CONFIDENTIAL
EXHIBIT 10.24
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT
BY AND AMONG
IDENIX PHARMACEUTICALS, INC.,
IDENIX (CAYMAN) LIMITED
AND
NOVARTIS PHARMA AG
MAY 8, 2003
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS..................................................................................... 1
ARTICLE 2. MANAGEMENT OF COLLABORATION..................................................................... 28
2.1 General.................................................................................. 28
2.2 Alliance Management Representatives...................................................... 28
2.3 Committees............................................................................... 29
ARTICLE 3. DESIGNATION OF PRODUCTS......................................................................... 37
3.1 HBV Products............................................................................. 37
3.2 HCV Option............................................................................... 37
3.3 ODC Options.............................................................................. 38
3.4 Rejected Compounds....................................................................... 41
ARTICLE 4. DEVELOPMENT OF PRODUCTS......................................................................... 42
4.1 Idenix Development Activities............................................................ 42
4.2 Development Plan......................................................................... 42
4.3 Development Budget....................................................................... 43
4.4 Development Responsibilities............................................................. 44
4.5 Interferon............................................................................... 44
4.6 Global Harmonized Clinical Trials........................................................ 44
4.7 Regulatory Filings and Approvals......................................................... 44
4.8 Manufacturing Capability Development..................................................... 48
ARTICLE 5. PRODUCT COMMERCIALIZATION....................................................................... 48
5.1 Supply of Product........................................................................ 48
5.2 Commercialization of Products in Co-Marketing Countries.................................. 48
5.3 Commercialization of Products in Co-Commercialization Countries.......................... 49
5.4 Co-Commercialization Plans............................................................... 49
5.5 Distribution and Sale of Product......................................................... 50
5.6 Field Forces............................................................................. 50
5.7 Detailing................................................................................ 52
5.8 Training................................................................................. 54
5.9 Promotional Materials.................................................................... 55
5.10 Promotional Claims/Compliance............................................................ 56
5.11 Reporting of Net Sales and Expenses...................................................... 56
5.12 Country Co-Promotion Reports............................................................. 56
5.13 Co-Promotion Payments.................................................................... 56
5.14 Medical and Consumer Inquiries........................................................... 58
5.15 Commercially Reasonable Efforts in the Novartis Territory................................ 58
5.16 Customer Referrals....................................................................... 58
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5.17 Compliance with Laws..................................................................... 58
5.18 Pirate Goods............................................................................. 58
5.19 Phase IV Clinical Trials................................................................. 59
5.20 Market Exclusivity Extensions............................................................ 59
ARTICLE 6. LICENSE GRANTS.................................................................................. 59
6.1 Idenix Grants............................................................................ 59
6.2 Novartis Grants.......................................................................... 63
6.3 Additional License Provisions............................................................ 66
ARTICLE 7. EXCLUSIVITY..................................................................................... 67
7.1 Competing Products....................................................................... 67
7.2 Limitation of Restrictions............................................................... 67
ARTICLE 8. FINANCIAL PROVISIONS............................................................................ 68
8.1 License Payment.......................................................................... 68
8.2 Operating Funds.......................................................................... 68
8.3 Development Expenses..................................................................... 69
8.4 Registration Expenses.................................................................... 71
8.5 Approval Milestones...................................................................... 72
8.6 Sales Milestones......................................................................... 74
8.7 Payments for Third Party Intellectual Property........................................... 75
8.8 Milestones for Other Products............................................................ 76
8.9 Sumitomo Payments........................................................................ 77
8.10 Audits................................................................................... 77
8.11 Tax Matters.............................................................................. 77
8.12 United States Dollars.................................................................... 78
8.13 Currency Exchange........................................................................ 78
8.14 Certain Payment Procedures............................................................... 78
8.15 Late Payments............................................................................ 78
ARTICLE 9. CONFIDENTIAL INFORMATION........................................................................ 78
9.1 Confidential Information................................................................. 78
9.2 Employee and Advisor Obligations......................................................... 79
9.3 Term..................................................................................... 79
9.4 Publications............................................................................. 79
9.5 Publicity................................................................................ 80
ARTICLE 10. INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS................................ 80
10.1 Ownership of Inventions.................................................................. 80
10.2 Prosecution and Maintenance of Patent Rights............................................. 81
10.3 Third Party Infringement................................................................. 82
10.4 Claimed Infringement..................................................................... 83
10.5 Patent Invalidity Claim.................................................................. 84
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10.6 Patent Marking........................................................................... 84
10.7 Third Party Licenses..................................................................... 84
10.8 Trademarks............................................................................... 84
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANT; INDEMNIFICATION........................... 86
11.1 Representations and Warranties of Idenix................................................. 86
11.2 Representations and Warranties of Novartis............................................... 96
11.3 Additional Covenants..................................................................... 97
11.4 Disclaimer of Warranty................................................................... 98
11.5 Indemnification.......................................................................... 98
ARTICLE 12. TERM AND TERMINATION........................................................................... 101
12.1 Term..................................................................................... 101
12.2 Extension of Country Terms............................................................... 101
12.3 Termination For Material Breach.......................................................... 101
12.4 Termination by Novartis.................................................................. 101
12.5 Termination for Insolvency............................................................... 101
12.6 Effect of Termination.................................................................... 102
12.7 Survival................................................................................. 104
12.8 Non-Exclusive Remedy..................................................................... 104
ARTICLE 13. MISCELLANEOUS.................................................................................. 105
13.1 Choice of Law............................................................................ 105
13.2 Notices.................................................................................. 105
13.3 Severability............................................................................. 106
13.4 Captions................................................................................. 106
13.5 Integration.............................................................................. 106
13.6 Dispute Resolution....................................................................... 106
13.7 Independent Contractors; No Agency....................................................... 108
13.8 Assignment; Successors................................................................... 108
13.9 Execution in Counterparts; Facsimile Signatures.......................................... 108
13.10 Waivers.................................................................................. 108
13.11 No Consequential or Punitive Damages..................................................... 108
13.12 Bankruptcy............................................................................... 109
Exhibit A LdC Description
Exhibit B LdT Description
Exhibit C Idenix Patent Rights
Exhibit D Supply Agreement
Exhibit E Principles and Methods for Calculation of Net Present Value
Exhibit F Financial Considerations for Other Products
Exhibit G Procedures for Adverse Event and Other Safety Data Exchange
Notification and Reporting
Appendix 1 to Exhibit G
Appendix 2 to Exhibit G
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Exhibit H Development Plans and Development Budgets
Exhibit I Promotion Expenses
Exhibit J Third Party Intellectual Property
Exhibit K Co-Marketing of Products
Exhibit L Example of Benefit Allocation Adjustment
Exhibit M Regulatory Tasks in U.S. Territory
Exhibit N Example of Adjustment for Failure to Perform PDEs
Exhibit O Commercialization and Marketing Guidelines
Exhibit P Example of Idenix NPV Proportionate Development Expense Share
Exhibit Q Examples of Backup HCV Development Expenses
Exhibit R Sumitomo Settlement Agreement
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DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT
This Agreement is made and effective as of the 8th day of May, 2003
(the "Effective Date") by and among Idenix Pharmaceuticals, Inc., with offices
at 000 XxxxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX ("Idenix U.S."),
Idenix (Cayman) Limited, with offices at c/o Walkers SPV Limited, Xxxxxx House,
Xxxx Street, Xxxxxx Town, Grand Cayman, Cayman Islands ("Idenix Cayman" and,
together with Idenix U.S., "Idenix"), and Novartis Pharma AG, with offices at
Xxxxxxxxxxx 00, 0000 Xxxxx, Xxxxxxxxxxx ("Novartis").
INTRODUCTION
1. Idenix controls or, during the Term (as defined below), may
control certain rights in the HBV Drug Candidates (as defined below), HCV Drug
Candidates (as defined below), Other Drug Candidates (as defined below) and
certain patents, intellectual property and know-how related thereto;
2. Novartis has considerable knowledge and experience in
developing and commercializing pharmaceutical products throughout the world and
has in place large, well-experienced regulatory and marketing forces; and
3. On and subject to the terms and conditions set forth herein,
Idenix and Novartis desire to develop and commercialize the Products (as defined
below) in the territories designated below.
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, Idenix and Novartis hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Unless specifically set forth to the contrary in this Agreement, the
following terms, when capitalized, whether used in the singular or plural, shall
have the respective meanings set forth below:
"1974 Convention". 1974 Convention shall have the meaning assigned to
it in Section 13.1.
"AAA". AAA shall have the meaning assigned to it in Section 13.6(b)(i).
"Abandoning Party". Abandoning Party shall have the meaning assigned to
it in Section 10.2(b).
"Adjusted Earnings". Adjusted Earnings shall have the meaning assigned
to it in Section 8.8(c).
"Adverse Reaction Reports". Adverse Reaction Reports shall have the
meaning assigned to it in Section 4.7(i)(ii).
"Affiliate". Affiliate shall mean any corporation, company,
partnership, joint venture and/or firm that controls, is controlled by, or is
under common control with a Party. For purposes of this definition of
"Affiliate", "control" shall mean (a) in the case of corporate entities, direct
or indirect ownership of at least fifty percent (50%) of the stock or shares
having the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
the United States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in such case
such lower percentage shall be substituted in the preceding sentence; provided
that such foreign investor has the power to direct the management and policies
of such entity. Notwithstanding the foregoing, neither Party shall be considered
an Affiliate of the other for purposes of this Agreement.
"Alliance Manager". Alliance Manager shall have the meaning assigned to
it in Section 2.2.
"Alternative License Terms". Alternative License Terms shall have the
meaning assigned to it in Section 3.3(c)(i).
"Alternative MR Terms". Alternative MR Terms shall have the meaning
assigned to it in Section 3.3(b)(ii).
"Amended and Restated By-laws". Amended and Restated By-laws shall have
the meaning assigned to it in the Stock Purchase Agreement.
"Ancillary Agreements". Ancillary Agreements shall have the meaning
ascribed to it in the Stock Purchase Agreement.
"Annual Net Sales". Annual Net Sales shall mean, with respect to a
Product, Net Sales of such Product during any Contract Year; provided, however,
that, for purposes of determining whether the milestone events relating to the
Sales Milestone Payments have occurred, only fifty percent (50%) of the
applicable Net Sales of such Product in any country in the Co-Commercialization
Countries shall be included in Annual Net Sales.
"API". API shall mean active pharmaceutical ingredient manufactured in
bulk form.
"Applicable Law". Applicable Law shall have the meaning assigned to it
in the Stock Purchase Agreement.
"Approval Milestone Payments". Approval Milestone Payments shall have
the meaning assigned to it in Section 8.5(a).
"Approval Milestone Percentage". Approval Milestone Percentage shall
have the meaning assigned to it in Section 8.8(c).
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"Audit Meeting". Audit Meeting shall have the meaning assigned to it in
Section 11.3(a).
"Audit Report". Audit Report shall have the meaning assigned to it in
Section 11.3(a).
"Backup HCV Development Expenses". Backup HCV Development Expenses
shall have the meaning assigned to it in Section 8.3(b)(ii).
"Backup HCV Drug Candidate". Backup HCV Drug Candidate shall have the
meaning assigned to it in Section 8.3(b)(ii).
"Backup HCV Drug Candidate Notice". Backup HCV Drug Candidate Notice
shall have the meaning assigned to it in Section 8.3(b)(ii).
"Benefit Allocation". Benefit Allocation shall have the meaning
assigned to it in Section 5.13(a).
"Blocking Third Party Intellectual Property Rights". Blocking Third
Party Intellectual Property Rights shall mean, with respect to any country in
the Territory, on a country-by-country basis, Patent Rights in such country
owned or controlled by a Third Party which, in the absence of a license granted
by such Third Party, would, in the reasonable judgment of Novartis (as supported
by the written opinion of reputable independent patent counsel) or as otherwise
agreed by the Parties, give such Third Party, were such Third Party to enforce
its Patent Rights under applicable Law, the right to prohibit the applicable
Selected Drug Candidate from being Developed or the applicable Product[s] from
being Commercialized or Manufactured.
"Breaching Party". Breaching Party shall have the meaning assigned to
it in Section 12.3.
"Business Day". Business Day shall mean a day on which banking
institutions in both New York, New York and Basel, Switzerland are open for
business.
"Candidate Intellectual Property". Candidate Intellectual Property
shall have the meaning assigned to it in Section 11.1(f)(i).
"Candidates". Candidates shall have the meaning assigned to it in
Section 11.1(f)(i).
"cGMP". cGMP shall mean the then-current good manufacturing practice
legal, regulatory and administrative guidelines, standards, specifications and
requirements which apply to the manufacture of a Product or the API therefor in
a particular country in the world as promulgated by the relevant Regulatory
Authority.
"Clinical Trial". Clinical Trial shall mean a Phase I Clinical Trial,
Phase I/IIA Clinical Trial, Phase IIA Clinical Trial, Phase IIB Clinical Trial,
Phase III Clinical Trial, Phase IIIB Clinical Trial, Phase IV Clinical Trial,
Pivotal Clinical Trial or combination thereof.
