UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

July 26, 2019

 


 

Aridis Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-38630

 

47-2641188

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(I. R. S. Employer
Identification No.)

 

5941 Optical Ct.

San Jose, California 95138

(Address of principal executive offices, including ZIP code)

 

(408) 385-1742

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol(s)

 

Name of each exchange on which registered:

Common Stock

 

ARDS

 

Nasdaq Capital Market

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company    x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o

 

 

 


 

Item 1.01                                            Entry into a Material Definitive Agreement.

 

On July 16, 2019, Aridis Pharmaceuticals, Inc. (the “Company”) entered into an Option Agreement for Exclusive Product and Platform Technology License (the “Option Agreement”) with Serum International BV, a company incorporated in the Netherlands (together with its affiliates, “SIBV”).

 

Pursuant to the Option Agreement, SIBV made a fee payment on July 26, 2019 to the Company in an amount of $5 million (which fee shall be reimbursed to SIBV if for any reason the License Agreement (as defined below) is not executed by August 31, 2019). SIBV is also obligated to pay a $10 million fee to the Company within 5 days of execution of the License Agreement.

 

Additionally, in connection with the Option Agreement, the Company and SIBV entered into a stock subscription agreement, dated July 19, 2019 (the “Subscription Agreement”). Pursuant to the Subscription Agreement, on July 26, 2019, SIBV purchased 801,820 shares of restricted Company common stock at a purchase price of approximately $12.47 per share, for an aggregate purchase price of $10 million.

 

Pursuant to the Option Agreement, SIBV received an option to enter into an Exclusive Product and Platform Technology License Agreement (the “License Agreement”) with the Company, which option may be exercised by executing the complete and final License Agreement with the Company. The parties have agreed to use their best commercially reasonable efforts to execute the License Agreement as soon as possible, but not later than August 31, 2019.

 

As of the effective date of the License Agreement (the “Effective Date”), the Company shall grant to SIBV an exclusive license to make, have made, import, use and have used, and sell and have sold Aridis products related to AR-301, AR-105, and AR-101 (“Aridis Products”) in (a) the country of India, and (b) all other countries of the world except the USA, Canada, EU Territory, UK, China, Australia, New Zealand, and Japan (the “Limited Territory”) for a term of 20 years (the “Term”). The Company shall also grant to SIBV 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 (as such term is defined in the Option Agreement) in all countries of the world except China (the “Worldwide Territory”), during the Term. The Company also agrees to grant the right for SIBV to have the Company perform Candidate Development (as such term is defined in the Option Agreement) for the development of up to five (5) Development Products. The Company shall also grant to SIBV an exclusive license to develop, make, have made, import, use and have used, and sell and have sold the AR-201 product in the Worldwide Territory during the Term.

 

Additionally, in certain circumstances, SIBV and the Company will agree to commit to negotiate in good faith to extend the rights to be granted in the License Agreement to include an exclusive license to make, have made, import, use and have used, and sell and have sold, certain Aridis Products in the European Union during the Term. Such an obligation upon Aridis to negotiate such rights is preconditioned upon the demonstration of certain milestones by SIBV, including its obtaining, under certain funding programs, sufficient financial support to cover all requisite clinical development and manufacturing development costs, under terms which allow distribution of Aridis Products at commercially reasonable prices and without materially hindering distribution of Aridis Products in any other territories.

 

The License Agreement will establish manufacturing rights and obligations for the parties. SIBV shall have the rights to manufacture any Aridis Product and any Development Product in the Worldwide Territory for use in the Worldwide Territory. SIBV shall have the right to supply Aridis Products for use by the Company and its sublicensees outside of the Limited Territory, upon the demonstration of 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 a manufacturing agreement that shall be negotiated and executed in good faith. The term of the manufacturing agreement shall be twenty (20) years. 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 the Company, then the Company shall have the right to buy back the manufacturing rights by paying to SIBV $5 million.

 

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The License Agreement will also establish regulatory rights and obligations for the parties, including, but not limited to, the obligation that the Company and SIBV establish a joint committee under which each party shall share all relevant clinical data and regulatory documentation created by it anywhere in the world.

