In November 2014, we and Janssen entered into the Collaboration Agreement under which we granted to Janssen exclusive worldwide rights to develop and commercialize imetelstat for all human therapeutic uses, including hematologic myeloid malignancies. Upon the effectiveness of the Collaboration Agreement, we received $35 million from Janssen as an upfront payment.
Under the Collaboration Agreement, Janssen is wholly responsible for the development, manufacturing, seeking regulatory approval for and commercialization of imetelstat worldwide. To that end, Janssen is conducting two clinical trials of imetelstat: IMbark™, a Phase 2 trial in myelofibrosis, and IMerge™, a Phase 2/3 trial in myelodysplastic syndromes. Development costs for IMbark and IMerge are being shared between us and Janssen on a 50/50 basis.
We remain responsible for prosecuting, at Janssen’s direction, the patents licensed to Janssen at the time we entered into the Collaboration Agreement, with costs shared between us and Janssen on a 50/50 basis.
Following completion of the protocol-specified primary analysis of IMbark or after a certain time period after the initiation of the first Phase 3 myelofibrosis study, if any, Janssen must notify us whether it elects to maintain its license rights and continue to advance the development of imetelstat in any indication. If IMbark is terminated early or suspended, Janssen must instead notify us of its decision by the date that is the later of 24 months from the initiation of IMerge or 24 months from the termination of IMbark or commencement of the suspension period, as applicable.
If Janssen elects to continue to maintain its license rights and advance the development of imetelstat in any indication (Continuation Decision), we then would have an option, (U.S. Opt-In Rights) to share further U.S. development and promotion costs, including our share of development costs incurred to date by Janssen beyond IMbark or IMerge, in exchange for higher tiered royalty rates and higher future development and regulatory milestone payments if imetelstat is successfully developed and approved. If we exercise the U.S. Opt-In Rights, then we and Janssen would share U.S. development and promotion costs beyond IMbark or IMerge on a 20/80 basis (Geron 20%, Janssen 80%), we would receive a $65 million milestone payment (Continuation Fee) at the time of an affirmative Continuation Decision, and would be eligible to receive additional potential payments of up to $470 million for the achievement of certain development and regulatory milestones, up to $350 million for the achievement of certain sales milestones, and tiered royalties ranging from a mid-teens up to low twenties percentage rate on worldwide net sales of imetelstat in any countries where regulatory exclusivity exists or there are valid claims under the patent rights exclusively licensed to Janssen. In addition, if we exercise the U.S. Opt-In Rights, we then would also have a separate option (U.S. Co-Promotion Option) to provide 20% of the U.S. selling effort with our sales force personnel, in lieu of funding 20% of U.S. promotion costs, upon regulatory approval and commercial launch of imetelstat in the United States. Such co-promotion would be conducted under a Janssen prepared promotion plan, and in accordance with a co-promotion agreement to be agreed by the parties at the time of our exercise of the U.S. Co-Promotion Option. We would be responsible for all costs associated with establishing and maintaining our sales force in any conduct of such co-promotion. All product sales would be booked by Janssen. If we do not exercise the U.S. Opt-In Rights, then all further development and promotion costs beyond IMbark or IMerge would be borne by Janssen, we would receive the $65 million Continuation Fee at the time of an affirmative Continuation Decision plus a $70 million payment for Janssen’s retention of full U.S. rights to imetelstat, and would be eligible to receive additional potential payments of up to $415 million for the achievement of certain development and regulatory milestones, up to $350 million for the achievement of certain sales milestones, and tiered royalties ranging from a double-digit up to mid-teens percentage rate on worldwide net sales of imetelstat in any countries where regulatory exclusivity exists or there are valid claims under the patent rights exclusively licensed to Janssen.
After an affirmative Continuation Decision by Janssen, the Collaboration Agreement would remain in effect until the expiration of the last-to-expire patent or the royalty obligations on sales of imetelstat cease, unless terminated earlier. If Janssen does not effect an affirmative Continuation Decision, then the Collaboration Agreement would terminate and all rights to the imetelstat program would revert to us. Janssen may terminate the Collaboration Agreement at any time for convenience or due to a safety-related concern. If a notice of termination from Janssen occurs, we would be entitled to certain continued operational support and cost sharing under various circumstances and all rights to the imetelstat program would revert to us.