Company: SION
Filing Date: 2025-02-07
Form Type: 424B4
Source: 0001193125-25-022709
Chunk: 134

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-07
Form: 424B4
Chunk 134
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 to pay CFF, net of the milestone amounts it is obligated to pay under the Sanofi License Agreement.

AbbVie License Agreement

In July 2024, we entered
into a license agreement (the “AbbVie License Agreement”) with AbbVie, pursuant to which we have been granted an exclusive, worldwide, 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 therapies: SION-2222, SION-2851 and SION-3067. 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, we paid a non-refundable, upfront payment of $5.0 million and
issued 1,414,445 shares of our common stock with a fair value of $8.6 million to AbbVie. We determined that the AbbVie License Agreement represented an asset acquisition as it did not meet the definition of the business. We recorded the total
initial consideration of $13.6 million as research and development expense during the nine month period ended September 30, 2024 because the acquired license represented in-process research and
development with no alternative future use. In addition, we are 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. We are 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