[sheet: Cover]

[sheet: Cover]
Field | Value
Matter | Penterra Pharmaceuticals Corp. — Out-License of PPC-4187 to Meridian Bio Therapeutics Ltd.
Document | Negotiation Issues List & Redline Tracker
Prepared By | Peter Vassiliev, Lead Associate, Calderwood & Harkness LLP
Reviewed By | Marcus Delgado, Responsible Partner, Calderwood & Harkness LLP
Client Contact | Anita M. Fremont, General Counsel, Penterra Pharmaceuticals Corp.
Counterparty Counsel | Lam, Cheung & Firth LLP (Jonathan M. Firth / Rebecca S. Liang)
Status | Updated through September 22, 2023 — Final Draft Circulated
Confidential | PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
Version 1.0 | August 18, 2023 — Initial draft circulated to LCF
Version 2.0 | September 5, 2023 — LCF redline received and issues logged
Version 3.0 | September 15, 2023 — Revised draft reflecting negotiated positions
Version 4.0 | September 22, 2023 — Final draft circulated; remaining open items noted
[sheet: Issues Tracker]
Issue # | Category | Agreement Section | Issue Description | Penterra / C&H Position | Meridian / LCF Position | Status | Resolution / Agreed Language | Date Raised | Date Resolved | Priority | C&H Notes
1 | Financial Terms — Upfront Payment | Section 5.1 | Upfront payment amount and payment mechanics | $18,000,000 payable at closing via escrow through Velthorn National Bank, N.A.; release upon satisfaction of all closing conditions and IP transfer verification | Agreed to $18M upfront; requested direct payment rather than escrow | Resolved | Agreed: $18,000,000 via escrow; Meridian to fund escrow by October 6, 2023; release upon closing/effective date (October 20, 2023). Escrow agent: Velthorn National Bank, N.A. (Teresa M. D'Angelo). Fee: $15,000 flat + $2,500/quarter. | 2023-08-18 | 2023-09-05 | High | LCF initially resisted escrow mechanism but accepted after C&H explained IP recordation timing requirements.
2 | Financial Terms — Development Milestones | Section 5.2 | Development milestone payment amounts and trigger events | $32M total: Phase III initiation ($6M), enrollment completion ($8M), positive topline Phase III data ($10M), first NDA/BLA submission in Territory to NMPA or PMDA ($8M) | LCF proposed reducing enrollment completion milestone to $5M and positive topline data to $8M; total $27M | Resolved | Agreed at Penterra's proposed amounts: $6M + $8M + $10M + $8M = $32,000,000. Trigger events as defined in Schedule E (Development Plan). | 2023-08-18 | 2023-09-15 | High | Meridian conceded after Penterra agreed to flexibility on technology transfer timeline (Issue #16).
3 | Financial Terms — Regulatory Milestones | Section 5.3 | Regulatory milestone payment amounts by jurisdiction | $25M total: China/NMPA ($10M), Japan/PMDA ($8M), South Korea/MFDS ($4M), Australia/TGA ($3M) | LCF proposed $8M (China), $6M (Japan), $3M (Korea), $2M (Australia) = $19M total | Resolved | Agreed at Penterra's proposed amounts: $10M + $8M + $4M + $3M = $25,000,000. | 2023-08-18 | 2023-09-15 | High | Resolved as part of overall milestone package negotiation.
4 | Financial Terms — Commercial Milestones | Section 5.4 | Commercial / sales milestone payment amounts and net sales thresholds | $45M total: Annual net sales first exceeding $50M ($10M), $100M ($15M), $200M ($20M) | LCF proposed thresholds at $75M ($8M), $150M ($12M), $250M ($15M) = $35M total | Resolved | Agreed at Penterra's proposed thresholds and amounts: $10M + $15M + $20M = $45,000,000. Total deal value confirmed at $120,000,000. | 2023-08-18 | 2023-09-15 | High | LCF argued higher thresholds more realistic for APAC market; Penterra prevailed citing comparable deals. Total: $18M + $32M + $25M + $45M = $120M.
5 | Royalty Structure | Section 6.1 | Tiered royalty rates on annual net sales in Territory | 8% (≤$50M), 11% (>$50M–$150M), 14% (>$150M) | LCF proposed 6% / 9% / 12% | Resolved | Agreed at Penterra's proposed rates: 8% / 11% / 14%. Royalty term: later of (a) expiration of last-to-expire licensed patent in country or (b) 12 years from first commercial sale in country. | 2023-08-18 | 2023-09-15 | High | Penterra's rates consistent with term sheet dated August 4, 2023.
