
|
( |
) |
|
$ |
|
|
Balance as of June 30, 2022 |
|
|
|
|
$ |
|
||
For the three and six months ended June 30, 2022, we recognized stock-based compensation expense related to RSAs under the Plans as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
|
June 30, 2022 |
|
|||||
|
|
(in thousands) |
|
|||||
Exchange Program |
|
$ |
— |
|
|
$ |
— |
|
Other RSAs |
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
||
As of June 30, 2022, there was $
2019 Employee Stock Purchase Plan (ESPP) of BridgeBio
For the three and six months ended June 30, 2022, stock-based compensation expense related to our ESPP was $
39
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Valuation Assumptions
We used the Black-Scholes model to estimate the fair value of stock purchase rights under the ESPP. For the six months ended June 30, 2022, we used the following weighted-average assumptions in the Black-Scholes calculations:
Expected term (in years) |
|
|
|
Expected volatility |
|
||
Risk-free interest rate |
|
||
Dividend yield |
|
— |
|
Weighted-average fair value of stock-based awards granted |
$ |
|
|
Equity Awards of Eidos
Prior to the Merger Transactions, Eidos issued its own equity-based awards under the Eidos 2016 Equity Incentive Plan and the Eidos 2018 Stock Option and Incentive Plan (collectively, the “Eidos Plans”). Upon closing of the Merger Transactions, we issued
Stock-based compensation under the Eidos Plans from January 1, 2021 until the closing of the Merger Transactions was not material.
In January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce. We estimate to incur total charges in the range of approximately $
Restructuring, impairment and related charges included in our condensed statement of operations for the three and six months ended June 30, 2022 consisted of the following:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
|
June 30, 2022 |
|
|||||
|
|
(in thousands) |
|
|||||
Long-lived assets impairments and write-offs |
|
$ |
— |
|
|
$ |
|
|
Severance and employee-related costs |
|
|
|
|
|
|
||
Exit and other related costs |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
40
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
||
|
|
June 30, 2022 |
|
|
|||||
|
|
(in thousands) |
|
|
|||||
Beginning balance |
|
$ |
|
|
$ |
— |
|
|
|
Reclassification of final payment obligation related to a manufacturing |
|
|
— |
|
|
|
|
|
|
Restructuring, impairment and related charges |
|
|
|
|
|
|
|
||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
Noncash activities |
|
|
— |
|
|
|
( |
) |
|
Ending balance |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
||
Reported as of June 30, 2022 |
|
|
|
|
(in thousands) |
|
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
|
||
Accrued research and development liabilities |
|
|
|
|
|
|
|
||
Other accrued liabilities |
|
|
|
|
|
|
|
||
|
|
|
|
|
$ |
|
|
||
BridgeBio is subject to U.S. federal, state and foreign income taxes as a corporation. BridgeBio’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter. There was
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, we have recorded a full valuation allowance against our otherwise recognizable net deferred tax assets.
As a result of the issuance of our 2027 Notes in 2020, it was determined that our existing deferred tax assets do not fully offset the deferred tax liabilities when reviewing the reversals of temporary differences. This resulted in a deferred tax liability of $
41
BRIDGEBIO PHARMA, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following common stock equivalents were excluded from the computation of diluted net loss per share, because including them would have been antidilutive:
|
As of June 30, |
|
|
|||||
|
2022 |
|
|
2021 |
|
|
||
Unvested RSAs |
|
|
|
|
|
|
||
Unvested RSUs |
|
|
|
|
|
|
||
Unvested performance-based RSUs |
|
|
|
|
|
|
||
Common stock options issued and outstanding |
|
|
|
|
|
|
||
Estimated shares issuable under performance-based milestone |
|
|
|
|
|
|
||
Estimated shares issuable under the ESPP |
|
|
|
|
|
|
||
Assumed conversion of 2027 Notes |
|
|
|
|
|
|
||
Assumed conversion of 2029 Notes |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Our 2029 Notes and 2027 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election.
As discussed in Notes 9 and 15, we have performance-based milestone compensation arrangements, whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole election, upon achievement of each contingent milestone. The common stock equivalents of such arrangements were estimated as if the contingent milestones were achieved as of the reporting date and the arrangements were all settled in equity.
42
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto for the year ended December 31, 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2022.
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated by the information, if any, in Part II, Item 1A, “Risk Factors” included in this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
Overview
BridgeBio Pharma, Inc. (we or the Company) is a commercial-stage biopharmaceutical company founded to discover, create, test and deliver transformative medicines to treat patients who suffer from genetic diseases and cancers with clear genetic drivers. BridgeBio’s pipeline of development programs ranges from early science to advanced clinical trials. BridgeBio was founded in 2015 and its team of experienced drug discoverers, developers and innovators are committed to applying advances in genetic medicine to help patients as quickly as possible. Since inception, BridgeBio has created 15 Investigational New Drug applications, or INDs, and had two products approved by the U.S. Food and Drug Administration. We work across over 20 disease states and have over 15 ongoing clinical trials at various stages of development. Several of our programs target indications that we believe present the potential for our product candidates, if approved, to target portions of market opportunities of at least $1.0 billion in annual sales.
We focus on genetic diseases because they exist at the intersection of high unmet patient need and tractable biology. Our approach is to translate research pioneered at academic laboratories and leading medical institutions into products that we hope will ultimately reach patients. We are able to realize this opportunity through a confluence of scientific advances: (i) identification of the genetic underpinnings of disease as more cost-efficient genome and exome sequencing becomes available; (ii) progress in molecular biology; and (iii) the development and maturation of longitudinal data and retrospective studies that enable the linkage of genes to diseases. We believe that this early-stage innovation represents one of the greatest practical sources for new drug creation.
Since our inception in 2015, we have focused substantially all of our efforts and financial resources on acquiring and developing product and technology rights, building our intellectual property portfolio and conducting research and development activities for our product candidates within our wholly-owned subsidiaries and controlled entities, including partially-owned subsidiaries and subsidiaries we consolidate based on our deemed majority control of such entities as determined using either the variable interest entity, or VIE model, or the voting interest entity, or VOE model. To support these activities, we and our wholly-owned subsidiary, BridgeBio Services, Inc., (i) identify and secure new programs, (ii) set up new wholly-owned subsidiaries or controlled entities, (iii) recruit key management team members, (iv) raise and allocate capital across the portfolio and (v) provide certain shared services, including accounting, legal, information technology and human resources, as well as workspaces. We have not generated any significant revenue from product sales. To date, we have funded our operations with proceeds from the sale of our equity securities, issuance of convertible notes, debt borrowings and, to a lesser extent, revenue from licensing arrangements and product sales. We do not anticipate to generate product sales for the rest of the fiscal year ending December 31, 2022 as the selling activities for our approved products have been transferred or transitioned to our respective partners.
Since our inception, we have incurred significant operating losses. For the six months ended June 30, 2022 and 2021, we incurred net losses of $203.9 million and $273.2 million, respectively. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates at our wholly-owned subsidiaries and controlled entities. We expect to continue to incur operating and net losses for at least the next several years.
43
Due to the inherently unpredictable nature of preclinical and clinical development, and given our novel therapeutic approaches and the stage of development of our product candidates, we cannot determine and are unable to estimate with certainty the timelines we will require and the costs we will incur for the development of our product candidates. Clinical and preclinical development timelines and costs, and the potential of development success, can differ materially from expectations due to a variety of factors. For example, in light of the continuing impact of COVID-19 and the focus of healthcare providers and hospitals on the virus and its variants, we have experienced delays in or temporary suspensions of the enrollment of patients in our subsidiaries’ ongoing clinical trials. We additionally may experience delays in certain ongoing activities, including commencement of planned clinical trials, non-clinical experiments and IND-enabling good laboratory practice toxicology studies. The duration of delays and their overall impact on our business are currently unknown, and we are continuing to monitor the situation. The continued spread of COVID-19 has resulted in significant governmental measures worldwide. These measures may result in business, supply, and drug product manufacturing disruptions and in reduced operations, any of which could materially affect our business, financial condition and results of operations. Accordingly, we may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that we determine are in the best interests of public health and safety and that of our patient community, employees, partners, suppliers and stockholders. We cannot predict the effects that such actions, the duration of the COVID-19 pandemic, or its continuing impact may have on our business or strategy, including the effects on our ongoing and planned clinical development activities and prospects, or on our financial and operating results.
In January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce. We estimate to incur total charges in the range of approximately $31.0 million to $33.0 million for the fiscal year 2022, consisting primarily of impairments and write-offs of long-lived assets, severance and employee-related costs, and exit and other related costs. Our estimate of the range of costs is subject to certain assumptions and actual results may differ from those estimates or assumptions. We may also incur additional costs that are not currently foreseeable as we continue to evaluate our restructuring alternatives to drive operational changes in business processes, efficiencies and cost savings.
Results of Operations
The following table summarizes the results of our operations for the periods indicated:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
||||
|
|
(in thousands) |
|
|
|||||||||||||
License and services revenue |
|
$ |
73,746 |
|
|
$ |
53,037 |
|
|
$ |
73,981 |
|
|
$ |
53,499 |
|
|
Product sales |
|
|
— |
|
|
|
987 |
|
|
|
1,459 |
|
|
|
987 |
|
|
Cost of license revenue and products sold |
|
|
700 |
|
|
|
109 |
|
|
|
2,048 |
|
|
|
109 |
|
|
Research and development |
|
|
108,400 |
|
|
|
101,960 |
|
|
|
216,049 |
|
|
|
224,519 |
|
|
Selling, general and administrative |
|
|
36,426 |
|
|
|
45,970 |
|
|
|
80,139 |
|
|
|
91,377 |
|
|
Restructuring, impairment and related charges |
|
|
8,396 |
|
|
|
— |
|
|
|
31,058 |
|
|
|
— |
|
|
Loss from operations |
|
|
(80,176 |
) |
|
|
(94,015 |
) |
|
|
(253,854 |
) |
|
|
(261,519 |
) |
|
Gain from sale of priority review voucher, net |
|
|
107,946 |
|
|
|
— |
|
|
|
107,946 |
|
|
|
— |
|
|
Net loss |
|
|
(2,559 |
) |
|
|
(102,074 |
) |
|
|
(203,889 |
) |
|
|
(273,156 |
) |
|
Net loss attributable to common |
|
|
(9,856 |
) |
|
|
(96,348 |
) |
|
|
(206,253 |
) |
|
|
(259,427 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
||||
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|||||||
Cash, cash equivalents and |
|
|
|
|
|
|
|
$ |
688,564 |
|
|
$ |
787,515 |
|
|
||
Investment in equity securities |
|
|
|
|
|
|
|
|
27,141 |
|
|
|
49,148 |
|
|
||
44
Cash, Cash Equivalents and Marketable Securities
As of June 30, 2022, we had cash, cash equivalents and marketable securities of $688.6 million and investment in equity securities of $27.1 million, compared to cash, cash equivalents and marketable securities of $787.5 million and investment in equity securities of $49.1 million as of December 31, 2021. The decrease in cash, cash equivalents and marketable securities primarily pertain to net cash used in our operating activities of $191.1 million, which includes payments of $25.4 million in debt-related interests and the cash inflow from our receipt of $90.0 million in upfront payment from the Navire-BMS License Agreement. The receipt of the upfront payment from BMS triggered certain mandatory prepayment provisions of our Amended Loan Agreement, which is further described in the succeeding sections, and, as a result, we paid $20.5 million to our lenders during the three-months ended June 30, 2022. The decrease in cash, cash equivalents and marketable securities was also partially offset by cash proceeds of:
We consider our investment in equity securities as a source of our liquidity as we may liquidate these shares to fund current operations, should the need arise. The decrease in investment in equity securities is primarily due to decline in market value.
Revenue
The following table summarizes our revenue for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
License and services revenue |
|
$ |
73,746 |
|
|
$ |
53,037 |
|
|
$ |
20,709 |
|
|
$ |
73,981 |
|
|
$ |
53,499 |
|
|
$ |
20,482 |
|
Product sales |
|
|
— |
|
|
|
987 |
|
|
|
(987 |
) |
|
|
1,459 |
|
|
|
987 |
|
|
|
472 |
|
Total revenue |
|
$ |
73,746 |
|
|
$ |
54,024 |
|
|
$ |
19,722 |
|
|
$ |
75,440 |
|
|
$ |
54,486 |
|
|
$ |
20,954 |
|
License and services revenue for the three and six months ended June 30, 2022 consists mainly of $73.4 million of license and services revenue from recognition of upfront license and services revenue under the Navire-BMS License Agreement. License and services revenue for the three and six months ended June 30, 2021 is comprised primarily of the recognition of upfront and launch milestone payments of $44.4 million in connection with the QED-Helsinn License and Collaboration Agreement. We also recognized $8.5 million in license revenue for the same periods in 2021 in connection with the achievement of a regulatory milestone under the Navire-LianBio License Agreement.
The level of license and services revenue that we recognize depends in part upon the estimated recognition period of the upfront payments allocated to continuing performance obligations, the achievement of milestones and other contingent events, and entering into new collaboration agreements, if any. We do not anticipate to generate product sales for the rest of the fiscal year ending December 31, 2022 as the selling activities for our approved products have been transferred or transitioned to our respective partners (see Notes 11 and 12 to our condensed consolidated financial statements).
Operating Costs and Expenses
Research and Development Expenses
The following table summarizes our research and development expenses for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
||||||
|
|
(in thousands) |
|
|
|||||||||||||||||||||
Research and development |
|
$ |
108,400 |
|
|
$ |
101,960 |
|
|
$ |
6,440 |
|
|
$ |
216,049 |
|
|
$ |
224,519 |
|
|
$ |
(8,470 |
) |
|
45
Research and development expense increased by $6.4 million for the three months ended June 30, 2022 compared to the same period in 2021, primarily due to the issuance of shares by one of our subsidiaries under an out-licensing agreement for $4.6 million and the reduced share in research and development costs of Helsinn under our arrangement discussed below. Research and development expenses decreased by $8.5 million for the six months ended June 30, 2022 primarily due to a decrease in stock-based compensation and our external costs as a result of reprioritization of our development programs in line with our restructuring initiative. Stock-based compensation recorded in research and development expense for the three and six months ended June 30, 2022 was $14.4 million and $22.9 million, respectively, as compared to $19.3 million and $41.7 million for the same periods in the prior year, which was mainly driven by higher stock-based compensation related to performance-based milestone compensation arrangements for regulatory and development milestones achieved and determined to be probable of achievement as of June 30, 2021.
Pursuant to the QED-Helsinn License and Collaboration Agreement, Helsinn shared 60% of our research and development costs for infigratinib for certain indications as stipulated under the agreement. Upon the effective date of the Amended QED-Helsinn License and Collaboration Agreement, Helsinn is solely responsible for development costs for infigratinib for certain indications and our incurred costs during the transitional period are fully reimbursable.
Refer to Note 11 to our condensed consolidated financial statements for more information on the QED-Helsinn License and Collaboration Agreement and the Amended QED-Helsinn License and Collaboration Agreement.
Research and development costs consist primarily of external costs, such as fees paid to consultants, contractors, contract manufacturing organizations, or CMOs, and contract research organizations, or CROs, in connection with our preclinical and clinical development activities and are tracked on a program-by-program basis. License fees and other costs incurred after a product candidate has been designated and that are directly related to the product candidate are included in the specific program expense. License fees and other costs incurred prior to designating a product candidate are included in early-stage research programs.
The following table summarizes our research and development expenses by program incurred for the following periods:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
||||
|
|
(in thousands) |
|
|
|||||||||||||
Acoramidis (Previously known |
|
$ |
20,950 |
|
|
$ |
13,955 |
|
|
$ |
40,761 |
|
|
$ |
35,171 |
|
|
Infigratinib (Previously known |
|
|
8,503 |
|
|
|
6,151 |
|
|
|
21,952 |
|
|
|
31,695 |
|
|
Encaleret (Previously known as |
|
|
6,263 |
|
|
|
1,763 |
|
|
|
13,457 |
|
|
|
4,413 |
|
|
BBP-631 (Adrenas Therapeutics, Inc.) |
|
|
9,526 |
|
|
|
5,443 |
|
|
|
18,567 |
|
|
|
27,618 |
|
|
BBP-454 (TheRas, Inc.) |
|
|
8,161 |
|
|
|
2,852 |
|
|
|
14,093 |
|
|
|
6,291 |
|
|
Other development programs |
|
|
37,026 |
|
|
|
34,493 |
|
|
|
68,271 |
|
|
|
70,734 |
|
|
Other research programs |
|
|
17,971 |
|
|
|
37,303 |
|
|
|
38,948 |
|
|
|
48,597 |
|
|
Total |
|
$ |
108,400 |
|
|
$ |
101,960 |
|
|
$ |
216,049 |
|
|
$ |
224,519 |
|
|
46
Selling, General and Administrative Expenses
The following table summarizes our selling, general and administrative expenses for the following periods:
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
||||||
|
|
(in thousands) |
|
|
|||||||||||||||||||||
Selling, general and administrative |
|
$ |
36,426 |
|
|
$ |
45,970 |
|
|
$ |
(9,544 |
) |
|
$ |
80,139 |
|
|
$ |
91,377 |
|
|
$ |
(11,238 |
) |
|
Selling, general and administrative expenses decreased by $9.5 million and $11.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, mainly due to our restructuring initiative.
Under the QED-Helsinn License and Collaboration Agreement, the parties co-commercialized TRUSELTIQ in the United States and shared profits and losses on a 50:50 basis. Upon the effective date of the Amended QED-Helsinn License and Collaboration Agreement, Helsinn is solely responsible for the commercialization of TRUSELTIQ and our incurred costs during the transitional period are fully reimbursable.
Restructuring, Impairment and Related Charges
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Restructuring, impairment and related charges |
|
$ |
8,396 |
|
|
$ |
— |
|
|
$ |
8,396 |
|
|
$ |
31,058 |
|
|
$ |
— |
|
|
$ |
31,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
As discussed in Note 16 to our condensed consolidated financial statements, in January 2022, we committed to a restructuring initiative designed to drive operational changes in our business processes, efficiencies and cost savings to advance our corporate strategy and development programs. The restructuring initiative included, among other components, consolidation and rationalization of our facilities, reprioritization of development programs and the reduction in our workforce. We estimate to incur total charges in the range of approximately $31.0 million to $33.0 million for the fiscal year 2022, consisting primarily of impairments and write-offs of long-lived assets, severance and employee-related costs, and exit and other related costs. Our estimate of the range of costs is subject to certain assumptions and actual results may differ from those estimates or assumptions. We may also incur additional costs that are not currently foreseeable as we continue to evaluate our restructuring alternatives to drive operational changes in business processes, efficiencies and cost savings.
Other Income (Expense), Net
Interest Income
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
||||||
|
|
(in thousands) |
|
|
|||||||||||||||||||||
Interest income |
|
$ |
766 |
|
|
$ |
323 |
|
|
$ |
443 |
|
|
$ |
1,033 |
|
|
$ |
717 |
|
|
$ |
316 |
|
|
Interest income consists of interest income earned on our cash equivalents and marketable securities. The change in interest income has been nominal during the periods presented. Generally, increases and decreases in interest income are attributable to changes in the interest-bearing average balances of our cash equivalents and marketable securities and fluctuations in interest rates.
47
Interest Expense
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Interest expense |
|
$ |
(20,279 |
) |
|
$ |
(10,839 |
) |
|
$ |
(9,440 |
) |
|
$ |
(40,623 |
) |
|
$ |
(20,577 |
) |
|
$ |
(20,046 |
) |
Interest expense for the three and six months ended June 30, 2022 consists primarily of interest expense incurred under our 2029 Notes issued in January 2021, our 2027 Notes issued in March 2020 and our term loan with various lenders under the Loan Agreement dated November 17, 2021. Interest expense for the three and six months ended June 30, 2021 consists primarily of interest expense incurred under our 2029 Notes, our 2027 Notes, our now fully-paid term loan with Hercules Capital, Inc., or Hercules, pursuant to our Loan and Security Agreement, dated June 19, 2018, as amended from time to time, and our now fully-paid term loan with Silicon Valley Bank, or SVB, and Hercules pursuant to the Loan and Security Agreement, dated November 13, 2019, or the SVB and Hercules Loan Agreement. The increase of $9.4 million and $20.0 million for the three and six months ended June 30, 2022 compared to the same periods in 2021 was primarily attributed to an increase in principal amounts of our debt.
Gain From Sale of Priority Review Voucher, net
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Gain from sale of priority review |
|
$ |
107,946 |
|
|
$ |
— |
|
|
$ |
107,946 |
|
|
$ |
107,946 |
|
|
$ |
— |
|
|
$ |
107,946 |
|
In May 2022, we announced that we entered into a definitive agreement to sell our PRV for $110.0 million. We received the PRV in February 2021 under a U.S. Food and Drug Administration program intended to encourage the development of treatments for rare pediatric diseases. We were awarded the PRV when our subsidiary Origin received approval of NULIBRY. The PRV sale was subject to customary closing conditions and was completed in June 2022 following the expiration of applicable U.S. antitrust clearance requirements. We received the proceeds of $110.0 million in June 2022 and recognized a net gain of $107.9 million, net of transaction costs for the three and six months ended June 30, 2022.
Other Income (Expense), net
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Other income (expense), net |
|
$ |
(10,816 |
) |
|
$ |
2,457 |
|
|
$ |
(13,273 |
) |
|
$ |
(18,391 |
) |
|
$ |
8,223 |
|
|
$ |
(26,614 |
) |
Other income (expense), net for the three months ended June 30, 2022 consists mainly of net realized and unrealized losses from changes in fair value of our equity security investment of $10.4 million. Other income (expense), net for the six months ended June 30, 2022 consists mainly of net realized and unrealized losses from changes in fair value of our equity security investment of $23.2 million and loss from disposal of Origin’s assets of $6.3 million, partially offset by a gain from the recognition of a receivable of $12.5 million from Helsinn under the Amended QED-Helsinn License and Collaboration Agreement.
Other income (expense), net for the six months ended June 30, 2021 primarily includes changes in fair value of the LEO Call Option liability. In March 2021, LEO elected to terminate the LEO Call Option, which resulted in derecognition of the LEO Call Option liability of $5.6 million.
Liquidity and Capital Resources
We have historically financed our operations primarily through the sale of our equity securities, issuance of convertible notes, debt borrowings, revenue from certain licensing arrangements and sale of certain assets. As of June 30, 2022, we had cash, cash equivalents and marketable securities of $688.6 million and investment in equity securities of $27.1 million. We consider our investment in equity securities as a source of our liquidity as we may liquidate these securities to fund current operations, should the need arise. The funds held by our wholly-owned subsidiaries and controlled entities are available for specific entity usage. As of June 30, 2022, our outstanding debt was $1.7 billion, net of debt discounts and issuance costs and accretion.
48
Since inception, we have incurred significant operating losses. For the years ended December 31, 2021, 2020 and 2019, we incurred net losses of $586.5 million, $505.5 million and $288.6 million, respectively. For the six months ended June 30, 2022, we incurred net losses of $203.9 million. We had an accumulated deficit as of June 30, 2022 of $1.6 billion. While we have undertaken a restructuring initiative to drive operational change in business processes, efficiencies and cost savings, we expect to continue to incur operating and net losses over the next several years as we continue to fund our drug development and discovery efforts, as well as costs related to commercial launch readiness for our late-stage programs. In particular, to the extent we advance our programs into and through later-stage clinical trials without a partner, we will incur substantial expenses. Our current business plan is also subject to significant uncertainties and risks as a result of, among other factors, our ability to generate product sales sufficient to achieve profitability, which will depend heavily on the successful development and eventual commercialization of product candidates at our consolidated entities as well as our ability to partner in the development of certain clinical programs, as well as the levels of our operating expenses.
Our short-term and long-term liquidity requirements include contractual payments related to our 2029 Notes, 2027 Notes and term loan (see Note 10 to our condensed consolidated financial statements), obligations under our real estate leases (see Note 13 to our condensed consolidated financial statements) and the remaining liabilities under our restructuring initiative (see Note 16 to our condensed consolidated financial statements).
We also have performance-based milestone compensation arrangements with certain employees and consultants, whose vesting is contingent upon meeting various regulatory and development milestones, with fixed monetary amounts known at inception that can be settled in the form of cash or equity at our sole election, upon achievement of each contingent milestone (see Note 9 to our condensed consolidated financial statements).
Additionally, we have certain contingent payment obligations under various license and collaboration agreements in which we are required to make milestone payments upon successful completion and achievement of certain intellectual property, clinical, regulatory and sales milestones. We also enter into agreements in the normal course of business with CROs and other vendors for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are generally cancelable upon written notice with potential termination charges.
We expect our cash and cash equivalents, marketable securities and investment in equity securities will fund our operations for at least the next 12 months from the date of filing of this Quarterly Report on Form 10-Q based on current operating plans and financial forecasts. If our current operating plans or financial forecasts change, including the effects of the ongoing COVID-19 pandemic on our research and development activities, we may require additional funding sooner in the form of public or private equity offerings, debt financings or additional collaborations and licensing arrangements. However, future financing may not be available in amounts or on terms acceptable to us, if at all.
In addition, we are closely monitoring ongoing developments in connection with the continuing COVID-19 pandemic and inflationary pressures, which may negatively impact our financial and operating results. We will continue to assess our operating costs and expenses and our cash and cash equivalents and, if circumstances warrant, we will make appropriate adjustments to our operating plan.
