On December 27, 2018, Achaogen, Inc. (the “Company”) entered into a License Confirmation Agreement and a Redemption Agreement with the Bill & Melinda Gates Foundation (the “Gates Foundation”) (together, the “2018 Agreements”) in connection with the amendment of certain provisions of the Grant Agreement (the “Grant Agreement”) and the Letter Agreement (the “Letter Agreement”) each previously entered into between the Company and the Gates Foundation and dated as ofMay 4, 2017.The 2018 Agreements were entered into following the de-prioritization of antibody work by the Company, which was the focus of the Company’s collaboration with the Gates Foundation.Among other things, the 2018 Agreements (a) terminated the Company’s obligations to conduct mutually agreed upon work, including work related the Company’s platform technology to develop and launch a product intended to prevent neonatal sepsis, (b) terminated the obligations of the Company to discover drug candidates intended to prevent neonatal sepsis and the obligation of the Gates Foundation to fund approximately $7.1 million in grants not yet received by the Company and (c) granted the Gates Foundation a non-exclusive license to intellectual property developed by the Company to the Grant Agreement and Letter Agreement in specified developing countries.
The Redemption Agreement also provided for the redemption by the Company of the 407,331 shares of the Company’s common stock (the “Gates Shares”) purchased by the Gates Foundation to a Common Stock Purchase Agreement between the Company and the Gates Foundation dated as of May 4, 2017 (the “Purchase Agreement”) for an aggregate redemption price of $5,737,082. The Company paid for the redemption of the Gates Shares with the unused portion of the restricted cash received by the Company to the original purchase of the Gates Shares under the Purchase Agreement.No unrestricted cash of the Company was used to fund the redemption.
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