"Co-Brand" or "Co-Branding". Co-Brand or Co-Branding shall mean, with
respect to a Product, the marketing and promotion of such Product under separate
and distinct trademarks by each Party or its Affiliates in a Co-Branding Country
pursuant to the applicable Country Co-
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Commercialization Plan, and where both brands are distributed and sold by the
Lead Commercialization Party.
"Co-Branding Country". Co-Branding Country shall mean each Major EU
Country in which Co-Promotion of Products is not permitted under local Law and
Co-Marketing is not required under local Law.
"Co-Commercialization Country". Co-Commercialization Country shall mean
each Co-Promotion Country and Co-Branding Country.
"Co-Commercialization Provisions". Co-Commercialization Provisions
shall have the meaning assigned to it in Section 5.2.
"Collaboration Intellectual Property". Collaboration Intellectual
Property shall mean Idenix Intellectual Property, Novartis Intellectual Property
with respect to which Novartis grants to Idenix a license pursuant to Section
6.2 and Joint Intellectual Property.
"Collaboration Patent Rights". Collaboration Patent Rights shall mean
those Patent Rights included in Collaboration Intellectual Property.
"Co-Market" or "Co-Marketing". Co-Market or Co-Marketing shall mean,
with respect to a Product, the separate marketing and sale of such Product under
separate and distinct trademarks by each Party or its Affiliates in a
Co-Marketing Country.
Co-Marketing Country". Co-Marketing Country shall mean each Major EU
Country in which Co-Promotion and Co-Branding are not permitted under local Law,
but in which Co-Marketing is required under local Law.
"Combination Therapy". Combination Therapy shall mean either (a) a
fixed dose product containing more than one (1) active pharmaceutical ingredient
or (b) separate co-administration products sold in combination.
"Commencement Notice". Commencement Notice shall have the meaning
assigned to it in Section 3.2(b).
"Commencement Notice Due Date". Commencement Notice Due Date shall have
the meaning assigned to it in Section 3.2(b).
"Commercialize" or "Commercialization". Commercialize or
Commercialization shall mean any and all activities directed to marketing,
promoting, distributing, importing, offering for sale and/or selling a Product,
which may include pre-launch market preparation, sampling and conducting Phase
IIIB Clinical Trials and/or Phase IV Clinical Trials.
"Commercially Reasonable Efforts". Commercially Reasonable Efforts
shall mean, with respect to the efforts to be expended by a Party with respect
to any objective, reasonable, diligent, good faith efforts to accomplish such
objective as such Party would normally use to accomplish a similar objective
under similar circumstances, it being understood and agreed that (a) with
respect to the research, Development or Commercialization of any Product, such
efforts
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shall be substantially equivalent to those efforts and resources commonly used
by a Party for a product owned by it or to which it has rights, which product is
at a similar stage in its development or product life and is of similar market
potential taking into account efficacy, safety, approved labeling, the
competitiveness of alternative products in the marketplace, the patent and other
proprietary position of the product, the likelihood of regulatory approval given
the regulatory structure involved, the profitability of the product, alternative
products and other relevant factors, and (b) with respect to the
Commercialization of any Product by Novartis, such efforts shall include those
"best practices" employed by Novartis with respect to the Commercialization of
internally discovered and developed products. Commercially Reasonable Efforts
shall be determined on a market-by-market and Product-by-Product basis, and it
is anticipated that the level of effort will change over time, reflecting
changes in the status of the Product and the market[s] involved.
"Company Contractor". Company Contractor shall have the meaning
assigned to it in the Stock Purchase Agreement.
"Company Disclosure Schedule". Company Disclosure Schedule shall mean
the disclosure schedule provided by Idenix U.S. to Novartis upon the date of
execution of, and in connection with, the Stock Purchase Agreement.
"Company Material Adverse Effect". Company Material Adverse Effect
shall have the meaning assigned to it in the Stock Purchase Agreement.
"Company Patents". Company Patents shall have the meaning assigned to
it in Section 11.1(f)(i).
"Company Property". Company Property shall have the meaning assigned to
it in Section 11.1(f)(i).
"Company Stock". Company Stock shall have the meaning assigned to it in
the Stock Purchase Agreement.
"Competing Product". Competing Product shall mean [**] Idenix [**].
[**], Competing Products shall [**] Novartis [**] Novartis' [**] the Parties
[**] hereunder.
"Competing Product Negotiation Period". Competing Product Negotiation
Period shall have the meaning assigned to it in Section 7.1(b)(i).
"Competing Product Opportunity". Competing Product Opportunity shall
have the meaning assigned to it in Section 7.1(a).
"Competing Product Opportunity Notice". Competing Product Opportunity
Notice shall have the meaning assigned to it in Section 7.1(a).
"Completion Notice". Completion Notice shall have the meaning assigned
to it in Section 3.3(a)(ii).
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"Completion Notice Due Date". Completion Notice Due Date shall have the
meaning assigned to it in Section 3.3(a)(ii).
"Computer Software". Computer Software shall have the meaning assigned
to it in Section 11.1(f)(i).
"Confidential Information". Confidential Information shall mean all
Know-How or other information, including, without limitation, proprietary
information and materials (whether or not patentable) regarding a Party's
technology, products, business information or objectives, that is designated as
confidential by the disclosing Party or is treated as confidential by the
disclosing Party in the regular course of business.
"Consent". Consent shall have the meaning assigned to it in the Stock
Purchase Agreement.
"Consolidated Co-Commercialization Budget". Consolidated
Co-Commercialization Budget shall mean, with respect to a Product, the annual
budget[s] for all Co-Commercialization Countries as set forth in the
Consolidated Co-Commercialization Plan approved by the Joint Steering Committee.
"Consolidated Co-Commercialization Plan". Consolidated
Co-Commercialization Plan shall mean, with respect to a Product, each annual
consolidated Co-Promotion plan for such Product, including the related
Consolidated Co-Commercialization Budget, for the Co-Commercialization Countries
approved by the Joint Steering Committee, which shall include the total number
of PDEs to be conducted by the Parties or their relevant Affiliates.
"Consolidated Net Sales and Expense Report". Consolidated Net Sales and
Expense Report shall mean a consolidated report setting forth in detail, for
each Product, the aggregate Net Sales, cost of goods sold, Promotion Expenses
incurred by, and PDE performance of, both Parties (and their respective
Affiliates), on a country-by-country and Product-by-Product basis, in each of
the Co-Commercialization Countries for which the Party preparing the report is
the Lead Commercialization Party.
"Contract". Contract shall have the meaning assigned to it in the Stock
Purchase Agreement.
"Contract Sales Force". Contract Sales Force shall mean the services of
sales representatives employed by a Third Party as a contract sales force.
"Contract Year". Contract Year shall mean the period beginning on the
Effective Date and ending on December 31, 2003, and each succeeding twelve (12)
month period thereafter during the Term.
"Control" or "Controlled". Control or Controlled shall mean, with
respect to any intellectual property right or other intangible property, the
possession (whether by license (other than a license granted pursuant to this
Agreement) or ownership, or by control over an Affiliate having possession by
license or ownership) by a Party, of the ability to grant to the other Party
6
access and/or a license or sublicense as provided herein without violating the
terms of any agreement with any Third Party.
"Controlling Party". Controlling Party shall mean, with respect to the
filing, prosecution and maintenance of a Joint Patent Right, (a) Novartis, in
the Novartis Territory, or (b) the Party from whom the majority of the data
underlying such Patent Application arises, with respect to the filing,
prosecution and maintenance of Joint Patent Rights in the Co-Commercialization
Countries.
"Co-Promote" or "Co-Promotion". Co-Promote or Co-Promotion shall mean,
with respect to a Product, the joint marketing and promotion of such Product by
the Parties (or their respective Affiliates), under the same trademark in each
Co-Promotion Country pursuant to the applicable Country Co-Commercialization
Plan, and the distribution and sale of such Product by the Lead
Commercialization Party
"Co-Promotion Country". Co-Promotion Country shall mean each country
included in the Major EU Countries and the U.S. Territory, other than the
Co-Branding Countries and the Co-Marketing Countries.
"Country Co-Commercialization Budget". Country Co-Commercialization
Budget shall mean the budget[s] included in the related Co-Commercialization
Plan for the relevant Co-Commercialization Country.
"Country Co-Commercialization Plan". Country Co-Commercialization Plan
shall mean the Joint Steering Committee-approved plan[s], including the related
Country Co-Commercialization Budget, developed by the relevant Joint Country
Commercialization Committee for its respective Co-Commercialization Country.
"Country Co-Promotion Report". Country Co-Promotion Report shall mean a
written report setting forth in reasonable detail the marketing and promotional
activities other than PDEs performed by a Party (or its relevant local
Affiliates) with respect to a Product in a Co- Commercialization Country.
"Country-Specific Termination". Country-Specific Termination shall have
the meaning assigned to it in Section 12.3.
"Country Term". Country Term shall mean, on a Product-by-Product and a
country-by-country basis for each country in the Territory, the period
commencing on the relevant Selection Date and ending on the latest of (a) the
latest date on which the Manufacture, use, offer for sale, sale or importation
of such Product in such country is Covered by a Valid Claim of Idenix Patent
Rights or Collaboration Patent Rights, (b) the twentieth (20th) anniversary of
the First Commercial Sale of such Product in such country, and (c) the
termination of the applicable Market Exclusivity Period, or ending on such later
date as the Parties may agree pursuant to Section 12.2.
"Covenant Intellectual Property". Covenant Intellectual Property shall
mean Novartis Intellectual Property that is first developed by Novartis or one
of its Subject Affiliates primarily in connection with its activities pursuant
to this Agreement.
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"Cover", "Covered" or "Covering". Cover, Covered or Covering shall
mean, with respect to a Patent Right, that, in the absence of a license granted
to a Person under a Valid Claim included in such Patent Right, the practice by
such Person of an invention claimed in such Patent Right would infringe such
Valid Claim (or, in the case of a Patent Right that is a Patent Application,
would infringe a Valid Claim in such Patent Application if it were to issue as a
Patent).
"Credit Agreement". Credit Agreement shall mean the Credit Agreement,
dated as of March 21, 2003, by and between Novartis and Idenix U.S.
"Detail" or "Detailing". Detail or Detailing shall mean a face-to-face
meeting in an individual or group practice setting, between a Sales
Representative of a Party or its Affiliate, on the one hand, and a Professional,
on the other hand, during which a Primary Product Presentation or a Secondary
Product Presentation is made to such Professional relating to a Product;
provided that such meeting is consistent with and in accordance with the
procedures and policies customarily employed by such Party's sales force
responsible for performing such activities for the majority of its other major
marketed pharmaceutical products, consistently applied.
"Develop" or "Development". Develop or Development shall mean (a)
preclinical and clinical drug development activities, including test method
development and stability testing, toxicology, formulation, quality
assurance/quality control development, statistical analysis, Clinical Trials
(other than Phase IIIB Clinical Trials conducted for purposes other than
labeling changes and Phase IV Clinical Trials) and regulatory affairs, product
approval and registration and (b) all other activities relating to developing
the ability to Manufacture the Products, including, without limitation, bulk
production, and Manufacturing process development until commencement of the
Manufacture of the Products intended for commercial sale.
"Development Budget". Development Budget shall mean the budget[s], as
prepared and approved in accordance with Section 4.3 or attached hereto as
Exhibit H (which attached budget[s] shall be deemed so approved), for activities
contemplated by a Development Plan with respect to each Early Selection Compound
or Selected Drug Candidate, and Products derived therefrom, and setting forth
the Development Expenses for such Products, and amended from time to time in
accordance with Section 4.3.
"Development Expenses". Development Expenses shall mean, with respect
to a Drug Candidate and Products derived therefrom, expenses and other costs,
excluding Registration Expenses, incurred by or on behalf of a Party in
connection with the worldwide Development of such Drug Candidate and Products
derived therefrom in accordance with the applicable approved Development Plan
and Development Budget, including without limitation the costs of Clinical
Trials, the preparation, collation and/or validation of data from such Clinical
Trials and the preparation of medical writing as will make the results of such
Clinical Trials an element of one or more Registration Filings; provided, that
Development Expenses shall include the cost of Phase IIIB Clinical Trials and
Phase IV Clinical Trials only if and to the extent they are intended to support
indications beyond the respective initial indications (as agreed upon by the
Parties) for the Products, to support expanded labeling for the Products, or to
satisfy requirements imposed by Regulatory Authorities in connection with
Regulatory Approvals for the Products. Development Expenses consist of:
8
(a) all Out-of-Pocket Costs incurred by the Parties or
their Affiliates, including payments made to Third Parties with respect to any
of the foregoing;
(b) the Fully Allocated Costs of internal scientific or
technical personnel engaged in such efforts, which costs, for planning purposes,
shall be determined based on the FTE Rate or such other basis as may otherwise
be agreed by the Parties;
(c) the costs of clinical supplies for such efforts as
agreed in the applicable approved Development Plan, including (i) the Fully
Allocated Cost or Out-of-Pocket Costs, as applicable, incurred in purchasing
and/or packaging comparator drugs, (ii) disposal of clinical samples;
(d) the costs and expenses incurred in connection with
Technical Development and with other Manufacturing development activities
conducted in accordance with the Manufacturing Plans and explicitly included in
the budgets contained therein; and
(e) any other costs or expenses explicitly included in
the Development Budget corresponding to the applicable approved Development
Plan.