6 | Royalty Structure — Post-Patent Reduction | Section 6.2 | Royalty rate reduction after patent expiration but during 12-year royalty term | 50% reduction of applicable rate (4% / 5.5% / 7%) following expiration of all licensed patents in a country | LCF proposed 60% reduction; also sought automatic termination of royalty upon patent expiry | Compromised | Agreed at 50% reduction (Penterra's position): post-patent rates of 4%, 5.5%, 7% for respective tiers. 12-year royalty term retained. | 2023-09-05 | 2023-09-15 | Medium | Key composition-of-matter patents expire August 12, 2037; crystalline form patent expires November 3, 2038. LCF withdrew automatic termination request.
7 | Royalty Structure — Minimum Annual Royalty | Section 6.3 | Minimum annual royalty floor and crediting mechanism | $2,000,000/year beginning in calendar year following first commercial sale in any Territory country; credited against earned royalties | LCF proposed $1,000,000/year minimum; argued $2M too high for initial launch year | Resolved | Agreed at $2,000,000/year (Penterra's position). Credited against earned royalties in same calendar year. | 2023-09-05 | 2023-09-15 | Medium | Penterra emphasized minimum royalty as incentive for diligent commercialization.
8 | Royalty Structure — Generic Entry Reduction | Section 6.4 | Royalty reduction upon generic competition in a given country | 40% reduction if one or more Generic Products achieve ≥30% market share in a given country | LCF proposed 50% reduction at ≥20% generic market share | Compromised | Agreed at 40% reduction (Penterra's position) but threshold set at ≥30% market share (Penterra's position). Country-by-country determination. | 2023-09-05 | 2023-09-15 | Medium | Market share measured by volume in applicable country; measured quarterly.
9 | Most Favored Nation Pricing | Section 7 / Schedule F | MFN pricing clause: Meridian not to offer PPC-4187 in Territory at net price more than 15% below lowest net price in U.S. or EU5 (Germany, France, Italy, Spain, UK) for same dosage strength and comparable pack size | 15% floor below lowest U.S./EU5 net price; quarterly reconciliation within 45 days of quarter end; MFN adjustment payment for breach = (MFN floor price − actual net price) × units sold in quarter | LCF proposed 25% floor (allowing greater discount); semi-annual reconciliation; no adjustment payment (only prospective correction) | Compromised | Agreed: 15% floor (Penterra's position); quarterly reconciliation within 45 days of calendar quarter end (Penterra's position); MFN adjustment payment formula as proposed by Penterra. Methodology detailed in Schedule F. | 2023-08-18 | 2023-09-22 | High | Heavily negotiated. LCF argued APAC pricing structures differ materially from U.S./EU5. C&H conducted analysis of comparable MFN provisions in recent pharma out-license transactions (see email from Vassiliev to Delgado, August 2023). Final position protects Penterra's global pricing integrity. Dosage strengths: 25 mg and 50 mg film-coated tablets.
10 | Sublicensing | Section 8 | Meridian's right to grant sublicenses in Territory; consent standard; pass-through economics | Sublicenses permitted only with Penterra's prior written consent (not to be unreasonably withheld); sublicense must contain terms no less protective of Penterra's rights (including MFN and indemnification); 50% of sublicense income (upfront, milestones, royalties) to Penterra, net of documented out-of-pocket development costs | LCF proposed sublicensing without Penterra consent for Meridian Affiliates (Meridian Shanghai, Meridian Japan K.K., Meridian Korea Inc., Meridian Bio Australia Pty Ltd); 35% pass-through to Penterra | Compromised | Agreed: Affiliate sublicenses permitted without consent but subject to written notice and compliance with MFN/indemnification flow-down; third-party sublicenses require Penterra's prior written consent (not to be unreasonably withheld). Sublicense income pass-through: 50% to Penterra (Penterra's position), net of Meridian's documented OOP development costs directly attributable to sublicensee's territory. | 2023-08-18 | 2023-09-22 | High | LCF's Affiliate carve-out was reasonable given Meridian's existing subsidiaries in CN, JP, KR, AU. Third-party sublicense consent right preserved for Penterra.
11 | Indemnification — Scope (Licensor) | Section 12.1 | Penterra's indemnification obligations as licensor | Penterra indemnifies Meridian for: (a) breach of reps/warranties, (b) Penterra negligence/willful misconduct, (c) claims that Licensed IP as of Effective Date infringes third-party IP, (d) Penterra's manufacture/supply of clinical supply material | LCF proposed expanding to cover any IP infringement claim (not limited to IP as existing on Effective Date) and any supply-related claims regardless of fault | Compromised | Agreed: Penterra's indemnification covers IP infringement claims based on Licensed IP as existing on Effective Date (Penterra's position); supply indemnification limited to Penterra's manufacture/supply of clinical material (Penterra's position). Broader IP and supply claims allocated to Meridian post-technology transfer. | 2023-09-05 | 2023-09-15 | High | Critical issue. Penterra unwilling to indemnify for IP developed or modified by Meridian post-closing.