Sources of Liquidity
Initial public offerings and at-the-market share issuances
In December 2019 and February 2020, Eidos, then our controlled subsidiary and a public company, received net proceeds of $23.9 million and $24.1 million, respectively, from its at-the-market issuance of shares. Prior to the effectiveness of the Merger Transactions with Eidos, all cash and cash equivalents held by Eidos were restricted and could be applied solely to fund the operations of Eidos.
On July 1, 2019, we completed the IPO of our common stock. As part of the IPO, we issued and sold 23,575,000 shares of our common stock, which included 3,075,000 shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares, at a public offering price of $17.00 per share. We received net proceeds of approximately $366.2 million from the IPO, after deducting underwriters’ discounts and commissions of $28.1 million and offering costs of $6.5 million.
On July 7, 2020, we filed a shelf registration statement on Form S-3ASR, or the 2020 Shelf, with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also simultaneously entered into an Open Market Sale Agreement, or the 2020 Sales Agreement, with Jefferies LLC and SVB Leerink LLC, or collectively, the Sales Agents, to provide for the offering, issuance and sale by us of up to an aggregate of $350.0 million of our common stock from time to time in “at-the-market” offerings under the 2020 Shelf and subject to the limitations thereof. We will pay to the applicable Sales Agents cash commissions of up to 3.0% of the gross proceeds of sales of common stock under the 2020 Sales Agreement. We have not issued any shares or received any proceeds from this offering through June 30, 2022.
49
Debt
As of June 30, 2022, we have borrowings under the 2029 Notes, the 2027 Notes and the Amended Loan Agreement, which are discussed below.
2029 Notes
In January 2021, we issued an aggregate principal amount of $747.5 million of our 2029 Notes, pursuant to an Indenture dated January 28, 2021, or the 2029 Notes Indenture, between us and U.S. Bank National Association, as trustee, or the 2029 Notes Trustee, in a private offering to qualified institutional buyers, or the 2021 Note Offering, pursuant to Rule 144A under the Securities Act.
The 2029 Notes accrue interest payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021, at a rate of 2.25% per year. The 2029 Notes will mature on February 1, 2029, unless earlier converted, redeemed or repurchased. The 2029 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
We received net proceeds from the 2021 Note Offering of approximately $731.4 million, after deducting the 2029 Notes Initial Purchasers’ discount. There were no direct offering expenses borne by us for the 2029 Notes. We used approximately $61.3 million of the net proceeds from the 2021 Note Offering to pay for the cost of the 2021 Capped Call Transactions and approximately $50.0 million to pay for the repurchase of shares of our common stock.
A holder of 2029 Notes may convert all or any portion of its 2029 Notes at its option at any time prior to the close of business on the business day immediately preceding November 1, 2028 only under certain circumstances.
On or after November 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2029 Notes at any time.
We may not redeem the 2029 Notes prior to February 6, 2026. We may redeem for cash all or any portion of the 2029 Notes, at our option, on a redemption date occurring on or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date, under certain circumstances. No sinking fund is provided for the 2029 Notes. If we undergo a fundamental change (as defined in the 2029 Notes Indenture), holders may require us to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2029 Notes Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the 2029 Notes Trustee or the holders of not less than 25% in aggregate principal amount of the 2029 Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable. The 2029 Notes are our general unsecured obligations and rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the 2029 Notes; equal in right of payment with all of our liabilities that are not so subordinated, including our 2027 Notes; effectively junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.
Refer to Note 10 in our condensed consolidated financial statements for other details, including our future minimum payments under the 2029 Notes.
2027 Notes
In March 2020, we issued an aggregate principal amount of $550.0 million of our 2027 Notes, pursuant to an Indenture dated March 9, 2020, or the Indenture, between BridgeBio and U.S. Bank National Association, as trustee, or the Trustee, in a private offering to qualified institutional buyers, or the 2020 Note Offering, pursuant to Rule 144A under the Securities Act.
The 2027 Notes are senior, unsecured obligations of BridgeBio and accrue interest payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2020, at a rate of 2.50% per year. The 2027 Notes will mature on March 15, 2027, unless earlier converted or repurchased. Upon conversion, the 2027 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
We received net proceeds from the 2020 Note Offering of approximately $537.0 million, after deducting the Initial Purchasers’ discount and offering expenses. We used approximately $49.3 million of the net proceeds from the 2020 Note Offering to pay for the cost of the Capped Call Transactions, and approximately $75.0 million to pay for the repurchases of shares of our common stock in connection with the 2020 Note Offering.
A holder of 2027 Notes may convert all or any portion of its 2027 Notes at its option at any time prior to the close of business on the business day immediately preceding December 15, 2026 only under certain circumstances.
On or after December 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2027 Notes at any time.
50
We may not redeem the 2027 Notes prior to the maturity date, and no sinking fund is provided for the 2027 Notes. If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their 2027 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2027 Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable. The 2027 Notes are our general unsecured obligations and rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the 2027 Notes; equal in right of payment with all of our liabilities that are not so subordinated; effectively junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.
Refer to Note 10 in our condensed consolidated financial statements for other details, including our future minimum payments under the 2027 Notes.
Loan and Security Agreement
In November 2021, we entered into the Loan Agreement, by and among (i) U.S. Bank National Association, in its capacity as administrative agent (in such capacity, the Administrative Agent), and collateral agent (in such capacity, the Collateral Agent), (ii) certain lenders, or the Lenders, (iii) BridgeBio, as a borrower, and (iv) certain subsidiaries of BridgeBio, as guarantors, or the Guarantors. In May 2022, we entered into the First Amendment to the Loan Agreement, or the First Amendment, as further described below.
Pursuant to the terms and conditions of the Loan Agreement as amended by the First Amendment, or the Amended Loan Agreement, the Lenders agreed to extend term loans to us in an aggregate principal amount of up to $750.0 million, comprised of (i) a tranche 1 advance of $450.0 million, or the Tranche 1 Advance, and (ii) a tranche 2 advance of $300.0 million, or the Tranche 2 Advance, or collectively, the Term Loan Advances. The Tranche 1 Advance under the Loan Agreement was funded on November 17, 2021.The Tranche 2 Advance was reduced under the Amended Loan Agreement to $100.0 million. The Tranche 2 Advance, which will remain available for funding until December 31, 2022, is available at our election subject to certain conditions as specified in the Amended Loan Agreement.
As security for our obligations under the Loan Agreement, each of BridgeBio and the Guarantors granted the Collateral Agent, for the benefit of the Lenders, a continuing security interest in substantially all of the assets of BridgeBio and the Guarantors, (including all equity interests owned or hereafter acquired by BridgeBio and the Guarantors), subject to certain customary exceptions. Upon exceeding certain investment and disposition thresholds, additional subsidiaries of BridgeBio will be required to join as guarantors.
Any outstanding principal on the Term Loan Advances will accrue interest at a fixed rate equal to 9.0% per annum. 3.00% of such interest can be paid in kind, or PIK, through a certain period. Interest payments are payable quarterly following the funding of a Term Loan Advance. We will be required to make principal payments on the outstanding balance of the Term Loan Advances commencing on January 2, 2025, or the Term Loan Amortization Date, in nine quarterly installments, plus interest. If we have achieved certain milestone events relating to data from the clinical trial of acoramidis, or the Acoramidis Milestone, on or prior to January 1, 2025, then the Term Loan Amortization Date will be automatically extended to January 2, 2026. Any amounts outstanding under the Term Loan Advances are due and payable on November 17, 2026, or the Maturity Date.
We may prepay the outstanding principal amount of the Term Loan Advances at any time (in whole, but not in part), plus accrued and unpaid interest and a prepayment premium ranging from 1% to 3% of the principal amount outstanding depending on the timing of payment (plus a customary make-whole amount if prepaid on or prior to November 17, 2022).
At the Lenders’ election, we are also required to make mandatory prepayments upon the occurrence of certain prepayment events related to the repurchase or redemption of pledged collateral, entry into certain royalty transactions, disposition of other assets or subsidiaries, entry into licensing and other monetization transactions (all such events “prepayment events”), which could be 50% or 75% of net cash proceeds from such transaction depending on achievement of the Acoramidis Milestone.
Subject to the mandatory prepayment requirements for certain prepayment events, the Loan Agreement contains customary affirmative and limited negative covenants which, among other things, limit our ability to (i) incur additional indebtedness, (ii) pay dividends or make certain distributions, (iii) dispose of our assets, grant liens, license or encumber our assets or (iv) fundamentally alter the nature of our business. BridgeBio and the Guarantors have broad ability to license our intellectual property, dispose of other assets and enter into monetization and royalty transactions, subject in each case to the requirement to make a mandatory prepayment described above. The Loan Agreement provides that BridgeBio and Guarantors may, subject to certain limitations, (x) repurchase BridgeBio’s equity interest and the equity interest of any of its subsidiaries, (y) enter into any joint ventures or similar investments, and (z) make other investments and acquisitions. Subject to the mandatory prepayment requirement described above, portfolio companies owned by BridgeBio that are not parties to the Loan Agreement are, subject to certain exceptions, not subject to any covenants or limitations under the Loan Agreement.
51
The Loan Agreement also contains customary events of default, including, among other things, our failure to make any principal or interest payments when due, the occurrence of certain bankruptcy or insolvency events or the breach of the covenants under the Loan Agreement. Upon the occurrence of an event of default, the Lenders may, among other things, accelerate our obligations under the Loan Agreement.
We received net proceeds from the Tranche 1 Advance of $431.3 million, after deducting debt discount and issuance costs of $18.7 million.
In May 2022, we entered into the First Amendment, which, among other things:
Refer to Note 10 in our condensed consolidated financial statements for other details, including our future minimum payments under the Amended Loan Agreement.
Cash Flows
The following table summarizes our cash flows during the periods indicated:
|
Six Months Ended June 30, |
|
|
|
|
|
||||||
|
2022 |
|
|
2021 |
|
|
Change |
|
|
|||
|
(in thousands) |
|
|
|||||||||
Net cash used in operating activities |
$ |
(191,088 |
) |
|
$ |
(242,478 |
) |
|
$ |
51,390 |
|
|
Net cash provided by (used in) investing activities |
|
288,325 |
|
|
|
(281,594 |
) |
|
|
569,919 |
|
|
Net cash provided by (used in) financing activities |
|
(20,956 |
) |
|
|
546,521 |
|
|
|
(567,477 |
) |
|
Net increase in cash, cash equivalents and restricted cash |
$ |
76,281 |
|
|
$ |
22,449 |
|
|
$ |
53,832 |
|
|
Net Cash Flows Used in Operating Activities
Net cash used in operating activities was $191.1 million for the six months ended June 30, 2022, consisting primarily of our net loss of $203.9 million, adjusted for non-cash items including a $110.0 million gain from sale of our PRV (excluding transaction costs), $52.4 million in stock-based compensation expense, $23.2 million in net loss from our investment in equity securities, $12.7 million in impairment of long-lived assets, $12.5 million gain from recognition of a receivable from Helsinn under the Amended QED-Helsinn License and Collaboration Agreement and $6.3 million loss on the sale of assets in connection with the Origin-Sentynl APA, as well as $23.2 million net cash inflow related to changes in operating assets and liabilities. The $23.2 million net cash inflow related to changes in operating assets and liabilities was attributed mainly to an increase of $16.6 million in deferred revenue arising from the Navire-BMS License Agreement, an increase of $8.4 million in other accrued and other long-term liabilities primarily due to build-up of accrued interests on our borrowings and a decrease in other assets of $8.7 million, partially offset by a decrease of $9.4 million in accrued compensation and benefits mainly due to timing of payments.
Net cash used in operating activities was $242.5 million for the six months ended June 30, 2021, consisting primarily of our net loss of $273.2 million, adjusted for non-cash items including $63.7 million in stock-based compensation expense, $4.1 million in depreciation and amortization and $5.6 million of income from the derecognition of the LEO Call Option liability, as well as $41.4 million net cash outflow related to changes in operating assets and liabilities. The $41.4 million net cash outflow related to changes in operating assets and liabilities was attributed mainly to an increase of $35.4 million in receivable from licensing and collaboration agreements, an increase of $9.0 million in receivable from a related party and a decrease of $8.5 million in accrued compensation and benefits mainly due to timing of payments, partially offset by an increase of $13.0 million in accounts payable mainly due to increases in our CROs’ and CMOs’ expenses for research activities.
52
Net Cash Flows Provided by (Used in) Investing Activities
Net cash provided by investing activities was $288.3 million for the six months ended June 30, 2022, consisting primarily of $293.9 million in maturities of marketable securities, $110.0 million in proceeds from the sale of our PRV, $10.0 million in proceeds under the Origin-Sentynl APA, and $9.7 million in proceeds from the sale of equity securities, partially offset by purchases of marketable securities of $119.6 million and purchases of investment in equity securities of $10.9 million.
Net cash used in investing activities was $281.6 million for the six months ended June 30, 2021, consisting primarily of purchases of marketable securities of $509.9 million and investments in equity securities of $20.0 million, partially offset by $238.9 million in maturities of marketable securities.
Net Cash Flows Provided by (Used in) Financing Activities
Net cash used in financing activities was $21.0 million for the six months ended June 30, 2022, consisting primarily of $20.5 million in mandatory prepayment of our term loan.
Net cash provided by financing activities was $546.5 million for the six months ended June 30, 2021, consisting primarily of the net proceeds from the issuance of our 2029 Notes of $731.4 million and from the additional principal borrowing under the Amended Hercules Term Loan of $25.0 million, offset by purchase of capped calls of $61.3 million, repurchase of our common stock of $55.3 million and prepayment of the Tranche A Loan of $18.1 million. We also used cash of $84.8 million to repurchase the noncontrolling interest of Eidos and pay for related direct transaction costs.
Critical Accounting Policies
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as revenues, if any, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, except for certain updates to our accounting policy on revenue recognition as discussed in Note 2 in our condensed consolidated financial statements as of and for the three and six months ended June 30, 2022.
Recent Accounting Pronouncements
There have been no significant changes in recently adopted or issued accounting pronouncements from those disclosed in the section titled “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.
53
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2022, we held cash, cash equivalents and marketable securities of $688.6 million. Our cash equivalents consist of amounts invested in money market accounts, such as money market funds and short-term commercial paper. Our marketable securities consist of high investment grade fixed income securities that are primarily invested in commercial paper, corporate bonds, and U.S. government securities. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. We do not believe that our cash, cash equivalents or marketable securities have a significant risk of default or illiquidity.
As of June 30, 2022, we had no outstanding debt with variable interest rate. Our 2029 Notes, 2027 Notes and term loan had principal balances of $747.5 million, $550.0 million and $435.0 million, respectively, and bear fixed interest rates. Our cash flows on these debt obligations are not subject to variability as a result of changes in interest rates.
We are exposed to changes in the fair value of our investment in equity securities. As of June 30, 2022, our investment in equity securities, which consist of equity securities of publicly held companies, had a balance of $27.1 million. These shares are carried in our condensed consolidated balance sheets at fair value based on the closing price of the shares owned on the last trading day of the reporting period. Fluctuations in the underlying bid price of the shares could result in material gains or losses.
Inflation has increased during the period covered by this Quarterly Report on Form 10-Q, and is expected to continue to increase for the near future. Inflationary factors, such as increases in the cost of our raw materials, clinical supplies, interest rates and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the near future if inflation rates continue to rise. Significant adverse changes in inflation and prices in the future could result in material losses.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file under the Securities Exchange Act of 1934, as amended, or the Exchange Act, with the U.S. Securities and Exchange Commission, or the SEC, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022 and concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of that date. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
54
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
As of the date of this Quarterly Report on Form 10-Q, we were not party to any material legal proceedings. In the future, we may become party to legal proceedings and claims arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe we are party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse impact on our financial position, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors.
In addition to the other information set forth in this Form 10-Q, including under the heading “Special Note Regarding Forward-Looking Statements”, the risks and uncertainties that we believe are most important for you to consider are discussed in “Part I, Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC, which could adversely affect our business, financial condition, or results of operations. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2021 are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition, or results of operations. There are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(a) Sales of Unregistered Securities
None.
(b) Use of Proceeds from Public Offering of Common Stock
None.
(c) Issuer Purchases of Company Equity Securities
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
55
Item 6. Exhibits.
Exhibit Number |
|
Exhibit Title |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
|
|
|
|
|
|
|
|
|
|
2.1 |
|
|
8-K |
|
001-38959 |
|
2.01 |
|
January 26, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of the Registrant, as currently in effect. |
|
8-K |
|
001-38959 |
|
3.1 |
|
July 3, 2019 |
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Amended and Restated Bylaws of the Registrant, as currently in effect. |
|
S-4 |
|
333-249944 |
|
3.2 |
|
November 6, 2020 |
|
|
|
|
|
|
|
|
|
|
|
4.1 |
|
|
S-1 |
|
333-231759 |
|
4.1 |
|
June 24, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
|
|
S-1 |
|
333-231759 |
|
4.3 |
|
June 24, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
4.3 |
|
|
8-K |
|
001-38959 |
|
4.1 |
|
March 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
4.4 |
|
Form of Global Note, representing BridgeBio Pharma, Inc.’s 2.50% Convertible Senior Notes due 2027. |
|
8-K |
|
001-38959 |
|
4.2 |
|
March 10, 2020 |
|
|
|
|
|
|
|
|
|
|
|
4.5 |
|
|
8-K |
|
001-38959 |
|
4.1 |
|
January 29, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
4.6 |
|
Form of Global Note, representing BridgeBio Pharma, Inc.’s 2.25% Convertible Senior Notes due 2029 |
|
8-K |
|
001-38959 |
|
4.2 |
|
January 29, 2021 |
|
|
|
|
|
|
|
|
|
|
|
10.1† |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
10.2† |
|
|
— |
|
— |
|
— |
|
Filed herewith |
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
— |
|
— |
|
— |
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Filed herewith |
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31.2 |
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— |
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— |
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— |
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Filed herewith |
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32.1* |
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— |
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— |
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— |
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Filed herewith |
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32.2* |
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— |
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— |
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— |
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Filed herewith |
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101.INS |
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Inline XBRL Instance Document |
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— |
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— |
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— |
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Filed herewith |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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— |
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— |
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— |
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Filed herewith |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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— |
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— |
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— |
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Filed herewith |
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56
101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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— |
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— |
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Filed herewith |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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— |
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Filed herewith |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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— |
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— |
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Filed herewith |
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104 |
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
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Filed herewith |
† Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit in accordance with the rules of the Securities and Exchange Commission because such information (i) is not material and (ii) is the type that the Registrant treats as private or confidential.
* This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.
57
SIGNATURES
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 thereunto duly authorized.
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BridgeBio Pharma, Inc. |
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Date: August 4, 2022 |
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By: |
/s/ Neil Kumar |
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Neil Kumar, Ph.D. |
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Chief Executive Officer, Director |
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(Principal Executive Officer) |
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Date: August 4, 2022 |
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By: |
/s/ Brian Stephenson |
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Brian Stephenson, Ph.D., CFA |
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Chief Financial Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
58
[***] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) is the type that the Registrant treats as private or confidential.
EXECUTION VERSION
Exhibit 10.1
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
DATED AS OF May 11, 2022
BY AND AMONG
Navire Pharma, Inc.
BRIDGEBIO PHARMA, INC.
AND
BRISTOL-MYERS SQUIBB COMPANY
PRIVILEGED AND CONFIDENTIAL
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This License, Development and Commercialization Agreement (this “Agreement”), dated as of May 11, 2022 (the “Effective Date”), is made by and among BridgeBio Pharma Inc., a Delaware corporation with offices at 421 Kipling Street Palo Alto, CA 91320-1799 (“BridgeBio”) (solely for the purposes of and solely to the extent set forth in the following provisions: Sections 2.2 (License Grant to [***]); 2.6 (Exclusivity); 10.1 (Mutual Representations and Warranties); and Article 12 through Article 16), Navire Pharma, Inc. (formerly known as PTP Pharmaceuticals, Inc.), a Delaware corporation with offices at 421 Kipling Street Palo Alto, CA 91320-1799 (“Navire”), and Bristol-Myers Squibb Company, a Delaware corporation headquartered at 430 East 29th Street, 14th Floor, NY, NY 10016 (“BMS”). Navire and BMS are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
Whereas, Navire has discovered and developed the Licensed Compounds, including BBP-398 (each as defined herein);
Whereas, BMS has experience in the development, manufacture and commercialization of pharmaceutical and biologic products in the Field (as defined herein) in the Territory (as defined herein); and
Whereas, Navire wishes to grant a license to BMS under certain intellectual property rights to further develop, manufacture, and commercialize Licensed Compounds and Licensed Products (as defined herein) in the Field in the Territory, and BMS wishes to take such license, in each case, in accordance with the terms and conditions set forth below.
Now Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
PRIVILEGED AND CONFIDENTIAL
ARTICLE 1
Definitions
As used in this Agreement, the following initially capitalized terms will have the meanings set forth in this Article 1 or as otherwise defined elsewhere in this Agreement:
2
PRIVILEGED AND CONFIDENTIAL
3
PRIVILEGED AND CONFIDENTIAL
4
PRIVILEGED AND CONFIDENTIAL
5
PRIVILEGED AND CONFIDENTIAL
6
PRIVILEGED AND CONFIDENTIAL
7
PRIVILEGED AND CONFIDENTIAL
8
PRIVILEGED AND CONFIDENTIAL
9
PRIVILEGED AND CONFIDENTIAL
10
PRIVILEGED AND CONFIDENTIAL
11
PRIVILEGED AND CONFIDENTIAL
[***] The calculations set forth in this definition of “Net Sales” shall be determined in accordance with Accounting Standards.
No deduction shall be made for any item of cost incurred by any Related Party in Developing or Commercializing Licensed Products except as permitted pursuant to clauses (a) to (e) above; provided that [***].
The calculations set forth in this section shall be determined in accordance with Accounting Standards. If any Licensed Product is, or is sold as part of, a Combination Product, Net Sales shall be calculated assuming that [***].
