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KYTH > SEC Filings for KYTH > Form 8-K on 10-Mar-2014All Recent SEC Filings

Show all filings for KYTHERA BIOPHARMACEUTICALS INC

Form 8-K for KYTHERA BIOPHARMACEUTICALS INC


10-Mar-2014

Entry into a Material Definitive Agreement, Completion of Acquisit


Item 1.01. Entry into a Material Definitive Agreement.

Summary of KYTHERA's Acquisition of Certain ATX-101 Rights

On March 7, 2014 (the "Signing Date"), KYTHERA Biopharmaceuticals, Inc. (the "Company" or "KYTHERA") and Bayer Consumer Care AG ("Bayer") entered into a series of related agreements pursuant to which KYTHERA's wholly-owned subsidiary, KYTHERA Holdings Ltd. ("KHL"), acquired the rights previously held by Bayer to develop, manufacture and commercialize ATX-101 outside of the United States and Canada. In consideration for the rights, Bayer will receive $33.0 million in KYTHERA's common stock, a $51.0 million unsecured promissory note due March 2024 and the right to receive certain long-term sales milestone payments on annual sales of ATX-101 outside of the United States and Canada.

Rights Purchase Agreements

On the Signing Date, KYTHERA entered into a Restructuring Agreement (the "Restructuring Agreement") with Bayer and Intendis GmbH, an affiliate of Bayer ("Intendis"), pursuant to which KYTHERA (i) entered into an Amended and Restated License Agreement with Bayer (the "Amended License Agreement"), which amended and restated that certain License Agreement between the Company and Bayer dated August 26, 2010 (the "License Agreement"), and (ii) terminated that certain Services, Research, Development and Collaboration Agreement between the Company and Intendis dated August 26, 2010 (the "Collaboration Agreement").

The Amended License Agreement removes Bayer's obligations to develop, manufacture, seek regulatory approval for and commercialize ATX-101, and terminates the joint steering committee, effective upon and after the Signing Date. The Amended License Agreement does not alter any rights or obligations of the Company and Bayer applicable to the periods prior to the Signing Date.

Certain provisions of the Collaboration Agreement relating to records, audits, confidential information, and indemnification, survive its termination.

On the Signing Date, subsequent to the execution of the Restructuring Agreement and the Amended License Agreement, the Company and KHL entered into an Assignment and Novation Agreement with Bayer (the "Assignment Agreement"), under which Bayer assigned and novated all of its right, title, and interest in and to the Amended License Agreement to KHL. As a result, effective on and after the Signing Date, the Amended License Agreement is between the Company and KHL and provides KHL an exclusive license to develop, manufacture and commercialize ATX-101 outside of the United States and Canada. The Assignment Agreement also includes certain terms to be included in a transition services agreement to be negotiated in good faith between KHL and Bayer within 30 days after the Signing Date.

The Assignment Agreement releases the Company, KHL, Bayer, and their respective affiliates from all claims against each other related to the License Agreement and Amended License Agreement, other than indemnification obligations applicable to acts or omissions of the Company or Bayer occurring prior to the Signing Date, and certain other provisions that survive as between the Company and Bayer. KHL will indemnify Bayer and its Affiliates from any activity performed by or on behalf of the Company or KHL in connection with the development, manufacture, or commercialization of ATX-101 that is not otherwise covered by the indemnification obligations surviving as between the Company and Bayer.

Under the Assignment Agreement, Bayer assigned to KHL all intellectual property, information and technology arising under the License Agreement and Collaboration Agreement prior to the Signing Date that solely relates to ATX-101, and all trademarks used in connection with ATX-101. Additionally, Bayer granted to KHL an exclusive license under other intellectual property, information and technology not solely relating to ATX-101 for use in developing and commercializing ATX-101. The Assignment Agreement provides that the Company and KHL are concurrently entering into the note and equity issuance transactions described below. In addition, KHL is obligated to pay Bayer up to $123.8 million upon the achievement of ex-United States and Canada sales milestones.

The Assignment Agreement restricts Bayer from commercializing any injectable technology, compound, product, or device that is directed to the reduction of submental fat for 3 years after the Signing Date in the European Union and 5 years after the Signing Date outside of the European Union.

The term of the Assignment Agreement commenced on the Signing Date and continues until the Company and KHL have ceased all development, manufacture and commercialization of ATX-101 and provided written notice to Bayer to such effect.


The Restructuring Agreement, Amended License Agreement, and Assignment Agreement are referred to collectively as the "Rights Purchase Agreements." None of the Rights Purchase Agreements may be assigned by either party without the prior written consent of the other party, except to an affiliate of such party or in the event of a merger or acquisition of such party.

The foregoing description of the material terms of the Rights Purchase Agreements is subject to, and is qualified in its entirety by reference to, the text of each of the Rights Purchase Agreements when filed. The Company expects to file certain of the Rights Purchase Agreements as an exhibit to its Quarterly . . .



Item 2.01. Completion of Acquisition or Disposition of Assets.

The information contained in Item 1.01 above is incorporated by reference into this Item 2.01.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 above is incorporated by reference into this Item 2.03.



Item 3.02. Unregistered Sales of Equity Securities.

The information contained in Item 1.01 above is incorporated by reference into this Item 3.02.

The issuance of the Shares by the Company to KHL pursuant to the Securities Purchase Agreement will be exempt from registration pursuant to the exemption for transactions by an issuer not involving any public offering under
Section 4(a)(2) of the Securities Act of 1933 (as amended, the "Securities Act"), and Regulation D promulgated under the Securities Act ("Regulation D"). KHL represented that (a) it is an "accredited investor" within the meaning of Rule 501 of Regulation D, (b) it is acquiring the Shares in the ordinary course of its business and with no present intention of distributing any of such securities except in compliance with the Securities Act, and does not have any arrangement or understanding with any other persons regarding the public distribution of the Shares, and (c) it has had an opportunity to request and review all information KHL deems sufficient in making an informed decision to purchase the Shares.

The sale of the Shares by KHL to Bayer pursuant to the Securities Purchase Agreement will be exempt from registration pursuant to the exemption for transactions by any person other than an issuer, underwriter, or dealer under
Section 4(a)(1) of the Securities Act, Section 4(a)(2) of the Securities Act and Regulation D, and the exemption for transactions made outside the United States pursuant to Regulation S promulgated under the Securities Act ("Regulation S"). Bayer represented that (a) it is an "accredited investor" within the meaning of Rule 501 of Regulation D, (b) it is not a "United States person" and is not acquiring the Shares for the account or benefit of any "United States person," within the meaning of Rule 902 of Regulation S, (c) it is acquiring the securities in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such securities, except in compliance with the Securities Act, and does not have any arrangement or understanding with any other persons regarding the distribution of the Shares, and (d) it has had an opportunity to request and review all information Bayer deems sufficient in making an informed decision to purchase the Shares.


Appropriate legends will be affixed to the Shares indicating that the Shares have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements.



Item 9.01 Financial Statements and Exhibits.

The following exhibits are filed as part of this Current Report on Form 8-K.

(d) Exhibits

Reference is made to the Exhibit Index included with this Current Report on Form 8-K.


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