- Gilead to reduce momelotinib commercial royalty rates in exchange for equity in Sierra -
- Amendments become effective upon Sierra Oncology closing a qualified financing -
VANCOUVER, Nov. 7, 2019 /PRNewswire/ - Sierra Oncology, Inc. (SRRA), a late-stage drug development company focused on the development and commercialization of momelotinib, a JAK1, JAK2 & ACVR1 inhibitor with a potentially differentiated therapeutic profile for the treatment of myelofibrosis, today announced that it has agreed to amend its Asset Purchase Agreement with Gilead Sciences, Inc. for momelotinib upon Sierra closing a qualified financing.
"These are significant amendments that meaningfully enhance the potential long-term value of momelotinib for Sierra and its stockholders. The amendments also affirm Gilead's support for the continued development of momelotinib with the goal of bringing meaningful benefit to patients with myelofibrosis," said Dr. Nick Glover, President and CEO of Sierra Oncology. "Following the closing by Sierra of a qualified financing, Gilead will become a stockholder in Sierra, the annual royalty rates payable to Gilead will be reduced, which will benefit the company and all its stockholders should momelotinib prove commercially successful, and we will also eliminate a milestone payment that would be due to Gilead in the coming months with the anticipated initiation of the MOMENTUM Phase 3 trial for momelotinib, further extending our financial resources."
"We are pleased to enter into this amended agreement with Sierra in order to support the company's continued advancement of momelotinib. Gilead continues to believe in the potential of momelotinib, and we are pleased that Sierra will continue development of the compound in hopes that it will benefit patients in the future," said Andrew Dickinson, Chief Financial Officer of Gilead.
In consideration for amending the royalty rates and milestones in the Asset Purchase Agreement, following the automatic conversion of shares of preferred stock to be issued in connection with Sierra's recently announced financing, Sierra and Gilead Sciences would enter into a Securities Purchase Agreement, pursuant to which Sierra would issue to Gilead Sciences shares of Sierra Common Stock and a warrant to purchase Sierra Common Stock. The number of shares of Common Stock to be issued would be equal to 7.5% of Sierra's outstanding shares of Common Stock, after giving effect to certain adjustments related to the financing. The Warrant would be exercisable to purchase up to an additional 7.5% of Sierra's outstanding shares of Common Stock. The Warrant would include a blocker provision, that may be waived by Gilead upon specified notice, that prevents Gilead from exercising the warrant for a number of shares that would result in Gilead owning more than 9.99% of Sierra's issued and outstanding shares of Common Stock.
About Sierra Oncology
Sierra Oncology is a late stage drug development company focused on advancing targeted therapeutics for the treatment of patients with significant unmet medical needs in hematology and oncology.
Momelotinib, Sierra's lead drug candidate, is a potent, selective and orally-bioavailable JAK1, JAK2 & ACVR1 inhibitor with a differentiated therapeutic profile in myelofibrosis encompassing robust constitutional symptom improvements, a range of meaningful anemia benefits, including eliminating or reducing the need for frequent blood transfusions, and comparable spleen control to ruxolitinib. More than 1,200 subjects have received momelotinib since clinical studies began in 2009, including more than 800 patients treated for myelofibrosis. Sierra plans to launch the MOMENTUM Phase 3 clinical trial in the fourth quarter of 2019 to support potential registration of momelotinib on a global basis. Momelotinib is wholly owned by Sierra Oncology and is covered by patents anticipated to provide potential exclusivity to 2040 in the United States and Europe (including Patent Term Extension or Supplementary Protection Certificate).
Sierra is also developing a portfolio of DNA Damage Response (DDR) assets, consisting of SRA737 and SRA141, and is conducting a campaign intended to seek non-dilutive strategic options to support their further advancement. SRA737 is a potent, highly selective, orally bioavailable small molecule inhibitor of Checkpoint kinase 1 (Chk1), a key regulator of cell cycle progression and the DDR, and has demonstrated preliminary clinical efficacy. SRA141 is a potent, selective, orally bioavailable small molecule inhibitor of Cell division cycle 7 kinase (Cdc7) with a potential novel mechanism of cytotoxicity, and has successfully completed the IND process with the FDA enabling the commencement of clinical trials.
Sierra Oncology retains the global commercialization rights to momelotinib, SRA737 and SRA141. For more information, please visit www.sierraoncology.com.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the effectiveness of the amendments to the Asset Purchase Agreement, any qualified financing by Sierra Oncology (including the timing and terms thereof), the issuance of any shares or warrants to Gilead, Sierra Oncology's expectations regarding the commercial success of momelotinib, the timing of the initiation of MOMENTUM and potential benefits of Sierra Oncology's product candidates. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, including, among others, the risk that Sierra Oncology may be unable to successfully develop and commercialize product candidates, product candidates may not demonstrate safety and efficacy or otherwise produce positive results, Sierra Oncology may experience delays in the preclinical and anticipated clinical development of its product candidates, Sierra Oncology may be unable to acquire additional assets to build a pipeline of additional product candidates, Sierra Oncology's third-party manufacturers may cause its supply of materials to become limited or interrupted or fail to be of satisfactory quantity or quality, Sierra Oncology's cash resources may be insufficient to fund its current operating plans and it may be unable to raise additional capital when needed, Sierra Oncology may be unable to obtain and enforce intellectual property protection for its technologies and product candidates and the other factors described under the heading "Risk Factors" set forth in Sierra Oncology's filings with the Securities and Exchange Commission from time to time. Sierra Oncology undertakes no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof, other than as may be required by applicable law.