 

Commencing upon the Effective Date, SIBV shall make commercially reasonable efforts 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 the AR-201 product in the Worldwide Territory. Upon the achievement of certain milestones, SIBV shall pay to the Company up to $18.5 million in milestone fees related to the Products covered in the License Agreement. SIBV shall also be obligated to pay the Company single digit percentage royalties on net sales of all licensed products, except for Aridis Products in the European Union, should such be authorized at a later date, which require payment of 20% royalties on the net sales of those products.

 

The foregoing description of the Option Agreement is not intended to be complete and is qualified in its entirety by reference to the Option Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.   The foregoing description of the Subscription Agreement is not intended to be complete and is qualified in its entirety by reference to the Subscription Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K.

 

Item 3.02                                            Unregistered Sales of Equity Securities.

 

The information included in Item 1.01 of this Form 8-K relating to the Subscription Agreement is hereby incorporated by reference into this Item 3.02. The sale of securities pursuant to the Subscription Agreement was made pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

 

Item 8.01               Other Events.

 

On July 30, 2019, the Company issued a press release announcing the Option Agreement and Subscription Agreement .  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01.              Financial Statements and Exhibits

 

(d) Exhibits.

 

10.1*

 

Option Agreement for Exclusive Product and Platform Technology License between Aridis Pharmaceuticals, Inc. and Serum International BV, dated July 16, 2019

10.2

 

Stock Subscription Agreement, dated July 19, 2019

99.1

 

Press Release dated July 30, 2019

 


* Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit were omitted by means of making such portions with an asterisk because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

 

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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.

 

Date: July 30, 2019

ARIDIS PHARMACEUTICALS, INC.

 

 

 

/s/ Vu Truong

 

Vu Truong

 

Chief Executive Officer

 

4


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

 

No.

 

Item

 

Detail

1.

 

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 30 th , 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 31 st  August 2019. Such refund to be made by 10 th  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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Item

 

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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 31 st  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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No.

 

Item

 

Detail

 

 

 

 

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

 

3


 

No.

 

Item

 

Detail

 

 

 

 

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,

 

4


 

No.

 

Item

 

Detail

 

 

 

 

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).

 

 

 

 

 

8.

 

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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No.

 

Item

 

Detail

 

 

 

 

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

 

6


 

No.

 

Item

 

Detail

 

 

 

 

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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No.

 

Item

 

Detail

 

 

 

 

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

 

9


Exhibit 10.2

 

STOCK SUBSCRIPTION AGREEMENT

 

ARIDIS PHARMACEUTICALS, INC.

 

This Stock Subscription Agreement (the “ Agreement ”) is entered into as of July 19, 2019 (the “ Effective Date ”), by and between Aridis Pharmaceuticals, Inc., a Delaware corporation (hereinafter the “ Company ”) and Serum International B.V., a corporation formed under the laws of the Netherlands (the “ Subscriber ”).

 

WHEREAS:

 

A .             The Company desires to issue to Subscriber (i) 801,820 shares of its common stock, par value $0.0001 per share (the “ Securities ”), for an aggregate issue price of Ten Million US Dollars ($10,000,000) (the “ Purchase Price ”), representing a purchase price of approximately $12.47 per share.

 

B.             Subscriber desires to acquire the Securities upon the terms and conditions herein.

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set-forth, the parties hereto do hereby agree as follows:

 

SUBSCRIPTION

 

1.1                    Subject to the terms and conditions hereinafter set forth, the Subscriber hereby agrees to be issued the Securities, and the Company agrees to issue the Securities to Subscriber at the Purchase Price.

 

1.2                    Promptly following the execution of this Agreement the Company will deliver to the Subscriber fully executed stock certificates representing the Securities, and record the same on the Company’s books.