12
PRIVILEGED AND CONFIDENTIAL
13
PRIVILEGED AND CONFIDENTIAL
14
PRIVILEGED AND CONFIDENTIAL
15
PRIVILEGED AND CONFIDENTIAL
16
PRIVILEGED AND CONFIDENTIAL
Term |
Section |
“Acquired Party” |
1.15 |
17
PRIVILEGED AND CONFIDENTIAL
“Additional Navire GDP Trials” |
4.1 |
“ADR” |
15.1 |
“Affiliate” |
Schedule 1.4 |
“Agreement” |
Preamble |
“Alliance Manager” |
3.6 |
“[***]” |
1.43 |
“ANDA Act” |
9.6.5 |
“Arising Know-How” |
9.1.2(a) |
“Arising Patent” |
9.1.2(a) |
“Arising Technology” |
9.1.2(a) |
“Audit” |
8.17 |
“Bankrupt Party” |
14.8 |
“[***]” |
Schedule 1.4 |
“BMS” |
Preamble |
“BMS Arising Know-How” |
9.1.2(a) |
“BMS Arising Patents” |
9.1.2(a) |
“BMS Arising Technology” |
9.1.2(a) |
“BMS Co-Funding Termination Notice” |
4.6.3 |
“BMS Indemnitees” |
11.1 |
“BMS Manufacturing Development Technology” |
2.7.4(a) |
“BMS Manufacturing Technology Transfer” |
2.7.4(a) |
18
PRIVILEGED AND CONFIDENTIAL
“BMS Other Reversion Technology” |
14.2.3 |
“BMS Third Party Payments” |
8.9 |
“Board” |
1.76 |
“Breaching Party” |
13.2 |
“[***] Affiliate IP License” |
2.2.1 |
“BridgeBio CoC Competing Product” |
2.6.2 |
“Chairperson” |
3.1.1 |
“Change of Control Party” |
16.5.1 |
“Competing Combination Program” |
16.4.3 |
“Competitive Activities” |
2.6.1 |
“Co-Funding Option” |
4.6.1 |
“Co-Funding Option Exercise Date” |
4.6.1 |
“Co-Funding Option Period” |
4.6.1 |
“Co-Funding Opt-Out Right” |
4.6.2(c) |
“Competing Combination Program” |
16.4.3 |
“Confidential Information” |
12.1.1 |
“[***]” |
4.2.3(b) |
“Development Milestone” |
8.2 |
“Development Milestone Notification Notice” |
8.2 |
19
PRIVILEGED AND CONFIDENTIAL
“Development Milestone Payment” |
8.2 |
“Dispute” |
15.1 |
“DMFs” |
1.103 |
“Effective Date” |
Preamble |
“Electronic Delivery” |
16.14 |
“Existing Navire Agreements” |
10.2.12(a) |
“Existing Navire GDP Trials” |
4.1 |
“Existing IND” |
5.1.1 |
“Existing Nivolumab Combination Trial Agreement” |
1.42 |
“Existing Sotorasib Combination Trial Agreement” |
1.43 |
“Force Majeure” |
16.2 |
“GAAP” |
1.1 |
“German Exemption Certificate” |
8.13.3 |
“Global Development Plan” or “GDP” |
4.2.1 |
“ICH” |
1.52 |
“Indemnified Party” |
11.3 |
“Indemnifying Party” |
11.3 |
“Infringement” |
9.6.1(a) |
“Initial Global Development Plan” |
4.2.2 |
20
PRIVILEGED AND CONFIDENTIAL
“Initial Navire Development Plan” |
4.3.1 |
“IPWG” |
9.2.1 |
“Joint Arising Know-How” |
9.1.2(a) |
“Joint Arising Patents” |
9.1.2(a) |
“Joint Arising Technology” |
9.1.2(a) |
“Joint Steering Committee” or “JSC” |
3.1.1 |
“[***]” |
1.68 |
“[***]” |
4.7.5 |
“Manufacturing Technology Transfer” |
2.7.2 |
“[***]” |
3.2 |
“Material Breach Notice” |
13.2 |
“[***]” |
1.76 |
“Milestone Payments” |
8.4 |
“Navire” |
Preamble |
“Navire Additional Development Budget” |
4.2.1 |
“Navire Arising Know-How” |
9.1.2(a) |
“Navire Arising Patents” |
9.1.2(a) |
“Navire Arising Technology” |
9.1.2(a) |
“Navire CoC Competing Product” |
2.6.1 |
“Navire Co-Funding Share” |
4.6.2(a) |
“Navire Development Plan” |
4.2.1 |
21
PRIVILEGED AND CONFIDENTIAL
“Navire GDP Trials” |
4.1 |
“Navire GDP Trial Breach” |
4.3.3 |
“Navire Indemnitees” |
11.1 |
“[***]” |
10.2.12(c) |
“Party” or “Parties” |
Preamble |
“Product Infringement” |
9.6.1(a) |
“Product Marks” |
9.8.4(a) |
“Prosecuting Party” |
9.3.3 |
“Registrational Trial Notice” |
4.6.1 |
“Retained Rights” |
2.3.2 |
“Reversion License” |
14.2.1 |
“Royalty Patent” |
1.110 |
“Sales Milestone” |
8.3 |
“Sales Milestone Payment” |
8.3 |
“Sublicensee” |
2.5.2 |
“Supply Agreements” |
7.1 |
“Supply Period” |
7.1 |
“[***]” |
1.76 |
“Term” |
13.1 |
“Upfront License Fee” |
8.1 |
“VAT” |
8.13.1 |
“Withholding Action” |
8.13.2 |
22
PRIVILEGED AND CONFIDENTIAL
23
PRIVILEGED AND CONFIDENTIAL
24
PRIVILEGED AND CONFIDENTIAL
25
PRIVILEGED AND CONFIDENTIAL
26
PRIVILEGED AND CONFIDENTIAL
27
PRIVILEGED AND CONFIDENTIAL
28
PRIVILEGED AND CONFIDENTIAL
29
PRIVILEGED AND CONFIDENTIAL
ARTICLE 3
Governance
30
PRIVILEGED AND CONFIDENTIAL
31
PRIVILEGED AND CONFIDENTIAL
32
PRIVILEGED AND CONFIDENTIAL
ARTICLE 4
Development
4.1 Overview of Development. Subject to the terms of this Agreement, Navire will be responsible for the performance of (a) the Existing BBP-398 Monotherapy GDP Trial, Existing Nivolumab Combination GDP Trial, and the Existing Sotorasib Combination GDP Trial (collectively, the “Existing Navire GDP Trials”); and (b) any additional Clinical Trials of Licensed Compounds and Licensed Products that the Parties mutually agree Navire will conduct pursuant to Section 4.3.1 (Navire Development Activities) (such additional Clinical Trials, the “Additional Navire GDP Trials” and together with the Existing Navire GDP Trials, collectively, the “Navire GDP Trials”). Except for the Navire GDP Trials, BMS will have the sole right, directly or through its Affiliates, Sublicensees and subcontractors, to Develop, and conduct Manufacturing Development Activities for, the Licensed Compounds and Licensed Products (including as a monotherapy as well as for use in any Combination Therapy) in the Field and in the Territory, and with respect to Manufacturing Development Activities outside the Territory for use in the Field and for the Territory.
33
PRIVILEGED AND CONFIDENTIAL
4.2 Global Development Plan.
4.2.1 General. The Development of the Licensed Products in the Field in the Territory will be conducted in accordance with a global Development plan (the “Global Development Plan” or “GDP”), which BMS will prepare, review, and update as set forth in this Section 4.2 (Global Development Plan). The Global Development Plan will set forth a high level overview of Development activities for the Licensed Product; provided that (a) if Navire is conducting any Navire GDP Trials, the GDP shall include a detailed plan for each Navire GDP Trial, including the protocol synopsis for each Navire GDP Trial (such plan, the “Navire Development Plan”); provided, that, the Navire Development Plan shall (i) [***] and (ii) [***]; (b) if Navire is conducting any Additional Navire GDP Trial, the Navire Development Plan shall also include a budget of the costs and expenses to be incurred by Navire directly for the performance of such Additional Navire GDP Trial (such budget, the “Navire Additional Development Budget”); and (c) if Navire exercises its Co-Funding Option, a budget of the Development Costs for the Development Activities.
4.2.2 Initial Global Development Plan and Updates and Amendments. The initial Global Development Plan for the Licensed Products is attached hereto as Schedule 4.2.2 (the “Initial Global Development Plan”). BMS will review, update, and amend as appropriate, the then-current Global Development Plan not less often than semi-annually (during the second and fourth Calendar Quarter of each Calendar Year) to reflect any material changes, reprioritizations of, or additions to the Global Development Plan; provided that, if the JSC is disbanded pursuant to Section 3.5 (Discontinuation of JSC), BMS shall be under no obligation to provide Navire updates or amendments pursuant to this Section 4.2.2 (Initial Global Development Plan and Updates and Amendments) following such discontinuation of JSC. BMS shall consider in good faith any Navire comments on any proposed amendment of the then-current Global Development Plan, and the Parties will submit any Material Amendments to the then-current Navire Development Plan to the JSC for its review, discussion, and approval.
4.2.3 [***].
(a) Navire will promptly notify BMS in the event that Navire receives a request from [***] pursuant to the [***] to [***]. For clarity, [***] right to [***] shall be subject to [***].
(b) Subject to Section 4.2.3(a), in the event that [***] participates, or includes any Clinical Trial sites outside the Territory. in any Clinical Trial conducted in or for the Territory hereunder pursuant to the [***], upon reasonable notification by BMS, and at BMS’ cost and expense, [***].
4.3 Navire Development.
4.3.1 Navire Development Activities. The initial Navire Development Plan (including a high-level budget of the costs and expenses to be incurred by Navire for the performance of the Navire GDP Trials set forth therein) is included as part of the Initial Global Development Plan (the “Initial Navire Development Plan”). Subject to the terms of this Agreement, Navire will be responsible for the performance of the Existing Navire GDP Trials
34
PRIVILEGED AND CONFIDENTIAL
(which are ongoing or contemplated as of the Effective Date and set forth in the Initial Navire Development Plan) and, to the extent mutually agreed by the Parties as set forth below, any Additional Navire GDP Trials. If BMS desires that Navire perform any additional Clinical Trials of Licensed Compounds and Licensed Products (other than the Existing Navire GDP Trials), then BMS will consult with Navire in connection therewith, and will thereafter present to Navire an update to the Navire Development Plan (together with a corresponding development budget for the reasonable costs of such Additional Navire GDP Trial to be incurred by Navire directly for the conduct of such Additional Navire GDP Trial) and will negotiate in good faith an updated plan and budget for the review, discussion, and approval of the JSC.
4.3.2 Navire GDP Trial Diligence. Navire will be responsible for the performance and completion of, and will perform, and use Commercially Reasonable Efforts to complete, each Navire GDP Trial in accordance with the Global Development Plan (including the Navire Development Plan set forth therein), the Existing Nivolumab Combination Trial Agreement (in the case of the Existing Nivolumab Combination GDP Trial), the Existing Sotorasib Combination Trial Agreement (in the case of the Existing Sotorasib Combination GDP Trial), and this Agreement.
4.3.3 Navire GDP Trial Breach. If Navire is not conducting any Navire GDP Trial in accordance with the Global Development Plan (including the Navire Development Plan set forth therein), including using Commercially Reasonable Efforts to meet the timelines set forth therein (“Navire GDP Trial Breach”), then BMS will provide written notice to Navire, and, as soon as reasonably practicable upon receipt of such notice, the Parties will discuss in good faith such issue and the activities necessary to remedy such Navire GDP Trial Breach. Upon receipt of such notice, Navire will have a period of [***] from receipt of such notice to remedy such Navire GDP Trial Breach; provided that if such breach by its nature, is curable, but cannot be cured within such [***] period, then the cure period will be extended if Navire provides a written plan for curing such breach to BMS and the Navire uses Commercially Reasonable Efforts to cure such breach in accordance with such written plan; provided however, that no such extension will exceed an additional [***] without the written consent of BMS. If Navire has not remedied such Navire GDP Trial Breach within such period, then BMS will have the right (but not the obligation), upon written notice to Navire, and in BMS’ sole discretion, to elect one of the following remedies ((a), (b) or (c), as applicable):
(a) terminate this Agreement pursuant to Section 13.2 (Termination for Breach) immediately upon written notice, notwithstanding any cure periods under Section 13.2 (Termination for Breach);
(b) terminate the applicable Navire GDP Trial that is the subject of such Navire GDP Trial Breach, in which case, (i) Navire shall wind-down such Navire GDP Trial at Navire’s costs and expense, (ii) BMS shall have the right to irrevocably terminate the Navire Co-Funding Participation Right pursuant to Section 4.6.3 (BMS Termination of Navire Co-Funding), and (iii) [***], as applicable, notwithstanding Section 8.2 (Development Milestone Payments), in no event shall the Development Milestone Payment corresponding to [***], as applicable, be deemed achieved or payable under Section 8.2 (Development Milestone Payments); or
35
PRIVILEGED AND CONFIDENTIAL
(c) if BMS has not elected to terminate this Agreement pursuant to Section 4.3.3(a) or terminate the applicable Navire GDP Trial that is the subject of such Navire GDP Trial Breach pursuant to Section 4.3.3(b), in which case, then:
(i) in the event that such Navire GDP Trial was [***], notwithstanding Section 8.2 (Development Milestone Payments), in no event shall the Development Milestone Payment corresponding to the First Successful Completion of [***], as applicable, be deemed achieved or payable under Section 8.2 (Development Milestone Payments);
(ii) except with respect to a Navire GDP Trial Breach for [***] (which shall be subject to Section 4.3.3(c)(iii)), assume and complete any activities with respect to such Navire GDP Trial, in which case:
(A) at its cost and expense, as and to the extent requested by BMS, Navire shall (1) [***];
(B) as BMS’ sole monetary remedy with respect to any direct damages incurred by BMS with respect to such Navire GDP Trial Breach (provided that, for clarity, BMS shall still have the right to seek remedies that do not involve BMS seeking payment for such direct damages (including indemnification pursuant to Section 11.1 (Indemnification by Navire))), BMS may elect to either:
(1) terminate the Navire Co-Funding Participation Right pursuant to Section 4.6.3 (BMS Termination of Navire Co-Funding), in which case, Navire shall reimburse BMS (x) [***] and (y) [***]; or
(2) if BMS elects not to so terminate the Navire Co-Funding Participation Right pursuant to the foregoing clause (1), Navire shall reimburse BMS (x) [***] and (y) [***];
in each case ((1) or (2)), which reimbursements shall be made on a [***] basis by Navire to BMS within [***] after the end of such [***] following receipt of an invoice therefor from BMS.
(iii) if such Navire GDP Trial Breach is with respect to the [***], conduct (or have conducted) a replacement Clinical Trial for the Licensed Product with [***], in which case, as BMS’ sole monetary remedy with respect to any direct damages incurred by BMS with respect to such Navire GDP Trial Breach (provided that, for clarity, BMS shall still have the right to seek remedies that do not involve BMS seeking payment for such direct damages (including indemnification pursuant to Section 11.1 (Indemnification by Navire))), BMS may elect to either:
(A) terminate the Navire Co-Funding Participation Right pursuant to Section 4.6.3 (BMS Termination of Navire Co-Funding), in which case,
36
PRIVILEGED AND CONFIDENTIAL
Navire shall reimburse BMS [***] of the costs incurred by BMS (or its designees) in connection with the performance of such replacement Clinical Trial by or on behalf of BMS (or its designee); or
(B) if BMS elects not to so terminate the Navire Co-Funding Participation Right pursuant to the foregoing clause (B), Navire shall reimburse BMS [***] of the costs incurred by BMS (or its designees) in connection with the performance of such replacement Clinical Trial by or on behalf of BMS (or its designee);
in each case ((A) or (B)), which costs shall include the cost of supply of the [***] for use in such Clinical Trial and which reimbursements shall be made by Navire to BMS within [***] after receipt of an invoice therefor from BMS.
Nothing in this Section 4.3.3 (Navire GDP Trial Breach), shall limit Navire’s ability to comply with Applicable Laws or to act in the interest of the safety of subjects participating in any clinical trials.
4.3.4 Safety Risk in Navire GDP Trial. Notwithstanding anything to the contrary in this Agreement, each Party shall have the right to (a)(i) suspend immediately or (ii) terminate, upon [***] written notice, any Navire GDP Trial (except in the case of BMS with respect to the [***]), which written notice shall include reasonable evidence in support of such suspension or termination, if it reasonably deems it necessary to protect the safety, health or welfare of subjects enrolled in any such Navire GDP Trial due to the existence of such Party’s good faith belief that there is an unacceptable risk for harm in humans based upon the observation of serious adverse events in humans after any Licensed Compound, Licensed Product has been administered to or taken by humans, such as during the a Navire GDP Trial or (b) suspend or terminate any Navire GDP Trial (except in the case of BMS with respect to the [***]) within [***] following notice to the other Party if a clinical hold arises. Prior to termination of any Navire GDP Trial pursuant to this Section 4.3.4 (Safety Risk in Navire GDP Trial), the JSC shall meet and discuss in good faith the safety concerns raised by such Party or the basis for the clinical hold, how long the clinical hold is expected to last and how the Parties might address the issue that caused the clinical hold and, in each case, consider in good faith the input, questions and advice of the other Party, but should any dispute arise in such discussion, the dispute resolution process set forth in Section 3.2 (Resolution of JSC Disputes) or Section 15.1 (Disputes) shall not apply to such dispute and either Party shall have the right to terminate such Navire GDP Trial (except in the case of BMS with respect to the [***]), provided that such termination shall take effect without the Parties first following the procedures set forth in Section 3.2 (Resolution of JSC Disputes) or Section 15.1 (Disputes).
4.3.5 Navire GDP Trial Sites and Informed Consent. Without limiting the provisions of this Section 4.3 (Navire Development) or Article 5, in each case, solely to the extent not prohibited under the [***]:
(a) Navire shall be responsible for the selection of the Navire GDP Trial sites and clinical trial investigators, and entering into clinical trial agreements in connection therewith; provided that, (i) for any such clinical trial agreements entered into after the Effective
37
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Date, Navire shall provide the template(s) for such clinical trial agreements (any material changes thereto) to BMS sufficiently prior to submission thereof so as to allow for a reasonable opportunity for BMS to review and approve such template(s) and (ii) for any such site or investigator that has not been engaged (through a written agreement) as of the Effective Date, Navire shall notify BMS thereof in writing prior to engagement thereof and sufficiently prior to execution thereof so as to allow for a reasonable opportunity for BMS to review and approve such sites and investigators; provided that, if BMS does not respond to such notice within [***], such lack of response shall be treated as an approval hereunder. Navire shall ensure that all Navire GDP Trial sites engaged after the Effective Date are engaged through a written clinical trial agreement in the form template approved by BMS. Any material changes to such form template with respect to any Navire GDP Trials shall be subject to BMS’ written consent, not to be unreasonably withheld. In addition, Navire hereby represents and warrants to BMS that Navire has provided to BMS true, correct and complete copies of any applicable Existing Clinical Trial Agreements (which may be in redacted form) that Navire has executed as of the Effective Date. In all cases, the clinical trial agreements shall require the Navire GDP Trial sites to comply with all Applicable Laws and, with respect to the clinical trial agreements executed after the Effective Date, will contain (A) terms and conditions protecting and limiting use and disclosure of Confidential Information at least to the same extent as under Article 12, and (B) subject to Section 2.5.3 (Subcontractors), intellectual property provisions that assign to Navire rights in all Arising Technology, including all Navire GDP Know-How, as provided for herein.
(b) Navire shall be responsible for preparing and obtaining all necessary approvals and clearances, including EC (Ethics Committee) approvals, customs clearances and patient informed consent forms necessary for the conduct of the Navire GDP Trials. Navire shall prepare the template patient informed consent form for the Navire GDP Trials, and with respect to any such forms prepared after the Effective Date, shall provide such template to BMS for its review and approval. Any material changes to such model forms shall be subject to BMS’ written consent, not to be unreasonably withheld. Navire shall ensure that all patient authorizations and consents (in the form approved by BMS) for the Navire GDP Trials are obtained, and Navire shall ensure that all patient authorizations and consents in connection with the Navire GDP Trials permit sharing of Navire GDP Know-How with BMS in accordance with this Agreement, in each case, in accordance with applicable data protection and privacy laws, rules and regulations, including the E.U. General Data Protection Regulation (2016/679) or any other similar Applicable Laws. In the event that BMS determines in its reasonable opinion that any patient authorizations and consents for any Existing Navire GDP Trials are insufficient to permit sharing of Navire GDP Know-How with BMS in accordance with this Agreement, in each case, in accordance with applicable data protection and privacy laws, rules and regulations, including the E.U. General Data Protection Regulation (2016/679) or any other similar Applicable Laws, then except with respect to the [***], Navire will use reasonable efforts to collaborate with BMS to agree upon the appropriate course of action to remedy such deficiencies and Navire will take reasonable steps to carry out such agreed course of action to remedy such deficiencies, including as agreed, seeking a waiver or other approval from the applicable institutional review boards for such Existing Navire GDP Trial or, if mutually agreed by the Parties, reconsenting patients.
4.3.6 Navire Change of Control. In the event of a Change of Control of Navire (or any of its Affiliates), [***].
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4.4 Objectives under the Global Development Plan.
4.4.1 Development Diligence Obligations. BMS will use Commercially Reasonable Efforts to Develop and seek Regulatory Approval for at least one Licensed Product in the Field in the Major Market Countries.
4.4.2 Compliance. Each Party will conduct the Development Activities allocated to such Party under the Global Development Plan in accordance with the Global Development Plan and sound and ethical business and scientific practices, and in compliance with all Applicable Law, including GCPs, GLPs and GMPs, and also including all applicable pharmacovigilance, data privacy, and data protection laws in the Territory. In addition, each Party will not use in any capacity, in connection with its Development of the Licensed Compounds or Licensed Products hereunder, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section. Each Party will inform the other Party in writing immediately if it or any Person who is performing services for such Party hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Applicable Law outside of the U.S.), or if any action, suit, claim, investigation, or legal administrative proceeding is pending or, to such Party’s knowledge, is threatened, relating to the debarment of such Party or any Person used in any capacity by such Party in connection with its Development of the Licensed Compounds or the Licensed Products hereunder.
4.5 Development Costs. Subject to Navire’s exercise of the Co-Funding Option and accordingly its responsibility for the Navire Co-Funding Share in accordance with Section 4.6.2 (Exercise of Navire Co-Funding Option), each Party will be solely responsible for [***] of all costs and expenses incurred by such Party or its Affiliates with respect to its Development Activities; provided, however, that (a) BMS will continue to be responsible for [***] of the expenses reasonably incurred by Navire directly for the performance of the [***] as and to the extent set forth in the [***], which amounts shall be shared in accordance with the [***]; and (b) BMS will be responsible for [***] of the costs and expenses reasonably incurred by Navire directly for the performance of any Additional Navire GDP Trial to the extent such costs and expenses are in accordance with the Navire Development Budget therefor. Accordingly, at the end of each Calendar Quarter, Navire will provide BMS an invoice of costs and expenses, including internal and out-of-pocket costs, incurred by Navire directly for the performance of any Additional Navire GDP Trial during the prior Calendar Quarter for which BMS is obligated to reimburse Navire pursuant to this Section 4.5 (Development Costs) and BMS will pay the undisputed invoiced amounts within [***] after the date of invoice. Each invoice shall enable BMS to compare the reported costs against each applicable Navire Development Budget, on both a quarterly basis and a cumulative basis for each activity covered therein. BMS shall have the right to audit Navire’s records to confirm the accuracy of Navire’s costs and reports as provided in Section 8.17 (Records; Audit).
4.6 Navire Co-Funding Option.
4.6.1 Grant of Option. BMS hereby grants to Navire the option (the “Co-Funding Option”) to co-fund the Development of Licensed Products in the Field for the U.S. No later than [***] prior to the expected date of Initiation of the first Registrational Trial for the first Licensed Product for the U.S. (or if a Clinical Trial that was not started as a Registrational Trial becomes
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the first Registrational Trial for such Licensed Product for the U.S., within [***] following the date that a Clinical Trial becomes the first Registrational Trial for such Licensed Product for the U.S.), BMS will provide Navire with written notice thereof along with an updated or amended copy of the then-current Global Development Plan, including BMS’ then-current estimated budget for such Global Development Plan and an estimate of all Allowable BMS Development Costs incurred by BMS or its Related Parties as of such date (the “Registrational Trial Notice”). Navire may exercise the Co-Funding Option by providing written notice to BMS at any time beginning upon Navire’s receipt of the Registrational Trial Notice and ending [***] thereafter (the “Co-Funding Option Period” and the date Navire provides such notice, the “Co-Funding Option Exercise Date”). If Navire does not exercise the Co-Funding Option during the Co-Funding Option Period, then the Co-Funding Option will expire.
4.6.2 Exercise of Navire Co-Funding Option.
(a) Navire Co-Funding Share. If Navire exercises the Co-Funding Option during the Co-Funding Option Period, (i) Navire will be responsible for (A) [***] of all Allowable BMS Development Costs incurred by BMS or its Related Parties prior to the Co-Funding Option Exercise Date and (B) [***] of all Allowable BMS Development Costs incurred by BMS or its Related Parties during the Co-Funding Term (Navire’s share of such Development Costs, the “Navire Co-Funding Share”); and (ii) Navire will be entitled to receive the increased Royalty Rates on Net Sales of Licensed Products in the U.S. as set forth in Section 8.5.2 (Royalty Rates for Licensed Products upon Exercise of Co-Funding Option) during the Co-Funding Term (the “Navire Co-Funding Participation Right”). For the purposes of determining the Navire Co-Funding Share, Development Costs will be determined from the books and records of BMS or its Related Parties maintained in accordance with Accounting Standards.
(b) Invoices and Payments.
(i) Within [***] of the Co-Funding Option Exercise Date, BMS will provide to Navire an invoice for the Navire Co-Funding Share with respect to the Allowable BMS Development Costs incurred by BMS or its Affiliates prior to the Co-Funding Option Exercise Date. Navire will remit such payment to BMS within [***] of Navire’s receipt of such invoice.
(ii) Upon and after Navire’s exercise of the Co-Funding Option, within [***] of the end of each Calendar Quarter, BMS will provide to Navire an invoice setting forth the Navire Co-Funding Share for the preceding Calendar Quarter. Navire will remit such payment to BMS in accordance with the terms of Section 8.15 (General Payment Procedures).
(iii) Notwithstanding the foregoing, in the event the Navire Co-Funding Participation Right is terminated pursuant to Section 4.6.2(c) (Navire’s Co-Funding Opt-Out Right) or Section 4.6.3 (BMS Termination of Navire Co-Funding), with respect to the last Calendar Quarter of the Co-Funding Term, the Navire Co-Funding Share and Royalty Payments accrued on the Net Sales of Licensed Products for such Calendar Quarter will be calculated on a pro-rated basis based on the number of days remaining in such Calendar Quarter.
(c) Navire’s Co-Funding Opt-Out Right. Subject to this Section 4.6.2(c) (Navire’s Co-Funding Opt-Out Right) and the other applicable terms of this Agreement, Navire
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may irrevocably terminate the Navire Co-Funding Participation Right (such termination, the “Co-Funding Opt-Out Right”). Navire may exercise the Co-Funding Opt-Out Right at any time upon [***] prior written notice to BMS. If Navire exercises the Co-Funding Opt-Out Right, then:
(i) Navire shall continue to be obligated to share any Development Costs incurred during the Co-Funding Term prior to the effective date of termination of the Co-Funding Term, and, with respect to Royalty Payments, BMS shall be obligated to pay Navire the increased Royalty Payments accrued on the Net Sales of Licensed Products as set forth in Section 8.5.2 (Royalty Rates for Licensed Products upon Exercise of Co-Funding Option) during the Co-Funding Term prior to the effective date of termination of the Co-Funding Term; and
(ii) Navire shall not be obligated to share any Development Costs incurred after the effective date of termination of the Co-Funding Term, and, with respect to Royalty Payments, BMS shall only be obligated to pay Navire Royalty Payments accrued on the Net Sales of Licensed Products as set forth in Section 8.5.1 (Royalty Rates) after the effective date of termination of the Co-Funding Term.
