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EXHIBIT 10.4
AMENDMENT NO. 2 TO DEVELOPMENT AGREEMENT
This Amendment No. 2 to Development Agreement (the
"Amendment") is made as of March 23, 2000 by and between
ALZA Corporation, a Delaware corporation ("ALZA"), and
Crescendo Pharmaceuticals Corporation, a Delaware
corporation ("Crescendo").
RECITALS
WHEREAS, ALZA and Crescendo have entered into that
certain Development Agreement dated as of September 5, 1997
(the "Development Agreement") pursuant to which ALZA
performs research and development activities on behalf of
Crescendo directed toward the development of pharmaceutical
products; and
WHEREAS, ALZA is marketing Doxil-registered trademark-
(STEALTH-registered trademark- liposomal doxorubicin HCI) in
the United States; and
WHEREAS, Doxil-registered trademark- has been approved
in the United States by the Food and Drug Administration
("FDA") for marketing only as a treatment for AIDS kaposi
sarcoma and metastatic carcinoma of the ovary in refractory
patients; and
WHEREAS, ALZA and Crescendo desire that Crescendo fund
a program with the goal of receiving clearance by the FDA to
market Doxil-registered trademark- for the treatment of
multiple myeloma; and
WHEREAS, such an arrangement is not currently
contemplated by the Development Agreement.
NOW, THEREFORE, in consideration of the foregoing and
the agreements contained herein, ALZA and Crescendo hereby
agree as follows:
1. Funding of the Development Program.
(a) In consideration of the royalty payments set forth
in Section 2 of this Agreement, Crescendo hereby agrees to
fund the Doxil Development Program in amounts as proposed by
ALZA and approved by Crescendo from time to time (the
"Development Payments"). The Doxil Development Program
shall be set forth in work plans prepared by ALZA which are
subject to the approval (in whole or in part) or the
rejection (in whole or in part) of Crescendo. Each such
approved work plan shall constitute a "Work Plan" within the
meaning of the Development Agreement. The parties agree to
review the Work Plan from time to time (no less often than
the end of each stage of development) and to revise the Work
Plan as appropriate so that it remains a best estimate of
the work to be done under the Doxil Development Program and
the amounts required to fund such work. Crescendo shall not
be obligated to make Development Payments in excess of those
provided for in an approved Work Plan, and ALZA shall not be
obligated to perform work on the Doxil Development Program
which would result in Development Payments exceeding those
in an approved Work Plan.
(b) ALZA and Crescendo agree that the Development
Payments shall be paid under the Development Agreement,
shall be made on the same basis as "Development Costs" (as
set forth in Sections 4.1 and 4.2 of the Development
Agreement) and shall constitute "Development Costs" within
the meaning of the Development Agreement.
(c) ALZA and Crescendo agree that the Doxil
Development Program constitutes an activity undertaken
pursuant to the Development Agreement within the meanings of
Sections 1.5 and 10.1 thereof.
(d) Developments Payments are intended to be included
as part of the "total amount paid by or due from this
corporation under the Development Agreement" for purposes of
Article FIFTH, Section (A)(18)(c) of the Restated
Certificate of Incorporation of Crescendo (the
"Certificate"), as part of "expenditures pursuant to the
Development Agreement" for purposes of Article FIFTH,
Section (A)(19) of the Certificate, as part of the "total
amounts paid by or due from this corporation pursuant to the
Development Agreement" for purposes of Article FIFTH,
Section (A)(21) of the Certificate, and as part of "any
additional amounts.that are paid by (or due from) this
corporation under the Development Agreement" for purposes of
Article FIFTH, Section (A)(10) of the Certificate.
2. Royalty Payments.
(a) In consideration of Crescendo making Development
Payments with respect to Doxil, beginning in the first
calendar quarter (the "Initial Quarter") in which any Public
Disclosure (as defined below) is made, ALZA shall pay
Crescendo royalties with respect to sales of Doxil in the
United States as follows: (i) in the Initial Quarter and the
following three calendar quarters, the greatest of (1) 2.5%
of Excess Net Sales (as defined below), (2) 1% of Excess Net
Sales plus an additional 0.1% of such Excess Net Sales for
each full one million dollars of Development Payments paid
by Crescendo or (3) 1% of Net Sales (as defined in the
Development Agreement); and (ii) in each subsequent calendar
quarter, the greatest of (1) 3.0% of Excess Net Sales (as
defined below), (2) 1% of Excess Net Sales plus an
additional 0.1% of such Excess Net Sales for each full one
million dollars of Development Payments paid by Crescendo or
(3) 1% of Net Sales.