 

REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER

 

2.1                    Subscriber hereby acknowledges, represents and warrants to the Company the following:

 

(A)                                            Subscriber acknowledges that the purchase of the Securities involves a high degree of risk in that the Company may require substantial additional funds;

 

(B)                                            Subscriber recognizes that acquiring the Securities of the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company and the Securities;

 

(C)                                            Subscriber has such knowledge and experience in finance, securities, investments, including investment in unregistered securities, and other business matters so as to be able to protect its interests in connection with this transaction;

 

(D)                                            The Subscriber is an “Accredited Investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “ Act ”);

 

(E)                                             Subscriber acknowledges that the market for the Securities may be illiquid and, accordingly, Subscriber may not be able to liquidate the Securities;

 

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(F)                                              Subscriber acknowledges that the Securities are subject to significant restrictions on transfer as imposed by state and federal securities laws, including but not limited to a minimum holding period of at least six (6) months;

 

(G)                                            Subscriber hereby acknowledges (i) that this offering of Securities has not been reviewed by the United States Securities and Exchange Commission or by the securities regulator of any state; (ii) that the Securities are being issued by the Company pursuant to an exemption from registration provided by Section 4(a)(2) of the Act; and (iii) that any certificate evidencing the Securities received by Subscriber will bear a legend in substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER AND THAT SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

 

(H)                                           Subscriber is acquiring the Securities as principal for Subscriber’s own benefit and not with a view to distribution, on behalf of the Company or otherwise, of the Securities;

 

(I)                                                Subscriber is not aware of any advertisement of the Securities or any general solicitation in connection with any offering of the Securities;

 

(J)                                                Subscriber acknowledges that it has had the opportunity and the Company’s encouragement to seek the advice and consultation of independent investment, legal and tax counsel;

 

(K)                                            Subscriber acknowledges and agrees that the Company has previously made available to Subscriber the opportunity to ask questions of and to receive answers from representatives of the Company concerning the Company and the Securities, as well as to conduct whatever due diligence the Subscriber, in its discretion, deems advisable.  Subscriber is not relying on any information communicated by any representatives of the Company and is relying solely upon information obtained during Subscriber’s due diligence investigation in making a decision to invest in the Securities and the Company.

 

REPRESENTATIONS BY THE COMPANY

 

3.1                    The Company represents and warrants to the Subscriber that:

 

(A)                                            The Company is a corporation duly organized, existing and in good standing under the laws of the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.

 

(B)                                            Upon issuance, the Securities will be duly and validly issued and fully paid and non-assessable, and the Securities will be issued in compliance with all applicable state and federal laws concerning the issuance of securities.

 

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(C)                                            The Company has reserved the shares of common stock for issuance pursuant to this Agreement,.

 

(D)                                            Material Contracts . Except as disclosed in any report, schedule, form, statement or other document filed by the Company under the Securities Act of 1933, as amended and the Exchange Act of 1934, as amended (the “ SEC Reports ”), and except for the agreements explicitly contemplated hereby, there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or by which it is bound which may involve (i) obligations of, or payments to, the Company in excess of $250,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company or (iii) the grant of rights to manufacture, produce, assemble, license, market or sell the Company’s products or affect the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products (each, a “ Material Contract ”, collectively the “ Material Contracts ”). All of the Material Contracts are valid, binding and in full force and effect in all material respects, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and to general principles of equity. Neither the Company is nor is any other party to the Material Contracts in material default under any of such Material Contracts.

 

(E)                                             Intellectual Property .

 

(a)  Ownership . Except as disclosed in the SEC Reports, to the knowledge of the Company (without having conducted any special investigation or patent search), the Company owns or possesses or can obtain on commercially reasonable terms sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, processes and similar proprietary rights (“ Intellectual Property ”) necessary to the business of the Company as presently conducted, the lack of which could reasonably be expected to have (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “ Material Adverse Effect ”). The Company has not received any written communication alleging that the Company has violated or, by conducting its business as currently conducted, would violate any of the Intellectual Property of any other person or entity , nor is the Company aware of any basis therefor.

 

(b)  No Breach by Employees. Except as disclosed in the SEC Reports, the Company is not aware that any of its employees is obligated under any contract or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with the use of his or her efforts to promote the interests of the Company or that would conflict with the Company’s business as presently conducted. Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated. The Company does not believe it is or will be necessary to use any inventions of any of its employees made prior to their employment by the Company.