"Development Plan". Development Plan shall mean, with respect to each
Early Selection Compound or Selected Drug Candidate, or with respect to NM-283
as and to the extent covered in Exhibit H referred to below, and in each case
the Products derived therefrom, the plan for the Parties' worldwide Development
efforts with respect to such Early Selection Compound or Selected Drug Candidate
or NM-283, and Products derived therefrom, as prepared and/or approved in
accordance with Section 4.2 or attached hereto as Exhibit H (which attached
plan[s] shall be deemed so approved), and amended from time to time in
accordance with such Section 4.2, and, following the Selection Date for such
Products, as approved in accordance with such Section 4.2.
"Discovered Compound". Discovered Compound shall have the meaning
assigned to it in Section 3.3(a)(i).
"Drug Candidate". Drug Candidate shall mean an HBV Drug Candidate, an
HCV Drug Candidate or an Other Drug Candidate, provided, however, that no
Rejected Compound shall be considered a Drug Candidate.
"Early Selection Compound". Early Selection Compound shall mean a Drug
Candidate which is not a Selected Drug Candidate and which the Joint Steering
Committee has determined to be an "Early Selection Compound" as further set
forth in Section 4.1(b).
"Effective Date". Effective Date shall have the meaning assigned to it
in the introductory paragraph.
"EMEA". EMEA shall mean the European Medicines Evaluation Agency or any
successor agency thereto.
"Encumbrance". Encumbrance shall have the meaning assigned to it in the
Stock Purchase Agreement.
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"Entire Agreement Termination". Entire Agreement Termination shall have
the meaning assigned to it in Section 12.3.
"Environmental Law". Environmental Law shall have the meaning assigned
to it in Section 11.1(h)(i).
"Excess Amount". Excess Amount shall have the meaning assigned to it in
Section 8.3(b)(ii)(B).
"Executive Officers". Executive Officers shall mean the Chief Executive
Officer of Idenix (or a senior executive officer of Idenix designated by Idenix'
Chief Executive Officer) and the Chief Executive Officer of Novartis (or a
senior executive officer of Novartis designated by Novartis' Chief Executive
Officer).
"FDA". FDA shall mean the United States Food and Drug Administration or
any successor agency thereto.
"Field". Field shall mean the prevention, treatment, diagnosis and/or
control of any human disease.
"First Commercial Sale". First Commercial Sale shall mean, with respect
to a Product in a country, the first sale of such Product by a Party or one of
its Affiliates or sublicensees to a Third Party in accordance with the laws and
regulations of such country on arm's length commercial terms which are
reasonably expected to be substantially similar to future terms of sale of such
Product to Third Parties for commercial use by patients in such country. Sales
for test marketing, Clinical Trial purposes or compassionate or similar use
shall not be considered to constitute a First Commercial Sale.
"Foreign Acceptance Date". Foreign Acceptance Date shall have the
meaning assigned to it in Section 8.2(b).
"FTE". FTE shall mean a full-time equivalent person year (taking into
account customary holiday and vacation periods and sick days, but in no event
less than 1,760 hours) of scientific, technical or managerial work on studies or
activities performed in accordance with the applicable Development Plan, in
connection with obtaining Regulatory Approvals for the Products or, in certain
circumstances, its connection with the Commercialization of a Product.
"FTE Rate". FTE Rate shall mean (a) with respect to the Contract Year
beginning on the Effective Date and ending on December 31, 2003, $[**] per FTE
and (b) with respect to each succeeding Contract Year during the Term, the FTE
Rate for the immediately preceding Contract Year increased, on January 1 of each
such Contract Year, by the percentage increase, if any, in the United States
Consumer Price For All Urban Consumers, Urban Wage Earners and Clerical Workers
(or any comparable successor index thereto).
"Fully Allocated Cost". Fully Allocated Cost shall mean, with respect
to an activity, all direct and indirect costs and overhead allocable to the
conduct of such activity in accordance with GAAP or IAS, including, without
limitation, costs of raw materials, supplies, other resources consumed in the
conduct of such activity, rent, real estate depreciation, utilities,
10
insurance, equipment lease payments, equipment depreciation and labor, plus
selling, general and administrative and similar expenses reasonably allocated to
the conduct of such activity.
"Fully Diluted Common Stock Deemed Outstanding". Fully Diluted Common
Stock Deemed Outstanding shall have the meaning assigned to it in the
Stockholders' Agreement.
"GAAP". GAAP shall mean generally accepted accounting principles in the
United States.
"Global Harmonized Clinical Trial Guidelines". Global Harmonized
Clinical Trial Guidelines shall mean the guidelines, applicable to pre-clinical
trials and Clinical Trials, which are developed by the ICH, as enacted in Law by
ICH member countries and those adherent countries which are not formal parties
to the ICH but which adhere to the tenets of the ICH process in whole or in
part.
"Global Projected NPV". Global Projected NPV shall mean, with respect
to an Other Product, the NPV of the projected worldwide sales of such Other
Product.
"Good Practices". Good Practices shall mean compliance with the
applicable standards contained in then-current "Good Laboratory Practices,"
"Good Manufacturing Practices" and/or "Good Clinical Practices," as promulgated
by the FDA and all analogous guidelines promulgated by the EMEA or the ICH.
"Governmental Entity". Governmental Entity shall have the meaning
assigned to it in the Stock Purchase Agreement.
"Gross Margin". Gross Margin shall mean, with respect to each
Co-Commercialization Country, the Net Sales of the Products by the Parties or
their Affiliates in such country, minus the cost of goods sold for the Products,
which cost of goods sold is determined as the price paid by the Parties (or
their Affiliates) for the Products sold in such country.
"Hazardous Materials". Hazardous Materials shall have the meaning
assigned to it in Section 11.1(h)(ii).
"HBV". HBV shall mean hepatitis B virus.
"HBV Drug Candidate". HBV Drug Candidate shall mean, individually or in
combination, LdT or LdC.
"HBV License". HBV License shall have the meaning assigned to it in
Section 6.1(b)(i).
"HBV Products". HBV Products shall have the meaning assigned to it in
the definition of "Product".
"HCV". HCV shall mean hepatitis C virus.
11
"HCV Drug Candidate". HCV Drug Candidate shall mean a drug candidate,
including prodrugs, active metabolites, polymorphs, salts, hydrates, solvates,
enantiomers and/or esters having the same active moiety, for the treatment of
HCV Controlled by Idenix during the Term.
"HCV Failure". HCV Failure shall have the meaning assigned to it in the
definition of "Selected HCV Drug Candidate".
"HCV Product". HCV Product shall have the meaning assigned to it in the
definition of "Product".
"Hepatitis Product Payment Percentages". Hepatitis Product Payment
Percentages shall have the meaning assigned to it in Section 8.8(c).
"Hepatitis Products Approval Milestone NPV". Hepatitis Products
Approval Milestone NPV shall have the meaning assigned to it in Section 8.8(c).
"Hepatitis Products License Fees NPV". Hepatitis Products License Fees
NPV shall have the meaning assigned to it in Section 8.8(c).
"Hepatitis Products NPV". Hepatitis Products NPV shall have the meaning
assigned to it in Section 8.8(c).
"HIV". HIV shall mean human immunodeficiency virus.
"IAS". IAS shall mean the International Accounting Standards.
"ICH". ICH shall mean the International Conference on Harmonisation of
Technical Requirements for Registration of Pharmaceuticals for Human Use.
"Idenix". Idenix shall have the meaning assigned to it in the
introductory paragraph.
"Idenix Cayman". Idenix Cayman shall have the meaning assigned to it in
the introductory paragraph.
"Idenix U.S.". Idenix U.S. shall have the meaning assigned to it in the
introductory paragraph.
"Idenix Intellectual Property". Idenix Intellectual Property shall mean
Idenix Know-How and Idenix Patent Rights, collectively.
"Idenix Know-How". Idenix Know-How shall mean any Know-How that (a)
either (i) is Controlled by Idenix on the Effective Date or (ii) comes within
Idenix' Control during the Term, and (b) relates to the Development, Manufacture
and/or Commercialization of a Drug Candidate or related Product[s]; provided,
however, that Idenix Know-How in any event excludes Idenix' rights in Joint
Know-How.
"Idenix Patent Rights". Idenix Patent Rights shall mean Patent Rights
that (a) Cover Idenix Know-How and (b) are Controlled by Idenix, including
without limitation the Patent
12
Rights set forth on Exhibit C, which shall be identified specifically as to the
owner[s] thereof and whether relating to the treatment of HBV, HCV or HIV
infection, or relating to an Other Drug Candidate; provided, however, that
Idenix Patent Rights in any event excludes Idenix' rights in Joint Patent
Rights.
"Idenix Sole Inventions". Idenix Sole Inventions shall have the meaning
assigned to it in Section 10.1(a).
"Indemnified Party". Indemnified Party shall have the meaning assigned
to it in Section 11.5(c)(i).
"Indemnifying Party". Indemnifying Party shall have the meaning
assigned to it in Section 11.5(c)(i).
"Initial HCV Drug Candidate". Initial HCV Drug Candidate shall have the
meaning assigned to it in the definition of "Selected HCV Drug Candidate".
"Initial Response Period". Initial Response Period shall have the
meaning assigned to it in Section 7.1(b)(i).
"Insolvent Party". Insolvent Party shall have the meaning assigned to
it in Section 12.5.
"Intellectual Property". Intellectual Property shall have the meaning
assigned to it in Section 11.1(f)(i).
"Interferon". Interferon shall have the meaning assigned to it in
Section 4.5.
"Interferon Acceptance Notice". Interferon Notice shall have the
meaning assigned to it in Section 4.5.
"Interferon Availability Notice". Interferon Notice shall have the
meaning assigned to it in Section 4.5.
"Interferon License". Interferon License shall have the meaning
assigned to it in Section 6.2(b)(i).
"Invalidity Claim". Invalidity Claim shall have the meaning assigned to
it in Section 10.5.
"IP Contracts". IP Contracts shall have the meaning assigned to it in
Section 11.1(f)(i).
"Joint Country Commercialization Committee". Joint Country
Commercialization Committee shall have the meaning assigned to it in Section
2.3(d).
"Joint Intellectual Property". Joint Intellectual Property shall mean
Joint Know-How and Joint Patent Rights, collectively.
"Joint Inventions". Joint Inventions shall have the meaning assigned to
it in Section 10.1(b).
13
"Joint Know-How". Joint Know-How shall mean any Know-How that is
developed or acquired jointly by the Parties in connection with their
collaborative activities pursuant to this Agreement, including Joint Inventions.
"Joint Manufacturing Committee". Joint Manufacturing Committee shall
have the meaning assigned to it in Section 2.3(c).
"Joint Operations Committee". Joint Operations Committee shall have the
meaning assigned to it in Section 2.3(b).
"Joint Patent Rights". Joint Patent Rights shall mean Patent Rights
that Cover Joint Know-How.
"Joint Steering Committee". Joint Steering Committee shall have the
meaning assigned to it in Section 2.3(a).
"Joint Sub-Committee". Joint Sub-Committee shall mean the Joint
Operations Committee, the Joint Manufacturing Committee, any Joint Country
Commercialization Committee or any other joint committee established by the
Joint Steering Committee in accordance with Section 2.3(a)(viii).
"Judgment". Judgment shall have the meaning assigned to it in the Stock
Purchase Agreement.
"Know-How". Know-How shall mean any information or materials, whether
or not proprietary or patentable and whether stored or transmitted in oral,
documentary, electronic or other form, Controlled by a Party during the Term
that is necessary or useful for the Development, Commercialization or
Manufacture of the Drug Candidates or the Products. Know-How may include,
without limitation, ideas, concepts, formulas, methods, procedures, designs,
compositions, plans, documents, data, inventions, discoveries, developments,
works of authorship, biological materials, and any information relating to
research and development plans, experiments, results, compounds, therapeutic
leads, candidates and products, clinical and preclinical data, trade secrets and
Manufacturing, marketing, financial, regulatory, personnel and other business
information and plans, and any scientific, clinical, regulatory, marketing,
financial and commercial information or data; in each case, to the extent
necessary or useful for the Development, Commercialization or Manufacture of the
Drug Candidates or the Products.
"Late-Stage In-Licensed ODC". Late-Stage In-Licensed ODC shall have the
meaning assigned to it in Section 3.3(c)(i).
"Launch Date". Launch Date shall mean, with respect to a Product in a
country, the first date on which such Product becomes available for commercial
sale to Third Party purchasers in such country in the ordinary course of
business after: (a) receipt of all required Regulatory Approvals, including, if
applicable, Pricing Approval and import approval; (b) establishment of full
commercial channels of distribution prior to the First Commercial Sale in such
country; and (c) sufficient Product inventory has been procured to meet
reasonably anticipated levels of demand.
