8-K: Tivic Health Systems Amends Exclusive License Agreement with Statera Biopharma, Restructuring Payments for TLR5 Agonist Program

Tivic Health Systems, Inc. has entered into an Amended and Restated Exclusive License Agreement with Statera Biopharma, Inc., modifying payment terms for the exclusive worldwide license to Statera's proprietary TLR5 agonist program, including direct payments to Avenue Capital to extinguish a lien.

Summary

• Tivic Health Systems, Inc. (the Company) and Statera Biopharma, Inc. (Statera) entered into an Amended and Restated Exclusive License Agreement (A&R License Agreement) on June 18, 2025, superseding their original agreement from February 11, 2025.
• The A&R License Agreement maintains substantially similar terms to the original, with two material changes: royalties may now be paid in cash or Company securities at Tivic's discretion, and all subsequent payments due to Statera (up to an aggregate of $5.6 million) will be paid directly by Tivic to Avenue Capital on Statera's behalf.
• Tivic holds an exclusive worldwide license to Statera's TLR5 agonist program, including Entolimod for Acute Radiation Syndrome, and an exclusive option for additional indications such as Lymphocyte Exhaustion, Immunosenescence, Neutropenia, and Vaccine Adjuvant, as well as the Entolasta program.
• The initial license fee paid by Tivic included $300,000 in cash, 945,785 shares of Common Stock, and 359.6691 shares of Convertible Preferred Stock.
• Tivic is solely responsible for the development and commercialization of Licensed Products, including non-clinical and clinical studies, and obtaining regulatory approvals, using Commercially Reasonable Efforts.
• Milestone payments for Acute Radiation Syndrome development total $1,750,000, with additional potential milestones of $6,500,000 for other indications if the exclusive option is exercised.
• Royalties on Net Sales of Licensed Products are confidential percentages, subject to reductions for third-party royalties or if no valid claims cover the products, but never below a confidential minimum percentage.
• Tivic has the right, but not the obligation, to acquire all rights to the Licensed Technology and related data through a 'Buyout' at any time during the agreement term.

Sentiment

Score: 6

Explanation: The document reflects a strategic move to secure and advance a potentially valuable drug development program. While it involves significant financial commitments and the need to extinguish a lien, the flexibility in payment terms and the exclusive nature of the license, coupled with the buyout option, suggest a positive long-term outlook for the intellectual property. The risks are inherent in drug development but are clearly outlined.

Positives

• Tivic Health Systems gains payment flexibility, allowing royalties to be paid in either cash or company securities at its discretion.
• The agreement facilitates the extinguishment of an approximately $5.6 million lien held by Avenue Capital on the Licensed Technology, with Tivic making direct payments to Avenue Capital on Statera's behalf.
• Tivic retains an exclusive worldwide license to the promising TLR5 agonist program, including Entolimod for Acute Radiation Syndrome, and an exclusive option for multiple additional indications and the Entolasta program.
• Tivic will own all Foreground IP generated specifically in connection with the development or manufacture of any Licensed Product.
• The agreement includes a 'Buyout' option, allowing Tivic to acquire full ownership of the Licensed Technology, providing long-term strategic control.

Negatives

• Specific royalty rates for Net Sales of Licensed Products are confidential and redacted in the public filing.
• Significant future financial obligations include up to $1,750,000 in development milestones for Acute Radiation Syndrome and an additional $6,500,000 for other indications if options are exercised.
• The approximately $5.6 million Avenue Capital Lien on the Licensed Technology needs to be extinguished through direct payments from Tivic, representing a substantial financial commitment.
• Licensor must resolve previous licenses/assignments to Genome Protection, Inc. to ensure Tivic has exclusive rights, which could pose a risk if not successfully demonstrated.
• Stockholder approval is required for the conversion of Convertible Preferred Stock into Common Stock, which could introduce uncertainty or delay.
• The Royalty NPV Amount, if the Buyout option is exercised, is subject to good faith negotiation and potentially arbitration if no mutual agreement is reached.

Risks

• Significant financial burden associated with the development and commercialization of Licensed Products, including all non-clinical and clinical studies, and regulatory activities.
• Uncertainty of obtaining Regulatory Approval for Licensed Products in the United States and other territories, which is critical for commercialization.
• Potential for third-party intellectual property infringement claims, despite Licensor's warranty that the Licensed Technology does not infringe.
• The need for Licensor to demonstrate exclusive holding of rights to Licensed Molecules previously licensed/assigned to Genome Protection, Inc., which could impact Tivic's exclusive rights if unresolved.
• Potential for dilution of existing shareholders if Tivic opts to pay royalties or milestone payments in company securities.
• The Royalty NPV Amount for the Buyout option is subject to negotiation and potential arbitration, introducing financial uncertainty for a full acquisition of rights.
• The omission of certain annexes, schedules, and exhibits, and redaction of confidential portions, limits full transparency of the agreement's details.