(b) ALZA shall notify Crescendo within three business
days after any Public Disclosure referred to in clause (a)
above is first made.
(c) "Public Disclosure" shall mean a presentation at a
public research seminar, lecture, professional meeting or
similar public venue, or any release of an abstract, poster,
summary, article or similar writing to the public (or any
target portion of the medical community), in each case which
(i) is made by or on behalf of ALZA or any person or entity
performing any activities under the Doxil-registered
trademark- Development Program, and (ii) reports human
clinical data or results obtained in connection with the
activities conducted under the Doxil Development Program
that support the use of Doxil-registered trademark- for the
treatment of multiple myeloma. "Excess Net Sales" shall
mean the amount by which
Net Sales exceed Base Net Sales. "Base Net Sales"
shall mean Net Sales of Doxil in the United States in the
calendar quarter immediately preceding the Initial Quarter.
(d) In determining payments under this Section 2 for
any calendar quarter, the amount of applicable Development
Payments shall be the cumulative amount of Development
Payments paid as of the last day of the preceding calendar
quarter.
(e) Royalty payments under this Section 2 shall be
subject to the requirements set forth in Sections 5.3, 7.6
and 7.8 of the Development Agreement with respect to
payments due under Section 7.4 of the Development Agreement.
3. Not a "Crescendo Product". Notwithstanding any
of the foregoing, ALZA and Crescendo confirm and agree Doxil
shall not be considered a "Crescendo Product" within the
meaning of the Development Agreement, the Technology License
Agreement between ALZA and Crescendo dated as of September
5, 1997 (the "Technology License Agreement") and the License
Option Agreement between ALZA and Crescendo dated as of
September 5, 1997 (the "License Option Agreement.")
4. Indemnification. ALZA shall indemnify, defend and
hold Crescendo harmless from and against any and all
liabilities, claims, demands, damages, costs, expenses or
money judgments rendered against Crescendo and its
Affiliates, which arise out of the use, design, labeling or
manufacture, processing, packaging, sale or
commercialization of Doxil by ALZA, its Affiliates,
assignees, subcontractors and sublicensees. Crescendo shall
permit ALZA's attorneys, at ALZA's discretion and cost, to
handle and control the defense of any claims or suits as to
which Crescendo may be entitled to indemnity hereunder, and
Crescendo agrees not to settle any such claims or suits
without the prior written consent of ALZA. Crescendo shall
give ALZA prompt written notice in writing, in the manner
set forth in Section 13.7 of the Development Agreement, of
any claim or demand made against Crescendo for which
Crescendo may be entitled to indemnity hereunder. Crescendo
shall have the right to participate, at its own expense, in
the defense of any such claim or demand to the extent it so
desires.
5. Miscellaneous.
(a) Capitalized terms used but not otherwise defined
herein shall have the meanings set forth in the Development
Agreement.
(b) Except as otherwise expressly provided herein, the
terms of the Development Agreement, the Technology License
Agreement and the License Option Agreement shall remain in
full force and effect.
(c) The provisions of Sections 1(b), 1(c), 1(d), 3 and
4, and this Section 5(c), of this Amendment, and of Section
2 to the extent of obligations under such section relating
to periods prior to termination of the Development
Agreement, shall survive the termination for any reason of
the Development Agreement. Any payments due under this
Amendment with respect to any period prior to termination of
the Development Agreement shall be made notwithstanding the
termination of the Development Agreement.
IN WITNESS WHEREOF, ALZA and Crescendo have caused this
Amendment to be executed as of the date first set forth
above by their duly authorized representatives.
ALZA Corporation
By: /s/ X. X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President, Commercial Development
Crescendo Pharmaceuticals Corporation
By: /s/ Xxxx X. Xxxx PhD
Name: Xxxx X. Xxxx, PhD
Title: President and Chief Executive Officer