14
"Law". Law shall mean any law, statute, rule, regulation, ordinance or
other pronouncement having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision,
domestic or foreign.
"Lead Commercialization Party". Lead Commercialization Party shall
mean, with respect to each Product in a Co-Commercialization Country, whichever
of Novartis or Idenix has been designated hereunder (or by the Joint Steering
Committee) as having responsibility for the distribution and sale of such
Product in such country, and with respect to each Product in a Co-Marketing
Country, both Novartis and Idenix.
"Lead Regulatory Party". Lead Regulatory Party shall mean, with respect
to each Product, whichever of Novartis or Idenix has been designated hereunder
(or by the Joint Steering Committee) as having responsibility for preparing,
prosecuting and maintaining Registration Filings and Regulatory Approvals
relating to such Product, and for related regulatory duties, as further set
forth in Section 4.7 or Exhibit K, as applicable
"LdC". LdC shall mean beta-L-deoxy-cytidine, including prodrugs (e.g.,
valtorcitabine), active metabolites, polymorphs, salts, hydrates, solvates,
enantiomers, and/or esters having the same active moiety as
beta-L-deoxy-cytidine, as more specifically described in Exhibit A to this
Agreement.
"LdC Product". LdC Product shall have the meaning assigned to it in the
definition of "Product".
"LdC+LdT Product". LdC+LdT Product shall have the meaning assigned to
it in the definition of "Product".
"LdT". LdT shall mean beta-L-deoxy-thymidine (also known as
telbuvidine), including prodrugs, active metabolites, polymorphs, salts,
hydrates, solvates, enantiomers, and/or esters having the same active moiety as
beta-L-deoxy-thymidine, as more specifically described in Exhibit B to this
Agreement.
"LdT Product". LdT Product shall have the meaning assigned to it in the
definition of "Product".
"Licensed Compound". Licensed Compound shall have the meaning assigned
to it in Section 3.3(a)(i).
"License Fee Percentage". License Fee Percentage shall have the meaning
assigned to it in Section 8.8(c).
"License Notice". License Notice shall have the meaning assigned to it
in Section 3.3(c)(i).
"License Opportunity". License Opportunity shall have the meaning
assigned to it in Section 3.3(c)(i).
15
"License Response". License Response shall have the meaning assigned to
it in Section 3.3(c)(i).
"License Response Period". License Response Period shall have the
meaning assigned to it in Section 3.3(c)(i).
"License Terms". License Terms shall have the meaning assigned to it in
Section 3.3(c)(i).
"Major EU Countries". Major EU Countries shall mean the United Kingdom,
France, Germany, Italy and Spain, and their respective territories and
possessions.
"Majority Equity Standard Period". Majority Equity Standard Period
shall mean the period commencing on the Effective Date and terminating on the
later of (a) the sixtieth (60th) consecutive day on which Novartis and its
Affiliates own less than fifty-one percent (51%) of the Voting Stock of Idenix
and (b) if applicable, the cure by Idenix of any then-outstanding breach of its
obligations under Section 4 of that certain Stockholders' Agreement, dated as of
the date hereof, by and among Idenix U.S., Novartis and the other stockholders
of Idenix U.S. signatory thereto (the "Stockholders' Agreement"); provided, that
the question of whether or not there has occurred such a breach shall be
resolved under the provisions of Section 13.6 (unless such a determination has
been made or a dispute resolution process has been commenced under the relevant
provisions of the Stockholders' Agreement, in which case such determination
shall control).
"Manufacture" or "Manufacturing". Manufacture or Manufacturing shall
mean any and all operations involved or relating to the manufacturing, quality
control testing (including in-process, release and stability testing), releasing
and/or packaging, for clinical and/or commercial purposes, of, as applicable,
each HCV Drug Candidate (to the extent contemplated under the Supply Agreement),
each Selected Drug Candidate and each Product.
"Manufacturing Plan". Manufacturing Plan shall mean, with respect to
each HCV Drug Candidate (to the extent contemplated under the Supply Agreement),
each Selected Drug Candidate and each Product, the plan for the Parties'
worldwide development of Manufacturing capability, including Technical
Development, for such Drug Candidates and Products to support the Development
and Commercialization thereof as such plan is developed, adopted and amended
from time to time by the Joint Manufacturing Committee. Each Manufacturing Plan
shall contain a budget for the Manufacturing development activities set forth
therein, which budget shall be considered part of the corresponding Development
Budget for the applicable Drug Candidate and Product[s].
"Market Exclusivity Period". Market Exclusivity Period shall mean, with
respect to each Product in each country, that period of time during which (a)
[a] Party[ies] has [have] the exclusive legal right, whether by means of [a]
Valid Claim[s] in [a] Patent Right[s] or through other rights granted by a
governmental authority in such country (each Patent Right containing such claim
or each such other right, a "Market Exclusivity Right"), to market, price and
sell such Product in such country, and (b) no generic equivalent of such Product
is marketed in such country.
16
"Market Exclusivity Right". Market Exclusivity Right shall have the
meaning assigned to it in the definition of "Market Exclusivity Period".
"Matching Rights Period". Matching Rights Period shall mean the period
commencing on the date, if any, that the ODC Rights Period ends, and ending on
the second anniversary thereof.
"Material Owned Property". Material Owned Property shall have the
meaning assigned to it in Section 11.1(f)(i).
"Minimum Equity Standard Period". Minimum Equity Standard Period shall
mean the period commencing on the Effective Date and terminating on the later of
(a) the sixtieth (60th) consecutive day on which Novartis and its Affiliates own
less than thirty percent (30%) of the Voting Stock of Idenix and (b) if
applicable, the cure by Idenix of any then-outstanding breach of its obligations
under Section 4 of the Stockholders' Agreement, subject to the proviso to the
definition of "Majority Equity Standard Period".
"Monitoring Party". Monitoring Party shall have the meaning assigned to
it in Section 5.18.
"MR Opportunity". MR Opportunity shall have the meaning assigned to it
in Section 3.3(b)(i).
"MR Opportunity Agreement". MR Opportunity Agreement shall have the
meaning assigned to it in Section 3.3(b)(ii).
"MR Response". MR Response shall have the meaning assigned to it in
Section 3.3(b)(ii).
"MR Response Period". MR Response Period shall have the meaning
assigned to it in Section 3.3(b)(ii).
"MR Terms". MR Terms shall have the meaning assigned to it in Section
3.3(b)(i).
"NDA". NDA shall have the meaning assigned to it in the definition of
"Registration Filing".
"Net Sales". Net Sales shall mean, with respect to any Product, the
gross invoiced sales price of such Product by a Party, its Affiliates and its
sublicensees to Third Parties, less the following deductions to the extent
included in the gross invoiced sales price for such Product or otherwise
directly paid or incurred by such Party, its Affiliates or sublicensees with
respect to the sale of such Product:
(a) normal and customary trade and quantity discounts
actually allowed and properly taken directly with respect to sales of such
Product;
(b) amounts repaid or credited by reason of rejections,
recalls, returns, rebates and allowances;
17
(c) chargebacks and other amounts paid on sale or
dispensing of such Product;
(d) retroactive price reductions that are actually
allowed or granted;
(e) tariffs, duties, excise, sales, value-added or other
taxes (other than taxes based on income);
(f) cash discounts for timely payment;
(g) delayed ship order credits; and
(h) discounts pursuant to patient discount programs,
including without limitation Together Rx and coupon discounts.
In the case of any sale of Products for consideration other than cash,
such as barter or countertrade, Net Sales shall be calculated on the fair market
value of the consideration received.
In the event a Product (for purposes of this paragraph, the "relevant
Product") comprises a Selected Drug Candidate and an additional active
pharmaceutical ingredient sold in a country in combination for use as a
fixed-dose Product as a Combination Therapy, and both a Product comprising the
Selected Drug Candidate as the sole active ingredient and a pharmaceutical
product containing such additional active pharmaceutical ingredient as the sole
active ingredient are sold separately in such country, the Net Sales for the
relevant Product in such country shall be calculated by multiplying Net Sales in
such country (as would otherwise be determined in accordance with the definition
of "Net Sales" as set forth in this Article 1 (i.e., without giving effect to
this paragraph or the immediately following paragraph) based on the gross
invoiced sales price of the relevant Product minus applicable deductions and
taking into account the fair market value of any non-cash consideration) by the
fraction A/(A+B), where A is the gross invoiced sales price in such country of
the Product comprising the Selected Drug Candidate as the sole active ingredient
(when sold separately from the Combination Therapy), and B is the gross invoiced
sales price in such country of the pharmaceutical product comprising the
additional active pharmaceutical ingredient as the sole active ingredient (when
sold separately from the Combination Therapy). Notwithstanding the foregoing,
the fractional adjustment set forth in this paragraph shall not apply (and the
fractional adjustment and procedures in the immediately following paragraph
shall apply instead) in the event actual sales of the separate pharmaceutical
product comprising the additional active pharmaceutical ingredient as the sole
active ingredient are not more than incidental in such country.
In the event a Product (for purposes of this paragraph, the "relevant
Product") comprises a Selected Drug Candidate and an additional active
pharmaceutical ingredient sold in a country in combination for use as a
fixed-dose Product as a Combination Therapy, and either a Product comprising the
Selected Drug Candidate as the sole active ingredient or the pharmaceutical
product comprising the additional active pharmaceutical ingredient as the sole
active ingredient is not sold separately in such country, the Net Sales for the
relevant Product in such country shall be calculated by multiplying Net Sales in
such country (as would otherwise be determined in accordance with the definition
of "Net Sales" in this Article 1 (i.e., without giving effect to this paragraph
or the immediately preceding paragraph) based on the gross invoiced sales price
of the
18
relevant Product minus applicable deductions and taking into account the fair
market value of any non-cash consideration) by the fraction A/(A+B), where A is
the fair market value in such country of the Product comprising the Selected
Drug Candidate as the sole active ingredient (when or if it were (as applicable)
sold separately from the Combination Therapy), and B is the fair market value in
such country of the pharmaceutical product comprising the additional active
pharmaceutical ingredient as the sole active ingredient (when or if it were (as
applicable) sold separately from the Combination Therapy). For purposes of
calculating the fraction specified in the immediately preceding sentence,
Novartis shall make a written proposal to the Joint Steering Committee, for its
review and approval, of the fair market value of each component of such
fraction, reasonably supported by written documentation. If the Joint Steering
Committee is unable to reach agreement on such matters, the provisions of
Section 13.6 shall apply.
For clarification purposes, there shall be no fractional adjustment in
the calculation of Net Sales (i.e., no effect shall be given to the immediately
preceding two paragraphs) with respect to any Product comprising a Selected Drug
Candidate that is sold together or promoted as a combination with a separate
pharmaceutical product (including any interferon) for co-administration as a
Combination Therapy.
"NM-283". NM-283 shall mean a 2'-C-Methyl-cytidine-3'-O-L-valine ester
(dihydrochloride salt) or val-mCyd.
"Non-Breaching Party". Non-Breaching Party shall have the meaning
assigned to it in Section 12.3.
"Non-Competition Period". Non-Competition Period means, on a
country-by-country basis, the period beginning on the Effective Date and ending
on the earlier of (a) five (5) years after the Effective Date, and (b) the
expiration or termination of this Agreement with respect to each country.
"Non-Material IP". Non-Material IP shall have the meaning assigned to
it in Section 11.1(f)(i).
"Notice of Disagreement". Notice of Disagreement shall have the meaning
assigned to it in Section 4.7(f).
"Novartis". Novartis shall have the meaning assigned to it in the
introductory paragraph.
"Novartis HSE Standards". Novartis HSE Standards shall have the meaning
assigned to it in Section 11.3(b).
"Novartis HCV License". Novartis HCV License shall have the meaning
assigned to it in Section 6.1(c)(i).
"Novartis HCV Option". Novartis HCV Option shall have the meaning
assigned to it in Section 3.2(a).
"Novartis HCV Option Exercise Notice". Novartis HCV Option Exercise
Notice shall have the meaning assigned to it in Section 3.2(b).
19
"Novartis Intellectual Property". Novartis Intellectual Property shall
mean Novartis Know-How and Novartis Patent Rights, collectively.
"Novartis Know-How". Novartis Know-How shall mean any Know-How that (a)
either (i) is Controlled by Novartis on the Effective Date or (ii) comes within
Novartis' Control during the Term, and (b) relates to the Development,
Manufacture and/or Commercialization of an Early Selection Compound or a
Selected Drug Candidate, or related Products; provided, however, that Novartis
Know-How in any event excludes Novartis' rights in Joint Know-How.
"Novartis ODC Option Exercise Notice". Novartis ODC Option Exercise
Notice shall have the meaning assigned to it in Section 3.3(a)(ii).
"Novartis Patent Rights". Novartis Patent Rights shall mean Patent
Rights that (a) Cover Novartis Know-How and (b) are Controlled by Novartis;
provided, however, that Novartis Patent Rights in any event excludes Novartis'
rights in Joint Patent Rights.
