Therapeutic Collaborations 

 

Epizyme has entered into strategic collaborations for several of our therapeutic programs. We believe that our collaborations contribute to our ability to rapidly advance our product candidates, build our product platform and concurrently progress a wide range of discovery and development programs. Our therapeutic collaborations have provided us with approximately $120 million in non-equity funding through December 31, 2012. Additionally, our therapeutic collaborations provide us with research funding and the potential for more than $1 billion of research, development, regulatory and sales-based milestone payments, as well as royalties or profit sharing on any net product sales. We have retained commercialization or co-commercialization rights in the United States for all of our programs other than the three programs in our GSK collaboration.

 

In April 2012, we entered into a collaboration and license agreement with Celgene under which we granted Celgene an exclusive license to our DOT1L program outside the United States, including EPZ-5676. We also granted Celgene the option to license rights outside the United States to other HMT programs, excluding HMT targets covered by our two other existing therapeutic collaborations. We are eligible to receive royalties on net product sales outside of the United States.

 

Under the terms of the agreement, we received a $65.0 million upfront payment and $25.0 million from the sale of our series C preferred stock to an affiliate of Celgene. In addition, we are eligible to earn up to $160.0 million in development and regulatory milestone payments related to DOT1L and up to $165.0 million in option exercise fees and development and regulatory milestone payments related to each additional target as to which Celgene exercises its option during an initial option period ending in July 2015. Celgene has the right to extend the option period until July 2016 by making a significant option extension payment. 

 

 

In April 2011, we entered into a collaboration and license agreement with Eisai under which we granted Eisai an exclusive worldwide license to our EZH2 program, including EPZ-6438, while retaining an opt-in right to co-develop, co-commercialize and share profits with Eisai as to licensed products in the United States.

 

Under the terms of the agreement, we received a $3.0 million upfront payment. Through March 31, 2013, we also received $11.3 million in research funding payments and $7.0 million in research milestone payments. We are eligible to receive up to $201.0 million in additional milestone payments, comprising aggregate research, development and regulatory milestone payments of up to $86.0 million and sales-based milestone payments of up to $115.0 million. We are also eligible to receive royalties on any net product sales.

 

Eisai solely funds all research, development and commercialization costs for licensed compounds. If we exercise our opt-in right to co-develop, co-commercialize and share profits with Eisai, we are required to share ongoing U.S. development costs with Eisai, Eisai is entitled to recover a portion of past development costs as a partial reduction of future milestone payments and royalties, and the milestone payments we are eligible to receive in the future are reduced. 

 

 

In January 2011, we entered into a collaboration and license agreement with GSK to discover, develop and commercialize novel small molecule HMT inhibitors directed to available targets from our product platform. Under the terms of the agreement, we granted GSK the option to obtain exclusive worldwide license rights to HMT inhibitors directed to up to three targets. GSK has selected and licensed three targets.

 

Under the agreement, we received an upfront payment of $20.0 million. Through March 31, 2013, we also received $4.5 million of research funding and $8.0 million of milestone payments. We are eligible to receive up to $630.0 million in additional milestone payments, comprising aggregate research, development and regulatory milestone payments of up to $360.0 million and sales-based milestone payments of up to $270.0 million. In addition, GSK is required to pay us royalties on worldwide net product sales. 

 

Companion Diagnostic Collaborations 

 

In collaboration with established diagnostic companies, we are developing companion diagnostics to identify patients who have the specific genetically defined cancer targeted by each of our product candidates.

 

 

 

 

In December 2012, together with Eisai, we entered into an agreement with Roche Molecular Systems, Inc., to develop and to commercialize a companion diagnostic for use with our EPZ-6438 product candidate. The development costs under the agreement with Roche will be the responsibility of Eisai until such time as we may exercise our opt-in right under the collaboration with Eisai. If we exercise our opt-in right under the Eisai agreement, the costs under the Roche agreement will be shared by us and Eisai as determined under the profit share and co-commercialization components of the Eisai collaboration agreement.

 

  

 

 In February 2013, we entered into an agreement with Abbott under which we agreed to fund Abbott’s development of a companion diagnostic to identify patients with the MLL-r genetic alteration targeted by EPZ-5676. Under the terms of the agreement, we paid Abbott an upfront payment of $0.9 million upon the execution of the agreement, are obligated to make aggregate milestone-based development payments of up to $6.0 million and are obligated to reimburse Abbott specified costs expected to be incurred in connection with Abbott conducting clinical trials to obtain the necessary regulatory approvals for the companion diagnostic. The reimbursable costs are not to exceed $0.9 million unless any excess costs are agreed to in advance by both Abbott and us. In addition to the upfront payment, we expect to pay an aggregate of approximately $1.5 million in milestone-based development payments under this agreement during 2013.

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