GlaxoSmithKline


In October 2007, Tolerx and GlaxoSmithKline (GSK) entered into a global alliance to develop and commercialize otelixizumab (formerly known as TRX4) in numerous indications, including type 1 diabetes. Under the terms of the agreement, Tolerx is responsible for conducting the Phase III clinical program for type 1 diabetes in the US and if successful, for submitting the biologics license application (BLA) to the FDA. Tolerx has the option to co-promote otelixizumab in type 1 diabetes in the US with GSK while GSK has exclusive rights to develop and commercialize otelixizumab in all indications worldwide, including pediatric type 1 diabetes.

As part of the collaboration, we have received $70 million from GSK to date, including an upfront payment, equity investment, and advance R&D funding. In addition, we may receive up to an additional $155 million for future development costs of otelixizumab in type 1 diabetes. We may earn up to $350 million in milestone payments, assuming successful development and approvals of otelixizumab for type 1 diabetes and multiple additional indications. We may also receive up to $175 million in sales milestone payments based on tiered net sales thresholds of otelixizumab. We will be entitled to receive tiered, double-digit royalty payments on worldwide net sales of otelixizumab in all indications. At the time of an initial public offering of our common stock, at the request of Tolerx and pursuant to certain other conditions, GSK will invest up to an additional $10 million in Tolerx's common stock.

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Juvenile Diabetes Research Foundation

In August 2006, Tolerx received funding from the Juvenile Diabetes Research Foundation (JDRF), the world's largest charitable funder of type 1 diabetes research. Through its Industry Discovery and Development Partnerships program, JDRF has provided funding for the clinical development of otelixizumab (TRX4). The funds will support clinical trials and further development of otelixizumab as a therapeutic for type 1 diabetes. JDRF's support of Tolerx is in the form of an equity investment.
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