"Novartis Sole Inventions". Novartis Sole Inventions shall have the
meaning assigned to it in Section 10.1(a).
"Novartis Territory". Novartis Territory shall mean worldwide, except
for the Co-Commercialization Countries and the Co-Marketing Countries.
"NPV". NPV shall mean net present value, calculated in accordance with
Exhibit E.
"ODC Late Stage Agreement". ODC Late Stage Agreement shall have the
meaning assigned to it in Section 3.3(c)(i).
"ODC License". ODC License shall have the meaning assigned to it in
Section 6.1(d)(i)(B).
"ODC Option". ODC Option shall have the meaning assigned to it in
Section 3.3(a)(i).
"ODC Rights Period". ODC Rights Period shall mean the period beginning
on the Effective Date and ending either (a) on the date on which the Majority
Equity Standard Period is first terminated, if, on such date, the Minimum Equity
Standard Period is also first terminated, or (b) on the earlier of (i) the third
(3rd) anniversary of the date on which the Majority Equity Standard Period is
first terminated or (ii) the date on which the Minimum Equity Standard Period is
first terminated, if, in the cases of clauses (i) and (ii), on the date that the
Majority Equity Standard Period is first terminated, the Minimum Equity Standard
Period has not yet terminated.
"Operating Payments". Operating Payments shall have the meaning
assigned to it in Section 8.2.
"Other Drug Candidate". Other Drug Candidate shall mean any compound
which is Controlled by Idenix, other than the HBV Drug Candidates, the Selected
HCV Drug Candidate and the Selected Other Drug Candidates, and any prodrugs,
active metabolites, polymorphs, salts, hydrates, solvates, enantiomers and/or
esters having the same active moiety as such compound.
20
"Other HCV Product". Other HCV Product shall have the meaning assigned
to it in the definition of "Product".
"Other Non-HCV Product". Other Non-HCV Product shall have the meaning
assigned to it in the definition of "Product".
"Other Product". Other Product shall have the meaning assigned to it in
the definition of "Product".
"Out-Of-Pocket Costs". Out-of-Pocket Costs shall mean costs and
expenses paid to Third Parties (or payable to Third Parties and accrued in
accordance with GAAP or IAS) by either Party and/or its Affiliates.
"Overpaid Party". Overpaid Party shall have the meaning assigned to it
in Section 5.13(b).
"Owned Property". Owned Property shall have the meaning assigned to it
in Section 11.1(f)(i).
"Party". Party shall mean either Idenix or Novartis; Parties shall mean
Idenix and Novartis.
"Patents". Patents shall have the meaning assigned to it in the
definition of "Patent Rights".
"Patent Applications". Patent Applications shall have the meaning
assigned to it in the definition of "Patent Rights".
"Patent Offices". Patent Offices shall have the meaning assigned to it
in Section 11.1(f)(v).
"Patent Rights". Patent Rights shall mean patents and all
substitutions, divisions, continuations, continuations-in-part, reissues,
reexaminations and extensions thereof and supplemental protection certificates
relating thereto, and all counterparts thereof or substantial equivalents in any
country (collectively, "Patents") and any applications for any of the foregoing
("Patent Applications").
"PDE". PDE shall mean, unless otherwise specified in a Country
Co-Commercialization Plan or Consolidated Co-Commercialization Plan, a primary
detail equivalent which is either (a) one (1) Primary Product Presentation, or
(b) two (2) Secondary Product Presentations.
"Permits". Permits shall have the meaning assigned to it in Section
11.1(i)(i).
"Person". Person shall mean any natural person, corporation, firm,
business trust, joint venture, association, organization, company, partnership
or other business entity, or any government, or any agency or political
subdivisions thereof.
21
"Phase I Clinical Trial". Phase I Clinical Trial shall mean a clinical
study, conducted in accordance with a protocol approved by the Joint Operations
Committee, of a Product in human volunteers with the endpoint of determining
initial tolerance, safety and/or pharmacokinetic information in single dose,
single ascending dose, multiple dose and/or multiple ascending dose regimens.
"Phase I/IIA Clinical Trial". Phase I/II Clinical Trial shall mean (a)
a Phase I Clinical Trial and a Phase IIA Clinical Trial, collectively, or (b) a
single clinical study meeting the requirements of a Phase I Clinical Trial and a
Phase IIA Clinical Trial.
"Phase IIA Clinical Trial". Phase IIA Clinical Trial shall mean a
clinical study, conducted in accordance with a protocol approved by the Joint
Operations Committee, of a Product in patients with the endpoint of determining
initial tolerance, safety and/or pharmacokinetic information in single dose,
single ascending dose, multiple dose and/or multiple ascending dose regimens.
"Phase IIB Clinical Trial". Phase IIB Clinical Trial shall mean a
clinical study, conducted in accordance with a protocol approved by the Joint
Operations Committee, of a Product in patients to determine initial efficacy and
dose range finding.
"Phase III Clinical Trial". Phase III Clinical Trial shall mean a
clinical study in patients, conducted in accordance with a protocol approved by
the Joint Operations Committee, which protocol is designed to ascertain efficacy
and safety of a Product for the purpose of preparing and submitting a
Registration Filing to the competent Regulatory Authority in a particular
country in the Territory.
"Phase IIIB Clinical Trial". Phase IIIB Clinical Trial shall mean Phase
III Clinical Trials commenced before receipt of Regulatory Approval in the
jurisdiction where such trials are being conducted, but which are not required
for receipt of Regulatory Approval and are conducted primarily for the purpose
of Product support (i.e., providing additional drug profile data).
"Phase IV Clinical Trial". Phase IV Clinical Trial shall mean a
clinical study initiated in a country after receipt of Regulatory Approval for a
Product in such country.
"Pirate Good". Pirate Good shall mean any good sold in a country which
infringes a Market Exclusivity Right in such country.
"Pivotal Clinical Trial". Pivotal Clinical Trial shall mean a clinical
trial, other than a Phase III Clinical Trial, which will constitute the last
clinical trial required to establish the basis upon which a Regulatory Approval
could be obtained.
"PRC". PRC shall mean the People's Republic of China.
"Pricing Approval". Pricing Approval shall mean such approval,
agreement, determination or governmental decision establishing prices for a
Product that can be charged to consumers and will be reimbursed by governmental
authorities in countries in the Territory where governmental authorities or
Regulatory Authorities of such country approve or determine pricing for
pharmaceutical products for reimbursement or otherwise.
22
"Primary Product Presentation". Primary Product Presentation shall mean
a full product presentation during a call in which key messages related to a
Product are presented in the first position and in a balanced manner consistent
with the terms of this Agreement, and at least fifty percent (50%) of the total
time of the call is spent on such presentation.
"Prior Meeting". Prior Meeting shall have the meaning assigned to it in
Section 13.6(a).
"Proceeding". Proceeding shall have the meaning assigned to it in
Section 11.1(e).
"Product". Product shall mean each of the following products, in
galenic form (packaged and labeled): (a) (i) a product containing LdT as the
sole active ingredient or as one of two or more active ingredients (other than
the LdC+LdT Product) (the "LdT Product") (ii) a product containing as the sole
active ingredients LdT and LdC in a fixed dose combination formulation (the
"LdC+LdT Product"), or (iii) a product containing LdC as the sole active
ingredient or as one of two or more active ingredients (other than the LdC+LdT
Product) (the "LdC Product") (the LdT Product, the LdC+LdT Product and the LdC
Product to be collectively referred to as the "HBV Products"), (b) a product
containing the Selected HCV Drug Candidate as the sole active ingredient or as
one of two or more active ingredients, which additional active ingredient[s] may
be an interferon (the "HCV Product"), or (c) each product containing a Selected
Other Drug Candidate as the sole active ingredient or as one of two or more
active ingredients (each, an "Other Product"), which Other Product shall be
either (i) an "Other HCV Product", if the Selected Other Drug Candidate is an
HCV Drug Candidate (a "Selected Other HCV Drug Candidate"), or (ii) an "Other
Non-HCV Product", if the Selected Other Drug Candidate is not an HCV Drug
Candidate (a "Selected Other Non-HCV Drug Candidate"). Without limitation to the
foregoing, each Other HCV Product may contain an interferon as an additional
active ingredient.
"Product/Drug-Specific Termination". Product/Drug-Specific Termination
shall have the meaning assigned to it in Section 12.3.
"Product Strategic Plan". Product Strategic Plan shall mean, with
respect to each Product, the five (5) year strategic plan prepared by the Joint
Operations Committee and approved by the Joint Steering Committee to optimize
the Development and Commercialization of such Product in the
Co-Commercialization Countries (including establishing pricing and rebate
strategies).
"Product Trademark[s]". Product Trademark[s] shall mean such
trademark[s] and service xxxx[s] as may be proposed by the Joint Operations
Committee and approved by the Joint Steering Committee, or otherwise in
accordance with this Agreement, for use in connection with the distribution,
marketing, promotion and sale of the Products in the Territory and/or
accompanying logos, trade dress and/or indicia of origin.
"Professional". Professional shall mean a physician or other health
care practitioner who is permitted, under the Laws of the country of the
Territory in which he or she works, to prescribe Products.
23
"Projected NPV in the United States". Projected NPV in the United
States shall mean that amount of Global Projected NPV which is attributable to
sales in the U.S. Territory of the relevant Selected Other Drug Candidate and
corresponding Other Products.
"Promotional Materials". Promotional Materials shall mean promotional,
advertising, communication and educational materials relating to a Product for
use in connection with the marketing, promotion and sale of such Product in the
Territory.
"Promotion Expenses". Promotion Expenses shall mean those types of
marketing, promotional and educational costs and expenses listed in Exhibit I
which are Out-of-Pocket Costs and other costs incurred by a Party or any of its
Affiliates in connection with the Co-Promotion and Co-Branding of the Products
under the approved Consolidated Co-Commercialization Plan as determined in
accordance with each Party's standard accounting procedures.
"Property". Property shall have the meaning assigned to it in Section
11.1(h)(ii).
"Proposed Resolution Deadline". Proposed Resolution Deadline shall have
the meaning assigned to it in Section 13.6(b)(iii).
"Purchase Price". Purchase Price shall have the meaning assigned to it
in Section 8.3(b)(ii)(B).
"Registered Intellectual Property". Registered Intellectual Property
shall have the meaning assigned to it in Section 11.1(f)(i).
"Registration Expenses". Registration Expenses shall mean, with respect
to a Product, all Out-of-Pocket Costs and Fully Allocated Costs incurred by or
on behalf of a Party in connection with the preparation and filing of
Registration Filings and the maintenance of Regulatory Approvals.
"Registration Filing". Registration Filing shall mean an application
submitted to a Regulatory Authority for marketing approval of a Product for a
particular indication which application contains complete details of the
Manufacture and testing of such Product, including (a) a New Drug Application
("NDA") filed with the FDA (as more fully defined in 21 CFR 314.5 et seq.) or
any successor applications or procedures, (b) except where otherwise
specifically provided in this Agreement, any equivalent of an NDA in the
Territory, and (c) all supplements and amendments that may be filed with respect
to the foregoing.
"Regulated Products". Regulated Products shall have the meaning
assigned to it in the Stock Purchase Agreement.
"Regulatory Approval". Regulatory Approval shall mean, with respect to
a Product in a country, the approval of the applicable Regulatory Authority
necessary for the marketing and sale of such Product in such country.
"Regulatory Authority". Regulatory Authority shall mean any federal,
national, multinational, state, provincial or local regulatory agency,
department, bureau or other
24
governmental entity with authority over the marketing, pricing and/or sale of a
pharmaceutical product in a country, including without limitation FDA in the
United States and EMEA in the Major EU Countries.
"Regulatory Law". Regulatory Law shall have the meaning assigned to it
in the Stock Purchase Agreement.
"Rejected Compound". Rejected Compound shall mean any compound
Controlled by Idenix with respect to which (a) Novartis has been offered the
opportunity to obtain a license therefor as required hereunder and Idenix has
complied with its obligations with respect to such compound (including, without
limitation, with respect to any rights of first refusal and matching rights),
(b) all licenses, if any, granted hereunder to Novartis with respect to such
compound have terminated or expired, and (c) all options or other rights granted
hereunder to Novartis to obtain [a] license[s] with respect to such compound
have terminated or expired.
"Release". Release shall have the meaning assigned to it in Section
11.1(h)(i).
"Restated Certificate". Restated Certificate shall have the meaning
assigned to it in the Stock Purchase Agreement.
"Sales Milestone Payments". Sales Milestone Payments shall have the
meaning assigned to it in Section 8.6(a).
"Sales Representative". Sales Representative shall mean an individual
who performs Details and other promotional activities with respect to a Product
and who has been appropriately trained and equipped by either Party or its
Affiliates to make calls concerning such Product and its approved indications as
is customary for the country wherever such individuals are employed.
"Secondary Product Presentation". Secondary Product Presentation shall
mean a full product presentation during a call in which one or more key messages
related to a Product are presented in the second position and in a balanced
manner consistent with the terms of this Agreement, and at least twenty-five
percent (25%) of the total time of the call is spent on such presentation.