 

(F)                                              Title to Properties and Assets; Liens . Except as disclosed in the SEC Reports, to the knowledge of the Company, the Company has good and marketable title to its properties and assets, and has good title to all its leasehold interests, in each case subject to no material mortgage, pledge, lien, lease, encumbrance or charge, other than (i) liens for current taxes not yet due and payable, (ii) liens imposed by law and incurred in the ordinary course of business for obligations not past due, (iii) liens in respect of

 

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pledges or deposits under workers’ compensation laws or similar legislation, and (iv) liens, encumbrances and defects in title which do not in any case materially detract from the value of the property subject thereto or have a Material Adverse Effect, and which have not arisen otherwise than in the ordinary course of business. With respect to the property and assets it leases, the Company is in compliance with such leases in all material respects and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances, subject to clauses (i)-(iv) above.

 

(G)                                            Compliance with Other Instruments. The Company is not in violation of any material term of its Certificate of Incorporation or bylaws, each as amended to date, or, to the Company’s knowledge, in any material respect of any term or provision of any material mortgage, indebtedness, indenture, contract, agreement, instrument, judgment, order or decree to which it is party or by which it is bound which would have a Material Adverse Effect. To the Company’s knowledge, the Company is not in violation of any federal or state statute, rule or regulation applicable to the Company the violation of which would have a Material Adverse Effect. The execution and delivery of the Agreement by the Company, the performance by the Company of its obligations pursuant to the Agreement, and the issuance of the Securities and such shares of Common Stock into which the Securities may be convertible or for which the Securities may be exercisable, will not result in any material violation of, or materially conflict with, or constitute a material default under, the Company’s Certificate of Incorporation or bylaws, each as amended to date, or any of its agreements, nor, to the Company’s knowledge, result in the creation of any material mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company.

 

(H)                                           Litigation . Except as disclosed in the SEC Reports, there are no actions, suits, proceedings or investigations pending against the Company or its properties (nor has the Company received notice of any threat thereof) before any court or governmental agency. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit or proceeding initiated by the Company currently pending.

 

( I)                                                Permits . The Company has all franchises, permits, licenses, and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which would have a Material Adverse Effect, and believes it can obtain, without undue burden or expense, any similar authority for the conduct of its business as presently planned to be conducted. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.

 

(J)                                                Offering . Subject to the accuracy of the Subscriber’s representations and warranties, the offer, sale and issuance of the Securities to be issued in conformity with the terms of this Agreement constitutes a transaction exempt from the registration requirements of the Act and, except for such notice requirements as may arise under applicable state law, from the registration or qualification requirements of applicable state securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.

 

( K)                                            Tax Returns and Payments . The Company has timely filed all tax returns required to be filed by it with appropriate federal, state and local governmental agencies, except where the failure to do so would not have a Material Adverse Effect. These returns and reports are true and correct in all material respects. All taxes shown to be due and payable on such returns, any assessments imposed, and, to the Company’s knowledge, all other taxes due and payable by the Company have been paid or will be paid prior to the time they become delinquent. The Company has not been advised in writing (i) that any of its returns have been or are being audited as of the date hereof, or (ii) of any deficiency in assessment or proposed judgment with respect to its federal, state or local taxes.

 

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TERMS OF SUBSCRIPTION

 

4.1                                Upon payment of the Purchase Price, Subscriber hereby authorizes and directs the Company to deliver the Securities to be issued to such Subscriber pursuant to this Agreement to Subscriber’s address indicated herein.

 

4.2                                Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of California. Exclusive venue for any dispute arising out of this Agreement or the Securities shall be the state or federal courts sited in San Jose, California.

 

4.3                                The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

CONDITIONS TO SUBSCRIBER’S OBLIGATION TO CLOSE

 

5.1                                The Subscriber’s obligation to acquire the Securities upon the execution of this Agreement is subject to the fulfillment, on or before the date hereof, of each of the following conditions, unless waived by the Subscriber:

 

(A)                                Representations and Warranties .  The representations and warranties made by the Company in this Agreement shall be true and correct in all material respects as of the date  hereof.

 

(B)                                Covenants.   The Company shall have performed or complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the date hereof.