4.6.3 BMS Termination of Navire Co-Funding. BMS may, without prejudice to any other remedies available to its at law or in equity, irrevocably terminate the Navire Co-Funding Participation Right upon written notice to Navire (such notice, “BMS Co-Funding Termination Notice”) in the event that either (a) any undisputed amount required to be paid by Navire under this Section 4.6 (Navire Co-Funding Option) is not paid on the date due in accordance with Section 4.6.2(b) (Invoices and Payments) (and Navire thereafter does not pay such undisputed amount within [***] notice from BMS that such payment was not made) [***]; (b) Navire has not remedied any Navire GDP Trial Breach within the cure period set forth in Section 4.3.3 (Navire GDP Trial Breach); or (c) there is a Change of Control of Navire or any of its Affiliates (subject to Section 16.5 (Change of Control)). In such event:
(a) Navire shall continue to be obligated to share any Development Costs incurred prior to the effective date of termination of the Co-Funding Term, and, with respect to Royalty Payments, BMS shall continue to be obligated to pay Navire the increased Royalty Payments accrued on the Net Sales of Licensed Products as set forth in Section 8.5.2 (Royalty Rates for Licensed Products upon Exercise of Co-Funding Option) as and to the extent otherwise payable pursuant to Section 8.5.2 (Royalty Rates for Licensed Products upon Exercise of Co-Funding Option) during the Co-Funding Term prior to the effective date of termination of the Co-Funding Term; and
(b) Navire shall not be obligated to share any Development Costs incurred after the effective date of termination of the Co-Funding Term, and, with respect to Royalty Payments, BMS shall only be obligated to pay Navire Royalty Payments accrued on the Net Sales of Licensed Products as set forth in Section 8.5.1 (Royalty Rates) as and to the extent otherwise payable pursuant to Section 8.5.1 (Royalty Rates) after the effective date of termination of the Co-Funding Term.
4.7 Records, Reports, and Information.
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4.7.1 General. Each Party will, and will cause each of its Related Parties to, maintain current and accurate records of all Development Activities conducted by it and them under this Agreement and all data and other information resulting from such activities (which records will include, as applicable, books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs, and documentation thereof (e.g., samples of materials and other graphic or written data generated in connection with such Development Activities)). Such records will properly reflect all work done and results achieved in the performance of such Development Activities in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes. Each Party will document its Development Activities to be conducted pursuant to this Agreement in formal written study reports according to applicable national and international guidelines (e.g., ICH, GCP and GLP). BMS shall have the right, during normal business hours and upon reasonable notice, to inspect and copy all records of Navire maintained pursuant to this Section 4.7.1 (General), in each case, solely to the extent not prohibited under the [***]. BMS shall maintain such records and the information disclosed therein in confidence in accordance with Article 12.
4.7.2 BMS Status Updates in the Territory. At least semi-annually, during the second and fourth Calendar Quarter of each Calendar Year, in advance of such Calendar Quarter’s regularly scheduled JSC meeting or in writing if the JSC is discontinued, BMS will provide Navire with a report summarizing, since the previous such report, (a) the Development Activities under the Global Development Plan for the Licensed Products in the Field in the Major Market Countries and the results thereof; (b) material regulatory matters and meetings with Regulatory Authorities related to the Licensed Products in the Field in the Major Market Countries; and (c) a high level overview of Development activities for the Licensed Product in the Field in the Major Market Countries to be conducted by BMS or its Affiliates.
4.7.3 Navire Status Updates in the Territory. During the Term, (a) least quarterly, during each Calendar Quarter of each Calendar Year, in advance of each regularly scheduled JSC meeting (or, thereafter, in writing if the JSC is discontinued), Navire will provide BMS with reports summarizing the Development Activities with respect to any Navire GDP Trial since the previous such report, including the information specified in Schedule 4.7.3 (Report Information for Navire GDP Trials); and (b) without limiting the foregoing clause (a), Navire will promptly provide to BMS copies of any data and results generated in connection with Navire’s Development Activities with respect to any Navire GDP Trial, and for clarity, all such data and results shall be considered Navire GDP Know-How; provided that, in each case ((a) or (b)), with respect to the [***].
4.7.4 Navire Status Updates Outside the Territory. At least quarterly, during each Calendar Quarter of each Calendar Year, in advance of each regularly scheduled JSC meeting or in writing if the JSC is discontinued (or otherwise promptly following Navire’s receipt of any reports, data or other information from [***] pursuant to the [***]), Navire will provide BMS with reports summarizing, since the previous such report, the Development activities and progress related to the pursuit or maintenance of Regulatory Approval for any Licensed Compound or Licensed Product in the Field outside the Territory. Navire will respond to BMS’ reasonable questions or requests for additional information relating to such activities in a timely manner, to the extent such information is in Navire’s (or its Affiliate’s) possession.
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4.7.5 Potential Harmful Actions.
(a) Solely to the extent required under the [***], in the event that any Development activities (including regulatory activities), conducted by or on behalf of BMS or any of its Affiliates or its Sublicensees with respect to any Licensed Product in the Territory would reasonably be expected to materially adversely impact the Development, Manufacture or Commercialization of any Licensed Product in the Field in the [***], then, to the extent that BMS or any of its Affiliates or its Sublicensees has knowledge of such activities, BMS shall give Navire reasonable advance notice of any such activities prior to the undertaking of such activities in the Territory.
(b) In the event that any Development (including regulatory activities), Manufacturing or Commercialization any Licensed Compound or Licensed Product outside the Territory by or on behalf of Navire, [***] or any of its or their respective Affiliates or direct or indirect licensees, would reasonably be expected to materially negatively impact the Development, Manufacture or Commercialization of any Licensed Compound or Licensed Product in the Territory, then, to the extent that Navire has knowledge of such activities (including, for clarity, in the event that Navire receives notice of any such activities from [***] pursuant the [***]), Navire shall give BMS reasonable advance notice of any such activities prior to the undertaking of such activities outside the Territory, but in any case, promptly following Navire receiving notice or otherwise becoming of aware of such activities. During the term of the [***] Agreement, in the event that (i) Navire delivers a notice to BMS pursuant to this Section 4.7.5(b), or BMS otherwise becomes aware that the Development, Manufacture or Commercialization of any Licensed Product by or on behalf of Navire, [***] or any of its or their respective Affiliates or direct or indirect licensees in the [***] would reasonably be expected to materially negatively impact the Development, Manufacture or Commercialization of any Licensed Compound or Licensed Product in the Territory, in each case, upon the reasonable request of BMS, Navire shall [***].
(c) Notwithstanding anything to the contrary set forth herein, BMS shall have final decision-making authority over all matters relating to the Development, Manufacture, Commercialization or other exploitation of any Licensed Compound or Licensed Products outside the Territory that would reasonably be expected to materially negatively impact BMS’ or any of its Related Party’s Development, Manufacture or Commercialization of any Licensed Compound or Licensed Product in the Field in the Territory. Without limiting Section 4.7.5(b), Navire shall consider in good faith any reasonable request of BMS for Navire [***].
(d) Without limiting Section 5.1.2(b), BMS shall not exercise its final decision-making authority with respect to any matter hereunder in any manner that shall require Navire, its Affiliates, BridgeBio, or any [***] Affiliate to violate Applicable Law or [***].
4.8 Patient Privacy and Data Protection. Subject to the terms of this Agreement, and prior to the sharing of any personal data (as defined under applicable data protection and privacy laws) between the Parties pursuant to this Agreement, Navire and BMS will cooperate in good faith to define the responsibilities of the Parties with respect to the control, processing and transfer of personal data as contemplated by and pursuant to this Agreement. These responsibilities shall include, as appropriate, mutually acceptable guidelines and procedures for the processing, receipt, investigation, recordation, communication, and exchange (as between the Parties) and regulatory
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submission of personal data pursuant to this Agreement. Such agreed procedures shall include, if applicable, the Standard Contractual Clauses published by the European Commission on June 4, 2021 for the transfer of personal data to third countries pursuant to the General Data Protection Regulation (EU) 2016/679.
4.9 Pharmacovigilance.
4.9.1 As between the Parties, BMS shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Licensed Product in the Field in the Territory, in each case in accordance with Applicable Law and this Agreement. Navire (or its designee) shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Licensed Product in the countries outside the Territory. Promptly following the Effective Date (but in all cases within [***] after the Effective Date), the Parties will negotiate in good faith a two way (between the Parties or their respective Affiliates) or three-way pharmacovigilance agreement (among the Parties or their respective Affiliates and [***]) as necessary to comply with Applicable Law on customary terms with respect to the exchange of adverse event and other safety information (a) arising from any and all Navire GDP Trial(s) or any other Clinical Trials relating to the Licensed Product in the Territory; or (b) relating to the Licensed Product outside the Territory; provided that BMS shall be responsible for maintaining the global safety database for the Licensed Product and, subject to the Parties entering into a pharmacovigilance agreement(s) pursuant to this Section 4.9.1, BMS shall make the worldwide safety database accessible to [***], its Affiliates, sublicensees and contractors. BMS agrees to comply and to cause its Affiliates and Sublicensees and contractors to comply with such obligations. Such pharmacovigilance agreement shall ensure that adverse event and other safety information is exchanged in a manner and according to a schedule that will permit each Party (and its sublicensees or designees) to comply with Applicable Laws in their respective markets.
4.9.2 With respect to any patient data or other patient information provided by Navire from outside the Territory pursuant to this Agreement or any pharmacovigilance agreement entered into pursuant to Section 4.9.1, as between the Parties, Navire shall be responsible for (a) securing all necessary approvals from all applicable Regulatory Authorities (and other Third Parties); and (b) making all filings under Applicable Laws outside the Territory, [***]; provided, however, that, in all cases, Navire shall (and shall cause its Affiliates to) (i) promptly notify BMS in writing if it is prohibited to provide BMS with any patient data, patient information and study reports as a result of the provisions of this Section 4.9.2, (ii) to the extent required under Applicable Laws, obtain full and proper consents from all data subjects (including any Persons participating in any Clinical Trials) that permit Navire (and its Affiliates) to provide and share the personal information of such data subjects to BMS (and its Affiliates), such that BMS (and its Affiliates) may receive, use, process and otherwise exploit such information as set forth in this Agreement or any pharmacovigilance agreement entered into pursuant to Section 4.9.1, and (iii) at the request of BMS, use Commercially Reasonable Efforts to provide BMS with such data, information and study reports in a manner that is compliant with Applicable Laws, including, if mutually agreed by the Parties, to provide any such data in anonymized form.
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ARTICLE 5
Regulatory
5.1 Regulatory Materials and Regulatory Approvals.
5.1.1 Transfer of Regulatory Materials and Regulatory Approvals. Except with respect to any Regulatory Materials and Regulatory Approvals solely related to the [***], upon the request of BMS, Navire shall assign and transfer to BMS all Regulatory Materials and Regulatory Approvals for any Licensed Compound or Licensed Product owned or Controlled by Navire (or any of its Affiliates) with respect to the Territory, including IND# 151,414 the “Existing IND”); provided that BMS may decide, at BMS’ discretion on a case-by-case basis, that it does not want to take assignment of one or more Regulatory Materials or Regulatory Approvals (including a particular Existing INDs), as applicable, in which case Navire shall not so transfer and assign the designated Regulatory Material or Regulatory Approval to BMS. In furtherance of the foregoing, Navire shall execute all documents and take all actions as are necessary or reasonably requested by BMS to transfer and vest title to BMS in all such Regulatory Materials and Regulatory Approvals including the Existing INDs. Pending such time as a given Regulatory Material or Regulatory Approval (including Existing IND) is assigned and transferred to BMS, Navire shall, and hereby does, grant to BMS (and its Affiliates and designees) a right of reference to any and all such Regulatory Material and Regulatory Approval (including the Existing INDs) solely as set forth herein. Following the assignment and transfer of the Existing INDs to BMS, during the pendency of any Navire GDP Trials, BMS shall assign sponsorship responsibilities and authorize Navire to conduct the Navire GDP Trials and communicate with the applicable Regulatory Authorities in accordance with this Agreement and the Existing Clinical Trial Agreements, and shall maintain [***]’s right of cross reference under the [***].
5.1.2 Regulatory Matters.
(a) Except as otherwise set forth in this Article 5, BMS will have the sole right, directly or through its Affiliates, Sublicensees and subcontractors, to prepare and submit Regulatory Materials for obtaining and maintaining the Regulatory Approvals for the Licensed Products in the Field in the Territory (including in connection with patient information leaflets, product inserts, and labeling and packaging for the Licensed Products in the Field in the Territory). For clarity, except in connection with those Development Activities to be conducted pursuant to the Global Development Plan by Navire, Navire shall have no right to, and shall not, file any Regulatory Materials related to any Licensed Compound or Licensed Product in the Territory or otherwise interact with any Regulatory Authorities with respect to any Licensed Compound or Licensed Product in the Territory; provided, however, if Navire is required to interact or communicate with a Regulatory Authority with respect to its activities under the Global Development Plan, it shall do so only in consultation with and at the direction of BMS, solely to the extent not prohibited under the [***]. With respect to any interactions or discussions with Regulatory Authorities to be conducted with respect to Navire’s Development Activities pursuant to the Global Development Plan by Navire (including any relevant Regulatory Materials relating thereto), Navire shall consult with BMS on all such interactions and discussions and allow BMS to participate in any such interactions and discussions, if permitted in accordance with Applicable Law, and to review and approve any Regulatory Materials to be made by Navire with respect to such Development Activities; provided that, with respect to the [***] solely to the extent
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prohibited under the [***]. At the request of BMS, Navire shall reasonably cooperate with and assist BMS in complying with regulatory obligations, including preparing Regulatory Materials and Regulatory Approvals, for the Licensed Product for use in the Field in the Territory, including by Navire providing to BMS, within [***] after a request (or such other shorter period of time provided by BMS to Navire in writing in the event a Regulatory Authority establishes a response deadline shorter than such [***] period), such information and documentation which is in Navire’s (or any of its Affiliate’s) Control and possession as may be necessary or reasonably helpful for BMS to prepare a response to an inquiry from a Regulatory Authority in the Territory with respect to the Licensed Product in the Field.
(b) [***]
5.1.3 Copies of Regulatory Materials to BMS. Within [***] after the Effective Date, and thereafter promptly (but no later than [***]) after generation thereof during the Term, Navire shall provide to BMS a copy of all Regulatory Materials, Regulatory Approvals and all documents, materials and correspondence in connection therewith, including all correspondence to or from any Regulatory Authority, that pertains to Licensed Compound or Licensed Product in the Field in the Territory, including any that are received or made in connection with Navire’s activities under the Global Development Plan solely to the extent not prohibited under the [***]. Such documents, materials and correspondence shall be the Confidential Information of BMS.
5.1.4 Cost of Regulatory Activities. Except as otherwise expressly set forth herein, all regulatory costs incurred by a Party or its Affiliates in connection with the preparation, submission and maintenance of any Regulatory Materials for, and obtaining of Regulatory Approvals of, the Licensed Products in the Field in the Territory as set forth in this Section 5.1 (Regulatory Materials and Regulatory Approvals) will be borne by such Party; provided that, if Navire exercises its Co-Funding Option, then all such regulatory costs incurred by BMS or its Related Parties will be included in Development Costs and subject to Navire Co-Funding Share in accordance with Section 4.6.2 (Exercise of Navire Co-Funding Option).
5.1.5 Regulatory Reporting.
(a) As part of the [***] updates provided in Section 4.7.1 (Records, Reports, and Information; General), BMS will keep Navire reasonably informed as to the status of Regulatory Approvals with respect to the Licensed Products in the Field in the Major Market Countries. BMS will promptly notify Navire of all communications or correspondence with Regulatory Authorities with respect to any Licensed Product in the Field in the Territory that (i) are received by BMS, its Affiliates or any of its Sublicensees during the Term from any Regulatory Authority or submitted by BMS, its Affiliates or any of its Sublicensees to any Regulatory Authority in the Territory and (ii) would reasonably be expected to impact the Development, Manufacture or Commercialization of any Licensed Product in the Field in the [***]; provided that BMS may redact any information related to a product other than a Licensed Product. In the event that, during the Term, Navire receives a request from [***] pursuant to [***] of the [***] Agreement for any data or information (including any communications with Regulatory Authorities, existing Regulatory Filings, clinical or pre-clinical data or supporting documentation) relating to any Licensed Product in the Field in the Territory, upon Navire’s request, BMS will promptly provide Navire with copies of such data or information (in each case, in the form such
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data and information is maintained by BMS or its Affiliates as of the time of such request, and BMS will have no obligation to compile or prepare any new Regulatory Materials or documentation) solely to the extent (A) relating to the Licensed Products in the Field in the Territory; (B) Controlled by and in the possession of BMS, its Affiliates or its Sublicensees (C) necessary or reasonably useful to support [***]'s Development, Manufacture or Commercialization of, or Regulatory Approval for, Licensed Products in Field in the [***], and (D) and required to be provided by Navire under the [***].
(b) Navire shall keep BMS reasonably and regularly informed in connection with the preparation of all Regulatory Materials, Regulatory Authority review of Regulatory Materials, and Regulatory Approvals, in each case with respect to the Licensed Product for sale in the Field outside the Territory. Without limiting the foregoing, Navire shall provide BMS, in a timely manner, with copies of all notices, questions, and requests for information in tangible form which it receives from a Regulatory Authority with respect to the Licensed Product for sale in the Field outside the Territory, in each case, solely to the extent not prohibited under the [***]. Without limiting the foregoing, within [***], Navire shall inform BMS of notification of any action by, or notification or other information which it receives (directly or indirectly) from, any Regulatory Authority outside the Territory which: (i) raises any material concerns regarding the safety or efficacy of the Licensed Product; (ii) indicates or suggests a potential material liability to Third Parties in connection with the Licensed Product; (iii) is reasonably likely to lead to a recall, market withdrawal or market notification with respect to the Licensed Product whether inside the Territory or outside the Territory; or (iv) relates to expedited and periodic reports of adverse events with respect to the Licensed Product whether inside the Territory or outside the Territory, and which may have an adverse impact on Regulatory Approval or the continued Commercialization of the Licensed Product whether inside the Territory or outside the Territory. Navire shall also promptly provide BMS with a copy of all correspondence received from a Regulatory Authority whether inside the Territory or outside the Territory specifically regarding the matters referred to above solely to the extent not prohibited under the [***].
(c) During the Term, at BMS’ election, and at BMS’ sole cost and expense, [***].
5.2 Rights of Reference; Further Assurances.
5.2.1 Navire hereby grants to BMS and its Related Parties a right of reference to any Regulatory Materials owned or Controlled by Navire or any of its Affiliates during the Term solely relating to any Licensed Compound or Licensed Product and any biomarkers or diagnostics for use in connection therewith, including the right to rely upon, access, inspect, copy, and otherwise use all information and data included in or used to support any such Regulatory Materials, solely for BMS’ or its Related Parties’ use in the Exploitation of the Licensed Compounds and Licensed Products (and any biomarkers or diagnostics for use in connection therewith) in the Field in the Territory.
5.2.2 BMS hereby grants to Navire and its Related Parties a right of reference to any Regulatory Materials owned or Controlled by BMS or any of its Affiliates during the Term solely relating to any Licensed Compound or Licensed Product, including the right to rely upon, access, inspect, copy, and otherwise use all information and data included in or used to support
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any such Regulatory Materials, solely for Navire’s or its Related Parties’ use in the Exploitation of the Licensed Compounds and Licensed Products in the Field outside the Territory.
5.2.3 In furtherance of the foregoing, each Party (and its Affiliates) will take such actions as may be reasonably requested by the other Party to give effect to the intent of the foregoing provisions and to give the requesting Party and its Related Parties the benefit of the foregoing right of reference. Such actions may include providing a signed statement that the requesting Party and its Related Parties may rely on, and that the Regulatory Authority may access, in support of the requesting Party (or its Related Party’s) application for Regulatory Approval in the Field in such Party’s territory or providing any underlying raw data or information submitted by a Party (or its Affiliates) to the Regulatory Authority with respect to any such Regulatory Materials or Regulatory Approvals.
5.2.4 Each Party shall use Commercially Reasonable Efforts to obtain Control of any and all Regulatory Materials of any of its direct or indirect licensees such that such Party can grant the foregoing rights of reference to the other Party hereunder with respect to such Regulatory Materials.
ARTICLE 6
Commercialization
6.1 Commercialization in the Field in the Territory. BMS will have the sole right, directly or through its Affiliates, Sublicensees and subcontractors, to Commercialize the Licensed Compounds and Licensed Products for use in the Field in the Territory. BMS shall have the sole right to invoice and book sales, establish all terms of sale (including pricing and discounts) and warehousing, and distribute the Licensed Products in the Territory and to perform or cause to be performed all related services. BMS shall handle all returns, recalls, or withdrawals, order processing, invoicing, collection, distribution, and inventory management with respect to the Licensed Products in the Territory.
6.2 BMS’ Performance.
6.2.1 Commercialization Diligence Obligations. BMS will use Commercially Reasonable Efforts to Commercialize at least one (1) Licensed Product for use in the Field in each Major Market Country in which BMS has obtained Regulatory Approval for such Licensed Product.
6.2.2 Compliance. In connection with BMS’ Commercialization of the Licensed Products in the Field in the Territory, BMS will comply with all Applicable Law in all material respects.
6.2.3 Reporting Obligations. BMS will inform Navire concerning the progress of its efforts to Commercialize Licensed Product, through annual updates that will summarize in reasonable detail BMS’ Commercialization activities for such Licensed Product. In addition, on a country-by-country basis, BMS will provide Navire with written notice of the First Commercial Sale of each Licensed Product in the Field in the Territory as soon as reasonably practicable after such event, and in any event within [***] of occurrence in such country.
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6.3 Diversion. Subject to Applicable Law, each Party hereby covenants and agrees that it and its Affiliates shall not, and it shall contractually obligate (and use commercially reasonable efforts to enforce such contractual obligation) its applicable licensees, sublicensees, and contractors not to, directly or indirectly, promote, market, distribute, import, sell or have sold any Licensed Product, including via the Internet or mail order, to any Third Party in the other Party’s territory. Neither Party shall engage, nor permit its Affiliates, licensees, sublicensees or contractors to engage, in any advertising or promotional activities relating to any Licensed Product for use directed primarily to customers or other buyers or users of such Licensed Product located in any country or jurisdiction in the other Party’s territory, or solicit orders from any prospective purchaser located in any country or jurisdiction in the other Party’s territory.
ARTICLE 7
Manufacturing
7.1 Supply of Licensed Compounds and Licensed Products to BMS.
7.1.1 Supply of Licensed Compounds and Licensed Products to BMS. During the period beginning on the Effective Date and ending on the date that BMS determines that the facilities designated by BMS pursuant to Section 2.7.2 (Manufacturing Technology Transfer) are fully qualified and validated for the Manufacture of Licensed Compound and Licensed Product following completion of Manufacturing Technology Transfer pursuant to Section 2.7.2 (Manufacturing Technology Transfer) (the “Supply Period”), unless BMS notifies Navire in writing in accordance with the terms and conditions set forth in the Supply Agreements that it no longer desires Navire to Manufacture and supply Licensed Compounds or Licensed Products to BMS (and its Related Parties), Navire shall Manufacture and supply to BMS (and its Related Parties) Licensed Compounds and Licensed Products, for the purpose of performing Development Activities. Such Manufacturing and supply shall be pursuant to one or more supply agreements and associated quality agreements (collectively, “Supply Agreements”) to be negotiated in good faith, mutually agreed, and entered into by the Parties in within [***] after the Effective Date (or such other period of time as agreed to by the Parties in writing). For clarity, the Parties may mutually agree to enter into a clinical supply agreement within such period and defer execution of a commercial supply agreement until a later date, and each such agreement shall be considered a “Supply Agreement” hereunder. The Supply Agreements will include terms customary and commercially reasonable for supply arrangements between parties in similar circumstances. In all cases, the price for the supply shall be [***], as more particularly set forth in the Supply Agreements. For clarity, in all cases, BMS will also have the right to use alternative sources of supply, in its discretion.
7.1.2 Materials Transfer.
(a) In accordance with the timelines set forth in Schedule 7.1.2 (Initial Materials Transfer) (or at such time as determined by the JSC thereafter), Navire will transfer to BMS, at BMS’ cost and expense (in accordance with the applicable Supply Agreement entered into pursuant to Section 7.1.1 (Supply of Licensed Compounds and Licensed Products to BMS)), (i) the amounts of Licensed Compounds and Licensed Products (including work-in-process from ongoing manufacturing campaigns) set forth in Schedule 7.1.2 (Initial Materials Transfer), which Schedule shall also indicate the amounts of Licensed Compounds and Licensed Products to be
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PRIVILEGED AND CONFIDENTIAL
transferred to BMS that are intended to be or identified as GMP material and the amounts of Licensed Compounds and Licensed Products to be retained by Navire, and (ii) the other materials set forth in Schedule 7.1.2 (Initial Materials Transfer). With respect to any Licensed Compounds and Licensed Products as set forth in Schedule 7.1.2 (Initial Materials Transfer) that is identified as GMP material, Navire hereby represents and warrants to BMS that, at the time of transfer to BMS, such Licensed Compounds and Licensed Products shall (A) have been Manufactured in accordance with GMP and Applicable Law, (B) conform to the Product Specifications with respect thereto, and (C) not be adulterated or mislabeled.
(b) Within [***] after the expiration of the Supply Period (or as soon as reasonably practicable thereafter), Navire will transfer to BMS, at BMS’ cost and expense (in accordance with the applicable Supply Agreement entered into pursuant to this Section 7.1.1 (Supply of Licensed Compounds and Licensed Products to BMS)), any remaining amounts of Licensed Compounds and Licensed Products (including work-in-process from ongoing manufacturing campaigns) then in Navire’s (or its Affiliates’ or Related Parties’ or its Third Party manufacturer’s) possession or control, other [***].