"Selected Drug Candidate". Selected Drug Candidate shall mean an HBV
Drug Candidate, the Selected HCV Drug Candidate or a Selected Other Drug
Candidate.
"Selected HCV Drug Candidate". Selected HCV Drug Candidate shall mean
either (a) NM-283, including any prodrugs, active metabolites (e.g., NM-107),
polymorphs, sales, hydrates, solvates, enantiomers and/or esters having the same
active moiety (the "Initial HCV Drug Candidate"), if Novartis exercises the
Novartis HCV Option, or (b) in the event and to the extent the Parties mutually
agree, in their reasonable discretion, at any time after the Selection Date for
the HCV Product, that a Product containing the Initial HCV Drug Candidate cannot
achieve Regulatory Approval in the U.S. Territory (an "HCV Failure"), the Backup
HCV Drug Candidate, provided that Novartis funds the applicable Backup HCV
Development Expenses pursuant to Section 8.3(b)(ii).
25
"Selected Other Drug Candidate". Selected Other Drug Candidate shall
mean an Other Drug Candidate for which, as applicable, (a) Novartis has
submitted to Idenix the Novartis ODC Option Exercise Notice, (b) Novartis has
submitted to Idenix an MR Response which includes acceptance of the applicable
MR Terms or, if Novartis specifies Alternative MR Terms in the MR Response, the
Parties have entered into a mutually agreed MR Opportunity Agreement, or (c)
Novartis has submitted to Idenix a License Response which includes acceptance of
the applicable License Terms or, if Novartis specifies Alternative License Terms
in the License Response, the Parties have entered into a mutually agreed ODC
Late Stage Agreement.
"Selected Other HCV Drug Candidate". Selected Other HCV Drug Candidate
shall have the meaning assigned to it in the definition of "Product".
"Selected Other Non-HCV Drug Candidate". Selected Other Non-HCV Drug
Candidate shall have the meaning assigned to it in the definition of "Product".
"Selection Date". Selection Date shall mean (a) with respect to each
HBV Product, the Effective Date, (b) with respect to the HCV Product, the date
on which Novartis submits to Idenix the Novartis HCV Option Exercise Notice, and
(c) with respect to each Other Product, the date on which, as applicable, (i)
Novartis submits to Idenix the Novartis ODC Option Exercise Notice for the Other
Drug Candidate at issue, (ii) Novartis submits to Idenix an MR Response for the
Other Drug Candidate at issue which includes acceptance of the applicable MR
Terms or, if Novartis specifies Alternative MR Terms in the MR Response, upon
effectiveness of an MR Opportunity Agreement, if any, entered into by the
Parties, or (iii) Novartis submits to Idenix a License Response for the Other
Drug Candidate at issue which includes acceptance of the applicable License
Terms or, if Novartis specifies Alternative License Terms in the License
Response, upon effectiveness of an ODC Late Stage Agreement, if any, entered
into by the Parties.
"Severed Clause". Severed Clause shall have the meaning assigned to it
in Section 13.3.
"Shortfall Party". Shortfall Party shall have the meaning assigned to
it in Section 5.7(c).
"Sole Inventions". Sole Inventions shall have the meaning assigned to
it in Section 10.1(a).
"Stockholders' Agreement". Stockholders' Agreement shall have the
meaning assigned to it in the definition of "Majority Equity Standard Period".
"Stock Purchase Agreement". Stock Purchase Agreement shall mean the
Stock Purchase Agreement by and among Novartis, Idenix U.S. and certain holders
of equity securities of Idenix U.S., dated as of March 21, 2003.
"Subject Affiliate". Subject Affiliate shall mean any corporation,
company, partnership, joint venture and/or firm that controls, is controlled by,
or is under common control with a Party. For purposes of this definition of
Subject Affiliate, "control" shall mean (a) in the case of corporate entities,
direct or indirect ownership of one hundred percent (100%) of the stock or
shares having the right to vote for the election of directors, and (b) in the
case of non-corporate entities, direct or indirect ownership of one hundred
percent (100%) of the equity interest with
26
the power to direct the management and policies of such non-corporate entities.
The Parties acknowledge that in the case of certain entities organized under the
laws of certain countries outside the United States, the maximum percentage
ownership permitted by law for a foreign investor may be less than one hundred
percent (100%), and that in such case such lower percentage shall be substituted
in the preceding sentence; provided that such foreign investor has the power to
direct the management and policies of such entity.
"Subject Patents". Subject Patents shall have the meaning assigned to
it in Section 11.1(f)(i)
"Subject Trade Secrets". Subject Trade Secrets shall have the meaning
assigned to it in Section 11.1(f)(viii).
"Subsidiary[ies]". Subsidiary[ies] shall mean, with respect to a
Person, any and all corporations, partnerships, joint ventures, associations and
other entities controlled by such Person directly or indirectly through one or
more intermediaries.
"Sumitomo Settlement Agreement" Sumitomo Settlement Agreement shall
mean the Final Settlement Agreement, dated as of March 26, 2003, between Idenix
B.V. and Sumitomo Pharmaceuticals Co., Ltd., a copy of which is attached as
Exhibit R.
"Supply Agreement". Supply Agreement shall mean the Manufacturing and
Supply Agreement, dated as of the Effective Date, between the Parties or their
respective Affiliates, in the form attached as Exhibit D.
"Technical Development". Technical Development shall mean, with respect
to a Drug Candidate and Products derived therefrom, activities utilizing
chemical, pharmaceutical (galenical/formulation science), analytical,
engineering and quality assurance principles to produce API or finished
pharmaceutical products (i.e., in galenic form) corresponding to such Drug
Candidate or Products for clinical or commercial use, including, without
limitation, development of (a) chemical processes for manufacturing of API, (b)
pharmaceutical processes for the manufacturing of finished pharmaceutical
products, (c) analytical methods and testing procedures for API and finished
pharmaceutical products, (d) packaging for finished pharmaceutical products, and
(e) stability testing, manufacturing, validation, quality assurance, quality
control and documentation standards and/or capabilities as necessary or
appropriate. Technical Development shall not include any clinical development
activities or preclinical safety activities (e.g., toxicology, pathology, drug
metabolism, bioanalytics, pharmacokinetics and pharmacodynamics).
"Territory". Territory shall mean, with respect to a Product, the
Co-Commercialization Countries, the Co-Marketing Countries and the Novartis
Territory, collectively.
"Term". Term shall have the meaning assigned to it in Section 12.1.
"Third Party". Third Party shall mean any Person other than a Party and
its Affiliates.
"Title 11". Title 11 shall have the meaning assigned to it in Section
13.12.
27
"Trade Secrets". Trade Secrets shall have the meaning assigned to it in
Section 11.1(f)(i).
"UAB License". UAB License shall mean the License Agreement, dated as
of June 20, 1998, by and between Idenix U.S., as successor to Novirio
Pharmaceuticals Limited, and UAB Research Foundation, as amended.
"Underpaying Party". Underpaying Party shall have the meaning assigned
to it in Section 5.13(c).
"U.S. Acceptance Date". U.S. Acceptance Date shall have the meaning
assigned to it in Section 8.2(a).
"U.S. Territory". U.S. Territory shall mean the United States of
America and all of its territories and possessions, and shall include Puerto
Rico.
"Valid Claim". Valid Claim shall mean a claim (a) of any issued,
unexpired Patent that has not been revoked or held unenforceable or invalid by a
decision of a court or governmental agency of competent jurisdiction from which
no appeal can be taken, or with respect to which an appeal is not taken within
the time allowed for appeal, and that has not been disclaimed or admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise, or (b) of any
Patent Application that has not been cancelled, withdrawn or abandoned or been
pending for more than seven (7) years.
"Voting Stock". Voting Stock shall have the meaning assigned to it in
the Stockholders' Agreement.
ARTICLE 2.
MANAGEMENT OF COLLABORATION
2.1 General. The goal of the Parties is to effectively
and efficiently Develop and Commercialize the Products in a manner to maximize
their commercial value, and, subject to the terms and conditions of this
Agreement and the Supply Agreement, the Parties shall use their Commercially
Reasonable Efforts to conduct their Development and Commercialization activities
to so maximize such commercial value for both Parties in all applicable
countries in the Territory. To achieve this and other objectives, the Parties
desire to provide for (a) joint worldwide Development of the Products, (b)
Co-Promotion, Co-Branding and Co-Marketing, as applicable, of the Products in
the Co-Commercialization Countries and Co-Marketing Countries, and (c)
Commercialization of the Products by Novartis in the Novartis Territory.
2.2 Alliance Management Representatives. Each of Novartis
and Idenix shall appoint a senior representative having a general understanding
of development, regulatory, manufacturing and marketing issues to act as its
Alliance Manager ("Alliance Manager"). Each Party will notify the other Party as
to the name of the individual so appointed within thirty (30) days after the
Effective Date, and each Party may replace its Alliance Manager at any time,
upon written notice to the other Party in accordance with Section 13.2. Each
Alliance Manager shall be primarily responsible for facilitating the flow of
information and otherwise promoting
28
communications and collaboration within and among the Joint Steering Committee
and Joint Sub-Committees, between the Parties and internally within the Parties.
Each Alliance Manager will also be responsible for:
(a) facilitating coordination among the various
functional representatives of Novartis or Idenix, as appropriate;
(b) providing single-point communication for seeking
consensus both internally within the respective Party's organization and
together regarding key global strategy and plan issues, as appropriate,
including facilitating review of external corporate communications in accordance
with Section 9.5; and
(c) raising cross-country, cross-Party and/or
cross-functional disputes to the Joint Steering Committee in a timely manner.
2.3 Committees.
(a) Joint Steering Committee. The Parties shall establish
a Joint Steering Committee (the "Joint Steering Committee"), comprised of two
(2) senior executives of Idenix, two (2) senior executives of Novartis and each
Party's Alliance Manager. Each Party shall make its designation of its
representatives not later than thirty (30) days after the Effective Date. Each
Party shall designate as its representatives individuals who have the requisite
experience, knowledge and seniority to be able to make decisions on behalf of
the Party designating such individual. The Joint Steering Committee shall meet
within sixty (60) days after the Effective Date and, thereafter, at least
quarterly during the Term to:
(i) approve target profiles for the Products and
Drug Candidates;
(ii) review the efforts of the Parties in
performing their respective Development activities;
(iii) review and, except as otherwise provided in
this Agreement, approve recommendations made by the Joint Manufacturing
Committee regarding proposed amendments to the budget in the applicable
Manufacturing Plan;
(iv) review and approve Consolidated
Co-Commercialization Plans, Consolidated Co-Commercialization Budgets,
Country Co-Commercialization Plans, Country Co-Commercialization
Budgets, Product Strategic Plans and other plans (including the budgets
contained therein) prepared by the Joint Sub-Committees;
(v) review and approve Product Trademarks as
proposed by the Joint Operations Committee;
(vi) review the efforts of the Parties in
performing their respective Co-Promotion and Co-Branding activities, as
applicable, in the Co-Commercialization Countries;
29
(vii) review information concerning Novartis'
Commercialization efforts in the Novartis Territory;
(viii) establish, as and when necessary and/or
appropriate, Joint Sub-Committees in addition to the Joint Operations
Committee, the Joint Manufacturing Committee and the Joint Country
Commercialization Committees, which additional Joint Sub-Committees
shall be organized in such a manner, be delegated such responsibilities
and report to the Joint Steering Committee or such other Joint
Sub-Committee(s) as the Joint Steering Committee deems appropriate;
(ix) review relevant information regarding, and
determine, whether Drug Candidates shall be designated as Early
Selection Compounds, as further set forth in Section 4.1(b);
(x) consider and act upon such other matters as
are specified in this Agreement; and
(xi) attempt to resolve any disputes relating to
this Agreement that may arise between the Parties.
Idenix shall designate the first chairperson of the Joint Steering Committee for
the first Contract Year, which designation shall thereafter be rotated between
the Parties at the end of each Contract Year. Each Party may from time to time
invite a reasonable number of participants (in addition to its designated
representatives) to attend meetings of the Joint Steering Committee. The
chairperson shall set agendas for the meetings of the Joint Steering Committee;
provided that the agendas shall include any matter requested by either Party.
The chairperson shall be responsible for recording, preparing and, within a
reasonable time, issuing draft minutes of meetings of the Joint Steering
Committee, which draft minutes shall be reviewed, modified and approved by the
members of the Joint Steering Committee. All decisions of the Joint Steering
Committee shall be made by unanimous vote of the Parties, with each Party's
representatives collectively having one vote. If the Joint Steering Committee is
unable to reach agreement on any matter referred to it for resolution within
thirty (30) days after the matter is referred to it, such matter shall be
referred to the Executive Officers for resolution. If the Executive Officers are
unable to resolve a matter referred to them under this Section 2.3 within thirty
(30) days after the matter is referred to them, the provisions of Section 13.6
shall apply.
