Team,
Wanted to confirm that the Exclusive License Agreement between Penterra Pharmaceuticals Corp. (as Licensor) and Meridian Bio Therapeutics Limited (as Licensee) for compound PPC-4187 (Penteracitinib) was fully executed by both parties today, October 2, 2023. In addition to the License Agreement, the following ancillary agreements were also fully executed today:
- **Escrow Agreement** (among Penterra, Meridian, and Velthorn National Bank, N.A.) - **API Supply Agreement** (Penterra and Meridian; cost plus 15% markup, 3-year initial term) - **Technology Transfer Agreement** (24-month completion deadline — by October 20, 2025) - **Trademark License Agreement** (PENTECLAR mark in the Territory) - **Pharmacovigilance Agreement**
As a reminder, the Quality Agreement form is attached as an exhibit to the License Agreement and is to be executed within 60 days of the Effective Date (i.e., by December 19, 2023).
The Signing Date is today, October 2, 2023, but the Effective Date / Closing is now targeted for **October 20, 2023**. As you'll recall, the originally scheduled closing date was October 9, but we pushed to October 20 to allow sufficient time for completion of all closing conditions and IP recordation across the Territory jurisdictions.
Executed documents are being compiled and will be circulated separately. The master closing checklist will also be updated and sent later this week.
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**DEAL SUMMARY (Brief Recap for Team Reference)**
- **Total deal value:** up to $120,000,000 - $18,000,000 upfront payment (payable at closing via escrow) - $32,000,000 in development milestones ($6M + $8M + $10M + $8M) - $25,000,000 in regulatory milestones ($10M NMPA + $8M PMDA + $4M MFDS + $3M TGA) - $45,000,000 in commercial milestones ($10M at $50M net sales + $15M at $100M + $20M at $200M) - **Tiered royalties on annual net sales:** 8% (≤$50M); 11% (>$50M–$150M); 14% (>$150M) - **Post-patent royalty reduction:** 50%; minimum annual royalty of $2,000,000 - **Most favored nation pricing:** no more than 15% below lowest U.S./EU5 net price; quarterly reconciliation - **Indemnification:** mutual; cap at 200% of total payments received (floor: $36M based on $18M upfront); de minimis of $150,000 per claim; aggregate basket of $750,000; carve-outs for fraud, willful misconduct, and IP infringement - **Governing law:** New York; disputes by ICC arbitration in New York (3 arbitrators) - **Licensed Territory:** PRC (incl. Hong Kong SAR and Macau SAR), Japan, South Korea, Australia, New Zealand, Singapore, Thailand, Malaysia, Indonesia, Philippines, Vietnam, Taiwan
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**NEXT STEPS TO CLOSING**
1. **Antitrust Clearance Confirmation** - No HSR filing required (pure IP license — no acquisition of voting securities or assets); we need to confirm this in writing. Expected by October 5, 2023. - CFIUS not applicable. - Meridian to evaluate PRC Technology Import/Export filing requirements (Meridian Pharma (Shanghai) Co., Ltd.) — Lam, Cheung & Firth (Jonathan Firth / Rebecca Liang) to advise.
2. **Escrow Funding** - Meridian to wire $18,000,000 to escrow account at Velthorn National Bank, N.A. (Teresa M. D'Angelo, Escrow Officer, 383 Madison Avenue, New York). - Target funding date: **October 6, 2023**. - Velthorn to issue funding confirmation letter upon receipt. - Escrow agent fee: $15,000 flat plus $2,500/quarter for maintenance.
3. **Closing Certificates** - *Officer's Certificate — Penterra:* Anita Fremont to certify reps, warranties, and board authorization (board authorized the transaction on July 18, 2023). **Wendy** to prepare draft. - *Officer's Certificate — Meridian:* David R. Cheung to certify on behalf of Meridian. LCF to prepare. - *Secretary's Certificate — Penterra:* certifying board resolutions, incumbency, and organizational documents (Delaware corp., EIN 22-3948175). **Wendy** to prepare draft. - *Secretary's Certificate — Meridian:* certifying board resolutions, incumbency, and organizational documents (HK Company Reg. No. 2847631). LCF to prepare.
4. **Good Standing Certificate** - Penterra good standing certificate from the Delaware Secretary of State — to be obtained; target by mid-October.
5. **Legal Opinions** - Calderwood & Harkness opinion letter to Meridian: re Penterra's due organization, authorization, enforceability, no conflicts. **Marcus** to finalize. - Lam, Cheung & Firth opinion letter to Penterra: re Meridian's due authorization, enforceability, no conflicts. To be coordinated with Jonathan Firth.
6. **IP Recordation Filings** - Record license/assignment in all Territory jurisdictions (CN, JP, KR, AU, SG, and others under PCT/US2019/045123 national phase entries). - Coordinate with Whitford & Marsh (Dr. Alan Whitford) for patent recordation filings. - Target completion of all IP recordation by approximately **October 18, 2023** (last jurisdiction).
7. **Closing Checklist** - **Peter and Wendy** to update the master closing checklist with status of all deliverables. Will circulate an updated version later this week.
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**POST-CLOSING REMINDERS (Flagged for Awareness)**
- Quality Agreement to be executed by **December 19, 2023** (60 days from Effective Date) - Technology transfer to Meridian's designated APAC manufacturer to be completed by **October 20, 2025** (24 months) - JSC (Joint Steering Committee) and JPC (Joint Patent Committee) to be constituted — first meetings to be scheduled after closing - Quarterly most favored nation pricing reconciliation begins following first commercial sale (within 45 days of each calendar quarter end) - Penterra to maintain transfer pricing documentation for API supply (cost plus 15%) - PRC foreign exchange approvals for milestone and royalty payments to be obtained by Meridian Shanghai
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**COORDINATION WITH CLIENT AND COUNTERPARTY COUNSEL**
I will send a brief confirmation email to Anita Fremont (Penterra GC) and Leland Cho (SVP, Business Development) to confirm execution. LCF (Jonathan Firth and Rebecca Liang) have confirmed receipt of fully executed counterparts on behalf of Meridian. We should also notify Prescott Hale (Victoria Chen) of signing for advisory fee purposes ($1,500,000 success fee) — Catherine, could you coordinate on that?
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Great work by everyone on the hard push through negotiation and execution. From the initial engagement on July 10, through the term sheet on August 4, due diligence completion on September 8, final draft circulation on September 22, and today's signing — it's been a lot of ground to cover in under three months, and the effort has been outstanding across the board.
Please flag any issues you see with the next-steps timeline above. I'll set up an internal call for later this week to coordinate closing deliverables and make sure we're tracking toward October 20.
Best, Peter
Peter Vassiliev Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022 D: (212) 555-4839 pvassiliev@calderwoodharkness.com