(c) Title to the foregoing amounts of Licensed Compounds and Licensed Products and such other materials will transfer to BMS upon BMS’ receipt thereof. Prior to the date of the first shipment of such Licensed Compounds and Licensed Products under the Supply Agreement, the Parties shall finalize and execute a quality agreement on customary terms that governs the transfer to BMS of Licensed Compounds and Licensed Products that are intended to be or identified as GMP material, which quality agreement shall (i) set forth the additional roles and responsibilities relative to the quality of such Licensed Compounds and Licensed Products as well as GMP documents and certifications required to release such Licensed Compounds and Licensed Products, (ii) attach the applicable Product Specifications, and (iii) set forth any documentation required for shipment.
7.2 Supply of Licensed Compounds and Licensed Products for Navire GDP Trials. Navire shall be responsible, at its cost, for Manufacturing and supplying sufficient quantities of Licensed Compounds and Licensed Products for the conduct of the Existing Navire GDP Trials. With respect to any such Licensed Compounds and Licensed Products, Navire hereby represents and warrants to BMS that such Licensed Compounds and Licensed Products shall (a) have been Manufactured in accordance with GMP and Applicable Law; (b) conform to the Product Specifications with respect thereto; and (c) not be adulterated or mislabeled.
7.3 Other Supply of Licensed Compounds and Licensed Products. Except as otherwise set forth in Section 7.1 (Supply of Licensed Compounds and Licensed Products to BMS) and 7.2 (Supply of Licensed Compounds and Licensed Products for Navire GDP Trials), BMS will have the sole right, directly or through its Affiliates, Sublicensees and subcontractors, to Manufacture the Licensed Compounds and Licensed Products for use in the Field in the Territory. For clarity, nothing set forth herein will prevent Navire or any of its licensees or sublicensees from Manufacturing the Licensed Compound or Licensed Products in the Territory for the Exploitation of such Licensed Compounds or Licensed Products outside of the Territory.
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ARTICLE 8
Payments
8.1 Upfront License Fee. Within [***] from the Effective Date, BMS will make a one-time payment to Navire of [***] (“Upfront License Fee”). The Upfront License Fee will be nonrefundable and noncreditable against any other payments due hereunder.
8.2 Development Milestone Payments. BMS will pay to Navire the one-time, non-refundable, non-creditable, milestone payments described in this Section 8.2 (Development Milestone Payments) and set forth in Table 8.2 (Development Milestones) below following the first achievement by BMS (or its Related Parties) hereunder of the corresponding milestone events for the first Licensed Product in the Field in the Territory to achieve such milestone event (each such Development milestone event, a “Development Milestone” and its corresponding milestone payment, a “Development Milestone Payment”). BMS will promptly notify Navire in writing of, but in no event later than [***] after, the achievement of each Development Milestone (each, a “Development Milestone Notification Notice”). BMS will pay the applicable Development Milestone Payment set forth in Table 8.2 (Development Milestone Payments) by electronic transfer of immediately available funds, into an account designated by Navire, within [***] after the achievement (first occurrence) of the applicable Development Milestone; provided, however, that in no event will a failure to deliver a Development Milestone Notification Notice relieve BMS of its obligation to pay Navire the Development Milestone Payments described in this Section 8.2 (Development Milestone Payments). Each Development Milestone will be paid a maximum of one (1) time, and Development Milestone Payments previously paid by BMS for any Licensed Product would not be paid again for any additional Licensed Product that achieves such Development Milestones or any repeated achievement by the same Licensed Product. Further, (a) if a Clinical Trial does not constitute a Registrational Trial at the time of its Initiation but subsequently becomes a Registrational Trial or if Regulatory Approval is granted for the first Licensed Product after such Clinical Trial, such Clinical Trial will be deemed a Registrational Trial and the applicable Development Milestone for such Registrational Trial will be deemed achieved (to the extent not previously achieved) at the time at which the applicable Regulatory Authority has agreed (as evidenced by definitive written correspondence from the applicable Regulatory Authority, which may include meeting minutes, email correspondence or other written correspondence) that such Clinical Trial is a Registrational Trial that supports the filing of an MAA without the need for additional Clinical Trials if the pre-defined endpoints are met, and (b) except as set forth in Section 4.3.3 (Navire GDP Trial Breach), (i) if the Development Milestone for “[***]” or “[***]” has failed to be achieved and (ii) BMS (or any of its Related Parties) achieves the subsequent Development Milestone for “[***]” with respect to (A) the same Licensed Product for use in [***] shall be deemed achieved and BMS shall pay to Navire the Development Milestone Payment corresponding to the [***] or (B) the same Licensed Product for use in Combination Therapy with a [***] and [***] then the [***] shall be deemed achieved and BMS shall pay to Navire the Development Milestone Payment corresponding to the [***], as applicable.
Table 8.2 – Development Milestones |
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Development Milestone |
Development Milestone Payment due [***] |
-- |
-- |
[***] |
$[***] |
-- |
-- |
[***] |
$[***] |
-- |
-- |
[***] |
$[***] |
-- |
-- |
[***] |
[***] |
[***] |
[***] |
[***] |
$[***] |
$[***] |
$[***] |
[***] |
$[***] |
$[***] |
[***] |
[***] |
$[***] |
$[***] |
[***] |
[***] |
$[***] |
||
8.3 Sales Milestones Payments. Within [***] following the end of the Calendar Year in which each of the sales milestone events described in Table 8.3 (Sales Milestones) below is first achieved hereunder for the first Licensed Product, whether by BMS or any Related Party, BMS will pay Navire the corresponding one-time, non-refundable, non-creditable, payment set forth in Table 8.3 (Sales Milestones) (each such sales milestone event, a “Sales Milestone” and its corresponding milestone payment, a “Sales Milestone Payment”). Such Sales Milestone Payment will be paid by electronic transfer of immediately available funds into an account designated by Navire. Each Sales Milestone will be paid a maximum of one (1) time, and Sales Milestone Payments previously paid by BMS for any Licensed Product would not be paid again for any additional Licensed Product that achieves such Sales Milestones or any repeated achievement by the same Licensed Product.
Table 8.3 – Sales Milestones |
|
Sales Milestone |
Sales Milestone Payment |
[***] |
$[***] |
[***] |
$[***] |
[***] |
$[***] |
[***] |
$[***] |
[***] |
$[***] |
[***] |
$[***] |
[***] |
$[***] |
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For clarity, (a) if no royalty is payable on a given unit of Licensed Product (e.g., following the Royalty Term for such Licensed Product in a given country), then the Net Sales of such unit of Licensed Product shall not be included for purposes of determining whether a Sales Milestone is achieved; and (b) if two (2) or more Sales Milestones are achieved in the same Calendar Year, then payment of the corresponding Sales Milestone Payments will be concurrently due for all such achieved Sales Milestones.
8.4 Payments for the first Licensed Product. All milestone payments described in Section 8.2 (Development Milestone Payments) and Section 8.3 (Sales Milestones Payments) (collectively, “Milestone Payments”) will be paid only once, regardless of the number of times achieved, and regardless of whether a Licensed Product is approved for use in different presentations, formulations, dosages or as a Combination Product and regardless of the number of Licensed Products that achieve each Development Milestone or Sales Milestone.
8.5 Royalty Payments.
8.5.1 Royalty Rates. As further consideration for the rights granted to BMS under this Agreement, subject to Section 8.5.2 (Royalty Rates for Licensed Products upon Exercise of Co-Funding Option) as well as Section 8.5.3 (Provisions Applicable to Royalty Payments), Section 8.6 (Generic Competition), Section 8.7 (Expiration of Valid Claims), Section 8.8 (Royalty Floor), Section 8.9 (Stacking) and Section 8.10 (Compulsory Licenses), during the applicable Royalty Term with respect to a given Licensed Product, BMS will pay to Navire, for each Calendar Year, a tiered royalty on annual Net Sales of such Licensed Product in the Field in the Territory, on a Licensed Product-by-Licensed Product basis, based on the Royalty Rates as set forth in Table 8.5.1 (Royalties for Licensed Products without Co-Funding Obligations).
Table 8.5.1 –Royalties for Licensed Products without Co-Funding Obligations |
|
Net Sales Thresholds Annual Net Sales for a given Licensed Product in a given Calendar Year in the Territory: |
Royalty Rates for a given Licensed Product |
[***] |
[***]% |
[***] |
[***]% |
[***] |
[***]% |
|
|
8.5.2 Royalty Rates for Licensed Products upon Exercise of Co-Funding Option. If Navire exercises its Co-Funding Option pursuant to Section 4.6.2 (Exercise of Navire Co-Funding Option); provided that (a) Navire is not in breach of its payment obligations under Section 4.6.2 (Exercise of Navire Co-Funding Option); and (b) the Co-Funding Term has not otherwise ended, during each applicable Royalty Term, in lieu of the Royalty Rates on Net Sales of Licensed Products set forth in Section 8.5.1 (Royalty Rates), subject to Sections 8.5.3 (Provisions Applicable to Royalty Payments), 8.6 (Generic Competition), 8.7 (Expiration of Valid Claims), 8.8 (Royalty Floor), 8.9 (Stacking) and 8.10 (Compulsory Licenses), BMS will pay to Navire, for each Calendar Year, a tiered royalty on annual Net Sales of such Licensed Product in
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PRIVILEGED AND CONFIDENTIAL
the Field in the Territory, on a Licensed Product-by-Licensed Product basis, based on the Royalty Rate as set forth in Table 8.5.2 (Co-Funding Option Royalties for Licensed Products):
Table 8.5.2 – Co-Funding Option Royalties for Licensed Products |
|
Outside the U.S. |
|
Net Sales Thresholds Annual Net Sales for a given Licensed Product in a given Calendar Year in the Territory other than the U.S.: |
Royalty Rates |
[***] |
[***]% |
[***] |
[***]% |
[***] |
[***]% |
Within the U.S. |
|
Net Sales Thresholds Annual Net Sales for a given Licensed Product in a given Calendar Year within the U.S.: |
Royalty Rates |
On the portion of annual Net Sales of a given Licensed Product in the U.S. in a given Calendar Year that is less than or equal to $[***] |
[***]% |
On the portion of annual Net Sales of a given Licensed Product in the U.S. in a given Calendar Year that is greater than $[***] but less than or equal to $[***] |
[***]% |
On the portion of annual Net Sales of a given Licensed Product in the U.S. in a given Calendar Year that is greater than $[***] |
[***]% |
8.5.3 Provisions Applicable to Royalty Payments.
(a) BMS’ royalty obligations to Navire under this Section 8.5 (Royalty Payments) shall apply on a Licensed Product-by-Licensed Product and country-by-country basis only during the applicable Royalty Term for such Licensed Product in such country. Following expiration of the applicable Royalty Term for a given Licensed Product in a given country, as applicable, no further royalties will be payable in respect of sales of such Licensed Product in such country and thereafter the license granted to BMS hereunder with respect to such Licensed Product in such country will automatically become fully paid-up, perpetual, irrevocable and royalty-free. For clarity, with respect to each Licensed Product and a country in the Territory, no Royalty Payments shall be due or payable on any future sales of such Licensed Product in such country held in inventory (i.e., that have not been sold as determined in accordance with Accounting Standards) as of the date of expiration of the Royalty Term for such Licensed Product in such country.
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PRIVILEGED AND CONFIDENTIAL
(b) The applicable Royalty Rates set forth in the applicable table above will apply only to that portion of the annual Net Sales of the applicable Licensed Product during a given Calendar Year that falls within the indicated range. For clarity, (i) if no royalty is payable on a given unit of Licensed Product (e.g., following the Royalty Term for a given Licensed Product in a given country), then the Net Sales of such unit of Licensed Product shall not be included for purposes of determining the royalties or royalty tiers, (ii) Net Sales of a given Licensed Product will not be combined with Net Sales of any other Licensed Product for purposes of determining the royalties or royalty tiers, and (iii) with respect to each of the Licensed Products for which a royalty is payable, only one royalty shall be payable by a Party to the other Party for each sale of such Licensed Product.
8.6 Generic Competition. On a country-by-country and Licensed Product-by-Licensed Product basis, if during a Calendar Quarter for which Royalty Payments are being calculated hereunder, one or more Generic Products are sold in a particular country and the aggregate number of units of such Licensed Product sold in such country for such Calendar Quarter declines by the percentage described below, relative to the average quarterly unit volume sales of such Licensed Product in such country in the four (4) Calendar Quarters prior to the first entry of a Generic Product in such country, then the Royalty Rate otherwise applicable to the Net Sales of such Licensed Product in such country for such Calendar Quarter and all future Calendar Quarters thereafter will be reduced by the following percentage of the otherwise applicable Royalty Rate:
Decline in Units |
Royalty Reduction |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
8.7 Expiration of Valid Claims. If, on a Licensed Product-by-Licensed Product and country-by-country basis, any Royalty Payments that are payable pursuant to Section 8.5 (Royalty Payments) attributable to Net Sales of such Licensed Product in a country in the Territory in which there is no Valid Claim within the Royalty Patents claiming such Licensed Product in such country, then the Royalty Rate otherwise applicable to the Net Sales of such Licensed Product in such country will be reduced by [***].
8.8 Royalty Floor. Subject to Section 8.10 (Compulsory Licenses), on a country-by-country and Licensed Product-by-Licensed Product basis, during the Royalty Term, in no event will the aggregate Royalty Payments that are payable pursuant to Section 8.5 (Royalty Payments) for such Licensed Product in such country in any Calendar Quarter be reduced, as a result of Section 8.6 (Generic Competition), Section 8.7 (Expiration of Valid Claims), or Section 8.9 (Stacking), individually or in combination, below [***] of the aggregate Royalty Payments
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PRIVILEGED AND CONFIDENTIAL
otherwise payable pursuant to Section 8.5 (Royalty Payments) for such Licensed Product in such country.
8.9 Stacking. If BMS (or any of its Affiliates or Sublicensees) obtains a license under Patents or Know-How of a Third Party ([***]) that are [***], or obtaining the right to license to such Patents or Know-How for use in connection with any of the foregoing, would result in a payment to such Third Party, then BMS may deduct from the Royalty Payments with respect to Net Sales of such Licensed Product in a particular Calendar Quarter and the Milestone Payments that would otherwise have been due under Section 8.2 (Development Milestone Payments) or Section 8.3 (Sales Milestone Payments) with respect to such Licensed Product, an amount equal to [***] paid by BMS (or any of its Affiliates or Sublicensees) to such Third Party for license (or the exercise thereof) (“BMS Third Party Payments”). Notwithstanding the foregoing, and subject to Section 8.8 (Royalty Floor) in no event shall the Royalty Payments with respect to Net Sales of such Licensed Product be reduced by more than [***] in any Calendar Quarter by operation of this Section 8.9 (Stacking); provided that, [***]. Notwithstanding the foregoing, except to the extent Navire has reimbursed BMS in accordance with Section 8.12 (Existing Third Party License Agreements and Other Third Party License Agreements), if (a) BMS (or any of its Affiliates or its Sublicensees) obtains a license from any Third Party to any Patents that [***]; or (b) [***], then BMS may deduct from any amounts payable by BMS to Navire hereunder (including upfronts, royalties and milestones), [***] paid by BMS (or any of its Affiliates or Sublicensees) to such Third Party or the applicable Navire Licensor, as applicable, for such license (or the exercise thereof) that is directly attributable to [***]. For the avoidance of doubt, and without limiting the right of BMS to reduce payments to Navire in accordance with this Section 8.9 (Stacking), in no event shall Navire, its Affiliates, BridgeBio or any [***] Affiliate have any obligation to make any payment to BMS or its Affiliates under this Section 8.9 (Stacking).
8.10 Compulsory Licenses. If a Compulsory License is granted to a Third Party with respect to a Licensed Product in any country in the Territory with a royalty rate lower than the Royalty Rate that otherwise would be applicable under Section 8.5 (Royalty Payments) to such Licensed Product in such country (as adjusted pursuant to Section 8.6 (Generic Competition) and Section 8.7 (Expiration of Valid Claims)), then the Royalty Rate to be paid by BMS on Net Sales in such country under Section 8.5 (Royalty Payments) shall be reduced to [***].
8.11 Royalty Payments and Reports. BMS will calculate all Royalty Payments payable to Navire pursuant to Section 8.5 (Royalty Payments) with respect to Net Sales of each Licensed Product at the end of each Calendar Quarter, which amounts will be converted to Dollars at such time in accordance with Section 8.14 (Currency Conversion). BMS will pay to Navire the Royalty Payments due for Net Sales during a given Calendar Quarter within [***] after the end of such Calendar Quarter. Each Royalty Payment due to Navire will be accompanied by a statement of the amount of Net Sales of each Licensed Product, (a) in the Territory as a whole; and (b) on a country-by-country basis during the applicable Calendar Quarter (including such amounts expressed in local currency and as converted to Dollars). Without limiting the generality of the foregoing, BMS will require its Related Parties to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by BMS.
8.12 Existing Third Party License Agreement and Other Third Party License Agreements. As between the Parties, Navire will be solely responsible for all payments, including
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PRIVILEGED AND CONFIDENTIAL
upfronts, milestones, royalties and other forms of consideration, owed to any Third Party with respect to the Licensed Compounds and Licensed Products or the Exploitation thereof (a) under any agreements between Navire (or any of its Affiliates) and a Third Party, including any Navire In-License Agreements; or (b) under any agreements between BMS (or any of its Related Parties) and a Third Party with respect to any (i) Patent that claims or covers [***] or (ii) intellectual property right that is [***]; provided, however, that with respect to this clause (b), Navire will be responsible solely to the extent such payments to are reasonably attributable to the license to such Patent or intellectual property right with respect to the Licensed Compound or Licensed Product. [***]. Without the prior written consent of BMS, Navire shall not, and shall cause its Affiliates not to, enter into any agreement with any Third Party after the Effective Date related to [***]. BMS will have the first right (but not the obligation) to negotiate and enter into any such agreement.
8.13 Taxes and Withholding.
8.13.1 VAT. The Parties agree to cooperate with one another and use reasonable efforts to ensure that value added tax or similar payment (“VAT”) in respect of any payments made by BMS to Navire under this Agreement does not represent an unnecessary cost in respect of payments made under this Agreement. For purposes of clarity, all sums payable under this Agreement will be exclusive of VAT. In the event that any VAT is owing in any jurisdiction in respect of any such payment, BMS will pay such VAT, and such payment will be made after deduction of such VAT. In the event that any deducted VAT is later recovered by BMS or an Affiliate, BMS will reimburse Navire within thirty (30) days of recovery for the deducted amount. In the event that any VAT is owed in any jurisdiction in respect of any such payment, Navire will provide to BMS tax invoices showing the correct amount of VAT in respect of such payments hereunder.
8.13.2 Withholding Tax Matters. If BMS is required to make a payment to Navire subject to a deduction of tax or withholding tax, then the sum payable by BMS (in respect of which such deduction or withholding is required to be made) will be made to Navire after deduction of the amount required to be so deducted or withheld, which deducted or withheld amount will be remitted in accordance with Applicable Law. Notwithstanding this Section 8.13.2 (Withholding Tax Matters) to the contrary, if, as a result of a Withholding Action, by BMS (including any assignee or successor), withholding is required by Applicable Law and the amount of such withholding exceeds the amount of withholding that would have been required if BMS had not committed the Withholding Action, then BMS shall pay an additional withholding amount to Navire such that, after withholding from the payment contemplated by this Agreement and such additional withholding amount, Navire receives the same amount as it would have received from BMS absent such Withholding Action by the Payor but only to the extent such additional withholding amounts cannot be otherwise recouped or offset by Navire. If, as a result of a Withholding Action by Navire (including any assignee or successor), withholding is required under Applicable Law and the amount of such withholding exceeds the amount of withholding that would have been required if Navire had not committed the Withholding Action, BMS shall not be required to pay an additional withholding amount. For purposes of this Section 8.13 (Taxes and Withholding), “Withholding Action” by a Party (including any assignee or successor) means (i) a permitted assignment or sublicense of this Agreement (in whole or in part) by such Party to an Affiliate or a Third Party outside of the United States; (ii) the exercise by such Party of its rights
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PRIVILEGED AND CONFIDENTIAL
under this Agreement (in whole or in part) through an Affiliate or Third Party outside of the United States (or the direct exercise of such rights by an Affiliate of such Party outside of the United States); and (iii) a redomiciliation of such Party, an assignee or a successor to a jurisdiction outside the United States.
8.13.3 German Exemption Certificate. If at any time the Navire Technology includes intellectual property that is registered in a German public book or register, Navire shall obtain and provide BMS with a valid certificate issued by the applicable German tax authorities establishing Navire’s exemption from German withholding tax (a “German Exemption Certificate”). If any payment is due to Navire hereunder with respect to such Navire Technology and, at the time such payment is to be made, BMS is not in possession of a valid and effective German Exemption Certificate, BMS shall inform Navire and Navire may elect to either have (a) BMS delay making such payment until such time as Navire receives such a German Exemption Certificate; or (b) BMS withhold such amounts from such payment as determined by BMS. If BMS withholds any amount under clause (b) above, BMS shall remit such withheld amount to the applicable German tax authorities and provide Navire with reasonable evidence of such payment. Such reasonable evidence shall in any event include without limitation the certificate under section 50a (5) sentence 7 of the German Income Tax Act (Einkommensteuergesetz).
8.13.4 Tax Cooperation. To the extent BMS is required to deduct and withhold taxes on any payments to Navire, BMS will pay the amounts of such taxes to the proper Governmental Authority in a timely manner and promptly transmit to Navire an official tax certificate or other evidence of such withholding sufficient to enable Navire to claim such payments of taxes. BMS agrees to reasonably cooperate with Navire in claiming refunds or exemptions from such deductions or withholdings under any Applicable Law or treaty to ensure that any amounts required to be withheld pursuant to this Section 8.13 (Taxes and Withholding) are reduced to the fullest extent permitted by Applicable Law or treaty. In addition, the Parties shall reasonably cooperate to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) in connection with this Agreement, as applicable.
8.14 Currency Conversion. All payments hereunder will be made in Dollars. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), any amount expressed in a foreign currency will be converted into Dollars in a manner consistent with such Party’s normal practices used to prepare its audited financial statements for external reporting purposes, in accordance with GAAP, consistently applied.
8.15 General Payment Procedures. Unless otherwise expressly payable in certain time frames as provided in this Agreement, the receiving Party will invoice the paying Party for all amounts due to such receiving Party under this Agreement, and such payments will be made within [***] following the receipt by the paying Party of an invoice from the receiving Party specifying the amount due. All payments under this Agreement will be made in Dollars. All payments to either Party under this Agreement shall be made by electronic funds transfer of immediately available funds in the requisite amount to such bank account designated by the receiving Party.
8.16 Offset Rights. Each Party shall have the right to offset any (a) undisputed amount; or (b) disputed amount once such dispute has been finally resolved pursuant to Article 15, in each
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case ((a) and (b)), owed by the other Party to such first Party under or in connection with this Agreement, including pursuant to Article 11, against any payments owed by such first Party to such other Party under this Agreement. Such offsets shall be in addition to any other rights or remedies available under this Agreement and Applicable Law.
8.17 Records; Audits. Each Party will keep full, true, and accurate records and books of account containing all particulars that may be necessary for the purpose of confirming the accuracy of, and calculating, as applicable, all Royalty Payments, the Navire Co-Funding Share, and all costs and expenses incurred for the performance of each Navire GDP Trial (in the case of Navire), during the Term and for [***] thereafter or such longer period as required by Applicable Law. Each Party will have a right to request an audit of the other Party in order to confirm the accuracy of the foregoing as provided in this Section 8.17 (Records; Audits) (an “Audit”); provided, however, that the auditing Party will only have the right to request such Audit [***] and may not Audit the same records or books more than [***], and may only Audit the records or books during the [***] period immediately prior to the date of such Audit. Upon the written request of either Party to Audit the other Party, the auditing Party will engage an independent, internationally recognized accounting firm reasonably acceptable to the audited Party to perform a review as is necessary to enable such accounting firm to calculate or otherwise confirm the accuracy of the applicable Royalty Payments payable to Navire hereunder (including records of Net Sales), the Navire Co-Funding Share, or costs and expenses incurred for the performance of each Navire GDP Trial, as applicable, in each case, for the Calendar Year(s) requested by the auditing Party; provided that (1) such accounting firm will be given access to, and will be permitted to examine and copy such books and records of the audited Party upon [***] prior written notice to the audited Party, and at all reasonable times on Business Days, (2) prior to any such examination taking place, such accounting firm will enter into a confidentiality agreement with the audited Party reasonably acceptable to the audited Party in order to keep all information and data contained in such books and records strictly confidential and only use the same for the purpose of the reviews, preparation of any audit reports or findings, or calculations that they need to perform in order to determine any amounts being reviewed, and (3) such accounting firm will use reasonable efforts to minimize any disruption to the audited Party’s business. The audited Party will make personnel reasonably available during regular business hours to answer queries on all such books and records to the extent required for the purpose of the Audit. The accounting firm will deliver a copy of their findings to each of the Parties within [***] of the completion of the review, and, unless the audited Party invokes the dispute resolution mechanism set forth in Section 15.1 (Disputes) within [***] of the audited Party’s receipt of such finding, the findings of such accounting firm will be final and binding on each of the Parties. Any undisputed underpayments by BMS or Navire will be paid to Navire or BMS, as applicable, within [***] of notification of the results of such Audit. Any undisputed overpayments made by BMS or Navire will be refunded by Navire or BMS, as applicable, within [***] of notification of the results of such Audit. The cost of the accounting firm will be the responsibility of Navire unless the accounting firm’s calculation shows that the actual amounts payable, as applicable, to be different, by more than the greater of (x) [***] of the amount otherwise due or (y) [***], than the amounts as paid or reported by the audited Party for the period subject to the Audit, in which case, the audited Party will reimburse the auditing Party for the reasonable cost of the Audit.
