Exhibit 10.1

 

[*] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Option for Exclusive Product and Platform Technology License

 


	
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Parties
    	
 
    	
Aridis Pharmaceuticals, Inc.,   a Delaware corporation with offices located at 5941 Optical Court, San Jose,   CA 95138 USA (“Aridis”); and Serum International BV, a Netherland based   company with offices located at Strawinskylaan 937, 1077   XX Amsterdam, The Netherlands (“SIBV”).

 

For purposes of this Agreement, “SIBV”, as used herein, shall be deemed to include the   following affiliated companies of Serum International BV, provided such   affiliated companies (i) are owned by or are under common ownership with   Serum International BV, and (ii) have agreed in writing that they are   bound by the terms of this Agreement to the same extent as Serum International   BV. Serum International BV shall remain separately responsible for the   performance of any obligations undertaken by any such affiliated company.

 

Affiliated companies include:

 

Serum Institute Of India Private Limited, [‘SERUM’]   an Indian Company having its Registered Office at 212/2 Off Soli Poonawalla   Road, Hadapsar, Pune 411028, INDIA
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Consideration
    	
 
    	
After execution of this Option Agreement by both   Parties, SIBV shall complete a “Closing” by July 30th, 2019. “Closing” shall   comprise:

 

·  Consummation   of the sale, within 5 days of the execution of this Option Agreement, by   Aridis to SIBV of 801,924 restricted shares of Aridis common stock at a price   of $12.47 per share or an aggregate of approximately $10,000,000,   representing, as of the date of execution of this Option Agreement,   approximately nine percent (9%) of the issued and outstanding common stock of   Aridis as calculated immediately upon the date of the execution of this   Option Agreement (the Parties shall cooperate in good faith to exchange such   documentation and execute such security purchase agreements as are required   to consummate the sale); and

 

·  Payment   by SIBV to Aridis of US $5 million coincident with the execution of this   Option Agreement (this fee shall be reimbursed to SIBV if for any reason the   License Agreement contemplated below is not executed by 31st August 2019. Such refund to be made by   10th September 2019).

 

After the Closing, SIBV   shall pay to Aridis US $10 million within 5 days of execution of License   Agreement (SIBV shall have sole responsibility for any governmental charges   of Netherlands imposed on payments hereunder by any entity for any reason,   including

 
    




 

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withholding, export or   excise taxes.)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Option and Exercise of Option
    	
 
    	
Upon execution of this Option Agreement, SIBV and/or   its subsidiary company shall have an option for an Exclusive Product and   Platform Technology License Agreement (“License Agreement”) on the terms   described herein, with such other terms as are reasonable and customary in   the industry.

 

SIBV may complete this option at any time after the   Closing by executing a complete License Agreement with Aridis. After the   Closing, the Parties shall use their best commercially reasonable efforts to   complete the License Agreement prior to July 31, 2019 but certainly by   31st August 2019.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
License Agreement Defined Terms
    	
 
    	
The following defined terms shall apply to the   License Agreement:

 

·  “Aridis   Products” (or “Limited License Products”) shall mean Aridis products AR-301,   AR-105, and AR-101 (each as further described at   www.aridispharma.com/ar-301/; www.aridispharma.com/ar-105; and   www.aridispharma/ar-101;

 

·  “AR-201   Product” shall mean Aridis product AR-201 as further described at   www.aridispharma.com/ar-201/;

 

·  “Aridis   Technology” shall mean all rights controlled by Aridis in the MabIgX platform   technology thereto (as further described at www.aridispharma.com/mabigx-overview);

 

·  “Development   Product” shall mean products designed solely from Candidates and solely for   use in the Field;

 

·  “Candidate”   shall mean a research cell bank expressing an antibody to a Target in the   Field, developed by Aridis using the Aridis Technology at request of SIBV /   its affiliate pursuant to section 6;

 

·  “Field”   shall mean a list, to be agreed by Aridis and SIIL as of the Effective Date   (and modified thereafter as appropriate by mutual agreement), comprising up   to five (5) targets to infectious diseases predominantly of economic   impact in the Developing World (Field excludes targets listed on the Aridis   pipeline as of the Effective Date);

 

·  “Worldwide   Territory” shall mean all countries of the world except China (“China”   includes PRC, Hong Kong, Macau and Taiwan).

 

·  “EU   Territory” shall mean the countries of the European Union.

