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Subsequent Events
 6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Swedish Orphan Biovitrum AB (Publ) License and Development Agreement
On June 11, 2020, the Company and Swedish Orphan Biovitrum AB (Publ), a Swedish corporation (“Sobi”), entered into a license and development agreement (the “Sobi License”). Pursuant to the Sobi License, the Company has agreed to grant Sobi an exclusive, worldwide (except as to Greater China) license to develop, manufacture and commercialize the Company’s SEL-212 drug candidate, which is currently in development for the treatment of chronic refractory gout. Pursuant to the Sobi License, in consideration of the license, Sobi agreed to pay the Company a one-time, up-front payment of $75 million. Sobi has also agreed to make milestone payments totaling up to $630 million to the Company upon the achievement of various
development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier.
Pursuant to the Sobi License, the Company has agreed to supply (at cost) quantities of SEL-212 as necessary for completion of the planned Phase 3 program for SEL-212, which includes two planned Phase 3 clinical trials and a crossover study. Sobi has agreed to reimburse the Company for all budgeted costs incurred to complete development of SEL-212, including but not limited to costs incurred while conducting and completing the Phase 3 program for SEL-212, except for any costs of additional development activities required that are related to ImmTOR and that are unrelated to SEL-212. Sobi will have control and responsibility over all regulatory filings, including any INDs, BLAs and MAAs relating to the licensed product.
The consummation of the transactions contemplated by the Sobi License is subject to customary closing conditions, including the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transactions contemplated by the Sobi License were consummated on July 28, 2020 following the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Sobi may terminate the Sobi License for any reason upon 180 days’ written notice to the Company, whereby the rights to the licensed compound would revert to the Company.
Additionally, on June 11, 2020, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Sobi, pursuant to which the Company agreed to sell to Sobi an aggregate of 5,416,390 shares of its common stock at a purchase price equal to $4.6156 per share, which represented 120% of the 10-day volume-weighted average price of the Company’s common stock prior to signing, for aggregate gross proceeds of $25 million (the “Sobi Private Placement”). The closing of the Sobi Private Placement occurred on July 31, 2020, following the closing of the transactions contemplated under the Sobi License. In accordance with ASC 815, this forward sale treatment qualifies as equity classification as the shares are not within the scope of ASC 480. The shares of common stock acquired in the Sobi Private Placement are subject to a one-year lock-up from closing, during which time Sobi is prohibited from selling or otherwise disposing of such shares.
Also on June 11, 2020, the Company entered into a registration rights agreement (the “Sobi Registration Rights Agreement”) with Sobi, pursuant to which the Company has agreed to prepare and file a registration statement with respect to the resale of the shares of common stock acquired in the Sobi Private Placement. The Company will be required to file this resale registration statement within 90 days from closing and to have the registration statement declared effective within 120 days from closing (or within 160 days if the SEC reviews the registration statement).
The Sobi Private Placement is exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. Sobi has represented that it will acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends have been affixed to the securities issued in this transaction.