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article 9
Intellectual Property Matters
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ARTICLE 10
Representations, Warranties and Covenants; Compliance
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ARTICLE 11
Indemnification
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ARTICLE 12
Confidentiality
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provided that the exceptions in subclauses (b) and (c) above shall not apply with respect to the BMS Arising Know-How, Regulatory Materials or Regulatory Data related to any Licensed Compound or Licensed Product, or Navire Know-How relating to (i) the composition of matter of a Licensed Compound or Licensed Product or (ii) a formulation, product by process, or method of use (whether as a monotherapy or for use in any Combination Therapy), manufacture, preparation or administration of a Licensed Compound or Licensed Product, or the Joint Arising Know-How.
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If to Navire or BridgeBio:
Navire Pharma, Inc.
421 Kipling Street
Palo Alto, CA 91320-1799
Attention: Chief Executive Officer
Email: [***]
With copies to:
BridgeBio Pharma, Inc.
421 Kipling Street
Palo Alto, CA91320
Attention: Legal Department
Email: [***]
If to BMS:
Bristol-Myers Squibb Company
Route 206 & Province Line Road
Princeton, NJ 08543-4000
Attention: Executive Vice President, Strategy and Business Development
With copies (that shall not constitute notice) to:
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Bristol-Myers Squibb Company
Route 206 & Province Line Road
Princeton, New Jersey 08543-4000
Attention: Senior Vice President, Associate General Counsel, Transactions Law
Email: [***]
Any such notice shall be deemed given on the date received, except any notice received after 5:30 p.m. (in the time zone of the receiving party) on a Business Day or if received on a non-Business Day, shall be deemed to have been received on the next Business Day. A Party may add, delete, or change the person or address to which notices should be sent at any time upon written notice delivered to the other Parties in accordance with this Section 16.3 (Notices).
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In Witness Whereof, the Parties and BridgeBio have executed this Agreement by their duly authorized representatives as of the Effective Date.
Bristol-Myers Squibb Company |
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Michael Henderson |
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EVP, |
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Chief Executive Officer |
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Strategy and Business Development |
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BridgeBio Pharma, Inc. |
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Neil Kumar |
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Chief Executive Officer |
Schedule 1.4
[***]
Schedule 1.37
[***]
Schedule 1.38
[***]
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Schedule 1.40
[***]
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Schedule 1.63
[***]
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Schedule 1.64
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Schedule 1.66
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Schedule 1.77
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Schedule 1.81
[***]
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Schedule 2.4
[***]
105
Schedule 4.2.2
Initial Global Development Plan
[***]
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Schedule 4.7.3
Report Information for Navire GDP Trials
[***]
107
Schedule 7.1.2
Initial Material Transfer
[***]
108
Schedule 10.2
Disclosure Schedule
[***]
109
Schedule 12.3
Press Release
[***]
110
Schedule 15.3
[***]
111
[***] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) is the type that the Registrant treats as private or confidential.
Execution Version
Exhibit 10.2
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT is made and dated as of May 12, 2022 (this “First Amendment”) by and among BRIDGEBIO PHARMA, INC., a Delaware corporation (“Borrower”), each other Person party hereto as a guarantor (each a “Guarantor” and collectively, the “Guarantors”), the several banks and other financial institutions or entities party hereto (individually or collectively, as the context requires, “Lender” or “Lenders”) and U.S. Bank National Association, in its capacity as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, “Administrative Agent”) and collateral agent for the Secured Parties (in such capacity, together with its successors in such capacity, “Collateral Agent”, and together with the Administrative Agent, the “Agents”).
RECITALS
WHEREAS, Borrower, the Guarantors, the Lenders, the Administrative Agent and the Collateral Agent, have entered into that certain Loan and Security Agreement dated as of November 17, 2021 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Loan Agreement”; the Existing Loan Agreement as amended by this First Amendment, the “Loan Agreement”);
WHEREAS, Borrower has requested that the Existing Loan Agreement be amended so as to, among other things: (1) permit the disposition and sale by Borrower of a certain priority review voucher issued by the Food and Drug Administration to Origin on February 28, 2021 [***]; (2) permit generally the disposition of other priority review vouchers; (3) reduce the aggregate amount of Tranche II Advances that may be made available to Borrower from $300,000,000 to $100,000,000, on the amended terms and conditions specified herein; (4) remove the amortization payments in respect of Term Loan Advances; (5) [***]; and (6) modify the terms and conditions governing as to when certain non-Loan Parties will be required to become Guarantors; and
WHEREAS, each of the Lenders party hereto, constituting all Lenders party to the Existing Loan Agreement, are willing on the terms and subject to the conditions set forth below, to consent to the amendments to the Existing Loan Agreement set forth herein.
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
4887-1953-8974.v6
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Definitions. Capitalized terms used (including in the preamble and recitals hereto) but not defined herein shall have the meanings assigned to such terms in the Existing Loan Agreement. As used in this First Amendment:
“Agents” is defined in the preamble hereto.
“Existing Loan Agreement” is defined in the first recital hereto.
“First Amendment” is defined in the preamble hereto.
“First Amendment Effective Date” is defined in Article III to the First Amendment.
ARTICLE II
AMENDMENTS TO EXISTING LOAN AGREEMENT
SECTION 2.1 Amendments to Existing Loan Agreement. Borrower, each Guarantor, each Lender party hereto and the Agents agree that, effective upon the First Amendment Effective Date, the Existing Loan Agreement is hereby amended as follows:
ARTICLE III
CONDITIONS TO EFFECTIVENESS
The effectiveness of this First Amendment is subject to the satisfaction (or waiver) of the following conditions (the date on which such conditions are satisfied (or waived), the “First Amendment Effective Date”):
SECTION 3.1 This First Amendment shall have been duly executed by Borrower, each Guarantor, the Administrative Agent, the Collateral Agent and each of the Lenders, and delivered to the Administrative Agent.
SECTION 3.2 No Default or Event of Default shall exist or would result from the amendments made herein on the First Amendment Effective Date.
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SECTION 3.3 The representations and warranties of each Loan Party set forth in Section 5 of the Existing Loan Agreement, Article IV of this First Amendment and in each other Loan Document shall be true and correct in all material respects (or, to the extent any such representation or warranty is qualified by any applicable standard of materiality, in all respects) on and as of the First Amendment Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all respects as of such earlier date.
SECTION 3.4 [Reserved.]
SECTION 3.5 Administrative Agent shall have received (A) resolutions of the board of directors or applicable governing body of Borrower authorizing the execution, delivery and performance of this Amendment, certified by an appropriate officers of Borrower and (B) a certificate of each Loan Party, dated the First Amendment Effective Date, substantially in the form of the certificate or certificates delivered pursuant to Section 4.1(a)(iii) and Section 4.1(a)(iv) of the Existing Loan Agreement, or confirming that the documents and information certified in such certificates remain true, correct and complete in all respects as so certified.
SECTION 3.6 Lenders and the Agents shall have received, to the extent invoiced prior to the First Amendment Effective Date, reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party under any Loan Document.
SECTION 3.7 Borrower and the Guarantors shall have delivered to the Agents and Lenders such documents and other information reasonably requested in writing prior to the First Amendment Effective Date that the Agents or any Lender has reasonably determined is required by United States regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation Title III of the USA Patriot Act.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties.
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ARTICLE V
EFFECTS ON LOAN DOCUMENTS
SECTION 5.1 Except as specifically amended herein, all Loan Documents shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1 APPLICABLE LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (EXCLUDING CONFLICT OF LAWS PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION).
SECTION 6.2 Execution in Counterparts; Severability. This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery by facsimile transmission or other electronic transmission of an executed counterpart of a signature page of this First Amendment shall be effective as delivery of an original executed counterpart hereof. The words “execution,” “signed,” “signature,” and words of like import in this Amendment and the other Loan Documents shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 6.3 MUTUAL WAIVER OF JURY TRIAL / JUDICIAL REFERENCE. Section 11.10 of the Existing Loan Agreement is incorporated herein by reference, mutatis mutandis.
SECTION 6.4 Reaffirmation. Each of the Loan Parties party to the Loan Agreement and the other Loan Documents, in each case as amended, supplemented or otherwise modified from time to time, hereby (i) acknowledges and agrees that all of its obligations under the Loan Documents to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) reaffirms each Lien granted by each Loan Party to Collateral Agent for the benefit of the Secured Parties and reaffirms the guaranties made pursuant to the Existing Loan Agreement, (iii) acknowledges and agrees that the grants of security interests by and the guaranties of the Loan Parties contained in the Existing Loan Agreement and the other Loan Documents (as applicable) are, and shall remain, in full force and effect after giving effect to the First Amendment, and (iv) agrees that the Secured Obligations include, among other things and without limitation, the prompt and complete payment and performance by the Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the Loans under the Existing Loan Agreement (as amended by this First Amendment). Nothing herein contained shall be construed as nor is intended by the parties to be, or shall be, construed as a substitution or novation of the instruments, documents and agreements securing the Secured Obligations, which shall each remain in full force and effect.
ARTICLE VII
COVENANTS
SECTION 7.1 Administrative Agent shall have received promptly, but in any event no later than ten (10) Business Days following the First Amendment Effective Date, resolutions of the board of directors or applicable governing body of each Loan Party (other than Borrower) authorizing the execution, delivery and performance of this Amendment and ratifying any past actions related thereto, certified by appropriate officers of such Loan Party.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
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Borrower: |
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BRIDGEBIO PHARMA, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President and Chief Executive Officer |
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[Signature Page to First Amendment]
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GUARANTORS: |
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BridgeBio Pharma LLC |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President and Chief Executive Officer |
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BridgeBio Services Inc. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President and Chief Executive Officer |
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QED Therapeutics, Inc. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President |
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EIDOS THERAPEUTICS, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President and Chief Executive Officer |
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ADRENAS THERAPEUTICS, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
Treasurer |
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GUARANTORS (Cont’d): |
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CALCILYTIX THERAPEUTICS, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President |
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PHOENIX TISSUE REPAIR, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President |
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ORIGIN BIOSCIENCES, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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Title: |
President |
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ML BIO SOLUTIONS, INC. |
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/s/ George McLendon |
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Print Name: |
George McLendon |
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Title: |
Chief Executive Officer |
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BRIDGEBIO GENE THERAPY LLC |
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/s/ Eric David |
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Eric David |
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President |
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[Signature Page to First Amendment]
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GUARANTORS (Cont’d): |
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BRIDGEBIO CHEMISTRY, INC. |
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Signature: |
/s/ Neil Kumar |
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Print Name: |
Neil Kumar |
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President |
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ADMINISTRATIVE AGENT: |
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U.S. BANK NATIONAL ASSOCIATION |
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/s/ Prital Patel |
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Print Name: |
Prital Patel |
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Vice President |
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COLLATERAL AGENT: |
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U.S. BANK NATIONAL ASSOCIATION |
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Signature: |
/s/ Alison Nadeau |
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Alison Nadeau |
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Vice President |
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[***] |
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[Signature Page to First Amendment]
Exhibit A
Amended Loan Agreement
[Attached]
4887-1953-8974.v6
EXHIBIT A
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made and dated as of November 17, 2021 and is entered into by and among BRIDGEBIO PHARMA, INC., a Delaware corporation (“Borrower”), each other Person party hereto from time to time as a guarantor, the several banks and other financial institutions or entities from time to time parties to this Agreement (individually or collectively, as the context requires, “Lender” or “Lenders”) and U.S. Bank National Association, in its capacity as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, “Administrative Agent”) and collateral agent for the Secured Parties (in such capacity, together with its successors in such capacity, “Collateral Agent”).
RECITALS
AGREEMENT
NOW, THEREFORE, each Loan Party, Agent and Lender agree as follows:
“Account Control Agreement(s)” means any agreement entered into by and among Agent, any Loan Party and a third party bank or other institution (including a Securities Intermediary) in which such Loan Party maintains a Deposit Account or an account holding Investment Property and which perfects Agent’s first priority security interest in the subject account or accounts.
“[***] Milestone Date” means [***].
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business, line of business or division or other unit of operation of a Person, (b) the acquisition of fifty percent (50%) or more of the Equity Interests of any Person, whether or not involving a merger, consolidation or similar transaction with such other Person, or otherwise causing any Person to become a Subsidiary of any Loan Party, or (c) the acquisition of, or the right to use, develop, license or sell (in each case, including through licensing), any product, product line, royalty rights or Intellectual Property of or from any other Person.
“ADH1” means autosomal dominant hypocalcemia type 1.
“Administrative Agent” has the meaning given to such term in the preamble to this Agreement.
“Advance” or “Advances” means, individually or collectively as the context may require, any Term Loan Advance or the Term Loan Advances.
“Advance Date” means the funding date of any Advance.
“Advance Request” means a request for Advance submitted by Borrower to Administrative Agent in substantially the form of Exhibit A.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question. As used in the definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power (x) to vote twenty percent (20%) or more of the equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. If not otherwise specified or required by the context, “Affiliate” shall refer to an Affiliate of a Loan Party.
“Agent” means any of Administrative Agent and the Collateral Agent (including their permitted successors and assigns), individually or collectively as the context requires, and “Agents” shall mean any or each Agent collectively, as the context requires.
“Agent Fee Letter” means the fee letter, dated the date of this Agreement, among the Loan Parties and the Agents, as amended, amended and restated, supplemented or otherwise modified from time to time.
“Agreement” means this Loan and Security Agreement, as amended, restated, supplemented or otherwise modified from time to time.
“Amortization Date” means (x) January 2, 2026, in the event that the [***] Milestone Date occurs on or before January 1, 2025 and no Default or Event of Default has occurred and is continuing as of January 1, 2025 or (y) otherwise, January 2, 2025.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption, including without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010 and other similar legislation in any other jurisdictions.
“Anti‑Terrorism Laws” means any laws, rules, regulations or orders relating to terrorism or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.
“Applicable Rate” means a per annum rate of interest equal to nine percent (9.00%), of which, prior to the Amortization Date, at Borrower’s election and subject to Section 2.1(c) [***], up to three percent (3.00%) of such per annum rate of interest may be in the form of PIK Interest.
“Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“Assignee” has the meaning given to it in Section 11.13.
“ATTR-CM” means transthyretin amyloid cardiomyopathy.
“Available Investment Amount” means, as of the applicable date of determination, an amount equal to [***].
“Available Investment Period” means the period commencing on January 1 and ending on December 31 of any fiscal year.
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“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“BB Square Capital” means BB Square GP I, LLC, BB Square LP Investment, LLC, BB Square Capital Partners I, LP, BB Square Holdings, LLC and BB Square Capital, LLC (and their respective successors, assigns and transferees, by acquisitions, Disposition, merger or otherwise).
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. § 1841(k)) of such party.
“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.
“Board” means, with respect to any Person that is a corporation, its board of directors, with respect to any Person that is a limited liability company, its board of managers, board of members or similar governing body, and with respect to any other Person that is a legal entity, such Person’s governing body in accordance with its Organizational Documents.
“Board Approved Projections” has the meaning given to it in Section 7.1(f).
“Borrower” has the meaning given to such term in the preamble to this Agreement.
“Business Day” means any day other than Saturday, Sunday and any other day on which banking institutions in the State of New York or Wilmington, Delaware are closed for business.
“CAH” means congenital adrenal hyperplasia.
“Cash” means all cash and Cash Equivalents.
“Cash Equivalents” has the meaning given to it in clause (b) of the definition of Permitted Investment.
“Cash Management Services” means any of the following to the extent not constituting a line of credit (other than an overnight draft facility that is not in default); automated clearing house transactions, treasury and/or cash management services, including, without limitation, treasury, depository, overdraft, credit, purchasing or debit card, non-card e-payable services, electronic funds transfer, treasury management services (including controlled disbursement services, overdraft automatic clearing house fund transfer services, return items and interstate depository network services), other demand deposit or operating account relationships, foreign exchange facilities, and merchant services.
“CFC” means a Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code.
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“Change in Control” means a transaction or series of related transactions (i) pursuant to which, or as a result of which, a single Person or group (within the meaning of Section 13(d)(3) of the Exchange Act) acquires or holds equity interests of Borrower representing (A) a majority of the outstanding voting securities (in each case excluding any unvested voting securities that would not become vested voting securities as a result of such transaction, whether pursuant to the terms of such unvested voting securities, by Board action or otherwise), or (B) the right to receive a majority of the proceeds in a final liquidation, dissolution or termination, voluntary or involuntary, of Borrower, or (ii) where a “change of control,” “fundamental change” or any other comparable term under any indenture governing any Permitted Convertible Debt (but not “make-whole fundamental change” unless it results in a put right for holders of such Permitted Convertible Debt) has occurred or a “change of control” or any other comparable term under any Permitted Senior Debt or other Indebtedness for borrowed money with an aggregate principal amount (including undrawn commitments) in excess of $10,000,000 has occurred. Notwithstanding the foregoing, a “Change in Control” shall not include any Permitted Transfer.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority.
“Charter” means, with respect to any Person, such Person’s formation documents, as in effect from time to time.
“Claims” has the meaning given to it in Section 11.10(a).
“Closing Date” means the first date on which the conditions to make the Tranche I Advance were satisfied or waived in accordance with Section 4 hereof, which date was November 17, 2021.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
“Collateral” means the property described in Section 3.1. For the avoidance of doubt, “Pledged Collateral” shall be deemed to constitute part of the “Collateral”.
“Collateral Agent” has the meaning given to such term in the preamble to this Agreement.
“Compliance Certificate” means a certificate in the form attached hereto as Exhibit F.
“Confidential Information” has the meaning given to it in Section 11.12.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed, without duplication of the primary obligation, to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement. For the avoidance of doubt, no Permitted Bond Hedge Transaction or Permitted Warrant Transaction will be considered a Contingent Obligation of any Loan Party.
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“Controlled Account” means a Deposit Account or account in which Investment Property is maintained that is subject to an Account Control Agreement in favor of Collateral Agent in form and substance reasonably satisfactory to Required Lenders and to Collateral Agent, in respect of its rights, duties and obligations.
“Controlled Investment Affiliate” means, as to any Person, any other Person, which directly or indirectly is in control of, is controlled by, or is under common control with such Person.
“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by a Loan Party or in which such Loan Party now holds or hereafter acquires any interest.
“Copyrights” means all copyrights, whether published or unpublished, registered or unregistered, now or hereafter existing, created, acquired or held pursuant to the laws of the United States of America, any State thereof, or of any other country.
“Covered Entity” means any of the following:
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect.
“Deemed Other Milestone” has the meaning given to such term in the definition of “Other Milestone”.
“Default” means any event, occurrence or condition which is, or with the giving of any notice, the passage of time, or both, could reasonably be expected to result in an Event of Default.
“Defaulting Lender” means, subject to Section 2.11(b), any Lender that (a) has failed to (i) fund all or any portion of a Loan hereunder within [***] Business Days of the date such Loan was required to be funded hereunder unless such Lender notifies the Agent and Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Lender any other amount required to be paid by it hereunder within [***] Business Days of the date when due, (b) has notified Borrower or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within [***] Business Days after written request by the Agent or the Borrower to confirm in writing to the Agent and Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent or the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory
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authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.11(b) upon delivery of written notice of such determination to Borrower and each Lender.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Delaware Divided LLC” means any Delaware LLC which has been formed upon the consummation of a Delaware LLC Division.
“Delaware LLC” means any limited liability company organized or formed under the laws of the State of Delaware.
“Delaware LLC Division” means the statutory division of any Delaware LLC into two or more Delaware LLCs pursuant to Section 18- 217 of the Delaware Limited Liability Company Act.
“Delayed Draw Expiration Date” has the meaning given to it in Section 2.1(a)(ii).
“Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit.
“Disposition” means, in respect of any Person, any voluntary or involuntary sale, transfer, lease, license, lending or advancement of funds or assets, conveyance of any equitable, beneficial or legal interest, or other disposition of any property, including any Equity Interest owned by it and including any disposition of property to a Delaware Divided LLC pursuant to a Delaware LLC Division (or any comparable event under a different jurisdiction’s laws), or any option for any of the foregoing. “Dispose” shall have a correlative meaning.
“Disqualified Institution” means (a) any of those Persons who are bona fide competitors of Borrower that are identified by Borrower in writing prior to the Closing Date, which list of bona fide competitors of Borrower may be updated by the Borrower on a quarterly basis by sending such updated list to the Agent and the Lenders, provided that any such updates shall not take effect until [***] Business Days after the updated Disqualified Institution list is made available to the Lenders, or (b) any of those banks, financial institutions and other Persons separately identified by Borrower in writing prior to the Closing Date (and, in each case, such specified entities’ Affiliates that are reasonably identifiable as Affiliates solely on the basis of their name, provided that the Agent shall have no obligation to carry out due diligence in order to identify such Affiliates). A list of the Disqualified Institutions shall be provided by the Agent to a Lender upon its request, including in connection with an assignment or participation hereunder; provided that, any Person that is a Lender and subsequently becomes a Disqualified Institution (but was not a Disqualified Institution at the time it became a Lender) will be deemed to not be a Disqualified Institution hereunder.
“Domestic Subsidiary” means any Subsidiary of Borrower organized under the laws of the United States, any State thereof or the District of Columbia
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country that is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
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“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway and any other country which may become a member of the European Economic Area or subject to Bail-In Legislation from time to time.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eidos” means Eidos Therapeutics, Inc.
“Equity Cash Payment Conditions” means, with respect to a given Equity Cash Payment Transaction, in each case measured immediately before and immediately after giving effect to any payments to be made in connection with such Equity Cash Payment Transaction: (a) no Default or Event of Default shall have occurred and be continuing, (b) the Milestone Satisfaction Date has occurred and (c) immediately after giving effect to such Equity Cash Payment Transaction, the Loan Parties shall have Qualified Cash in an amount equal to or greater than (x) [***] in each case as set forth in the Board Approved Projections for the relevant period of determination.
“Equity Cash Payment Transaction” means any transaction or series of related transactions whereby any Cash or other immediately available funds are distributed, exchanged, redeemed, deposited, paid, settled or otherwise transferred for, on account of, or in connection with the ownership of any Equity Interests or other ownership rights in any capital stock, joint venture or similar interests, including without limitation in connection with any Permitted Investments, Permitted Indebtedness or any transaction permitted under Section 7.7 of this Agreement.
“Equity Cure Investment” means any Investment by a Loan Party in a Platform Company or Subsidiary thereof, whether directly or indirectly through an Affiliate or another Platform Company, if (i) immediately prior to the consummation of such Investment, an event of default has occurred and is continuing pursuant to the terms of any secured loan facility to which such Platform Company or Subsidiary is a party, which could result in the acceleration of Indebtedness of such Platform Company in excess of $[***] or more, and (ii) immediately after the making of such Investment, such event of default will be cured or waived.
“Equity Documents” means any agreement entered into in connection with an equity financing or otherwise among holders of the Equity Interests of a Person or otherwise binding upon the holders of the Equity Interests of such Person.
“Equity Interests” means, with respect to any Person, the capital stock, partnership or limited liability company interest, or other equity securities or equity ownership interests of such Person.
“Equity Sale Milestone” means a sale or series of sales (including in connection with business development transactions) of Borrower’s common stock for cash by Borrower after the First Amendment Effective Date to third-party purchasers who are not Affiliates of Borrower.
“Equity Sale Premium” means the portion of the proceeds from any Equity Sale Milestone (other than any publicly-marketed follow-on financing, at-the-market offering (including pursuant to that certain Open Market Sale Agreement, dated July 7, 2020, by and among Borrower, Jefferies LLC and SVB Leerink LLC, as may be amended from time to time) or similar publicly marketed transaction), received in connection with any transaction or series of transactions related to any business development, corporate collaboration, private investment in public equity transaction, licensing transaction or similar non-publicly marketed transaction, which portion of such proceeds shall be deemed to be equal to (x) the gross cash proceeds received by Borrower from such Equity Sale Milestone minus (y) the Equity Sale Proceeds from such Equity Sale Milestone.
“Equity Sale Proceeds” means the proceeds from any Equity Sale Milestone, which proceeds shall be deemed to be (a) with respect to any publicly-marketed follow-on financing, at-the-market offering
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(including pursuant to that certain Open Market Sale Agreement, dated July 7, 2020, by and among Borrower, Jefferies LLC and SVB Leerink LLC, as may be amended from time to time), or similar publicly marketed transaction, the gross cash proceeds received by Borrower from such Equity Sale Milestone and (b) for all other Equity Sale Milestones, the lesser of (x) the gross cash proceeds received by Borrower from such Equity Sale Milestone and (y) the fair market value of Borrower’s common stock sold from such Equity Sale Milestone, as determined by reference to [***].