 

(C)                                Blue Sky .  The Company shall have obtained all necessary Blue Sky law permits and qualifications, or have the availability of exemptions therefrom, required by any state for the offer and sale of the Securities, as applicable.

 

( D)                                Consents and Waivers .  The Company and the Subscriber shall have obtained any and all consents, permits and waivers necessary or appropriate for consummation of the transactions contemplated by the Agreements.

 

( E)                                 Proceedings and Documents .  All corporate and other proceedings required to carry out the transactions contemplated by this Agreement, and all instruments and other documents relating to such transactions, shall be reasonably satisfactory in form and substance to the Company, and the Company shall have been furnished with such instruments and documents as it shall have reasonably requested.

 

CONDITIONS TO COMPANY’S OBLIGATION TO CLOSE

 

6.1                                The Company’s obligation to sell and issue the Securities is subject to the fulfillment on or before the date hereof of the following conditions, unless waived by the Company:

 

(A)                                Representations and Warranties .  The representations and warranties made by the Subscriber in this Agreement shall be true and correct in all material respects when made and shall be true and correct as of the date of hereof.

 

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(B)                                Covenants .  The Subscriber shall have performed or complied with all covenants, agreements and conditions contained in the Agreements to be performed or complied with by the Subscriber on or prior to the date hereof in all material respects.

 

(C)                                Compliance with Securities Laws .  The Company shall be satisfied that the offer and sale of the Securities and the Common Stock into which the Securities may be convertible or for which the Securities may be exercisable shall be qualified or exempt from registration or qualification under all applicable federal and state securities laws (including receipt by the Company of all necessary blue sky law permits and qualifications required by any state, if any).

 

( D)                                Consents and Waivers .  The Company and the Subscriber shall have obtained any and all consents, permits and waivers necessary or appropriate for consummation of the transactions contemplated by the Agreement.

 

( E)                                 Proceedings and Documents .  All corporate and other proceedings required to carry out the transactions contemplated by this Agreement, and all instruments and other documents relating to such transactions, shall be reasonably satisfactory in form and substance to the Company, and the Company shall have been furnished with such instruments and documents as it shall have reasonably requested.

 

(F)                                  Accredited Investor Status. Subscriber shall have satisfactorily completed Annex A— Accredited Investor Status.

 

MISCELLANEOUS

 

7 .1                    Amendment .  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Subscriber.

 

7 .2                    Notices .  All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid or otherwise delivered by hand, messenger or courier service addressed:

 

(A)                                            if to Subscriber, to the Subscriber’s address as shown in the Company’s records, as may be updated in accordance with the provisions hereof; or

 

(B)                                            if to the Company, to the attention of the Chief Executive Officer or Secretary of the Company at 5941 Optical Ct., San Jose, California 95138, or at such other current address as the Company shall have furnished to the Subscriber.

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid.

 

7 .4                                Expenses .  The Company and the Subscriber shall each pay their own expenses in connection with the transactions contemplated by this Agreement.

 

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7 .5                                Survival .  The representations, warranties, covenants and agreements made in this Agreement shall survive any investigation made by any party hereto and the closing of the transaction contemplated hereby for 1 year from the date hereof.

 

7.6                                Entire Agreement .  This Agreement, including the exhibits attached hereto, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.

 

7.7                                Delays or Omissions .  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

 

7.8                                Successors and Assigns .  The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

7.9                                California Corporate Securities Law .  THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

7.10                         Severability .  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

 

7.11                         Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

7.12                         Telecopy Execution and Delivery .  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

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7 .14                         Further Assurances .  Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

 

7 .15                         Attorney’s Fees .  In the event that any suit or action is instituted to enforce any provisions in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party  all fees, costs and expenses of appeals.

 

7 .16                         Jury Trial .  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT. Any claim or cause of action arising out of or relating to this Agreement shall be settled by judicial reference pursuant to California Code of Civil Procedure Section 638 et seq. before a referee sitting without a jury, such referee to be mutually acceptable to the parties or, if no agreement is reached, by a referee appointed by the Presiding Judge of the California Superior Court for Santa Clara County. This paragraph shall not restrict a party from exercising remedies under the Uniform Commercial Code or from exercising pre-judgment remedies under applicable law.