 

·  “Limited   Territory” shall mean (a) the country of India, and (b) all other   countries of the world except USA, Canada, EU Territory, UK, China,   Australia, New Zealand, and Japan. Each of the “Worldwide Territory”, EU   Territory,” and “Limited Territory” in all cases shall 
    




 

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exclude any countries   which are embargoed by the US as of the Effective Date;

 

·  “Effective   Date” shall mean the date of execution of the full License Agreement as   contemplated in point no. 3 above;

 

·  “Term”   shall mean 20 years from the Effective Date.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Grant of License Rights
    	
 
    	
As of the Effective Date, Aridis shall grant to   SIBV:

 

·  An exclusive license to make, have made,   import, use and have used, and sell and have sold, Aridis   Products in the Limited Territory   for the Term;

 

·  An exclusive license to develop, make, have   made, import, use and have used, and sell and have sold, up to five   (5) approved Development Products   incorporating Aridis Technology in the Worldwide Territory for the Term,   for use in the Field;

 

·  An exclusive license to develop, make, have   made, import, use and have used, and sell and have sold AR-201 Product in the   Worldwide Territory for the Term; and

 

·  The right for SIBV to have Aridis perform Candidate development according to the terms of section 8.

 

All rights hereunder shall include rights to   sublicense subject to the terms of this Agreement and the final License   Agreement. The licensee continues to be responsible for all fees and   royalties payable hereunder for all sublicensed rights.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Right of Good Faith Negotiation to Extend License   Rights Into The EU Territory
    	
 
    	
In certain circumstances, SIBV (including   affiliates) and Aridis agree to commit to negotiate in good faith to extend   the rights to be granted in the License Agreement pursuant to section 5   above, to include an exclusive license to make, have made, import, use and   have used, and sell and have sold, certain Aridis   Products in the EU Territory   for the Term (herein, an “EU   Territory Grant”). Such commitment to negotiate in good faith   shall be subject to the following requirements:

 

1. Any such EU   Territory Grant shall be consummated by amendment to the License Agreement   executed in the reasonable discretion of both Parties;

 

2. Any such EU   Territory Grant shall be applicable solely to those Aridis Products   specifically noted in the amendment, and for which the conditions below are   met. Aridis shall reasonably cooperate with SIBV in its attempts to meet the   conditions set out below (although until such conditions are met Aridis is   not restricted from licensing Aridis Products to third parties);

 

3. As   consideration, an EU Territory Grant for Aridis Product/s shall include a   requirement that SIBV will be responsible for all
    




 

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costs related to all   further clinical trials as shall be necessary for licensure of those Aridis   Product in EU Territory ; shall include reasonable timelines for the   completion of clinical trials, regulatory submission, and commencement of   commercial sales; and shall include as a prerequisite requirement that SIBV   shall have obtained (or the parties shall have jointly determined that SIBV   may reasonably obtain) a loan / funding/ financial support from [*] for such   clinical trials costs, according to the [*] program entitled (the “[*]”).   SIBV shall be allowed to conduct clinical trials globally as [* ] may allow   such trials;

 

4. Any EU   Territory Grant shall provide that the conduct of all SIBV-supported clinical   trials shall remain under the oversight and consultation of Aridis, with   ultimate control with SIBV. SIBV shall have full rights of ownership of all   resulting clinical data and results. Aridis shall have full access and right   to use all clinical data generated out of these clinical trials so that   Aridis can use the data in the territory;

 

5. As   prerequisite to the execution of any EU Territory Grant, SIBV must   demonstrate that the [*] will allow for distribution of Aridis Products in   the EU Territory at commercial prices which are not required to be set at   lower than market rates, and shall not materially prohibit or hinder   distribution of Aridis Product in any other territory (that is, the Parties   must reasonably agree that an appropriate and financially reasonable market   for Aridis Products in the EU Territory will exist);

 

6. EU Territory   Grants shall be negotiated and executed by Q4 2020 (including completion of   prerequisites noted in the subsections above);

 

7. Royalties   payable to Aridis shall be as otherwise provided hereunder;

 

8. EU Territory   Grants shall include an option for Aridis to buy-back part or whole of the   territory granted under the EU Territory Grant from SIBV, if global sales   rights are requested by a partner or licensee of Aridis, by   (i) reimbursement to SIBV of all costs incurred by SIBV,   (ii) payment of [*]% (if the buy-back occurs after all clinical and   regulatory development is complete; for buy-back which occurs prior to   product commercialization, the License Agreement may include terms agreeable   to the Parties providing for pro-ration of   this amount) of the net amount received and receivable by Aridis from such   partner or licensee and (iii) repayment by Aridis or its licensee of any   required amounts under any [*]. (In the instance of any such buy-back, 
    




 

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SIBV shall retain its   Limited Territory rights to such Aridis Products.)

 

The EU Territory option as described in this   Section 6 shall be included as an Exhibit to the License Agreement   and is subject to such additional terms as are reasonably required by the   Parties and as specified in that final License Agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Reversal of Licensed Territory
    	
 
    	
If Aridis seeks back any part of SIBV Territory so   as to give it to any third party who wishes to have a license for Aridis   Products to such party, then both parties shall execute an amendment so   allowing, provided that SIBV receives from Aridis (i) reimbursement of   all costs incurred by SIBV for that territory (ii) payment of [*]% of   the amount received and receivable by Aridis from such partner or licensee.