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” has the meaning given to it in Section 9.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated pursuant thereto.
“Excluded Accounts” means Deposit Accounts (i) established in the ordinary course of business and used exclusively for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of employees of the Loan Parties, provided that the aggregate balance maintained in such Deposit Accounts shall not exceed the amount to be paid for the following four payroll periods at any time, (ii) used exclusively as escrow, fiduciary, withholding, tax payment or trust accounts, (iii) used exclusively to maintain Cash subject to a Lien permitted pursuant to the defined term “Permitted Liens” (other than, for the avoidance of doubt, Deposit Accounts subject to control agreements in favor of any Permitted Senior Debt, which will be subject to the terms and conditions of an intercreditor agreement in respect of such Permitted Senior Debt), (iv) that is a deposit account subject to a zero dollar balance, and (v) that do not at any time have Cash, investment property or other amounts on deposit therein in excess of $[***] individually or $[***] in the aggregate for all such accounts, provided that, in each case, any Excluded Account shall be identified to Agent in writing.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes that are imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Term Commitment pursuant to a law in effect on the date that (i) such Lender acquires such interest in the Loan or Term Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.8, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) any withholding Taxes imposed under FATCA, and (d) Taxes attributable to such Recipient’s failure to comply with Section 2.8(d).
“Existing Priority Review Voucher” means that certain Priority Review Voucher (PRV NDA 214018), which voucher was issued by the FDA to Origin on February 28, 2021 [***].
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among governmental authorities and implementing such Sections of the Code.
“FDA” means the United States Food and Drug Administration or any successor agency thereto.
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“FDA Criteria” means that:
(i) [***]
(ii) [***]
(iii) [***]
“Fee Letter” means that certain Fee Letter, dated as of the date of this Agreement, among the Loan Parties and each Lender, as amended, amended and restated, supplemented or otherwise modified from time to time with the consent of each Lender.
“Fee Letters” means, collectively, the Agent Fee Letter and the Fee Letter.
“First Amendment” means the First Amendment to Loan and Security Agreement, dated as of the First Amendment Effective Date, among Borrower, the Guarantors, the Lenders, the Administrative Agent and the Collateral Agent.
“First Amendment Effective Date” means May 12, 2022.
“Financial Statements” has the meaning given to it in Section 7.1.
“Foreign Lender” shall mean a Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary of Borrower that is not a Domestic Subsidiary.
“Foreign Subsidiary Holdco” means any Subsidiary of Borrower that owns no material assets other than Equity Interests (or Equity Interests and Indebtedness) of one or more Foreign Subsidiaries that are CFCs.
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantor” means each Subsidiary of Borrower listed as a “Guarantor” on the signature pages hereto and each other Person which guarantees, pursuant to Section 12 or otherwise, all or any part of the Secured Obligations.
“Hedge Agreement” means any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, fuel or mineral or other commodity hedge or exchange agreement or any other agreement or arrangement entered into for non-speculative purposes designated to protect a Person against fluctuation in interest rates, currency exchange rates, commodity or mineral prices.
“Hercules Loan Agreement” means that certain Loan and Security Agreement, dated as of June 19, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among Borrower, Hercules Capital, Inc. and the lenders and other parties party thereto.
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“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business), including reimbursement and other obligations with respect to surety bonds, letters of credit, banker’s acceptances and similar instruments, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, as determined under GAAP, (d) guarantees of indebtedness of third parties and (e) all Contingent Obligations. For the avoidance of doubt, no Permitted Warrant Transaction shall be considered Indebtedness of Borrower.
“Indemnified Person” shall have the meaning set forth in Section 6.13.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Intellectual Property” means all of each Loan Party’s Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask works; each Loan Party’s applications therefor and reissues, extensions, or renewals thereof; and each Loan Party’s goodwill associated with any of the foregoing, together with each Loan Party’s rights to sue for past, present and future infringement of Intellectual Property and the goodwill associated therewith.
“Intercompany Subordination Agreement” means that certain intercompany subordination agreement, dated as of the Closing Date, by and among the Loan Parties, each Subsidiary and the Agent, substantially in the form attached hereto as Exhibit J, as may be amended, supplemented or otherwise modified from time to time.
“Investment” means, as to any Person, any acquisition or investment, including any beneficial ownership (including stock, partnership or limited liability company interests) of or in any other Person, or any loan (by way of guarantee, Contingent Obligations or otherwise), advance or capital contribution to any other Person or the acquisition of any asset, property or indebtedness of another Person, including by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person (including in connection with any Acquisition) or (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person (and including, for the avoidance of doubt, any acquisition of or similar investment in any Platform Company).
“Investment Company Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.
“Joinder Agreements” means a completed and executed Joinder Agreement in substantially the form attached hereto as Exhibit G.
“Lender” or “Lenders” has the meaning given to each such term in the preamble to this Agreement.
“LGMD2i” means limb-girdle muscular dystrophy type 2I.
“Liabilities” shall have the meaning given to such term in Section 6.3.
“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest.
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“Loan” means the Advances made under this Agreement.
“Loan Documents” means this Agreement, any Term Note (if any), the Fee Letters, the Account Control Agreements, any Joinder Agreements, the Intercompany Subordination Agreement and any other documents executed in connection with the Secured Obligations and the security interest granted in connection therewith, in each case, as the same may from time to time be amended, modified, supplemented or restated.
“Loan Party” means each of Borrower and the Guarantors; “Loan Parties” means Borrower and the Guarantors, collectively.
“Make-Whole Amount” means, on any date of prepayment, repayment or that has become or is declared accelerated pursuant to Section 10.1 or otherwise, or in respect of which such claim in an insolvency proceeding has arisen of all or any portion of the outstanding Advance pursuant to Section 2.4(a), as calculated by Borrower, an amount equal to the net present value of all required interest payments due on the Advance or portion thereof that is being prepaid, repaid or is declared accelerated from the date of prepayment, repayment or acceleration to, but excluding, the first anniversary of the Closing Date (other than, for the avoidance of doubt, accrued but unpaid interest to the date of prepayment), computed using a discount rate equal to the Treasury Rate [***] and assuming (x) that the interest rate applicable to all such interest is the Applicable Rate in effect on the date of such prepayment, (y) all rates are calculated on the basis of a 360-day year consisting of twelve 30-day months and actual days elapsed and (z) all such interest on the Advance or portion thereof being prepaid, repaid or accelerated is paid entirely in cash with no election for PIK Interest. For the avoidance of doubt, such amount shall be payable whether before or after an Event of Default or acceleration of the Loans.
“Market Capitalization” means, as of any date of determination, an amount equal to (a) the summation of the product of (x) the daily volume weighted average price of Borrower’s common stock as reported for each trading day during the immediately preceding January 1 through December 31 (it being understood that a “trading day” shall mean a day on which shares of Borrower’s common stock trade on the NASDAQ (or other stock exchange, if no longer traded on NASDAQ) in an ordinary trading session) multiplied by (y) the total number of issued and outstanding shares of Borrower’s common stock that are issued and outstanding on such trading date and listed on the NASDAQ (or other stock exchange, if no longer traded on NASDAQ), after dividing such summation of values in clauses (a)(x) and (a)(y) by (b) the total number of such trading days in such relevant period of calculation. Such determination shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period. Notwithstanding anything to the contrary herein, the Market Capitalization for the Available Investment Period ending December 31, 2021 for purposes of calculating the Available Investment Amount for relevant usage during the period commencing on the Closing Date and ending on December 31, 2021 shall be equal to $[***].
“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of the Loan Parties and each of its Subsidiaries taken as a whole; or (ii) the ability of the Loan Parties, taken as a whole, to perform or pay the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lenders to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the Collateral or the priority of such Liens except, in the case of clauses (ii) or (iii), to the extent resulting from an action or failure to act by Agent or Lenders, as applicable.
“Material Intellectual Property” means any Intellectual Property that is material to the business or operations of the Borrower, any Loan Party or any Platform Company, including, but not limited to, (i) Intellectual Property covering or relating to [***] (other than in connection with any Disposition pursuant to clause (h) of the definition of “Permitted Transfers”), and [***], (ii) Intellectual Property covering or relating to the product candidates that are the subject of the clinical trials referenced in the definition of “Other Milestones” and (iii) any other Intellectual Property covering or relating to any product candidates owned or controlled by the Borrower, the Loan Parties or the Platform Companies that become the subject of a Phase 1 Clinical Trial.
“Maturity Date” means November 17, 2026.
“Maximum Rate” has the meaning given to such term in Section 2.2.
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“Milestone Approval Date” means [***].
“Milestone Satisfaction Date” means [***].
“NDA” means a New Drug Application, a Biologics License Application or similar application, as applicable, submitted to the FDA to obtain marketing approval for a pharmaceutical or biologic product in the United States.
“Net Cash Proceeds” means (a) with respect to any Prepayment Event other than in connection with an Equity Sale Milestone, the amount of all Cash proceeds (including deferred compensation) and including securities or other property converted into Cash, in each case received (directly or indirectly) by or on behalf of a Loan Party (if on behalf, then for the account of such Loan Party) or a Platform Company, or distributable to a Loan Party or a Platform Company (to the extent such proceeds which are distributable are not distributed at the direction of such Loan Party or Platform Company or as a result of such Loan Party or Platform Company voting Equity Interests owned in favor of any corporate action that would result in such proceeds not being actually distributed), and (b) with respect to any Prepayment Event in connection with an Equity Sale Milestone, the applicable Equity Sale Premium from such Equity Sale Milestone, in each case, from time to time, as a result of a Prepayment Event occurring after the Closing Date, after deducting therefrom, without duplication, (x) reasonable fees, commissions, expenses and other direct costs related thereto and required to be paid or payable by such Loan Party (or the applicable Platform Company or its applicable Subsidiary) in connection with such Prepayment Event (including attorneys’ fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith), (y) Taxes paid, payable, or determined by such Loan Party or Platform Company to be payable or attributable for payment in connection with such transaction to any taxing authorities by such Loan Party (or the applicable Platform Company or its applicable Subsidiary), to the extent then paid or payable and reasonably attributable to such transaction, and any repatriation costs associated with receipt or distribution by the applicable taxpayer of such proceeds, and (z) any cash reserves required to be maintained by such Loan Party (or the applicable Platform Company or its applicable Subsidiary) in connection with such transaction in accordance with GAAP or applicable law, provided that when any reserve or any portion thereof is no longer required to be maintained such amount shall be considered Net Cash Proceeds then received, and provided further, that such Loan Party (or the applicable Platform Company or its applicable Subsidiary) shall, at Agent’s reasonable request, provide such calculations or evidence of costs deducted in arriving at Net Cash Proceeds as Agent may reasonably require to confirm the calculation of Net Cash Proceeds in accordance with the foregoing.
“New Drug Application” means a new drug application filed with the FDA under 21 U.S.C. § 355(b).
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“Operating Company” means a Person which is predominantly in the business of research, development, manufacturing, sale or marketing of products and activities substantially related thereto, or a Person holding assets, including without limitation Intellectual Property that are useful for a Person that is predominantly in the line of business described above and in anticipation of such Person commencing operations in such line of business and which Borrower intends to cause to commence operations.
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“Organizational Documents” means with respect to any Person, such Person’s formation documents, and (a) if such Person is a corporation, its bylaws, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Origin” means Origin Biosciences, Inc.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Milestone” means each of the following:
in each case of clauses (a) through (e) above, as certified by the Chief Executive Officer or the Chief Financial Officer of Borrower as to the satisfaction of such applicable requirements (and with such certification to be accompanied by reasonably detailed supporting documentation demonstrating that such requirements have been satisfied);.
provided, however, in the case of each of the foregoing, if the Required Lenders do not agree with such determination by Borrower with respect to the advancement of the applicable Product into a Pivotal Clinical Trial (and the applicable Product has not so advanced into a Pivotal Clinical Trial) then Borrower may elect, if it reasonably determines that such Product would reasonably be expected to be advanced into a Pivotal Clinical Trial no later than [***] (such date, the “Pivotal Clinical Trial Deadline”), and provides a certificate to that effect executed by the Chief Executive Officer or the Chief Financial Officer of Borrower, then such Other Milestone shall, solely for purposes of Section 2.1(a), be deemed achieved (such election, a “Deemed Other Milestone”); provided that, for the avoidance of doubt, upon such Product actually so advancing into a Pivotal Clinical Trial on or prior to the Pivotal Clinical Trial Deadline, an Other Milestone shall be deemed to have occurred for all purposes hereunder.
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“Pass-through Entity” means any holding company of any entity that would constitute a Platform Company, which holding company is wholly-owned by a Loan Party and which holding company does not hold any material assets (other than its direct or indirect Equity Interests in such Platform Company, which Equity Interests in any such Platform Company shall be pledged as Pledged Collateral) or engage in any material operations or business other than as a holding company for one or more Platform Companies.
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“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement any Loan Party now holds or hereafter acquires any interest.
“Patents” means all letters patent of, or rights corresponding thereto, in the United States of America or in any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States of America or any other country, and all reisssues, divisions, continuations, renewals, extensions, revisions, reexaminations and continuation-in-parts thereof.
“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001, as amended from time to time.
“Payment Date” is the first Business Day of each fiscal quarter, commencing on January 3, 2022.
“Perfection Certificate” means that certain perfection certificate dated as of the Closing Date and executed by each of the Loan Parties as of such date (as may be amended, supplemented or otherwise modified from time to time).
“Permitted BB Square Investment” has the meaning set forth in Section 7.6 of this Agreement.
“Permitted Bond Hedge Transaction” means any call or capped call option (or substantively equivalent derivative transaction) relating to Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of Borrower) purchased by Borrower in connection with the issuance of any Permitted Convertible Debt and as may be amended in accordance with its terms; provided that, the net purchase price of any such call option transaction less the amount received by Borrower in respect of any Permitted Warrant Transaction in connection with such issuance of Permitted Convertible Debt shall not exceed 20% of the gross proceeds to Borrower from such issuance of Permitted Convertible Debt; provided further that the terms, conditions and covenants of each such call option transaction are customary for agreements of such type; provided further that a certificate of Borrower as to the satisfaction of such requirement (described in the immediately preceding proviso) delivered to Administrative Agent (for delivery to Lenders) at least [***] Business Days prior to entering into such transaction, together with a reasonably detailed description of the material terms, conditions and covenants of such transaction or drafts of documentation relating thereto, stating that Borrower has determined in good faith that such terms, conditions and covenants satisfy the foregoing requirement, shall be conclusive evidence of satisfaction thereof unless Administrative Agent notifies Borrower within such [***] Business Day period that Required Lenders disagree, in their commercially reasonably judgment, with such determination (which notice shall include a description of the basis upon which Required Lenders disagree).
“Permitted Convertible Debt” means Indebtedness of Borrower that is convertible into a fixed number (subject to customary anti-dilution adjustments, “make-whole” increases and other customary changes thereto) of shares of common stock of Borrower (or other securities or property following a merger event or other change of the common stock of Borrower), Cash or any combination thereof (with the amount of such Cash or such combination determined by reference to the market price of such common stock or such other securities); provided that such Indebtedness shall (a) not require any scheduled amortization or otherwise require payment of principal prior to, or have a scheduled maturity date, earlier than, [***] days after the Maturity Date, (b) be unsecured, (c) not be guaranteed by any Subsidiary of Borrower, and (d) be on terms and conditions customary for Indebtedness of such type; provided further that a certificate of Borrower as to the satisfaction of the conditions described in clause (d) delivered to Administrative Agent (for delivery to Lenders) at least [***] Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness and drafts of documentation relating thereto, stating that Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of clause (d), shall be conclusive unless Administrative Agent notifies Borrower within such [***] Business Day period that Required Lenders disagree, in their commercially reasonable judgment, with such determination which notice shall include a description of the basis upon which Required Lenders disagree. For the avoidance of doubt, the Borrower’s (i) 2.50% Convertible Senior Notes due 2027 issued pursuant to the indenture dated as of March 9, 2020 between the Borrower and U.S. Bank National Association, as trustee, and (ii) 2.25% Convertible Senior Notes due 2029 issued pursuant to the indenture
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dated as of January 28, 2021 between the Borrower and U.S. Bank National Association, as trustee, shall both constitute Permitted Convertible Debt.
“Permitted Indebtedness” means:
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“Permitted Investment” means:
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provided further that no Loan Party shall make Investments in any Platform Company that is not a Loan Party that is in default with respect to Indebtedness in excess of $[***] except for (x) Equity Cure Investments of up to $[***] for any such Platform Company and up to $[***] in the aggregate for all Platform Companies that are not Loan Parties (which such Equity Cure Investments, if made, shall be made as an Investment in reliance on clause (y) of this definition), (y) to fund any mandatory legal and regulatory expenses of a Platform Company that is not a Loan Party when due, or (z) as otherwise approved by the Required Lenders in writing.
Notwithstanding anything herein to the contrary, to the extent any Platform Company, other Subsidiary of the Borrower or any joint venture is required to become a Guarantor pursuant to Section 7.13, then no further Investments may be made in such Platform Company, other Subsidiary of the Borrower or any joint venture until such Platform Company, other Subsidiary of the Borrower or any joint venture has become a Guarantor in accordance with this Agreement.
“Permitted Liens” means any and all of the following:
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“Permitted Royalty Transaction” has the meaning set forth in clause (u) of the definition of “Permitted Indebtedness.”
“Permitted Senior Debt” means senior secured Indebtedness of the Loan Parties in the form of an asset-based revolving credit facility in a maximum principal amount not to exceed $[***] at any one time outstanding incurred under the Permitted Senior Debt Documents which satisfies the following requirements: (a) Borrower shall have delivered to Agent and the Lenders all material Permitted Senior Debt Documents concurrently with its entry into such Permitted Senior Debt Documents, certified by an officer of Borrower, and (b) such Indebtedness shall be secured solely by the Loan Parties’ accounts receivable, inventory and ancillary rights required for the exercise of remedies with respect to the foregoing of the Loan Parties and proceeds thereof (the “Permitted Senior Debt Priority Collateral”).
“Permitted Senior Debt Priority Collateral” has the meaning set forth in the definition of “Permitted Senior Debt.”
“Permitted Senior Debt Documents” means each agreement, instrument and document entered into by any Loan Party in connection with the Permitted Senior Debt, as the same may be amended, modified, extended, restated, replaced or supplemented from time to time, and which agreements, instruments and documents shall include (and, as applicable, be subject to) the terms and provisions of an intercreditor agreement in form and substance reasonably acceptable to the Required Lenders in their reasonable discretion in connection therewith.
“Permitted Senior Debt Holder” means any holder of Permitted Senior Debt or any agent thereof.
“Permitted Transfers” means:
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“Permitted Warrant Transaction” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of Borrower) and/or Cash (in an amount determined by reference to the price of such common stock) sold by Borrower substantially concurrently with any purchase by Borrower of a related Permitted Bond Hedge Transaction and as may be amended in accordance with its terms; provided that (x) the terms, conditions and covenants of each such call option transaction are customary for agreements of such type, as determined by Lender in its commercially reasonable discretion and (y) such call option transaction would be classified as an equity instrument in accordance with GAAP; provided further that a certificate of Borrower as to the satisfaction of such requirement (described in the immediately preceding proviso) delivered to Administrative Agent (for delivery to Lenders) at least [***] Business Days prior to the entry into such transaction, together with a reasonably detailed description of the material terms, conditions and covenant of such transaction or drafts of documentation relating thereto, stating that Borrower has determined in good faith that such terms, conditions and covenants satisfy the foregoing requirement, shall be conclusive unless Agent notifies Borrower within such [***] Business Day period that Agent notifies Borrower within such [***] Business Day period that Required Lenders disagree, in their commercially reasonable judgment, with such determination which notice shall include a description of the basis upon which Required Lenders disagree).
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.
“Phase 1 Clinical Trial” means a clinical trial that generally provides for the first introduction into humans of a pharmaceutical or biologic product with the primary purpose of determining safety, metabolism and pharmacokinetic properties and clinical pharmacology of such product, in a manner that is generally consistent with 21 CFR § 312.21(a), as amended (or its successor regulation).
[***]
“Phase 3 Study” means with respect to a clinical trial evaluating a drug, any clinical trial initiated after preliminary evidence suggesting effectiveness of such drug has been obtained, conducted to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of such drug and to provide an adequate basis for physician labeling.
“PIK Interest” means interest payable in-kind by adding an amount equal to the applicable percentage of the Applicable Rate of the outstanding principal balance of the Term Loan Advances to the then outstanding principal balance of the applicable Term Loan Advances on a quarterly basis on each applicable Payment Date so as to increase the outstanding principal balance of such Term Loan Advances (which such capitalized principal in the form of PIK Interest shall accrue interest from and including the Payment Date on which such PIK Interest is added to the Term Loan Advance at the Applicable Rate).
“Pivotal Clinical Trial” means a clinical trial with a defined dose or a set of defined doses of a pharmaceutical or biologic product designed to ascertain efficacy and safety of such product, in a manner that is generally consistent with 21CFR § 312.21(c), as amended (or its successor regulation), for the purpose of enabling the preparation and submission of an NDA.
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“Pivotal Clinical Trial Deadline” has the meaning given to such term in the definition of “Other Milestone”.
“Platform Company” means any Operating Company in the life sciences or healthcare sector and focused on the development and commercialization of products, and in which a Loan Party has made an Investment (whether by capital contribution, the acquisition of the Equity Interests thereof, a Disposition of assets thereto, or in connection with a joint venture, corporate collaboration or similar corporate structure) in accordance with the terms of this Agreement, its Organizational Documents and consistent in all material respects with past practices, including each Operating Company in which Loan Party maintains an Investment as of the Closing Date.
“Pledged Collateral” means:
“Prepayment Charge” has the meaning assigned to such term in Section 2.4(a).
“Prepayment Event” means, with respect to any transaction consummated after the Closing Date, (i) any Disposition of Pledged Collateral to the extent the Net Cash Proceeds for all such transactions, whether in a single transaction or series of related transactions, exceed (x) prior to the [***] Milestone Date, $[***] in any fiscal year and (y) from and after the [***] Milestone Date, $[***] in any fiscal year, (ii) any Disposition of Collateral (other than Pledged Collateral, assets covered in clause (iii) below or Intellectual Property specified in clause (iv) below) to the extent the Net Cash Proceeds for all such transactions, whether in a single transaction or series of related transactions, exceed (x) prior to the [***] Milestone Date, $[***] in any fiscal year and (y) from and after the [***] Milestone Date, $[***] in any fiscal year, (iii) any Disposition by a Platform Company, any Loan Party or any of their Subsidiaries of assets (including Intellectual Property, but without duplication of clause (iv) below) of such Platform Company, Loan Party or Subsidiary, to the extent (x) the subject assets constitute all or a material part of the applicable entity’s assets, on a consolidated basis and (y) Net Cash Proceeds for all such transactions, whether in a single transaction or in a series of related transactions, plus any Equity Sale Premium (without duplication of any Equity Sale Premium applied in clause (iv) of this definition below) exceed $[***] in any
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fiscal year in the aggregate, (iv) any Disposition of Intellectual Property by any Person that is a Loan Party on the Closing Date, to the extent the Net Cash Proceeds for all such transactions, whether in a single transaction or in a series of related transactions, plus any Equity Sale Premium (without duplication of any Equity Sale Premium applied in clause (iii) of this definition above), exceed (x) prior to the [***] Milestone Date, $[***] in any fiscal year and (y) from and after the [***] Milestone Date, $[***] in any fiscal year, (v) the repurchase or redemption of Pledged Collateral by a Pass-through Entity, Platform Company or Loan Party, or (vi) any Permitted Royalty Transaction, except to the extent such transaction relates to [***] or (vii) the receipt of any Equity Sale Premium in connection with the issuance or sale of Equity Interest of the Borrower in connection with any Equity Sale Milestone, provided that the Net Cash Proceeds for any such issuance or sale (other than in connection with any Disposition of the Existing Priority Review Voucher) shall be deemed to be the receipt of Net Cash Proceeds pursuant to clause (iii) or (iv), as applicable, of this definition above (and be subject to the same applicable thresholds specified in such clause (iii) or (iv)); provided that, notwithstanding anything to the contrary herein, (A) any non-exclusive Licenses granted in the ordinary course of business and not for purposes of commercializing any Intellectual Property (including for purposes of joint development, manufacturing, distribution, partnership or similar purposes, including any licensing transactions with contract research organizations or contract manufacturing organizations) and, (B) any Licenses, sublicenses and similar and customary arrangements for the use of Intellectual Property solely in connection with contract manufacturing, contract research, distribution, supplier and other similar arrangements that are entered into in the ordinary course of business and not in connection with any monetization or revenue-specific purpose and for which no Loan Party, Platform Company or Pass-through Entity will receive any consideration (whether in the form of cash, equity or otherwise), shall not constitute a Prepayment Event and (C) any Disposition of the Existing Priority Review Voucher shall not constitute a Prepayment Event.
“Priority Review Voucher” means a voucher issued by the FDA to the sponsor of a rare pediatric disease product application, as such term is defined in 21 U.S.C. § 360ff, which entitles the holder of such voucher to priority review of a New Drug Application or Biologics License Application after the date of approval of the rare pediatric disease product application.
