Company: SION
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001193125-25-018825
Chunk: 343

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-03
Form: S-1/A
Chunk 343
---
 when the sales occur.
As of December 31, 2023, none of such milestones have been achieved. The Company is also required to pay royalties to Sanofi in the low single-digit percentage range based on net sales of licensed products, subject to customary reductions and
offsets. Such royalty payments shall be reduced for products covered by derived patents.

CFF Payment Agreement

In December 2019, the Company entered into a payment agreement (the “CFF Payment Agreement”) with the Cystic Fibrosis Foundation
(“CFF”), pursuant to which the Company agreed to provide CFF with compensation in exchange for the grant of, or forbearance from exercising, certain of CFF’s rights existing under the license agreement by and between CFF (through an
assignment by Cystic Fibrosis Foundation Therapeutics, Inc.) and Genzyme Corporation, an affiliate of Sanofi (the “CFFT-Genzyme Agreement”). Under the CFF Payment Agreement, the Company is obligated
to compensate CFF in connection with the Company’s development and commercialization of licensed products under the Sanofi License Agreement.

As initial consideration for CFF’s grant of, and forbearance from exercising, its rights under the
CFFT-Genzyme Agreement, the Company paid an upfront fee of $0.2 million and issued CFF 300,300 shares of its Series Seed preferred stock, valued at $1.0 million. In addition, the Company agreed
to pay CFF a sub-teen double-digit percentage of any amounts paid by it to Sanofi under the Sanofi License Agreement, other than milestone, royalty or reimbursement payments. In addition, the

F-20

Company is required to pay CFF a total of up to $40.0 million upon achievement of certain late-stage developmental and commercial milestones. Such milestone and royalty payments shall be
reduced for products covered by derived patents. Further, a side letter was executed between the Company and Sanofi, which clarifies the relationship between the Company, Sanofi and CFF, under which the Company is obligated to pay Sanofi 20% of the
milestones it would have been obligated to pay CFF, net of the milestone amounts it is obligated to pay under the Sanofi License Agreement.

The
Company records the milestone payments as research and development expenses when the milestones occur and consideration is paid or becomes payable. As of December 31, 2023, none of such milestones have been achieved. The Company is also