UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
Settlement Agreement
On August 8, 2023, Novavax, Inc. (the “Company”) and SK bioscience Co., Ltd. (“SK”) entered into a Settlement Agreement and General Release (the “Settlement Agreement”) regarding mutual release by the parties of all claims arising from or in relation to certain statements of work canceled by the Company (as described below, the “Subject SOWs”) under the Development and Supply Agreement dated August 11, 2020 (“DSA”) and the Collaboration and License Agreement, dated February 12, 2021 as amended on December 23, 2021 and July 1, 2022 (“CLA”, collectively the “Business Agreements”), and other statements or work under the Business Agreements, in each case, in connection with the cessation of all drug substance and drug product manufacturing activity at SK for supply to the Company.
In connection with the Settlement Agreement, the Company cancelled the Subject SOWs with written notice to SK on May 22, 2023, including (i) Statement of Work No. 1 dated as of December 23, 2021 as amended to date under the CLA; (ii) Statement of Work No. 5 dated as of July 18, 2022 under the DSA; and (iii) Statement of Work No. 6 dated as of July 18, 2022, and as amended as of December 28, 2022 under the DSA.
Pursuant to the Settlement Agreement, the Company is responsible for payment of $149.75 million (the “Settlement Payment”) to SK in connection with cancellation of manufacturing activity for the Subject SOWs under the Business Agreements, of which (i) $130.4 million is to be paid on or before August 10, 2023 and (ii) the remaining balance is to be paid in on or before November 15, 2023. Under the Settlement Agreement, the Company and SK will agree to a wind down plan with respect to the remaining products, materials and equipment under the Subject SOWs.
Under the Settlement Agreement, the Company and SK agreed to remove certain restrictions under the CLA that have been triggered by the launch of SK’s competing vaccine SKYCovione™ in the Republic of Korea. In addition, the Company agreed to (i) grant and extend the term of an exclusive license to SK under the CLA for the exploitation of antigen and vaccine products utilizing Company’s proprietary coronavirus vaccine antigens and Matrix-M adjuvant in the Republic of Korea until February 12, 2029 and (ii) grant a non-exclusive license to SK under the CLA for exploitation of antigen and vaccine products utilizing Company’s proprietary coronavirus vaccine antigens and Matrix-M adjuvant in Thailand and Vietnam until June 30, 2028.
The foregoing description of the material terms of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the Settlement Agreement, which will be filed with the Securities and Exchange Commission (“SEC”) as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
Securities Purchase Agreement
On August 8, 2023, the Company also entered into a Securities Subscription Agreement (the “Subscription Agreement”) with SK, pursuant to which the Company agreed to sell and issue to SK, in a private placement (the “Private Placement”), 6,500,000 shares of the Company’s common stock, par value $0.01 per share (the “Shares”) at a price of $13.00 per share for aggregate gross proceeds to the Company of approximately $84.5 million. The closing of the Private Placement is anticipated to occur on August 10, 2023 (the “Closing”), subject to the satisfaction of customary closing conditions.
The foregoing description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement, which is filed as exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement
In connection with the parties’ entry into the Settlement Agreement, the Company and SK terminated Statement of Work No. 1 dated as of December 23, 2021 as amended to date.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference in this Item 1.02.
Item 3.02 Unregistered Sales of Equity Securities.
To the extent required by Item 3.02 of Form 8-K, the information regarding the Shares set forth under Item 1.01 of this Form 8-K is incorporated by reference in this Item 3.02. The Company will issue the Shares to SK in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The offer and sale of the Shares have not been registered under the Securities Act.
This Current Report on Form 8-K includes forward-looking statements including the expected timing of the Closing. Generally, forward-looking statements can be identified through the use of words or phrases such as “believe,” “may,” “could,” “will,” “would,” “possible,” “can,” “estimate,” “continue,” “ongoing,” “consider,” “anticipate,” “intend,” “seek,” “plan,” “project,” “expect,” “should,” “would,” “aim,” or “assume,” the negative of these terms, or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements involve estimates, assumptions, risks, and uncertainties that could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements, and, therefore, you should not place considerable reliance on any such forward-looking statements. Such risks and uncertainties include, among others, those related to market conditions and satisfaction of customary closing conditions related to the Private Placement. Further, any forward-looking statement speaks only as of the date when it is made, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. New factors emerge from time to time, and it is not possible for the Company to predict which factors will arise. In addition, the Company cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. |
Description | |
| 10.1 | Securities Subscription Agreement, dated as of August 8, 2023, between Novavax, Inc. and SK bioscience Co., Ltd. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Novavax, Inc. | ||
| Date: August 8, 2023 | By: | /s/ John A. Herrmann III |
| Name: | John A. Herrmann III | |
| Title: | Executive Vice President, Chief Legal Officer and Corporate Secretary | |