12 | Indemnification — Scope (Licensee) | Section 12.2 | Meridian's indemnification obligations as licensee | Meridian indemnifies Penterra for: (a) breach of reps/warranties, (b) development, manufacture, or commercialization of Licensed Products in Territory, (c) Meridian negligence/willful misconduct, (d) product liability claims from commercial sales in Territory | LCF sought to narrow (b) to exclude claims arising from Penterra-supplied materials and narrow (d) to exclude claims caused by design defects in PPC-4187 | Compromised | Agreed: Meridian's indemnification as proposed by Penterra, but with carve-out for Losses to the extent directly caused by defects in Penterra-supplied API (which are covered by Penterra's supply indemnification under Section 12.1(d)). | 2023-09-05 | 2023-09-15 | High | Allocation reflects standard risk-sharing for pharma out-licenses.
13 | Indemnification — Cap | Section 12.3 | Aggregate cap on indemnification liability for each party | Cap at 200% of total payments received by Penterra as of date of claim (floor: 200% × $18M upfront = $36,000,000, increasing as milestones are paid); no cap for fraud, willful misconduct, or IP infringement indemnity | LCF proposed cap at 100% of total payments received; carve-outs only for fraud | Compromised | Agreed: 200% of total payments received (Penterra's position). Cap floor = $36,000,000 (200% × $18M). No cap for fraud, willful misconduct, or IP infringement indemnity (Penterra's position on carve-outs, with LCF adding willful misconduct carve-out). | 2023-09-05 | 2023-09-15 | High | LCF conceded on 200% cap after Penterra agreed to the de minimis and basket thresholds (Issues #14–15).
14 | Indemnification — De Minimis Threshold | Section 12.4(a) | Minimum threshold per individual claim before indemnification applies | $150,000 per individual claim | LCF proposed $250,000 per claim | Resolved | Agreed at $150,000 per individual claim (Penterra's position). | 2023-09-05 | 2023-09-15 | Medium | Part of overall indemnification package negotiation.
15 | Indemnification — Aggregate Deductible Basket | Section 12.4(b) | Aggregate deductible basket before indemnification obligations attach | $750,000 aggregate deductible (tipping basket — once exceeded, indemnifying party liable for all qualifying Losses from dollar one) | LCF proposed $1,500,000 aggregate deductible (true deductible — indemnifying party liable only for excess) | Compromised | Agreed: $750,000 aggregate deductible basket (Penterra's amount). Structured as tipping basket (Penterra's position) — once aggregate qualifying Losses exceed $750,000, indemnifying party liable from dollar one. | 2023-09-05 | 2023-09-15 | Medium | LCF preferred true deductible but accepted tipping basket in exchange for Penterra's concession on Affiliate sublicense consent (Issue #10).
16 | Technology Transfer | Section 9 / Tech Transfer Agreement | Timeline and scope of manufacturing process know-how transfer from Penterra to Meridian's designated APAC manufacturer | Transfer to be completed within 24 months of Effective Date (by October 20, 2025); includes manufacturing process, analytical methods, CMC documentation from Alkerra Manufacturing Inc. | LCF proposed 18-month timeline; requested that Penterra bear costs of Penterra personnel travel for tech transfer | Compromised | Agreed: 24-month timeline (Penterra's position; deadline October 20, 2025). Each party bears its own personnel costs; Penterra provides reasonable technical support. Scope includes manufacturing process for 25 mg and 50 mg tablets, analytical methods, stability data, CMC documentation. | 2023-08-18 | 2023-09-15 | High | Penterra argued 24 months necessary given complexity of process validation at new site. Alkerra Manufacturing Inc. (Research Triangle Park, NC) is current CMO. See also Supply Agreement (cost + 15% for 3-year initial term post-closing).
17 | API Supply Pricing | Section 10 / Supply Agreement | Pricing for Penterra-supplied API during initial supply period | Cost plus 15% markup for first 3 years post-closing; transfer pricing documentation to be maintained by Penterra | LCF proposed cost plus 10%; 5-year supply term | Compromised | Agreed: Cost plus 15% (Penterra's position) for 3-year initial term (Penterra's position). Penterra to maintain contemporaneous transfer pricing documentation. Quality Agreement to be executed within 60 days of Effective Date (by December 19, 2023). | 2023-09-05 | 2023-09-15 | Medium | Transfer pricing rate reviewed by Sylvia Hartwell (Tax). 15% markup within arm's length range per TP analysis.
