ARCT Arcturus Therapeutics Holdings Inc

Item 1.01 Entry Into a Material Definitive Agreement.

On November 1, 2022, Arcturus Therapeutics Holdings Inc. (“Arcturus”) entered into a Collaboration and License Agreement (the “Collaboration Agreement”) with CSL Seqirus, Inc., a part of CSL Limited (“CSL Seqirus”), one of the world’s leading influenza vaccine providers, for the research, development, manufacture and global commercialization of self-amplifying mRNA vaccines.

CSL Seqirus will receive exclusive global access to Arcturus’ technology for vaccines against SARS-CoV-2 (COVID-19), influenza and three other globally prevalent respiratory infectious diseases. Specifically, the Collaboration Agreement grants CSL Seqirus a license to Arcturus’ STARR^TM mRNA technology and LUNAR^® lipid-mediated delivery, as well as mRNA drug substance and drug product manufacturing expertise. CSL Seqirus would also receive global non-exclusive access to Arcturus’ intellectual property rights in the field of pandemic preparedness (i.e., pathogens identified as priority diseases by the World Health Organization), with the right to convert to an exclusive license.

Arcturus will receive an up-front payment of $200 million. Arcturus will be eligible to potentially receive development milestones totaling more than $1.3 billion if all products are registered in the licensed fields. Arcturus will also be entitled to potentially receive up to $3 billion in commercial milestones based on “net sales” of vaccines in the various fields. In addition, Arcturus is entitled to receive a 40% share of net profits from COVID-19 vaccine sales and up to low double digit royalties of annual net sales for vaccines against influenza and the other three specified infectious disease pathogens, as well as royalties on revenues from vaccines that may be developed for pandemic preparedness. Entitlement to all such payments is subject to the strict conditions, requirements, royalties reduction provisions and other limitations set forth in the Collaboration Agreement.

The Collaboration Agreement sets forth how Arcturus and CSL Seqirus shall collaborate to research and develop vaccine candidates. In the COVID-19 field, Arcturus will lead activities for certain regulatory filings for ARCT-154 in the US and Europe and for research and development activities of a next-generation COVID vaccine candidate. CSL Seqirus will lead and be responsible for all other research and development in COVID-19, influenza and the other fields. Arcturus will provide to CSL Seqirus a credit against milestone payments over five years to offset expenses of research and development activities on non-COVID-19 programs that Arcturus conducts at the request of CSL Seqirus. CSL Seqirus will have the sole exclusive right to commercialize any products that may be developed.

The Collaboration Agreement will not become effective until expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Either party may terminate the Collaboration Agreement on a field-by-field basis for material breach by the other party, following notice and opportunity to cure. CSL Seqirus may also terminate the Collaboration Agreement in its entirety or on a field-by-field basis for any reason or no reason whatsoever, but may not exercise this termination “for convenience” of the entire agreement or with respect to the influenza field prior to the first commercial sale of a “vaccine product” in the US, Japan, Australia or specified European countries. The Collaboration Agreement may also be terminated by CSL Seqirus for safety reasons, clinical data nonviability, commercial nonviability and other specified reasons.

The Collaboration Agreement allows Arcturus to fulfill its obligations under its award from the Biomedical Advanced Research and Development Authority (BARDA) relating to rapid pandemic influenza response and announced by Arcturus in August 2022.

The foregoing is only a partial summary of the material terms of the Collaboration Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the Collaboration Agreement that will be filed as an exhibit to a subsequent filing on a periodic report.