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S-1
VITAE PHARMACEUTICALS, INC filed this Form S-1 on 08/12/2014
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Collaborations

        We currently have two collaborations with BI relating to VTP-34072, for the treatment of type 2 diabetes, and VTP-37948, for the treatment of Alzheimer's.

    11b HSD1

        On October 2, 2007, 21 months after initiating our 11b HSD1 program, we entered into a research collaboration and license agreement with BI, or the 11b Agreement, under which the companies agreed to combine their respective 11b HSD1 programs and to work together to identify and develop compounds for patients with type 2 diabetes and certain related metabolic disease conditions, such as dyslipidemia. As of June 30, 2014, we have received $74.2 million from BI since 2007 related to the 11b Agreement, including a $15 million equity investment, $22.2 million in upfront fees and research funding and $37 million in development milestones. In addition, we are eligible to receive up to $278.0 million in additional milestone payments based on the achievement of pre-specified events, including up to $153.0 million in development and regulatory milestone payments and up to $125.0 million in commercialization milestone payments. We are also eligible to receive tiered royalty payments from BI, ranging from the upper single digits up to the low double digits percentages, based on the net sales of potential future products, subject to certain reductions. We have the option to participate in funding the Phase 3 clinical trials in exchange for increased royalties. BI's obligation to pay the royalties continues on a country-by-country and product-by-product basis for the later of ten years following the first commercial sale of such product in such country, or as long as the product is covered by any of the patents licensed to BI under the agreement or any of the patents controlled by BI as of the effective date thereof. We are also eligible to receive 50% of the aforementioned milestone payments for any subsequent products and for any additional indications of a product to achieve those milestones. We are eligible to receive a $6.0 million milestone payment upon the first patient dosed in the Phase 2 clinical trial, which commenced in July 2014.

        Under the terms of the 11b Agreement, BI has the worldwide exclusive license to use certain of our patents and other intellectual property assets to develop and commercialize 11b HSD1 inhibitors for the treatment of the indications referred to above. BI will control and is responsible for the expenses of the preclinical and clinical development and commercialization of the product candidates resulting from the collaboration. We are responsible for carrying out certain activities relating to the identification, synthesis, characterization and optimization of compounds pursuant to an agreed-upon research plan and received research funding from BI in connection with those activities. We also have the right, subject to the approval of the joint steering committee established pursuant to the 11b Agreement, to use our patents and other intellectual property as licensed to BI as well as certain patents and other intellectual property assets of BI worldwide develop and commercialize any particular 11b HSD1 inhibitor that BI has not selected as a development candidate in accordance with the criteria agreed upon by the parties, for the treatment of indications other than those referred to above.

        We have entered into three amendments to the 11b Agreement: the first in October 2007, the second in February 2012, and the third in May 2014. The first and third amendments clarified the scope of the parties' rights with respect to certain intellectual property. The second amendment revised the development plan and the timing and amounts of payments from BI to us associated with BI's achievement of certain development milestones. There was no incremental monetary consideration provided by either party in connection with the execution of any of these amendments.

        Either party may terminate the 11b Agreement following an uncured material breach by the other party; however, we may not terminate the agreement following the first sale of a product in certain major markets except in the event of certain breaches by BI of its payment obligations under the 11b Agreement. If BI terminates the agreement due to our material breach, then, except in certain circumstances, we would continue to be eligible to receive royalty and milestone payments under the agreement. After the completion of the research phase of the collaboration, BI also has the right to terminate the 11b Agreement in its entirety or on a product-by-product basis without cause, in which case we would obtain

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