Company: SION
Filing Date: 2025-01-17
Form Type: S-1
Source: 0001193125-25-008474
Chunk: 353

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-01-17
Form: S-1
Chunk 353
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 royalty-bearing, sublicensable license to research, develop and commercialize certain CFTR compounds. The licensed rights are directed, among other things,
to three clinical-stage CFTR modulator assets. The license granted to us under the AbbVie License Agreement is subject to certain preexisting rights held by AbbVie and Galapagos NV (“Galapagos”). In particular, certain of the licensed
patents and other intellectual property rights were developed by or on behalf of Galapagos and are sublicensed to us subject to the terms of the second amended and restated collaboration agreement between Galapagos and AbbVie in October 2018 (the
“Galapagos License Agreement”), as amended by a side letter between Galapagos and AbbVie in July 2024.

As initial consideration for the
license, the Company paid a non-refundable, upfront payment of $5.0 million and issued 2,066,646 shares of its common stock with a fair value of $8.6 million to AbbVie. The Company determined that
the AbbVie License Agreement represented an acquisition of an asset, which was the in-process research and development. The Company recorded the total initial consideration of $13.6 million as research
and development expense during the nine months ended September 30, 2024 because the acquired license represented in-process research and development with no alternative future use. In addition, the
Company is required to pay AbbVie a total of up to $360.0 million upon achievement of certain development and commercial milestones, consisting of up to $70.0 million in late-stage development milestones and up to $290.0 million in
commercial milestones. The Company is also required to pay royalties to AbbVie in the low to mid single-digit percentage range based on net sales of licensed products, subject to customary reductions and offsets. The royalty term will terminate on a
product-by-product and country-by-country basis upon the later of (i) the expiration
of the last-to-expire valid claim within the relevant licensed patent rights, (ii) the expiration of regulatory exclusivity in such country for such licensed
product and (iii) the tenth anniversary of the first commercial sale of a licensed product in such country.

In addition, the Company is
required to pay AbbVie up to $130.0 million in commercial and sales-based milestone payments, mid to high single-digit royalties on the licensed products, or other payments due to Galapagos pursuant to the Galap