(b) Joint Operations Committee. The Parties shall
establish a Joint Operations Committee (the "Joint Operations Committee"),
comprised of three (3) representatives of Idenix and three (3) representatives
of Novartis. Each Party shall make its designation of its representatives not
later than thirty (30) days after the Effective Date. Each Party shall designate
as its representatives to the Joint Operations Committee individuals who have
the requisite experience, knowledge and seniority to be able to make the
relevant decisions on behalf of the Party designating such individual. The Joint
Operations Committee shall meet within sixty (60) days after the Effective Date
and, thereafter, as determined by the Joint Steering Committee, to:
(i) make recommendations to the Joint Steering
Committee with respect to target profiles for the Products and Selected
Drug Candidates (including key
30
labeling claims required for commercial success of the Products and
Selected Drug Candidates given the competitive environment and any
other key Product or Selected Drug Candidate features and benefits that
would be used to develop or support a promotional message for the
Products or Selected Drug Candidates);
(ii) review and, as appropriate, approve, in
accordance with Section 4.2, an updated Development Plan (excluding the
Development Budget) prepared by Idenix for each Product for Development
activities following the relevant Selection Date;
(iii) monitor the Parties' activities pursuant to
the applicable Development Plan and approve proposed amendments to the
applicable Development Plan (excluding, in any event, proposed
amendments to the Development Budget);
(iv) make recommendations to Novartis with
respect to proposed amendments to the Development Budgets;
(v) approve protocols for pre-clinical studies
and Clinical Trials of the Selected Drug Candidates and Products in the
Territory;
(vi) monitor and make modifications to the
Clinical Trials and studies set forth in clause (v) above;
(vii) review and approve material regulatory
correspondence, final study reports and submissions to Regulatory
Authorities;
(viii) facilitate an exchange between the Parties
of data, information, material and results relating to the Development
of the Selected Drug Candidates and Products in the Territory;
(ix) establish and implement procedures regarding
the collection, sharing and reporting of adverse event information
related to the Selected Drug Candidates and Products in each country in
the Territory;
(x) establish the overall strategy for the
Commercialization of the Products in the Co-Commercialization
Countries;
(xi) prepare Product Strategic Plans for the
Products;
(xii) prepare, for review and approval by the
Joint Steering Committee, an annual Consolidated Co-Commercialization
Plan (including timelines, recommendations on pricing and pricing
reimbursement strategies, discounting and rebating), based on the
then-current relevant Product Strategic Plans and Country
Co-Commercialization Plans prepared by the Joint Country
Commercialization Committees, and a Consolidated Co-Commercialization
Budget for the Products and updating such Plan and Budget in no event
less frequently than once per calendar year;
(xiii) prepare and maintain the overall plan for
Commercialization in the Co-Commercialization Countries, defining joint
planning and executing items, including,
31
without limitation, timelines, Product branding, Product positioning,
Product message, tactical plan, staffing, Detailing, budgets and
amendments thereto;
(xiv) define target groups to be covered by
overall marketing efforts in the Co-Commercialization Countries,
including without limitation key opinion leaders, physician groups,
hospitals and regional buying groups, managed care organizations and
governmental and government-affiliates buyers;
(xv) review the Parties' respective marketing and
promotional activities for consistency with the Consolidated
Co-Commercialization Plan;
(xvi) develop and propose Product Trademarks for
approval by the Joint Steering Committee and as further set forth in
Section 10.8;
(xvii) develop and implement plans and policies
regarding journal and other publications;
(xviii) develop concepts for potential Phase IIIB
Clinical Trials and Phase IV Clinical Trials; and
(xix) consider and act upon such other matters as
are specified in this Agreement or by the Joint Steering Committee.
Novartis shall designate the first chairperson of the Joint Operations Committee
for the first Contract Year, which designation shall thereafter be rotated
between the Parties at the end of each Contract Year. Each Party may from time
to time invite a reasonable number of participants (in addition to its
designated representatives) to attend meetings of the Joint Operations
Committee. The chairperson shall set agendas for each of the meetings of the
Joint Operations Committee; provided that the agendas shall include any matter
requested by either Party. The chairperson shall be responsible for recording,
preparing and, within a reasonable time, issuing draft minutes of meetings of
the Joint Operations Committee, which draft minutes shall be reviewed, modified
and approved by the members of the Joint Operations Committee. All decisions of
the Joint Operations Committee shall be made by unanimous vote of the Parties,
with each Party's representatives collectively having one vote. If the Joint
Operations Committee is unable to reach agreement on any matter referred to it
for resolution within thirty (30) days after the matter is referred to it, such
matter shall be referred to the Joint Steering Committee for resolution. The
Joint Operations Committee shall provide the Joint Manufacturing Committee with
reasonable prior notice of each meeting of the Joint Operations Committee so
that a representative from the Joint Manufacturing Committee may be present at
such meetings.
(c) Joint Manufacturing Committee. The Parties shall
establish a Joint Manufacturing Committee (the "Joint Manufacturing Committee")
comprised of three (3) representatives of Idenix and three (3) representatives
of Novartis. Each Party shall make its designation of its representatives not
later than thirty (30) days after the Effective Date. Each Party shall designate
as its representatives individuals who have the requisite experience, knowledge
and seniority to be able to make the relevant decisions on behalf of the Party
designating such individual. The Joint Manufacturing Committee shall meet (I)
within thirty
32
(30) days after the Effective Date to discuss and initiate development of a
Manufacturing Plan for the HBV Drug Candidates, (II) within ninety (90) days
after the Effective Date to discuss and initiate development of a Manufacturing
Plan for the Initial HCV Drug Candidate, (III) within thirty (30) days after
each applicable Selection Date to discuss and initiate development of a
Manufacturing Plan for each Selected Drug Candidate, and (IV) at such other
times as determined by the Joint Steering Committee. The Joint Manufacturing
Committee will:
(i) make specification, supply, fill and finish
determinations and oversee Technical Development and production and
quality issues with respect to the Initial HCV Drug Candidate, any
other HCV Drug Candidate to the extent Novartis makes an applicable
election in accordance with Section 2.4(a) of the Supply Agreement,
Selected Drug Candidates and Products;
(ii) prepare, review and (except with respect to
the budgets contained therein) approve the Manufacturing Plans for the
HCV Drug Candidates (to the extent contemplated under and/or necessary
or appropriate in connection with the Supply Agreement) and for each
Selected Drug Candidate and Product;
(iii) in connection with developing the
Manufacturing Plans, (A) forecast Manufacturing development tasks,
timelines, costs/budgets and deliverables, including Product and
relevant API validation and certification of specifications and cGMP
and quality assurance compliance, (B) perform supply chain risk
assessments (which risks assessed shall include, without limitation,
risks relating to personnel, location, natural conditions, suppliers,
infrastructure, utilities, materials, processes, past supply
performance, lead times, information technology systems and quality and
regulatory issues), and (C) prepare action plans which shall provide
for, among other things, second supply points, adequate safety stock,
adequate capacity and key performance indicators, in each case as
needed to support the approved Development Plan[s];
(iv) monitor the Parties' activities pursuant to
the Manufacturing Plans and prepare, review and (except with respect to
the budgets contained therein) approve proposed amendments, including
updates, to the Manufacturing Plans;
(v) make recommendations to the Joint Steering
Committee with respect to proposed amendments, including updates, to
the budgets contained in the Manufacturing Plans;
(vi) review Technical Development and related
information regarding Early Selection Candidates that it requests and
receives from Idenix from time to time; and
(vii) consider and act upon such other matters
relating to the Supply Agreement as necessary or appropriate, or such
matters as are specified in this Agreement or by the Joint Steering
Committee.
Idenix shall designate the first chairperson of the Joint Manufacturing
Committee for the first Contract Year, which designation shall thereafter be
rotated between the Parties at the end of
33
each Contract Year. The chairperson shall set agendas for each of the meetings
of the Joint Manufacturing Committee; provided that the agendas shall include
any matter requested by either Party. The chairperson shall be responsible for
recording, preparing and, within a reasonable time, issuing draft minutes of
meetings of the Joint Manufacturing Committee, which draft minutes shall be
reviewed, modified and approved by the members of the Joint Manufacturing
Committee. All decisions of the Joint Manufacturing Committee shall be made by
unanimous vote of the representatives of the two Parties, with each Party's
representatives collectively having one vote. If the Joint Manufacturing
Committee is unable to reach agreement on any matter referred to it for
resolution within thirty (30) days after the matter is referred to it, such
matter shall be referred to the Joint Steering Committee for resolution. A
representative from the Joint Manufacturing Committee shall be present at all
meetings of the Joint Operations Committee to provide reports and updates on the
activities of the Joint Manufacturing Committee.
(d) Joint Country Commercialization Committee. The
Parties shall establish a separate Joint Country Commercialization Committee for
each Product in each Co-Commercialization Country (each, a "Joint Country
Commercialization Committee"), each committee being comprised of three (3)
representatives of Idenix and three (3) representatives of Novartis. Each Party
shall make its designation of its representatives not later than thirty (30)
days after the applicable Selection Date. Each Party shall designate as its
representatives to the Joint Commercialization Product Committees individuals
who have the requisite experience, knowledge and seniority to be able to make
relevant decisions on behalf of the Party designating such individual.
(i) Each such Joint Country Commercialization
Committee shall meet within sixty (60) days after the applicable
Selection Date and, thereafter, as determined by the Joint Steering
Committee, to:
(A) prepare and recommend to the Joint Steering
Committee (and to Joint Operations Committee so that it may
prepare Consolidated Co-Commercialization Plans and
Consolidated Co-Commercialization Budgets) an annual Country
Co-Commercialization Plan and Country Co-Commercialization
Budget for its Co-Commercialization Country, provided, that
the Joint Country Commercialization Committee shall consider
whether to reflect any of the Commercialization and marketing
guidelines set forth in Exhibit O in such Country
Co-Commercialization Plan[s];
(B) monitor compliance with the Joint Steering
Committee-approved Country Co-Commercialization Plan for its
respective Co-Commercialization Country;
(C) provide written notification to the Joint
Operations Committee of (1) any overspends or underspends with
respect to the approved Country Co-Commercialization Budget
for its respective Co-Commercialization Country, or (2) any
divergence from the approved Country Co-Commercialization Plan
for its respective Co-Commercialization Country, in each case
stating in reasonable
34
detail the reasons therefor and the action being taken, or
proposed to be taken, with respect thereto;
(D) report details of Promotion Expenses
incurred by each Party in its respective Co-Commercialization
Country to the Joint Operations Committee;
(E) develop and implement local
scientific/promotional messages and advertising strategies
consistent with the approved Country Co-Commercialization Plan
for its respective Co-Commercialization Country and core
scientific/promotional messages and advertising guidelines
approved by the Joint Operations Committee;
(F) develop and implement strategies for the
Detailing and marketing of the Product in its respective
Co-Commercialization Country, including allocation of
responsibility for such activities, and monitoring the
Parties' performance of such activities under Section 5.7;
(G) manage allocations and spending parameters
for the relevant Product within its respective
Co-Commercialization Country, including, without limitation,
sample allocations per Sales Representative and allocation of
spending for grants, symposia and speaker programs, in
accordance with the relevant approved Country
Co-Commercialization Plan and Country Co-Commercialization
Budget;
(H) plan and conduct educational and
professional symposia in accordance with the relevant approved
Country Co-Commercialization Plan and Country
Co-Commercialization Budget;
(I) recommend to the Joint Operations Committee
for approval, appropriate Clinical Trials (including
investigator initiated studies and medical affairs studies) in
its respective Co-Commercialization Country;
(J) monitor advertising placement and market
responses;
(K) initiate and monitor market research and
pharmacoeconomic studies, plan medical/scientific liaison and
managed markets/health authority liaison support, in
accordance with the relevant approved Country
Co-Commercialization Plan and Country Co-Commercialization
Budget;
(L) recommend to the Joint Operations Committee
the number of Details to be made by each Party's Sales
Representatives in its respective Co-Commercialization Country
for each calendar quarter during the Term;
(M) prepare, and submit to the Joint Operations
Committee, Country Co-Promotion Reports for its respective
Co-Commercialization Country;
(N) monitor, and coordinate appropriate
responses to, routine medical and consumer inquiries received
by the Parties and responded to by the Parties;
35
(O) develop and implement local regulatory
strategy and labeling in accordance with the relevant approved
Product Strategic Plan, approved Development Plan, Country
Co-Commercialization Plan and Country Co-Commercialization
Budget and global guidelines;
(P) develop and implement local publication and
communication strategies in accordance with the relevant
approved Country Co-Commercialization Plan, Country
Co-Commercialization Budget and global guidelines;
(Q) make recommendations to the Joint
Manufacturing Committee regarding final product images and
packaging for the Products in its respective
Co-Commercialization Country; and
(R) determine local terms and conditions of sale
for the relevant Product (including without limitation rebates
and managed market matters) in accordance with the relevant
approved Country Co-Commercialization Plan and Country
Co-Commercialization Budget and global guidelines.
