Form 8-K for KITE PHARMA, INC.
Entry into a Material Definitive Agreement
Under the terms of the Agreement, Cell Design Labs will be responsible for developing the “on/off switches” for Kite’s CAR T cell pipeline. Kite will receive exclusive worldwide rights to develop and commercialize CAR product candidates containing Cell Design Labs’ “on/off switches” directed to certain targets that are associated with acute myeloid leukemia. Kite also has the exclusive option for a pre-defined period to develop and commercialize CAR product candidates containing “on/off switches” directed to certain targets that are associated with B-cell malignancies.
Pursuant to the Agreement, Kite will pay Cell Design Labs a $2.0 million upfront payment and up to an additional $9.0 million of payments during the research and development term to support Cell Design Labs’ research. Kite previously made a $1.0 million equity investment in Cell Design Labs in December 2015 and, in connection with entering into the Agreement, Kite is making an additional equity investment in Cell Design Labs of approximately $6.0 million. Cell Design Labs will be eligible to receive up to $56.5 million in total milestone payments based on the successful completion of research, clinical, regulatory and commercial milestones. Cell Design Labs will also be eligible to receive tiered single digit royalties for sales on a licensed product-by-licensed product and country-by-country basis, until the date on which the licensed product is no longer covered by certain intellectual property rights.
Kite may terminate the Agreement with prior written notice. Either party may also terminate the agreement upon certain insolvency events of the other party, or with written notice upon material breach by the other party, if such breach has not been cured within a defined period of receiving such notice.
The foregoing description of the Agreement is only a summary and is qualified in its entirety by reference to the Agreement. Kite intends to file a copy of the Agreement as an exhibit to its Quarterly Report on Form 10-Q for its fiscal quarter ending June 30, 2016, portions of which will be subject to a FOIA Confidential Treatment Request to the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.