18 | JSC Governance — Voting Mechanics | Section 11.1 | Joint Steering Committee composition, meeting frequency, and tie-breaking vote allocation | 3 representatives per party; quarterly meetings; Penterra has tie-breaking vote on global IP strategy matters; Meridian has tie-breaking vote on Territory-specific commercialization (subject to MFN compliance) | LCF proposed Meridian tie-breaking vote on all Territory matters including IP prosecution/enforcement in Territory; no Penterra tie-breaking vote | Compromised | Agreed: 3 reps per party; quarterly meetings. Penterra tie-breaking vote on matters relating to global IP strategy (Penterra's position). Meridian tie-breaking vote on Territory-specific commercialization matters, subject to MFN compliance (compromise). IP prosecution/enforcement in Territory managed by Joint Patent Committee (Issue #19). | 2023-09-05 | 2023-09-22 | High | Delicate balance — Penterra needed to protect global IP strategy coordination while respecting Meridian's commercial autonomy in APAC.
19 | JPC Governance — Patent Committee | Section 11.2 | Joint Patent Committee composition and responsibilities for patent prosecution, maintenance, and enforcement in Territory | 2 representatives per party; oversees patent prosecution, maintenance, and enforcement in Territory; Penterra has final decision authority on global patent strategy | LCF proposed 3 reps per party on JPC; Meridian to have lead on Territory patent enforcement with Penterra's consent | Compromised | Agreed: 2 reps per party (Penterra's position). Penterra has final decision on matters affecting global patent strategy. Meridian may lead Territory enforcement actions with Penterra's prior written consent and cooperation. | 2023-09-05 | 2023-09-22 | Medium | Whitford & Cascade Insurance Brokers (Dr. Alan J. Whitford) serves as Penterra's patent prosecution counsel; coordination with JPC activities.
20 | Representations & Warranties — IP Ownership | Section 3.1 | Scope of Penterra's representations regarding IP ownership and validity | Penterra represents it is sole owner of all Licensed IP (7 patent families, PENTECLAR trademark, know-how); no encumbrances; patents valid and enforceable to Penterra's knowledge | LCF proposed absolute representation of patent validity (not qualified by knowledge); requested representation that no third-party IP is infringed | Compromised | Agreed: IP ownership representation unqualified. Patent validity representation qualified by Penterra's knowledge. Penterra represents that to its knowledge, Licensed IP does not infringe third-party IP in Territory (supported by Whitford & Marsh FTO opinion). Key patents: U.S. 11,234,567 (CoM, exp. Aug 12, 2037), U.S. 11,345,678 (Crystalline Form A, exp. Nov 3, 2038), CN ZL 2020 1 0456789.0, JP 7,012,345, KR 10-2345678, AU 2020234567. | 2023-09-05 | 2023-09-15 | High | Standard pharma licensing approach — absolute ownership rep, knowledge-qualified validity and non-infringement reps.
21 | Representations & Warranties — Clinical Data | Section 3.2 | Penterra's representations regarding accuracy and completeness of clinical data for PPC-4187 | Penterra represents that Study PPC-4187-201 data (420 patients, Phase IIb, EASI-75 at Week 16, p<0.001 vs. placebo, topline results June 2023) is accurate and complete in all material respects | LCF proposed unqualified accuracy representation; requested access to full clinical study report | Compromised | Agreed: Material accuracy and completeness representation (Penterra's position). Full clinical study report for PPC-4187-201 provided to Meridian under confidentiality during diligence (completed September 8, 2023). | 2023-09-05 | 2023-09-15 | Medium | Meridian's CMO (Dr. Kenji Morimoto) reviewed clinical data package during diligence.
22 | Territory Definition | Section 2.1 / Schedule D | Precise definition of Licensed Territory | PRC (including Hong Kong SAR and Macau SAR), Japan, Republic of Korea, Australia, New Zealand, Singapore, Thailand, Malaysia, Indonesia, Philippines, Vietnam, and Taiwan | LCF proposed including India and additional South Asian markets | Resolved | Agreed: Territory as defined by Penterra (12 countries/regions per Schedule D). India and South Asia excluded; Penterra retains rights. | 2023-08-18 | 2023-09-05 | Medium | Consistent with term sheet dated August 4, 2023. Meridian has existing commercial infrastructure in all Territory markets.
23 | Governing Law & Dispute Resolution | Section 15 | Choice of law and dispute resolution mechanism | New York law (without regard to conflicts principles); ICC arbitration in New York; 3 arbitrators; English language; either party may seek preliminary injunctive relief in S.D.N.Y. or NY Supreme Court, NY County | LCF proposed Hong Kong as arbitration seat; HKIAC rules | Resolved | Agreed: New York governing law; ICC International Court of Arbitration; seat in New York, NY; panel of 3 arbitrators; English language (Penterra's position). Injunctive relief available in S.D.N.Y. or NY Supreme Court, NY County. | 2023-08-18 | 2023-09-15 | Medium | LCF accepted New York seat given Penterra is U.S.-headquartered public company (Nasdaq: PNTR) and C&H's New York office involvement.