 

7 .17                         Obligation of Company .  The Company agrees to use its reasonable efforts to enforce the terms of this Agreement, to inform the Subscriber of any breach hereof (to the extent the Company has knowledge thereof) and to assist the Subscriber in the exercise of its rights and the performance of its obligations hereunder.

 

[remainder of this page intentionally blank, accredited investor

status page and signature page to follow]

 

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ANNEX A

 

ACCREDITED INVESTOR STATUS

 

o   By checking this box, Subscriber represents and warrants to the Company that the Subscriber is an “Accredited Investor” as such term is defined in Rule 501 of Regulation D promulgated under the United States Securities Act of 1933, as amended (the “ Act ”).  The Subscriber acknowledges having reviewed and considered the definition of “Accredited Investor” as follows:

 

Accredited Investor Definition

 

The Subscriber will be an “Accredited Investor” as such term is defined in Rule 501 of Regulation D promulgated under the United States Securities Act of 1933, as amended (the “ Act ”) if the Subscriber is any of the following:

 

a)                          Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

b)                          Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

 

c)                           Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

d)                          Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

 

e)                           Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000, exclusive of the value of such person’s primary residence;

 

f)                            Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

 

g)                           Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); and

 

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h)                          Any entity in which all of the equity owners are accredited investors.

 

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IN WITNESS WHEREOF, this Stock Subscription Agreement is executed as of the Effective Date.

 

 

Number of Common Stock Shares Subscribed For:

 

 

 

 

 

Total Purchase Price:

 

 

 

 

 

Signature of Authorized Signatory:

 

 

 

 

 

Name of Authorized Signatory:

 

 

 

 

 

Title of Authorized Signatory:

 

 

 

 

 

Name of Subscriber:

 

 

 

 

 

Address of Subscriber:

 

 

 

 

 

Subscriber’s tax ID or EIN #:

 

 

 

 

Subscriber’s Email Address:

 

 

 

 

 

 

 

ACCEPTED BY:

 

 

 

 

 

 

 

Aridis Pharmacueticals, Inc., a Delaware corporation

 

 

 

 

 

Signature of Authorized Signatory:

 

 

 

 

 

 

 

Name of Authorized Signatory:

 

 

 

 

 

 

 

Title of Authorized Signatory:

 

 

 

 

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Exhibit 99.1

 

Aridis Pharmaceuticals Enters Into Equity Purchase and Option Agreements with The Serum Institute of India, Ltd for Exclusive License to Products and MabIgX® Platform Technology

 

·             $10 million of equity purchased at a premium of approximately 31%

·             License agreement includes a $15 million up-front payment

 

SAN JOSE, Calif., July 30, 2019 /PRNewswire/ —  Aridis Pharmaceuticals, Inc. (Nasdaq: ARDS) , a biopharmaceutical company focused on the discovery and development of targeted immunotherapies using fully human monoclonal antibodies (mAbs) to treat life-threatening bacterial infections, announced today that it has entered into an option agreement with the Serum International BV (“SIBV”), an affiliate of Serum Institute of India, Ltd., the world’s largest vaccine manufacturer by dose units. The agreement grants SIBV the option to license multiple programs from Aridis and access the Company’s MabIgX® platform technology for asset identification and selection.  As part of the option agreement, SIBV made an equity investment of $10 million whereby Aridis will issue 801,820 shares of its restricted common stock to SIBV at a price of approximately $12.47 per share which represents approximately 31% premium to yesterday’s closing share price. In addition, Aridis received an upfront cash payment of $5 million upon execution of this option agreement and will receive an additional $10 million upon execution of the license agreement by August 31, 2019. The upfront payment is refundable should the parties not complete the license agreement.  Furthermore, under the license agreement, Aridis will receive future milestone payments for achieving product development and commercial objectives, along with royalties on net sales.

 

“I am pleased to reach agreement for a comprehensive licensing relationship with the Serum Institute, who has built formidable capabilities in monoclonal antibody development and manufacturing as part of its plan to expand into biotherapeutics and transition to a major global biotechnology company,” commented  Vu Truong , Ph.D., Chief Executive Officer of Aridis Pharmaceuticals.

 

Under the terms of the agreement, SIBV has the option to in-license Aridis’ clinical stage programs AR-301(ventilator associated pneumonia), AR-105 (ventilator associated pneumonia), and AR-101 (hospital acquired pneumonia): these license rights will be exclusive and to a limited territory, which includes territories outside of  the U.S., Europe, Canada, UK, China, Australia, New Zealand and Japan. The option includes the right to acquire an exclusive, worldwide license (excluding China) to AR-201, a preclinical fully human mAb for the prevention of respiratory syncytial virus (RSV). In addition, under the agreement SIBV may elect to collaborate with Aridis to utilize MabIgX® to identify and advance up to 5 wholly-owned programs for the treatment of infectious diseases of import to the developing world. MabIgX® is Aridis’ proprietary technology platform to rapidly identify rare, potent antibody-producing B-cells from patients who have successfully overcome an infection to produce mAbs.

 

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“This strategic alliance provides a commercial gateway for our monoclonal antibody (mAb) immunotherapies to be implemented in emerging markets, where the Serum Institute has strong commercial presence. More importantly because our targeted anti-infective immunotherapies are effective against antibiotic resistant infections, which are frequently common in developing world and emerging market countries, this partnership allows for the introduction of much needed innovative medicines to regions of the world where antimicrobial resistance is particularly high,” said Dr. Truong.

 

“We are excited by the potential to establish a multi-faceted relationship with Aridis as it represents a unique opportunity to add important assets to our commercial product portfolio while bolstering our development pipeline,” commented Adar C. Poonawalla, Chief Executive Officer of Serum Institute. “We are encouraged by the data demonstrated to date by these programs, view the MabIgX® platform as a promising source for additional pipeline candidates, and are excited to invest in an anti-infective company with a novel approach to treating bacterial diseases using fully human monoclonal antibodies (mAbs).”

 

About Serum Institute of India, Ltd.

 

Serum Institute of India Pvt. Ltd. is the world’s largest vaccine manufacturer by number of doses produced and sold globally (more than 1.3 billion doses) which includes Polio vaccine as well as Diphtheria, Tetanus, Pertussis, Hib, BCG, r-Hepatitis B, Measles, Mumps and Rubella vaccines. It is estimated that about 65% of the children in the world receive at least one vaccine manufactured by Serum Institute. Vaccines manufactured by the Serum Institute are accredited by the World Health Organization, Geneva and are being used in around 170 countries across the globe in their national immunization programs, saving millions of lives throughout the world. The Serum Institute also manufactures and commercializes recombinant protein products such as anti-sera, monoclonal antibodies, human erythropoietin.

 

Serum Institute of India is ranked as India’s No. 1 biotechnology company, manufacturing highly specialized life-saving biologicals using cutting edge genetic and cell-based technologies, antisera and other medical specialties.

 

Serum Institute of India was founded in 1966 by Dr. Cyrus Poonawalla with the aim of manufacturing life-saving immuno-biologicals, which were in shortage in the country and imported at high prices. Thereafter, several life-saving biologicals were manufactured at prices affordable to the common man and in abundance, with the result that the country was made self-sufficient for Tetanus Anti-toxin and Anti-snake Venom serum, followed by DTP (Diphtheria, Tetanus and Pertussis) group of Vaccines and then later on MMR (Measles, Mumps and Rubella) group of vaccines. Additional information is available at the Company’s website at www.seruminstitute.com.

 

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About Aridis Pharmaceuticals, Inc.

 

Aridis Pharmaceuticals, Inc. discovers and develops anti-infectives to be used as add-on treatments to standard-of-care antibiotics. The Company is utilizing its proprietary MabIgX® technology platform to rapidly identify rare, potent antibody-producing B-cells from patients who have successfully overcome an infection to produce mAbs. These mAbs are already of human origin and functionally optimized for high potency by the donor’s immune system, hence they do not require genetic engineering or further optimization to achieve full functionality and high mAb productivity. MabIgX® also allows for the selection of any antibody isotype depending on the optimal effector function required for treating the target infection. By bypassing the humanization and binding sequence optimization steps, and the entire process of generation of genetically engineered antibody producing cell lines, MabIgX® enables high gross-margins and expedited progression to clinical development.