Future Outlook

Tivic Health Systems plans to continue the development and commercialization of Licensed Products, starting with Entolimod for Acute Radiation Syndrome. The company has the exclusive option to expand its focus to additional indications like Lymphocyte Exhaustion, Immunosenescence, Neutropenia, and Vaccine Adjuvant, and to include the Entolasta program. The company also holds a buyout option to acquire full ownership of the Licensed Technology, indicating a long-term strategic interest in these assets.

Management Comments

• Lisa Wolf, Interim Chief Financial Officer, signed the 8-K filing on behalf of Tivic Health Systems, Inc.
• Jennifer Ernst, Chief Executive Officer, signed the Amended and Restated Exclusive License Agreement on behalf of Tivic Health Systems, Inc.

Industry Context

This agreement positions Tivic Health Systems within the biopharmaceutical sector, specifically focusing on Toll-like Receptor 5 (TLR5) agonists. These compounds are designed to modulate the innate immune response, with potential applications in diverse areas such as acute radiation syndrome, immune dysfunction (lymphocyte exhaustion, immunosenescence), neutropenia, and as vaccine adjuvants. The development of such therapies addresses significant unmet medical needs and aligns with broader industry trends towards targeted immunotherapies and novel vaccine technologies. The restructuring of payments to address a lien on the intellectual property is a common financial maneuver in the biotech industry to secure valuable assets.

Management Changes

Corporate Governance

Legal Proceedings

• Licensor warrants that it has not received any claim challenging its ownership of the Licensed Technology and is not aware of any facts that would give rise to such claim.
• Licensor warrants that, to its best knowledge, the Licensed Technology does not infringe third-party Intellectual Property Rights and no third party has asserted infringement claims.
• The agreement outlines procedures for patent infringement, including the right for either party to institute suit and share litigation costs and recoveries.
• Licensor is obligated to demonstrate that it has or has recovered exclusive rights to uses of the Licensed Molecules previously licensed and/or assigned to Genome Protection, Inc., potentially involving legal clarification.

Related Party Transactions

• The agreement is between Tivic Health Systems, Inc. and Statera Biopharma, Inc. (Licensor).
• Payments due to Statera (except the initial license fee) are directed to Avenue Capital on Statera's behalf to extinguish a lien.
• Licensor may nominate an individual to Tivic's Board of Directors.
• Licensor's key personnel, including its current CEO, are expected to join Tivic to work on the Licensed Products, subject to negotiated employment terms.

Stakeholder Impact

• Shareholders: Potential for future value creation from the licensed drug development program, but also potential dilution from stock-based payments and the financial commitment to extinguish the Avenue Capital lien.
• Employees: Potential for new hires from Statera Biopharma to join Tivic Health Systems, bringing specialized expertise.
• Customers/Patients: Potential for new therapeutic options for conditions like Acute Radiation Syndrome, Lymphocyte Exhaustion, Immunosenescence, Neutropenia, and improved vaccines.
• Creditors (Avenue Capital): Direct payments from Tivic Health Systems will be made to Avenue Capital to extinguish a lien, providing a clear path for debt resolution related to the licensed assets.
• Suppliers: Potential for increased demand for raw materials and services related to drug development and manufacturing.

Next Steps

• Tivic Health Systems, Inc. will continue to develop and commercialize Licensed Products, starting with Entolimod for Acute Radiation Syndrome, at its own cost and expense.
• Tivic will undertake all regulatory activities to obtain and maintain Regulatory Approval for Licensed Products in the Field in the Territory.
• Tivic may exercise its exclusive option to expand the Indications to include Lymphocyte Exhaustion, Immunosenescence, Neutropenia, or uses as a Vaccine Adjuvant, and to include the Entolasta program.
• Tivic will make direct payments to Avenue Capital on behalf of Statera to extinguish the approximately $5.6 million lien on the Licensed Technology.
• Licensor is obligated to demonstrate that it exclusively holds all rights to uses of the Licensed Molecules previously licensed/assigned to Genome Protection, Inc.
• Tivic and Statera's designated key personnel (including Statera's current CEO) will negotiate employment or consulting agreements for services to Tivic in support of Licensed Product development.
• Tivic may exercise its right to 'Buyout' all right, title, and interest in the Licensed Technology and related assets at any time during the agreement term.

Key Dates

Keywords

Biopharma, License Agreement, TLR5 agonist, Entolimod, Entolasta, Acute Radiation Syndrome, Lymphocyte Exhaustion, Immunosenescence, Neutropenia, Vaccine Adjuvant, SEC filing, 8-K, Tivic Health Systems, Statera Biopharma, Intellectual Property, Drug Development, Biologics License Application, IND