 

But in such a case, SIBV shall retain status of   exclusive manufacturer and supplier of such Aridis products as are given to   such third party (subject to buy back and other terms of section 9).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
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Candidate Development
    	
 
    	
Upon request by SIBV as appropriate during the Term,   Aridis shall provide services to SIBV for the development of up to five   (5) Candidates for Development Products. Such services shall be negotiated   in good faith by the Parties when requested by SIBV, and SIBV shall reimburse   Aridis for its internal and out-of-pocket costs for such services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Manufacturing Rights and Obligations
    	
 
    	
The following manufacturing rights and obligations shall   apply to Aridis Products and Development Products to be licensed under the   License Agreement:

 

1. Upon request   of SIBV, Aridis shall provide clinical trial material for Aridis Products for   use by SIBV or by its associate companies for any required clinical trials in   the Limited Territory as described in section 9. SIBV shall reimburse Aridis   for all internal and out-of-pocket costs for such material on cost basis   without any mark-up (other than allocable overhead costs).;

 

2. SIBV or its   associate companies shall have the rights to manufacture any Aridis Product   and any Development product in the Worldwide Territory for use in the   Worldwide Territory (this right shall be exclusive to SIBV [and affiliates]   and Aridis shall not manufacture through another party except where SIBV   elects to develop manufacturing capacity for only a portion of its territory,   or waives this option, or pursuant to the buy-back all as set out in parts 3   and 4 below);

 

3. SIBV manufacturing option for Aridis Products: SIBV shall   have the right to supply Aridis Products (all Products or a portion thereof   according to SIBV capacity) for use by Aridis and its 
    




 

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sublicensees outside of   the Limited Territory.

 

To exercise this   manufacturing option, SIBV shall demonstrate: SIBV’s ability for   manufacturing consistency of Aridis Products in conformance to all regulatory   FDA and EMA requirements, at commercially reasonable rates, and at sufficient   capacity as specified in the manufacturing agreement; and SIBV shall   negotiate and execute in good faith a manufacturing agreement with Aridis.   The term of the manufacturing agreement shall be twenty (20) years from the   effective date thereof, provided that SIBV shall maintain during the   agreement manufacturing consistency, capacity and commercially competitive   pricing as set out above. Aridis shall pay such reasonable manufacturing fees   to SIBV as are negotiated.

 

In order to allow   Aridis to plan its supply chain and ensure the availability of an adequate   supply of Aridis Products, SIBV agrees to exercise or waive this option by   December 31, 2020.

 

4. Aridis manufacturing right buy-back option: If a third   party sublicensee of Aridis Products wishes to have Aridis Product   manufactured by itself for the territory for which it has a license from   Aridis, then Aridis shall have the right to buy back the option noted in this   section 9 by paying to SIBV five million US dollars ($5,000,000).

 

5. Th   manufacturing option described in this Section 9 shall be included as an   Exhibit to the License Agreement and is subject to such additional terms   as are reasonably required by the Parties and as specified in that final   License Agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Regulatory Rights and Obligations
    	
 
    	
The following regulatory rights and obligations   shall apply to Aridis Products and Development Products licensed hereunder:

 

·  Aridis and SIBV shall establish a joint   committee under which each Party shall share all relevant clinical data and   regulatory documentation created by it anywhere in the world. Pursuant to   this, Aridis shall provide to SIBV all US FDA and EMA data and documentation   created by Aridis for all licensed Aridis Products;

 

·  SIBV shall be responsible for and shall   take such actions as are required for the registration and licensing of   Aridis Products, AR-201 Product, and Development Products with any required   governmental organization in the Limited Territory, including the completion   of all required clinical trials for Development Products and any additional   required clinical trials for Aridis Products, all solely in the Limited   Territory.

 

·  SIBV shall be responsible for and shall   take all actions as are required for the registration and licensing of each   Development Product and
    




 

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AR-201 Product in the   Worldwide Territory, including completion of all required clinical trials.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Diligence, Milestones, and Milestone Fees
    	
 
    	
Commencing upon the Effective Date, SIBV shall make   commercially reasonable efforts to complete all activities described in sections   9 and 10, and to register, to obtain all regulatory approvals, to have   approved for commercialization and sale, and to commercialize and sell   (i) Aridis Products in the Limited Territory, and (ii) Development   Products and AR-201 Product in the Worldwide Territory. Such obligations   shall include commercially reasonable efforts to achieve the following   milestones:

 

·  Milestone 1: Completion of all clinical   trials necessary for regulatory approval in India for each Development   Product, and completion of any supplemental clinical trials if necessary for   regulatory approval in India for each Aridis Product;

 

·  Milestone 2: New Drug Application approval   in India for each Aridis Product, AR-201 Product and Development Product;

 

·  Milestone 3: Completion of all clinical   trials necessary for regulatory approval in the US and Europe for each   Development Product, (with respect to Aridis Products for which the option   for EU Territory under Section 6 above has been exercised, such   obligation is solely provided that SIBV gets appropriate funding from [*]);   and

 

·  Milestone 4: New Drug Application approval   in the US and Europe for each Development Product and AR-201 Product.