24 | Withholding Tax Allocation | Section 5.6 | Responsibility for withholding taxes on royalty and milestone payments | Meridian responsible for all applicable withholding taxes; payments to Penterra made gross of withholding; U.S.–HK treaty rate 0% on royalties; PRC withholding 10% for payments via Meridian Pharma (Shanghai) Co., Ltd. unless reduced by treaty | LCF proposed net-of-tax payments (Penterra bears withholding tax burden); argued PRC 10% WHT should reduce royalty amounts | Resolved | Agreed: Meridian bears all withholding tax obligations; payments to Penterra gross of withholding (Penterra's position). Meridian to provide tax receipts. PRC outbound remittance approvals to be obtained by Meridian Shanghai. Tax structuring per C&H memo (Sylvia Hartwell, August 2023). | 2023-09-05 | 2023-09-22 | High | Critical economic point. Penterra unwilling to absorb PRC WHT. Meridian to structure payment flows to minimize WHT where possible.
25 | Pharmacovigilance | Section 13 / PV Agreement | Adverse event reporting and safety data exchange obligations | Separate Pharmacovigilance Agreement governing AE reporting, PSURs, global safety database; ICH E2B/E2D standards; expedited reporting timelines | LCF proposed incorporating PV terms in main agreement rather than separate agreement | Resolved | Agreed: Separate Pharmacovigilance Agreement to be executed concurrently with License Agreement (Penterra's position). ICH E2B/E2D standards apply. | 2023-09-05 | 2023-09-15 | Low | Industry standard to have separate PV agreement for operational flexibility.
26 | Trademark License — Quality Control | Section 14 / TM License Agreement | Quality control standards for Meridian's use of PENTECLAR mark in Territory | Separate Trademark License Agreement; Penterra retains quality control and approval rights over all promotional materials using PENTECLAR mark (U.S. Reg. No. 6,789,012 and Territory registrations/applications) | LCF proposed Meridian self-certification of quality standards after initial approval period | Resolved | Agreed: Separate Trademark License Agreement. Penterra retains ongoing quality control rights (Penterra's position). Meridian to submit samples and promotional materials for Penterra review annually. | 2023-09-05 | 2023-09-15 | Low | Penterra needs to maintain quality control to preserve trademark rights globally.
27 | Insurance Requirements | Section 12.5 | Clinical trial insurance and product liability coverage requirements for Meridian | Meridian to maintain clinical trial insurance and product liability coverage with reputable insurer in amounts customary for the Territory; evidence of coverage to be provided to Penterra | LCF accepted; confirmed Jade Dragon Insurance Limited as Meridian's insurer (Christine A. Lo, underwriter) | Resolved | Agreed: Meridian to maintain adequate clinical trial and product liability insurance through Jade Dragon Insurance Limited or equivalent carrier. Certificates of insurance to be provided to Penterra annually. | 2023-09-05 | 2023-09-05 | Low | Non-contentious. Jade Dragon Insurance (Hong Kong) is Meridian's existing insurer.
28 | Closing Conditions & Timeline | Section 16 | Conditions to closing and target closing date | Closing conditions: execution of all ancillary agreements, escrow funding, officer's and secretary's certificates, legal opinions, good standing certificates, IP recordation filings initiated. No HSR filing required (pure IP license, no acquisition of voting securities or assets). CFIUS not applicable. | LCF proposed closing within 5 business days of signing | Compromised | Agreed: Scheduled closing October 9, 2023 (subject to satisfaction of conditions). Actual closing/Effective Date: October 20, 2023 (delayed to accommodate IP assignment recordation completion in last jurisdiction on October 18, 2023). Antitrust: no filing required, confirmed October 5, 2023. Meridian to evaluate China MOFCOM/SAMR Technology Import/Export filing. | 2023-09-15 | 2023-09-22 | High | Closing delayed from October 9 to October 20 due to IP recordation timing. Escrow funded October 6, 2023. Escrow released October 20, 2023.
SUMMARY
Resolved | 16
Compromised | 12
Open | 0
Deferred | 0
[sheet: Redline Log]
Version | Date | Document | Sent By | Sent To | Description of Changes | Issues Addressed | Status
1.0 | 2023-08-18 | Exclusive License Agreement — Initial Draft | Peter Vassiliev (Calderwood & Harkness) | Jonathan M. Firth, Rebecca S. Liang (Lam, Cheung & Firth) | Initial draft of License Agreement prepared by C&H; circulated with Schedules A–F. cc: Marcus Delgado, Anita M. Fremont. | All issues established | Circulated
1.1 | 2023-08-18 | Schedules A–F to License Agreement | Peter Vassiliev (Calderwood & Harkness) | Jonathan M. Firth, Rebecca S. Liang (LCF) | Schedule A (Licensed Patents), Schedule B (Licensed Know-How), Schedule C (Licensed Trademarks), Schedule D (Territory), Schedule E (Development Plan), Schedule F (MFN Methodology). Circulated concurrently with v1.0. | Issues #2–5, #9, #22 | Circulated
2.0 (Redline) | 2023-09-05 | Exclusive License Agreement — LCF Redline | Jonathan M. Firth, Rebecca S. Liang (LCF) | Peter Vassiliev, Marcus Delgado (C&H) | Tracked-changes redline from LCF reflecting Meridian's positions on: reduced development/regulatory milestones, lower royalty rates (6%/9%/12%), 25% MFN floor, indemnification cap at 100%, higher de minimis/basket, 18-month tech transfer, Hong Kong arbitration, PRC WHT allocation, Affiliate sublicensing without consent, expanded IP reps. | Issues #2–15, #16, #18–24 | Under Review
2.1 | 2023-09-08 | LCF Due Diligence Supplemental Request List | Rebecca S. Liang (LCF) | Peter Vassiliev (C&H) | Additional diligence requests: full clinical study report for PPC-4187-201, patent prosecution file histories for Territory filings, Alkerra Manufacturing quality audit reports, PENTECLAR trademark prosecution histories. | Issues #20, #21, #26 | Responded
2.2 | 2023-09-10 | C&H Due Diligence Response and Document Production | Peter Vassiliev, Wendy Schultz (C&H) | Rebecca S. Liang (LCF) | Responsive document production via secure data room: clinical study report (PPC-4187-201), patent file histories (7 families), Alkerra audit reports (2021–2023), TM prosecution files. Subject to AEO confidentiality restrictions. | Issues #20, #21, #26 | Complete
3.0 | 2023-09-15 | Exclusive License Agreement — Revised Draft | Peter Vassiliev (Calderwood & Harkness) | Jonathan M. Firth, Rebecca S. Liang (LCF) | Revised draft incorporating negotiated positions: milestones at Penterra's proposed levels ($32M dev / $25M reg / $45M commercial); royalties at 8%/11%/14%; indemnification cap at 200%; basket $750,000 tipping; de minimis $150,000; 24-month tech transfer; Affiliate sublicense carve-out; NY law/ICC arbitration; gross-of-tax payments. | Issues #2–17, #19–25, #27 | Circulated
3.1 (Comments) | 2023-09-18 | LCF Comments on Revised Draft | Rebecca S. Liang (LCF) | Peter Vassiliev (C&H) | Remaining comments on MFN quarterly reconciliation mechanics (Schedule F), JSC/JPC voting details, closing timeline, and minor definitional points. | Issues #9, #18, #19, #28 | Under Review
4.0 (Final) | 2023-09-22 | Exclusive License Agreement — Final Draft | Peter Vassiliev (Calderwood & Harkness) | Jonathan M. Firth, Rebecca S. Liang (LCF) | Final draft reflecting all agreed positions. MFN reconciliation within 45 days of quarter end; JSC 3+3 with split tie-breaking; JPC 2+2; closing conditions finalized. All 28 issues resolved or compromised. Circulated for final review before execution target of October 2, 2023. | Issues #9, #18, #19, #28 | Final
4.1 | 2023-09-25 | Ancillary Agreements — Final Drafts (Supply, Tech Transfer, PV, TM License) | Peter Vassiliev, Wendy Schultz (C&H) | Jonathan M. Firth, Rebecca S. Liang (LCF) | Final drafts of: (i) Supply Agreement (cost + 15%, 3-year term), (ii) Technology Transfer Agreement (24-month timeline), (iii) Pharmacovigilance Agreement (ICH E2B/E2D), (iv) Trademark License Agreement (PENTECLAR mark, ongoing QC). | Issues #16, #17, #25, #26 | Final