“Products” means all products, software, service offerings, technical data or technology currently being designed, manufactured or sold by a Platform Company or any of its Subsidiaries or which a Platform Company or such Subsidiary intends to Dispose of, or distribute, in the future including any products or service offerings under development, collectively, together with all products, software, service offerings, technical data or technology that have been sold, licensed or distributed by a Platform Company since each of its formation.
“Publicity Materials” has the meaning set forth in Section 11.18.
“QED” means QED Therapeutics, Inc.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).
“Qualified Cash” means the amount of the Loan Parties’ unrestricted Cash held in accounts subject to an Account Control Agreement.
“RDEB” means recessive dystrophic epidermolysis bullosa.
“Receivables” means (i) all of each Loan Party’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto.
“Recipient” means Agent, any Lender or any other recipient of any payment to be made by or on account of the Secured Obligations.
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“Refinancing” means the prepayment in full of all amounts borrowed under the Hercules Loan Agreement, the termination of all commitments thereunder and the release of all security interests and guaranties in connection therewith.
“Register” has the meaning given to it in Section 11.7.
“Required Lenders” means at any time, the holders of more than 50.1% of the aggregate total amount of the outstanding principal amount of the Term Loan Advances of all Lenders then outstanding and the unused Term Commitments of all Lenders; provided, in any event, Required Lenders shall include at least two Lenders who are not Affiliates of each other.
“Required Prepayment Date” has the meaning given to it in Section 2.4(c).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Sanctioned Country” means, at any time, a country or territory which is the subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or by the United Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“Secured Obligations” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed or allowable in such proceeding) the Loans and all other obligations and liabilities of the Loan Parties to the Agent, and any other Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement or any other Loan Document, whether on account of principal, interest, any premium (including, without limitation, any Prepayment Charge), reimbursement obligations, payment obligations, fees, indemnities, costs and expenses (including all reasonable and documented out-of-pocket fees, charges and disbursements of counsel to the Agent or any other Lender), but excluding any warrant or other equity investment.
“Secured Parties” means, collectively, the Agents and the Lenders.
“Services Company” has the meaning given to such term in the preamble to this Agreement.
“Signature Law” has the meaning given to such term in Section 11.15.
“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions (including as to maturity) satisfactory to the Required Lenders in their reasonable discretion and subject to a subordination agreement in form and substance reasonably satisfactory to the Required Lenders in their discretion on customary deep subordination terms.
“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which a Loan Party owns or controls, directly or indirectly, 50% or more of the outstanding voting securities.
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“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.
“Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to Loan Parties as set forth in Section 2.1.
“Term Loan Advance” or “Term Loan Advances” means, individually or collectively, as the context may require, the Tranche I Advance and/or any Tranche II Advance.
“Term Note” means a Secured Term Promissory Note in substantially the form of Exhibit B.
“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by a Loan Party or in which a Loan Party now holds or hereafter acquires any interest.
“Trademarks” means all trademarks (including service marks and trade dress), other source or business identifier, whether registered, common law or otherwise, and any applications of the same now or hereafter existing, created, acquired or held in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States of America, any State thereof or any other country or any political subdivision thereof.
“Tranche I Advance” has the meaning set forth in Section 2.1(a)(i).
“Tranche I Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to the Loan Parties in a principal amount not to exceed the amount set forth under the heading “Tranche I Term Commitment” opposite such Lender’s name on Schedule 1.1.
“Tranche II Advance” has the meaning set forth in Section 2.1(a)(ii).
“Tranche II Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to the Loan Parties in a principal amount not to exceed the amount set forth under the heading “Tranche II Term Commitment” opposite such Lender’s name on Schedule 1.1.
“Treasury Rate” means with respect to the Make-Whole Amount, as of the date of the prepayment notice with respect to such prepayment, a rate equal to the then-current yield to maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) (or is obtainable from the Federal Reserve System’s Data Download Program as of the date of such H.15 (519)) that has become publicly available at least [***] Business Days prior to such date (or, if such Federal Reserve Statistical Release is no longer published, any publicly available source of similar market data)) of actively traded U.S. Treasury securities having a constant maturity and having a duration equal to (or the nearest available tenor) the period from the date that payment is received to the date that falls on the first anniversary of the Closing Date; provided, however, that if the period from the date that payment is received to the date that falls on the first anniversary of the Closing Date is less than one year, then the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year shall be used; provided, further, that in no case shall the Treasury Rate be less than zero.
“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of New York, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.
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“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“United States” and “U.S.” mean the United States of America.
“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.8(d).
“Waivable Mandatory Prepayment” has the meaning given to it in Section 2.4(c).
“Withholding Agent” means Borrower or Agent.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement. Unless otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP, consistently applied. Unless otherwise defined herein or in the other Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in the UCC. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been Disposed of from the original Person to the subsequent Person and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
Notwithstanding anything to the contrary in this Agreement or any other Loan Document, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof. For the avoidance of doubt, and without limitation of the foregoing, Permitted Convertible Debt shall at all times be valued at the full stated principal amount thereof and shall not include any reduction or appreciation in value of the shares deliverable upon conversion thereof.
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SECTION 2. THE LOAN
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(ii) If any Tranche II Advance has been made pursuant to Section 2.1(a)(ii) based on the occurrence of a Deemed Other Milestone, then, unless Borrower has actually advanced the applicable Product (as indicated by a decision of the Board of Borrower to so advance) that is the subject of the Deemed Other Milestone into a Pivotal Clinical Trial on or prior to the Pivotal Clinical Trial Deadline, then Borrower shall, within [***] of the Pivotal Clinical Trial Deadline, prepay an amount equal to 100% of the Tranche II Advance made on such basis (plus all accrued and unpaid interest thereon), unless (w) the [***] Milestone Date has occurred, (x) [***] or more Other Milestones and/or other Deemed Other Milestones in respect of which Borrower has actually advanced (as indicated by a decision of the Board of Borrower to so advance) the applicable Product into a Pivotal Clinical Trial have been achieved, (y) the aggregate principal amount of Tranche II Advances made does not exceed $[***] and [***] or more Other Milestones and/or other Deemed Other Milestones in respect of which Borrower has actually advanced the applicable Product into a Pivotal Clinical Trial have been achieved or (z) the aggregate principal amount of Tranche II Advances made does not exceed $[***] and one or more Other Milestones and/or other Deemed Other Milestones in respect of which Borrower has actually advanced the applicable Product into a Pivotal Clinical Trial have been achieved.
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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower and Agent in writing of its legal inability to do so.
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SECTION 3. SECURITY INTEREST
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The security interest granted pursuant to this Agreement shall be automatically released (a) with respect to all Collateral upon the payment in full in Cash of all Secured Obligations in accordance with this Agreement (other than contingent indemnity obligations for which no claim is outstanding), (b) with respect to any Pledged Collateral that is the subject of a sale or other Disposition that constitutes a “Permitted Transfers” and is otherwise permitted hereunder as certified to the Collateral Agent by Borrower as being permitted hereunder, upon the consummation of such transaction, or (c) if otherwise approved, authorized or ratified in writing by the Required Lenders in their discretion. Upon such release, the Collateral Agent shall, upon the reasonable request and at the sole cost and expense of the Loan Parties, assign, transfer and deliver to the Loan Parties, against receipt and without recourse to or warranty by the Collateral Agent, except as to the fact that the Collateral Agent does not continue to encumber the released assets, such Collateral or any part thereof, which shall be released in accordance with customary documents and instruments (including UCC-3 termination financing statements or releases) acknowledging the release of such Collateral. The Collateral Agent agrees, on behalf of itself and the Lenders, that if any Platform Company is consummating an initial public offering of its stock or any relevant follow on offering that is certified to the Collateral Agent by Borrower as being a permitted transaction hereunder, that Agent shall enter into lockup or similar agreements (in form and substance reasonably satisfactory to the Required Lenders) reasonably requested by any Loan Party or any underwriter with respect to the Collateral Agent’s exercise of remedies with respect to the Pledged Collateral constituting Equity Interests the Platform Company that is the issuer in such offering, in each case at the sole cost and expense of the Loan Parties.
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SECTION 4. CONDITIONS PRECEDENT TO LOAN
The obligations of each Lender to make the applicable Loans hereunder are subject to the satisfaction by Borrower of the following conditions:
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Notwithstanding the foregoing, to the extent any of the above closing conditions is set forth on Schedule 7.19, Borrower may deliver the same when required to be delivered pursuant to Schedule 7.19.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES
Each Loan Party represents and warrants that:
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SECTION 6. INSURANCE; INDEMNIFICATION
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SECTION 7. COVENANTS OF THE LOAN PARTIES
Each Loan Party agrees as follows:
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Notwithstanding the foregoing, documents required to be delivered under this Section 7 may be delivered electronically and shall be deemed delivered when Borrower posts a link to such publicly disclosed documents on its publicly available website.
No Loan Party shall make any change in its (a) accounting policies or reporting practices other than to the extent required or otherwise contemplated by GAAP or other applicable regulatory requirements, or (b) fiscal years or fiscal quarters. The fiscal year of Borrower shall end on December 31.
Each executed Compliance Certificate may be sent via email to Administrative Agent at [***]; [***]; [***]. All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to [***] with a copy to [***]; [***] with a copy to [***]; and, provided, that if e-mail is not
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available or sending such Financial Statements via e-mail is not possible, they shall be faxed to Administrative Agent at: [***], attention: [***].
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Notwithstanding anything to the contrary in the foregoing, the issuance of, performance of obligations under (including any payments of interest), and conversion, exercise, repurchase, redemption (including, for the avoidance of doubt, a redemption of Permitted Convertible Debt upon satisfaction of a condition, if any, related to the stock price of Borrower’s common stock set forth in the indenture (or other agreement) governing the Permitted Convertible Debt), settlement or early termination or cancellation of (whether in whole or in part and including by netting or set-off) (in each case, whether in Cash, common stock of Borrower, Permitted Convertible Debt or, following a merger event or other change of the common stock of Borrower, other securities or property), or the satisfaction of any condition that would permit or require any of the foregoing, any Permitted Convertible Debt shall not constitute a prepayment of Indebtedness by Borrower for the purposes of this Section 7.4; provided that Borrower shall not be permitted to redeem or repurchase, (in part or in full) Permitted Convertible Debt with cash consideration (including via open-market repurchases with cash consideration) unless, after giving pro forma effect to such redemption or repurchase of such Permitted Convertible Debt: (a) no Default or Event of Default shall exist or would result therefrom and (b) the Loan Parties’ Qualified Cash shall be equal to or greater than [***]% of the outstanding Secured Obligations.
Notwithstanding anything to the contrary herein, no Loan Party shall permit or suffer Platform Companies which are not Loan Parties to (x) create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness (other than intercompany Indebtedness constituting Permitted Investments or other Permitted Indebtedness of the types described in clauses (c) (to the extent not [***] days or more past the invoice date), (e), (h), (i), (p), (q), (r) (to the extent not in an outstanding amount in excess of, when combined with the amount incurred by Loan Parties under such clause (r) at such time, the maximum aggregate amount specified in such clause) or (s) of the definition of “Permitted Indebtedness”) in excess of $[***] in the aggregate at any one time outstanding for all such Platform Companies or (y) consummate any royalty financings or similar transactions other than Permitted Royalty Transactions.
No Loan Party shall guarantee or be or remain liable with respect to any Indebtedness of BB Square Capital.
Notwithstanding anything to the contrary herein, no Loan Party shall permit or suffer Platform Companies which are not Loan Parties to (x) create, incur, assume, guarantee or be or remain liable with respect to, or suffer to exist, any Indebtedness that is secured by Liens in excess of $[***] in the aggregate at any one time outstanding for all such Platform Companies or (y) consummate any royalty financings or similar transactions other than Permitted Royalty Transactions which are secured by Liens of the type described in clause (s) of the definition of “Permitted Liens”.
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Notwithstanding the foregoing, and for the avoidance of doubt, this Section 7.6 shall not prohibit the conversion by holders of (including any payment upon conversion, whether in Cash, common stock or a combination thereof), or required payment of any principal or premium on (including, for the avoidance of doubt, in respect of a redemption of Permitted Convertible Debt upon satisfaction of a condition, if any, related to the stock price of Borrower’s common stock set forth in the indenture (or other agreement) governing the Permitted Convertible Debt) or required payment of any interest with respect to, any Permitted Convertible Debt in each case, in accordance with the terms of the indenture (or other agreement) governing such Permitted Convertible Debt, subject in each case, to the extent applicable pursuant to the second paragraph of Section 7.4, to compliance therewith.
Notwithstanding the foregoing, Borrower may repurchase, exchange or induce the conversion of Permitted Convertible Debt by delivery of shares of Borrower’s common stock and/or a different series of Permitted Convertible Debt, or by payment of Cash in an amount that does not exceed the net cash proceeds received by Borrower from a substantially concurrent issuance of shares of Borrower’s common stock and/or Permitted Convertible Debt plus the net cash proceeds, if any, received by Borrower pursuant to the related exercise or early unwind or termination of the related Permitted Bond Hedge Transactions and Permitted Warrant Transactions, if any, pursuant to the immediately following proviso; provided that, for the avoidance of doubt, Borrower may exercise or unwind or terminate early (whether in Cash, shares or any combination thereof) the portion of the Permitted Bond Hedge Transactions and Permitted Warrant Transactions, if any, corresponding to such Permitted Convertible Debt that are so repurchased, exchanged or converted.
Notwithstanding the foregoing, Borrower may repurchase its common stock with up to an amount equal to [***]% of (x) the net cash proceeds from a substantially concurrent issuance and sale of Permitted Convertible Debt, less (y) the proceeds from such issuance and sale of Permitted Convertible Debt which are used to redeem, cash settle, prepay, exchange, convert or otherwise refinance any existing Permitted Convertible Debt (including related interest, fees, expenses and premiums payable in respect thereof).
Notwithstanding anything to the contrary herein, no Loan Party shall legally or beneficially transfer the title of, or otherwise Dispose of, or make an Investment consisting of, or otherwise transfer or distribute, any of its Material Intellectual Property (or the exclusive rights thereto) to a Platform Company, Subsidiary or Affiliate that is not a Loan Party.
Notwithstanding the foregoing, (x) from and after the Closing Date and until the occurrence of the Milestone Satisfaction Date, no Loan Party may make any additional Investments in [***] and (y) from and after the occurrence of the Milestone Satisfaction Date, Loan Parties may make additional Investments in [***], provided that the aggregate additional Investments made by the Loan Parties in [***] shall not exceed (a) $[***] in the aggregate, plus (b) up to $[***] in additional Investment made by the Loan Parties in [***] in any fiscal year for operating, overhead or other expenses; provided in each case that Borrower and/or one or more other Loan Parties or Pass-through Entities shall pledge the Equity Interests which Borrower and/or any other Loan Party or Pass-through Entity holds in [***] as Pledged Collateral (each such Investment, a “[***]”). For the avoidance of doubt, any Investments made in [***] prior to the Closing Date shall not reduce the available amounts under clauses (a) and (b) above and such previously made Investments may remain invested in [***].
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Notwithstanding the foregoing, and for the avoidance of doubt, this Section 7.7 shall not prohibit (i) the conversion by holders of (including any Cash payment upon conversion), or required payment of any principal or premium on (including, for the avoidance of doubt, in respect of a redemption of Permitted Convertible Debt upon satisfaction of a condition, if any, related to the stock price of Borrower’s common stock set forth in the indenture (or other agreement) governing the Permitted Convertible Debt) or required payment of any interest with respect to, any Permitted Convertible Debt in each case, in accordance with the terms of the indenture (or other agreement) governing such Permitted Convertible Debt, or (ii) the entry into (including the payment of premiums in connection therewith) or any required payment with respect to, or required early unwind or settlement of, any Permitted Bond Hedge Transaction or Permitted Warrant Transaction, in each case, in accordance with the terms of the agreement governing such Permitted Bond Hedge Transaction or Permitted Warrant Transaction, subject in each case of the foregoing clauses (i) and (ii), to the extent applicable pursuant to the second paragraph of Section 7.4, to compliance therewith.
Notwithstanding the foregoing, Borrower may repurchase, exchange or induce the conversion of Permitted Convertible Debt by delivery of shares of Borrower’s common stock and/or a different series of Permitted Convertible Debt and/or by payment of Cash in an amount that does not exceed the net cash proceeds received by Borrower from the substantially concurrent issuance of shares of Borrower’s common stock and/or Permitted Convertible Debt plus the net cash proceeds, if any, received by any Loan Party pursuant to the related exercise or early unwind or termination of the related Permitted Bond Hedge Transactions and Permitted Warrant Transactions, if any, pursuant to the immediately following proviso; provided that, for the avoidance of doubt, Borrower may exercise or unwind or terminate early (whether in Cash, shares or any combination thereof) the portion of the Permitted Bond Hedge Transactions and Permitted Warrant Transactions, if any, corresponding to such Permitted Convertible Debt that are so repurchased, exchanged or converted.
Notwithstanding the foregoing, Borrower may repurchase its common stock with up to an amount equal to [***]% of (x) the net cash proceeds from a substantially concurrent issuance and sale of Permitted Convertible Debt, less (y) the proceeds from such issuance and sale of Permitted Convertible Debt which are used to redeem, cash settle, prepay, exchange, convert or otherwise refinance any existing Permitted Convertible Debt (including related interest, fees, expenses and premiums payable in respect thereof).
Notwithstanding anything to the contrary herein, no Loan Party shall legally or beneficially transfer the title of, or otherwise Dispose of, or make an Investment consisting of, or otherwise transfer or distribute, any of its Material Intellectual Property (or the exclusive rights thereto) to a Platform Company, Subsidiary or Affiliate that is not a Loan Party.
Notwithstanding anything to the contrary herein, no Loan Party shall legally or beneficially transfer the title of, or otherwise Dispose of, or make an Investment consisting of, or otherwise transfer or distribute,
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any of its Material Intellectual Property (or the exclusive rights thereto) to a Platform Company, Subsidiary or Affiliate that is not a Loan Party.
Notwithstanding anything herein to the contrary, to the extent any Platform Company, Pass-through Entity, other Subsidiary of the Borrower or any joint venture is required to become a Guarantor pursuant to Section 7.13, then no further Dispositions, transfers, distributions or Investments may be made in such Platform Company, Pass-through Entity, other Subsidiary of the Borrower or any joint venture until such Platform Company, Pass-through Entity, other Subsidiary of the Borrower or any joint venture has become a Guarantor in accordance with this Agreement.
Except for a [***], no Loan Party shall Dispose of or otherwise transfer, distribute or Invest any of its assets to or in [***].
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SECTION 8. [RESERVED]
SECTION 9. EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall be an Event of Default:
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SECTION 10. REMEDIES
First, to Agents in an amount sufficient to pay in full the Agents’ fees, costs, indemnities, liabilities and related obligations, including reasonable costs and professionals’ and advisors’ fees and expenses as described in Section 11.11;
Second, to Lenders in an amount sufficient to pay in full the Lenders’ fees, costs, indemnities, liabilities and related obligations, including reasonable costs and professionals’ and advisors’ fees and expenses as described in Section 11.11, ratably among them in proportion to the amounts described in this clause Second payable to them;
Third, to Lenders in an amount equal to the accrued and unpaid interest on the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Third held by them;
Fourth, to Lenders in an amount equal to the unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to the payment of all other Secured Obligations of the Loan Parties that are due and payable to the Agents and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Secured Obligations owing to the Agents and the other Secured Parties on such date; and
Finally, after the full and final payment in Cash of all of the Secured Obligations (other than inchoate obligations), to any creditor holding a junior Lien on the Collateral, or to the Loan Parties or each of their representatives or as a court of competent jurisdiction may direct.
Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.
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SECTION 11. MISCELLANEOUS
U.S. Bank National Association, as Administrative Agent
c/o Corporate Trust – CDO Loan Agency
Attention: [***]
214 N.Tryon Street
27th Floor
Charlotte, NC 28202
email: [***]
Telephone: [***]
U.S. Bank National Association, as Collateral Agent
Global Corporate Trust
1 Federal St.
Boston, MA 02110
EX-MA-FED
Attention: [***]
email: [***]
Telephone: [***]
c/o BridgeBio Pharma, Inc.
421 Kipling Street
Palo Alto, CA 94301
email: [***]
Telephone: [***]
or to such other address as each party (including any Lender) may designate for itself by like notice.
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Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, any Defaulting Lender shall be excluded in determining whether all Lenders, all affected Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to this Section 11.3); and any amendment, waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Term Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.
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In the event that any Lender sells participations in a Loan, such Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the Borrower, maintain, or cause to be maintained, a register, on which it enters the name of all participants in the Registered Loans held by it and the principal amount (and stated interest thereon) of the portion of the Registered Loan that is the subject of the participation (the “Participant Register”). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. The Participant Register shall be available for inspection by Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Term Commitments and the Loans made by it); provided, that (i) such Lender's obligations under this Agreement (including without limitation, its Term Commitments hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and Borrower, the Agent and the Lenders
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shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents; and (iii) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (A) action directly effecting an extension of the maturity dates or decrease in the principal amount of the Loans, (B) action directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loans or the fees payable under this Agreement or under the Fee Letters, or (C) actions directly effecting a release of all or a substantial portion of the Collateral or any Loan Party (except as otherwise permitted under this Agreement or any other Loan Document). The Loan Parties agree that each participant shall be entitled to the benefits of Section 2.8 (subject to the requirements and limitations therein, including the requirements under Section 2.8(d) (it being understood that the documentation required under Section 2.8(d) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant this Section 11.7; provided that such participant shall not be entitled to receive any greater payment under Section 2.8, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the participant acquired the applicable participation.
Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or loans made to such Lender pursuant to securitization or similar credit facility (a “Securitization”); provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. The Loan Parties shall cooperate with such Lender and its Affiliates to effect the Securitization including, without limitation, by providing such information as may be reasonably requested by such Lender in connection with the rating of its Loans or the Securitization.
The list of Disqualified Institutions will be available to the Lenders upon written request to the Borrower and the Agent, including in connection with an assignment or participation. The parties to this Agreement hereby acknowledge and agree that the Agent will not be deemed to be in default under this Agreement or to have any duty or responsibility or to incur any liabilities as a result of a breach of this paragraph, nor will the Agent have any duty, responsibility or liability to monitor or enforce assignments, participations or other actions in respect of Disqualified Institutions, or otherwise take (or omit to take) any action with respect thereto.
In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and the Agent, the applicable pro rata share of Term Loan Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Term Loan Advances in accordance with its pro rata share thereof. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
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SECTION 12. GUARANTY
it being agreed by each Loan Party that its obligations under this Section 12 shall not be discharged until the full and final payment in Cash of all of the Secured Obligations (other than contingent indemnity obligations for which no claim is outstanding)). Each Loan Party shall be regarded, and shall be in the same position, as principal debtor with respect to the Secured Obligations guaranteed hereunder.
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The provisions of this Section 12.6 shall be implemented automatically without the need for any amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document
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In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Loan Parties, Agent and each Lender have duly executed and delivered this Loan and Security Agreement as of the day and year first above written.
Borrower: |
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BRIDGEBIO PHARMA, INC. |
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Signature: |
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Print Name: |
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Title: |
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GUARANTORS: |
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BridgeBio Pharma LLC |
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Signature: |
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Print Name: |
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Title: |
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BridgeBio Services Inc. |
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Signature: |
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Print Name: |
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Title: |
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QED Therapeutics, Inc. |
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Signature: |
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Print Name: |
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Title: |
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EIDOS THERAPEUTICS, INC. |
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Signature: |
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Print Name: |
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Title: |
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ADRENAS THERAPEUTICS, INC. |
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Signature: |
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Print Name: |
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Title: |
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GUARANTORS (Cont’d): |
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CALCILYTIX THERAPEUTICS, INC. |
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Signature: |
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Print Name: |
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Title: |
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PHOENIX TISSUE REPAIR, INC. |
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Signature: |
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Print Name: |
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Title: |
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ORIGIN BIOSCIENCES, INC. |
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Signature: |
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Print Name: |
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Title: |
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ML BIO SOLUTIONS, INC. |
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Signature: |
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Print Name: |
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Title: |
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BRIDGEBIO GENE THERAPY LLC |
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Signature: |
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Print Name: |
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Title: |
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BRIDGEBIO CHEMISTRY, INC. |
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Signature: |
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Print Name: |
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Title: |
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ADMINISTRATIVE AGENT: |
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U.S. BANK NATIONAL ASSOCIATION |
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Signature: |
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Print Name: |
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Title: |
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COLLATERAL AGENT: |
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U.S. BANK NATIONAL ASSOCIATION |
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Signature: |
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Print Name: |
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Title: |
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LENDERS: |
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[***] |
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Exhibit B
[***]
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Neil Kumar, certify that:
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I have reviewed this Quarterly Report on Form 10-Q of BridgeBio Pharma, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 4, 2022 |
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By: |
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/s/ Neil Kumar |
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Neil Kumar, Ph.D. |
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Chief Executive Officer and Director (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brian Stephenson, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of BridgeBio Pharma, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 4, 2022 |
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By: |
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/s/ Brian Stephenson |
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Brian Stephenson, Ph.D., CFA |
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BridgeBio Pharma, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 4, 2022 |
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By: |
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/s/ Neil Kumar |
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|
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Neil Kumar, Ph.D. |
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Chief Executive Officer and Director (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BridgeBio Pharma, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 4, 2022 |
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By: |
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/s/ Brian Stephenson |
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|
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Brian Stephenson, Ph.D., CFA |
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |