Fenwick represented Sutro Biopharma (NASDAQ: STRO), a clinical-stage oncology company pioneering site-specific and novel-format antibody drug conjugates (ADCs), in its option grant agreement with Vaxcyte, a vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases, through which Vaxcyte acquired an option to access expanded rights to develop and manufacture cell-free extract, among other rights. This agreement is an expansion of a nearly decade-long relationship between Sutro and Vaxcyte, during which Sutro has been responsible for supplying Vaxcyte with extract, a key material used to develop Vaxcyte’s cell-free vaccine candidates.
Under the agreement, Vaxcyte has acquired from Sutro (i) authorization to enter into an agreement with an independent alternate contract manufacturing organization (CMO) to source extract and have direct oversight over financial and operational aspects of the relationship with the CMO; and (ii) a right, but not an obligation, to obtain certain exclusive rights to internally manufacture and/or source extract from certain CMOs and the right to independently develop and make improvements to extract for use in connection with the exploitation of certain vaccine compositions (the Option). As consideration for the Option and other rights and authorizations granted to Vaxcyte under the agreement, Vaxcyte will pay Sutro upfront payments totaling $22.5 million in cash and Vaxcyte common stock. In the event that Vaxcyte elects to exercise the Option, Vaxcyte would pay Sutro $75 million in cash in two installments and, upon the occurrence of certain regulatory milestones, additional milestone payments totaling up to $60 million in cash. More information about the option grant agreement can be obtained from Sutro Biopharma’s announcement.
The Fenwick transaction team was led by life sciences partner Stefano Quintini and included counsel Amy Manning.