Execution | 2023-10-02 | Exclusive License Agreement — Execution Version | Both parties | Both parties | Executed by Penterra (Dr. Raymond K. Ostrowski, CEO; witnessed by Anita M. Fremont, GC) and Meridian (Angela C.Y. Fong, CEO; witnessed by David R. Cheung, GC). Effective Date: October 20, 2023. | All | Executed
[sheet: Deal Economics Summary]
Category | Milestone / Item | Penterra Proposed Amount | Meridian / LCF Proposed Amount | Agreed Amount | Notes
Upfront Payment | Closing payment via escrow | $18,000,000 | $18,000,000 | $18,000,000 | Escrow funded Oct 6; released Oct 20, 2023 via Velthorn National Bank
Development Milestone | Initiation of first Phase III trial in Territory | $6,000,000 | $6,000,000 | $6,000,000
Development Milestone | Completion of enrollment in first Phase III trial | $8,000,000 | $5,000,000 | $8,000,000 | Penterra prevailed
Development Milestone | Positive topline Phase III data | $10,000,000 | $8,000,000 | $10,000,000 | Penterra prevailed
Development Milestone | First NDA/BLA submission (NMPA or PMDA) | $8,000,000 | $8,000,000 | $8,000,000
Dev Milestones Subtotal | $32,000,000 | $27,000,000 | $32,000,000
Regulatory Milestone | First Approval — China (NMPA) | $10,000,000 | $8,000,000 | $10,000,000
Regulatory Milestone | First Approval — Japan (PMDA) | $8,000,000 | $6,000,000 | $8,000,000
Regulatory Milestone | First Approval — South Korea (MFDS) | $4,000,000 | $3,000,000 | $4,000,000
Regulatory Milestone | First Approval — Australia (TGA) | $3,000,000 | $2,000,000 | $3,000,000
Reg Milestones Subtotal | $25,000,000 | $19,000,000 | $25,000,000
Commercial Milestone | Annual Net Sales > $50M | $10,000,000 | $8,000,000 | $10,000,000 | LCF proposed $75M threshold
Commercial Milestone | Annual Net Sales > $100M | $15,000,000 | $12,000,000 | $15,000,000 | LCF proposed $150M threshold
Commercial Milestone | Annual Net Sales > $200M | $20,000,000 | $15,000,000 | $20,000,000 | LCF proposed $250M threshold
Comm Milestones Subtotal | $45,000,000 | $35,000,000 | $45,000,000
TOTAL DEAL VALUE | $120,000,000 | $99,000,000 | $120,000,000 | $18M + $32M + $25M + $45M = $120M
Royalty Tier 1 | ≤$50M annual net sales | 8% | 6% | 8%
Royalty Tier 2 | >$50M–$150M annual net sales | 11% | 9% | 11%
Royalty Tier 3 | >$150M annual net sales | 14% | 12% | 14%
Post-Patent Royalty | 50% reduction of applicable rate | 4% / 5.5% / 7% | 3.6% / 4.8% / 6% (60% reduction proposed) | 4% / 5.5% / 7% | Penterra's 50% reduction agreed
Minimum Annual Royalty | Beginning CY after 1st commercial sale | $2,000,000 | $1,000,000 | $2,000,000 | Credited against earned royalties
Generic Entry Reduction | ≥30% generic market share in country | 40% reduction | 50% reduction at ≥20% | 40% at ≥30%
MFN Price Floor | vs. lowest U.S./EU5 net price | 15% below | 25% below | 15% below | Quarterly reconciliation; 45 days after Q-end
Sublicense Pass-Through | % of sublicense income to Penterra | 50% | 35% | 50% | Net of documented OOP dev costs
API Supply Markup | Cost plus | 15% | 10% | 15% | 3-year initial term
Indemnification Cap | % of total payments received | 200% | 100% | 200% | Floor = $36M (200% × $18M)
Indemnification De Minimis | Per individual claim | $150,000 | $250,000 | $150,000
Indemnification Basket | Aggregate deductible | $750,000 | $1,500,000 | $750,000 | Tipping basket
[sheet: Key Contacts]
Name | Title / Role | Organization | Email | Notes
Marcus Delgado | Responsible Partner, IP | Calderwood & Harkness LLP | mdelgado@calderwoodharkness.com | Lead partner on deal; 600 Lexington Ave, 30th Fl, NY
Catherine Bloom | Billing Partner, IP | Calderwood & Harkness LLP | cbloom@calderwoodharkness.com
Peter Vassiliev | Lead Associate, IP | Calderwood & Harkness LLP | pvassiliev@calderwoodharkness.com | Primary drafter; maintains this tracker
Wendy Schultz | Working Associate, IP | Calderwood & Harkness LLP | wschultz@calderwoodharkness.com | IP diligence; patent schedule preparation
Sylvia Hartwell | Specialist Partner, Tax | Calderwood & Harkness LLP | shartwell@calderwoodharkness.com | WHT/transfer pricing analysis
Anita M. Fremont, Esq. | General Counsel | Penterra Pharmaceuticals Corp. | afremont@penterra.com | Primary client contact; 400 Pharma Drive, Princeton, NJ
