Lifecore enters term sheet to expand CDMO pact with hyaluronic acid customer

Lifecore announced that it has entered into a term sheet to seek to expand its existing CDMO relationship with one of its long-term commercial hyaluronic acid and CDMO customers, including obtaining certain up-front cash payments and capital reimbursement obligations from the customer and entering into a non-binding agreement to amend the current contract manufacturing agreement, or CMA, with the customer to extend and expand the existing relationship. With the signing of the Term Sheet, the customer agreed to a one-time, non-refundable $10M cash commitment to Lifecore, payable in installments over the next seven months, to prepare infrastructure and manufacturing capacity. The customer also agreed to reimburse Lifecore, subject to certain conditions, for up to approximately $15M in capital expenditures to purchase equipment related to the expansion of our relationship with this customer, which equipment would be installed at Lifecore’s facility and owned by the customer. The upfront cash and reimbursement commitments are binding obligations under the Term Sheet, subject to certain limitations. The term sheet also contemplates, on a non-binding basis, the negotiation of a long-term extension to the existing CMA. The company expects to proceed with negotiating and drafting the amendment to the CMA over the next several months.