On August 1, 2019 (the "Effective Date"), AVEO Pharmaceuticals, Inc. ("AVEO") reported that it has entered into an amendment (the "Amendment") to the license agreement dated December 21, 2006 (the "KKC Agreement") with Kyowa Kirin Co., Ltd. (formerly Kirin Brewery Co., Ltd.) ("KKC") (Filing, 8-K, AVEO, AUG 1, 2019, View Source [SID1234537983]). Under the KKC Agreement, KKC granted AVEO an exclusive license to research, develop, manufacture and commercialize tivozanib in all human diseases and conditions in the territory licensed to AVEO, which covers all territories in the world except for Asia and the Middle East (the "AVEO Territory"). Pursuant to the Amendment, KKC repurchased the non-oncology rights to tivozanib in the AVEO Territory, excluding the rights AVEO sublicensed to EUSA Pharma (UK) Limited ("EUSA") under the license agreement between AVEO and EUSA dated December 18, 2015.
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In consideration for KKC’s repurchase of the non-oncology rights to tivozanib in the AVEO Territory, KKC has upfront, milestone and royalty payment obligations to AVEO under the Amendment. The Amendment provides that KKC (a) will make an upfront payment of $25.0 million within thirty (30) days after the Effective Date, (b) waives a one-time milestone payment of $18.0 million otherwise payable by AVEO upon AVEO obtaining marketing approval for tivozanib in the U.S., (c) will make milestone payments to AVEO of up to an aggregate of $390.7 million upon the successful achievement of certain development and sales milestones of tivozanib in non-oncology indications, and (d) will make tiered royalty payments to AVEO on net sales of tivozanib in non-oncology indications in the AVEO Territory, which range from high single digit to low double digits as a percentage of net sales. The royalty rate escalates within this range based on increasing tivozanib sales, subject to certain adjustments. KKC’s royalty payment obligations in a particular country in the AVEO Territory begin on the date of the first commercial sale of tivozanib in that country, and end on the later of the expiration date of the last valid claim of a patent application or patent owned by KKC covering tivozanib or 10 years after the date of first commercial sale of tivozanib in non-oncology indications in that country. If KKC sublicenses any of its non-oncology rights to tivozanib to a third party, KKC is required to pay AVEO a percentage of amounts KKC receives from its sublicensees related to the AVEO Territory, including upfront license fees, milestone payments and royalties, but excluding amounts KKC receives in respect of research and development reimbursement payments or equity investments, subject to certain limitations.
The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.