Dr. Raymond K. Ostrowski | CEO | Penterra Pharmaceuticals Corp. | rostrowski@penterra.com | Signatory for Penterra
Leland J. Cho | SVP, Business Development | Penterra Pharmaceuticals Corp. | lcho@penterra.com | Commercial terms lead for Penterra
Dr. Priya Nandakumar | VP, intellectual Property | Penterra Pharmaceuticals Corp. | pnandakumar@penterra.com | IP portfolio oversight
Garrett T. Holloway | CFO | Penterra Pharmaceuticals Corp. | gholloway@penterra.com | Financial terms / revenue recognition
Jonathan M. Firth | Lead Partner, IP/Licensing | Lam, Cheung & Firth LLP | jfirth@lcf.com | Lead counsel for Meridian; 25/F Jardine House, HK
Rebecca S. Liang | Associate | Lam, Cheung & Firth LLP | rliang@lcf.com | Working-level counterpart to Vassiliev
Angela C.Y. Fong | CEO | Meridian Bio Therapeutics Ltd. | afong@meridianbio.com | Signatory for Meridian
David R. Cheung, Esq. | General Counsel | Meridian Bio Therapeutics Ltd. | dcheung@meridianbio.com
Patrick S.H. Kwok | CFO | Meridian Bio Therapeutics Ltd. | pkwok@meridianbio.com | Financial terms counterpart
Victoria R. Chen | Senior Managing Director | Prescott Hale & Co. LLC | vchen@prescotthale.com | Financial advisor to Penterra; deal valuation
Simon K.P. Woo | Managing Director | Eastbridge Partners Limited | swoo@eastbridgepartners.com | Financial advisor to Meridian
Dr. Alan J. Whitford | Patent Prosecution Partner | Whitford & Cascade Insurance Brokers | awhitford@whitfordmarsh.com | Penterra's patent prosecution counsel; FTO opinion
[sheet: Timeline]
Date | Event | Responsible Party | Status | Notes
2023-06-01 | Phase IIb topline results — Study PPC-4187-201 (420 patients; EASI-75 at Week 16; p<0.001) | Penterra | Complete | Positive data triggers APAC licensing process
2023-07-10 | C&H engagement opened; conflict check completed | Calderwood & Harkness | Complete | Marcus Delgado / Catherine Bloom
2023-07-18 | Penterra Board authorization to negotiate out-license | Penterra | Complete | Board resolution authorizing CEO
2023-08-04 | Exclusivity Agreement and Non-Binding Term Sheet executed | Penterra / Meridian | Complete | 60-day exclusive negotiation period
2023-08-18 | Initial Draft License Agreement circulated to LCF | Calderwood & Harkness | Complete | Version 1.0
2023-09-05 | LCF Redline received | Lam, Cheung & Firth | Complete | Version 2.0; substantive counterproposals on all major terms
2023-09-08 | Due diligence completion | Both parties | Complete | IP, clinical, regulatory, and financial DD completed
2023-09-15 | Revised Draft License Agreement circulated | Calderwood & Harkness | Complete | Version 3.0; most issues resolved or compromised
2023-09-18 | LCF remaining comments received | Lam, Cheung & Firth | Complete | Version 3.1; MFN, JSC, closing timeline
2023-09-22 | Final Draft License Agreement circulated | Calderwood & Harkness | Complete | Version 4.0; all issues resolved
2023-09-25 | Ancillary Agreements final drafts circulated | Calderwood & Harkness | Complete | Supply, Tech Transfer, PV, TM License Agreements
2023-10-02 | License Agreement and ancillary agreements executed (Signing Date) | Both parties | Complete | Signed by Ostrowski/Fremont (PPC) and Fong/Cheung (MBT)
2023-10-05 | Antitrust clearance confirmed — no HSR filing required | Both parties / counsel | Complete | Pure IP license; no acquisition of voting securities or assets
2023-10-06 | Escrow funded — $18,000,000 deposited by Meridian | Meridian / Velthorn National Bank | Complete | Teresa M. D'Angelo confirmed receipt
2023-10-09 | Scheduled Closing Date | Both parties | Delayed | Delayed to Oct 20 pending IP recordation
2023-10-18 | IP assignment recordation completed (last jurisdiction) | Calderwood & Harkness / Whitford & Marsh | Complete | All Territory jurisdictions recorded
2023-10-20 | Actual Closing / Effective Date; escrow release | Both parties / Velthorn | Complete | $18M released to Penterra
2023-12-19 | Quality Agreement execution deadline | Penterra / Meridian | Pending | 60 days from Effective Date
2025-10-20 | Technology transfer completion deadline | Penterra / Meridian | Pending | 24 months from Effective Date