Company: SION
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001193125-25-018825
Chunk: 196

Company: Sionna Therapeutics, Inc.
Filing Date: 2025-02-03
Form: S-1/A
Chunk 196
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 and commercialization responsibilities for such therapies. Pursuant to the terms of the AbbVie License Agreement, we must use commercially reasonable efforts to develop, pursue regulatory approval for and commercialize a licensed
product. We are also required to achieve certain development milestones within specified time periods for products incorporating intellectual property covered by the AbbVie License Agreement.

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 dated as of October 24, 2018 (the “Galapagos License Agreement”), as amended by a side letter between Galapagos and AbbVie dated as of July 11, 2024. We are also entitled to
sublicense the rights granted to us under the AbbVie License Agreement under certain circumstances, provided that any such sublicense must be consistent with the terms of the AbbVie License Agreement and the Galapagos License Agreement.

As initial consideration for the license, we paid a non-refundable, upfront payment of $5 million and
issued 1,414,445 shares of our common stock to AbbVie. In addition, we are required to pay AbbVie a total of up to $360 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. None of such milestones have been achieved to date. 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, with the percentage range depending in part on the compounds used. 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 patent rights that covers the manufacture, use, sale or other exploitation of a product in such country,
(ii) the tenth anniversary of the first commercial sale of a product in such country and (iii) expiration of regulatory exclusivity of a product in such country. In addition, we are required to pay AbbVie up to $130 million in