July 14, 2014
California-based Codexis, Inc., a leading developer of biocatalysts for the pharmaceutical and fine chemical industries, has signed a platform technology license agreement with GlaxoSmithKline (GSK) under which Codexis has granted GSK a license to use Codexis' proprietary CodeEvolver® protein engineering platform technology in the field of human healthcare. The license allows GSK to use Codexis' platform technology to develop novel enzymes for use in the manufacture of GSK's pharmaceutical and health care products. GSK may also use the licensed technology to develop new therapeutic, diagnostic and prophylactic products in the human health field. Upon completion of technology transfer, GSK will have Codexis' state-of-the-art CodeEvolver protein engineering platform installed at its Upper Merion, Pennsylvania research and development site. The agreement marks the first time that Codexis has licensed its protein engineering platform technology to any party in the healthcare field.
Codexis is eligible to receive up to $25 million over approximately the next two years, $6 million of which will be paid upfront shortly after signing and an additional $19 million subject to satisfactory completion of technology transfer milestones. Codexis also has the potential to receive numerous additional milestone payments that range from $5.75 million to $38.5 million per project based on GSK's successful application of the licensed technology. In addition, Codexis will be eligible to receive royalties based on net sales, if any, of a limited set of products developed by GSK using Codexis' CodeEvolver protein engineering platform technology.
Latham & Watkins LLP represented Codexis in the agreement with a corporate team led from the firm’s Silicon Valley office by partner Charles Hoyng, with associate Vincent Chuang in San Diego. The deal further highlights the firm’s market leadership in life sciences strategic licensing agreements, a highly specialized area of law. Often characterized as “the most important deal a life sciences company will make,” strategic alliances provide crucial funding to develop and commercialize life-saving and life-enhancing drugs as companies navigate the clinical trial and regulatory approval processes. Upfront and milestone payments are frequently involved, as well as revenue sharing mechanisms such as royalties or profit sharing payments. These transactions can result in large “bio bucks” payments to the innovator company, if all collaboration goals are met and all options exercised.