 

The Company has generated multiple clinical stage mAbs targeting bacteria that cause life-threatening infections such as ventilator associated pneumonia (VAP) and hospital acquired pneumonia (HAP). The use of mAbs as anti-infective treatments represents an innovative therapeutic approach that harnesses the human immune system to fight infections and is designed to overcome the deficiencies associated with broad spectrum antibiotics, which is the current standard of care. Such deficiencies include, but are not limited to, increasing drug resistance, short duration of efficacy, disruption of the normal flora of the human microbiome, and lack of differentiation among current treatments. The mAb portfolio is complemented by a non-antibiotic novel mechanism small molecule anti-infective candidate being developed to treat lung infections in cystic fibrosis patients. The company’s pipeline is highlighted below:

 

Aridis’ Pipeline

 

AR-301  (ventilator associated pneumonia). AR-301 is a fully human immunoglobulin 1, or IgG1, mAb currently in Phase 3 clinical development targeting gram-positive  S. aureus  alpha-toxin in ventilator-associated pneumonia, or VAP, patients.

 

AR-105  (ventilator associated pneumonia). AR-105 is a fully human IgG1 mAb targeting gram-negative  P. aeruginosa  alginate in VAP patients. AR-105 is currently being evaluated in a global Phase 2 clinical study.

 

AR-101  (hospital acquired pneumonia). AR-101 is a fully human immunoglobulin M, or IgM, mAb targeting  P. aeruginosa liposaccharide serotype O11, which accounts for approximately 22% of all  P. aeruginosa  hospital acquired pneumonia cases worldwide. A plan for the next clinical study will be communicated following the availability of Phase 2 clinical data for AR-105.

 

AR-501  (cystic fibrosis). AR-501 is an inhaled formulation of gallium citrate with broad-spectrum anti-infective activity being developed to treat chronic lung infections in cystic fibrosis patients.  This program is currently in a Phase 1/2a clinical study in healthy volunteers and CF patients.

 

AR-401  (blood stream infections). AR-401 is a fully human mAb currently in preclinical development aimed at treating infections caused by gram-negative  Acinetobacter baumannii .

 

AR-201  (RSV infection). AR-201 is a fully human IgG1 mAb currently in preclinical development aimed at neutralizing diverse clinical isolates of respiratory syncytial virus (RSV).

 

For additional information on Aridis Pharmaceuticals, please visit https://aridispharma.com/.

 

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Forward-Looking Statements

 

Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties.  These statements may be identified by the use of words such as “anticipate,” “believe,” “forecast,” “estimated” and “intend” or other similar terms or expressions that concern Aridis’ expectations, strategy, plans or intentions. These forward-looking statements are based on Aridis’ current expectations and actual results could differ materially.  There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements.  These factors include, but are not limited to, the timing of regulatory submissions, Aridis’ ability to obtain and maintain regulatory approval of its existing product candidates and any other product candidates it may develop, approvals for clinical trials may be delayed or withheld by regulatory agencies, risks relating to the timing and costs of clinical trials, risks associated with obtaining funding from third parties, management and employee operations and execution risks, loss of key personnel, competition, risks related to market acceptance of products, intellectual property risks, risks associated with the uncertainty of future financial results, Aridis’ ability to attract collaborators and partners and risks associated with Aridis’ reliance on third party organizations.  While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Actual results could differ materially from those described or implied by such forward-looking statements as a result of various important factors, including, without limitation, market conditions and the factors described under the caption “Risk Factors” in Aridis’ 10-K for the year ended December 31, 2018 and Aridis’ other filings made with the Securities and Exchange Commission. Forward-looking statements included herein are made as of the date hereof, and Aridis does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances.

 

Contact:

 

Investor Relations

Jason Wong

Blueprint Life Science Group

jwong@bplifescience.com

(415) 375-3340 Ext. 4

 

SOURCE Aridis Pharmaceuticals, Inc.

 

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