 

SIBV shall pay to Aridis the following Milestone   Fees for Aridis Product:

 

·  Within thirty (30) days of the successful   completion by Aridis of Phase III clinical trials in USA for the first Aridis   Product: [*] US dollars ($[*]);

 

·  Within thirty (30) days of the successful   completion by Aridis of Phase III clinical trials in USA for the second   Aridis Product: [*] US dollars ($[*]);

 

·  Within thirty (30) days of the receipt by   Aridis of New Drug Application approval from the US FDA or EU EMA for the   first Aridis Product: [*] US dollars ($[*]);

 

SIBV shall pay to Aridis the following Milestone   Fees for Development Product and AR-201 Product:

 

·  Within thirty (30) days of the filing of   IND for each of AR-201 Product and the 5 chosen development product; [*] US   dollars ($[*])

 

·  Within thirty (30) days of the successful   completion by SIBV of Phase III clinical trials required for FDA or European   approval for 
    




 

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each Development   Product and AR-201 Product: [*] US dollars (US $[*]); and

 

·  Within thirty (30) days of the completion   of FDA or European New Drug Application approval for each Development Product   and AR-201 Product: [*] million US dollars (US $[*]);
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Royalties
    	
 
    	
SIBV shall pay earned royalties to Aridis according   to the following terms:

 

·  SIBV shall pay the Royalty Rate for:   (i) Net Sales of Aridis Products in the Limited Territory (and the EU   Territory, if applicable pursuant to section 6); and (ii) Net Sales of   Development Products and AR-201 Product in the Worldwide Territory.

 

·  All earned royalties shall be paid   quarterly, within thirty (30) days of the end of such quarter, and shall be   accompanied by appropriate royalty reports as shall be defined in the License   Agreement. SIBV shall be responsible for any excise or other tax required to   be paid on such royalty payments.

 

“Royalty Rate” shall be defined separately for each   Aridis Product, AR-201 Product and Development Product, and shall mean:

 

·  For Net Sales (by the paying Party and   solely for that product) up to (and including) US $[*] million in each   calendar year: [*] percent ([*]%) of Net Sales;

 

·  For Net Sales above US $[*] million and up   to US $[*] million in each calendar year: [*]percent ([*]%) of Net Sales; and

 

·  For Net Sales above US $[*] million in each   calendar year: [*] percent ([*]%) of Net Sales.

 

·  Net Sales of Aridis Product in the EU   Territory (if applicable, pursuant to section 6), shall not be included in   the above calculations of Net Sales totals or royalty rates. For Net Sales of   Aridis Product in the EU Territory, the Royalty Rate shall be 20% of Net   Sales.

 

“Net Sales” shall mean, in the case of each Aridis   Product, AR-201 Product or Development Product licensed hereunder, the   aggregate gross amount invoiced by or on behalf of SIBV or its sublicensee   for sales of the Product to independent, unrelated third parties in bona fide arms’ length transactions, less deductions for:

 

·  any sales, excise or value added taxes imposed   on or charged to the selling party;

 

·  actual out-of-pocket costs for packing,   transportation, importation, postage, shipping and handling charges, and   other customary charges, such as insurance and customs duties, relating   thereto;

 

·  trade, quantity, prompt settlement or   similar discounts (including 
    




 

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chargebacks and   allowances) actually granted, allowed or incurred in connection with the sale   of such product.
    




 

This Option Agreement will be governed by the laws of the State of Delaware, without regard to conflict of law provisions, and the application of United Nations Convention on Contracts for the International Sale of Goods is expressly excluded.  This Agreement may be executed in any number of counterparts and by PDF, all of which shall constitute a single agreement.

 

IN WITNESS WHEREOF, the Parties acknowledge their agreement and acceptance of the foregoing terms of this Option Agreement by executing in the space provided below.

 

	
Aridis   Pharmaceuticals, Inc.
    	
 
    	
Serum   International BV
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BY:
    	
/s/ Vu Truong
    	
 
    	
BY:
    	
/s/ A.C. Pounawalla
    
	
 
    	
Name: Vu Truong
    	
 
    	
 
    	
Name: A. C. Pounawalla
    
	
 
    	
Title: CEO
    	
 
    	
 
    	
Title: CEO
    
	
 
    	
Date: July 13, 2019
    	
 
    	
 
    	
Date: July 16, 2019
    


 

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