(ii) In addition to the foregoing, each Joint
Country Commercialization Committee shall manage the performance of the
approved Development Plan insofar as it relates to its relevant Product
and its respective Co-Commercialization Country. In particular, solely
with respect to its relevant Product in its respective
Co-Commercialization Country, each Joint Country Commercialization
Committee will:
(A) facilitate the exchange and reporting to the
Joint Operations Committee of all relevant Development
information and data relating to the relevant Product;
(B) at the request of the Joint Operations
Committee, provide input with respect to the proposed
Development Plan and Development Budget; and
(C) review and report to the Joint Operations
Committee on country-specific Development activities against
the then-applicable approved Development Plan.
Idenix shall designate the first chairperson of the each Joint Country
Commercialization Committee for a Product in the U.S. Territory, in each case
for the Contract Year in which the applicable Selection Date falls (or portion
thereof) plus the next succeeding Contract Year, which designation shall
thereafter be rotated between the Parties at the end of every two Contract
Years. Novartis shall designate the chairperson of each Joint Country
Commercialization Committee for a Product in each Major EU Country, and such
designation shall in no event rotate to Idenix. The chairperson shall set
agendas for each of the meetings of the applicable Joint Country
Commercialization Committee; provided that the agendas shall include any matter
requested by either Party. The chairperson shall be responsible for recording,
preparing and, within a reasonable time, issuing draft minutes of meetings of
the applicable Joint Country Commercialization Committee, which draft minutes
shall be reviewed, modified and approved by the members of the applicable Joint
Country Commercialization Committee. All decisions of
36
each Joint Country Commercialization Committee shall be made by unanimous vote
of the Parties, with each Party's representatives collectively having one vote.
If a Joint Country Commercialization Committee is unable to reach agreement on
any matter referred to it for resolution within thirty (30) days after the
matter is referred to it, such matter shall be referred to the Joint Operations
Committee for resolution.
(e) Meeting Logistics for Joint Steering Committee and
Joint Sub-Committees. The location of the meetings of each of the Joint Steering
Committee and the Joint Sub-Committees shall alternate between Boston,
Massachusetts, on the one hand, and, at the discretion of Novartis, Basel,
Switzerland or East Hanover, New Jersey, on the other hand, or as otherwise
agreed by the Parties. The Joint Steering Committee and Joint Sub-Committees may
also meet by means of a telephone or video conference call, and may take action
by vote at a meeting or telephone or video conference call, or pursuant to a
written vote. Each Party may change any one or more of its representatives to
the Joint Steering Committee and/or the Joint Sub-Committees at any time upon
notice to the other Party in accordance with Section 13.2. Each Party shall use
reasonable efforts to cause its representatives to attend the meetings of the
Joint Steering Committee and the Joint Sub-Committees. If a representative of a
Party is unable to attend a meeting, such Party may designate an alternate to
attend such meeting in place of the absent representative. In addition, each
Party may, at its discretion, invite non-voting employees, and, with the consent
of the other Party, consultants or scientific advisors (provided they are
engaged under obligations of confidentiality) to attend the meetings of the
Joint Steering Committee and/or the Joint Sub-Committees.
(f) Costs of Committee Participation. Each Party shall
bear its own costs associated with its participation in the Joint Steering
Committee and the Joint Sub-Committees. For clarity, such costs shall not be
includable in Development Expenses or Registration Expenses.
ARTICLE 3.
DESIGNATION OF PRODUCTS
3.1 HBV Products. The Parties acknowledge and agree that
the HBV Drug Candidates are Selected Drug Candidates.
3.2 HCV Option.
(a) Option. Subject to the terms and conditions of this
Agreement, Idenix hereby grants to Novartis an exclusive option (the "Novartis
HCV Option") to obtain the Novartis HCV License.
(b) Exercise. Without limitation to Idenix' obligations
to provide Novartis quarterly written reports pursuant to Section 4.1, Idenix
shall provide written notice to Novartis of its anticipated commencement of a
Phase III Clinical Trial or a Pivotal Trial with respect to the Initial HCV Drug
Candidate at least ninety (90) days prior to such anticipated commencement (the
"Commencement Notice"), such notice to include a proposed Development Plan and
Development Budget. Novartis may exercise the Novartis HCV Option by submitting
a
37
written notice to Idenix requesting the Novartis HCV License together with the
fee to be paid by Novartis pursuant to Section 8.1(b) (such notice and fee
together, the "Novartis HCV Option Exercise Notice") on or before the later of
the commencement of a Phase III Clinical Trial or a Pivotal Clinical Trial with
respect to the Initial HCV Drug Candidate, on the one hand, or the expiration of
ninety (90) days after Novartis' receipt of the Commencement Notice, on the
other hand (such later date, the "Commencement Notice Due Date").
(c) Idenix Rights. So long as Idenix has provided
Novartis with the Commencement Notice in accordance with paragraph (b) above, if
Novartis has not submitted to Idenix a Novartis HCV Option Exercise Notice on or
before the Commencement Notice Due Date, then Idenix shall be thereafter free,
without any further obligation to Novartis, to Develop and Commercialize, in all
areas of the world, the Initial HCV Drug Candidate and any products of which the
Initial HCV Drug Candidate constitutes a part, either alone or with Third
Parties. Notwithstanding the foregoing, if a Clinical Trial other than a Phase
III Clinical Trial or a Pivotal Trial with respect to the Initial HCV Drug
Candidate is converted into or otherwise becomes the equivalent of a Phase III
Clinical Trial or a Pivotal Trial, then Idenix shall provide written notice
thereof to Novartis, such notice to include a proposed Development Plan and
Development Budget, as soon as commercially practicable and Novartis shall
thereafter have ninety (90) days after the date of receipt of such notice to
exercise the Novartis HCV Option by submitting to Idenix a Novartis HCV Option
Exercise Notice; provided, however, that Novartis shall use Commercially
Reasonably Efforts to make a decision (and submit to Idenix a Novartis HCV
Option Exercise Notice) as soon as practicable so as not to delay the
commencement of any additional Clinical Trials. In any event, if Novartis has
not submitted to Idenix a Novartis HCV Option Exercise Notice prior to the
expiration of such ninety (90) day period, then Idenix shall be thereafter free,
without any further obligation to Novartis, to Develop and Commercialize, in all
areas of the world, the Initial HCV Drug Candidate and any products of which the
Initial HCV Drug Candidate constitutes a part, either alone or with Third
Parties.
3.3 ODC Options.
(a) Option.
(i) Subject to the terms and conditions of this
Agreement, Idenix hereby grants to Novartis, during the ODC Rights
Period, an exclusive option (each, an "ODC Option") to obtain the
relevant ODC License with respect to each Other Drug Candidate and the
Other Products derived therefrom, once such Other Drug Candidate has
reached the endpoints of (A) a Phase I/IIA Clinical Trial with respect
to such Other Drug Candidate, in the case of any compound discovered by
Idenix or on behalf of Idenix incident to a directed research contract
or sponsored research agreement (a "Discovered Compound"), or (B) a
Phase IIB Clinical Trial with respect to such Other Drug Candidate, in
the case of any compound licensed-in by Idenix (other than a Discovered
Compound) (a "Licensed Compound").
(ii) Exercise. Without limitation to Idenix'
obligations to provide quarterly written reports pursuant to Section
4.1, Idenix shall provide written notice to Novartis not later than
forty-five (45) days after the last patient to be enrolled in the trial
has completed treatment in the relevant Phase I/IIA Clinical Trial, in
the case of a
38
Discovered Compound, or of the relevant Phase IIB Clinical Trial, in
the case of a Licensed Compound. Such notice will include a proposed
Development Plan and Development Budget and efficacy, safety and such
other related material information from the final data set for the
relevant Phase I/IIA (in the case of a Discovered Compound) or Phase
IIB Clinical Trial (in the case of a Licensed Compound) (the
"Completion Notice"). In addition, Idenix shall include in the
Completion Notice its proposals for milestone payments, including a
proposed payment schedule, as determined by Idenix, and to be
considered by Novartis, in accordance with Section 8.8. Such proposals
shall be considered by Novartis and, if Novartis exercises its ODC
Option, agreed upon by the Parties in accordance with Section 8.8.
Novartis may exercise the ODC Option with respect to the relevant Other
Drug Candidate and the Other Products derived therefrom, by submitting
a written notice to Idenix requesting the relevant ODC License (the
"Novartis ODC Option Exercise Notice") on or before the later of (A)
the completion of the Phase I/IIA Clinical Trial or Phase IIB Clinical
Trial, on the one hand and as the case may be, or (B) the expiration of
ninety (90) days after Novartis' receipt of the Completion Notice, on
the other hand (such later date (A) or (B), the "Completion Notice Due
Date"), and upon such submission the applicable license to Novartis
under Section 6.1(d)(i) shall be deemed effective; provided, however,
that in the event the Parties cannot agree on projections, milestone
payments and/or payment schedules and, in accordance with the
provisions of Section 8.8, the disagreement becomes subject to the
provisions of Section 13.6, the Completion Notice Due Date shall be
extended to a date that is sixty (60) days after the disagreement is
resolved in accordance with Section 13.6.
(iii) Idenix Rights. Subject to the provisions of
Section 3.4, so long as Idenix has provided Novartis with the
Completion Notice in accordance with paragraph (ii) above, if Novartis
has not submitted to Idenix a Novartis ODC Option Exercise Notice on or
before the Completion Notice Due Date, then Idenix shall be thereafter
free, without any further obligation to Novartis, to Develop and
Commercialize, in all areas of the world, the relevant Other Drug
Candidate and the Other Products derived therefrom, either alone or
with Third Parties.
(b) Matching Rights.
(i) Opportunities. If, at any time during the
Matching Rights Period, (A) an Other Drug Candidate has reached the
endpoints of (1) a Phase I/IIA Clinical Trial, in the case of a
Discovered Compound, or (2) a Phase IIB Clinical Trial, in the case of
a Licensed Compound, and (B) Idenix intends to Develop or
Commercialize, in collaboration with one or more Third Parties, such
Other Drug Candidate and the Other Products derived therefrom (an "MR
Opportunity"), then Idenix shall provide written notice of such intent
to Novartis, which notice shall include information reasonably
necessary to enable Novartis to make an informed decision with respect
to such MR Opportunity, including all materials terms and conditions, a
proposed Development Plan and Development Budget and all efficacy,
safety and such other related material information from the final data
set for the relevant Phase I/IIA Clinical Trial (in the case of a
Discovered Compound) or Phase IIB Clinical Trial (in the case of a
Licensed Compound) (the "MR Terms"). For purposes of clarity, Idenix
shall be free, without any obligation to Novartis, to itself, to the
exclusion of all Third Parties (other than
39
subcontractors of Idenix such as contract research organizations,
contract manufacturers, contract employees, consultants and the like
which merely conduct activities on behalf of Idenix and subject to
Idenix' supervision and control), to Develop and Commercialize anywhere
in the world any Other Drug Candidate, and the Other Products derived
therefrom, which reached the endpoints of (C) a Phase I/IIA Clinical
Trial, in the case of a Discovered Compound, or (D) a Phase IIB
Clinical Trial, in the case of a Licensed Compound, at any time during
or after the Matching Rights Period.
(ii) Process. Novartis shall notify Idenix in
writing within [**] days after receipt of the MR Terms (the "MR
Response Period"; such notice, the "MR Response") if it wishes to
accept such MR Terms, upon which acceptance the Parties shall be bound
by such MR Terms and, without prejudice to the binding nature of such
MR Terms, the Parties shall use Commercially Reasonable Efforts to
execute a definitive agreement (each, an "MR Opportunity Agreement")
reflecting such MR Terms within [**] days after the date of the MR
Response. However, Novartis may specify in the MR Response terms other
than the MR Terms which Novartis is willing to accept (the "Alternative
MR Terms"), in which case the Parties shall not be bound to any terms
unless and until they enter into an MR Opportunity Agreement on
mutually agreed to terms.
(iii) Idenix Rights. Subject to the provisions of
Section 3.4, if (A) Novartis does not respond during the MR Response
Period, (B) Novartis indicates during the MR Response Period that it
has no interest in accepting the MR Terms, or (C) Novartis specifies
Alternative MR Terms (and the Parties do not enter into an applicable
MR Opportunity Agreement), then Idenix shall be free thereafter,
without any further obligation to Novartis, to Develop and
Commercialize such Other Drug Candidate and Other Products derived
therefrom anywhere in the world, itself or through Third Parties,
which, if done in conjunction with [a] Third Party[ies], shall be on
terms not more favorable, taken as a whole, to such Third Party[ies],
than the MR Terms (if Novartis did not propose Alternative MR Terms) or
the Alternative MR Terms (if Novartis did propose Alternative MR
Terms).
(c) Other Drug Candidates In-Licensed At or After Phase
III.
(i) Right of First Refusal. If, at any time
during the Term, (A) an Other Drug Candidate (and any Other Products
derived therefrom) is licensed-in by Idenix which, at the time of such
in-license, is in or beyond Phase III Clinical Trials (a "Late-Stage
In-Licensed ODC"), and (B) Idenix intends to license to any Third Party
the right to Develop or Commercialize such Late-Stage In-Licensed ODC
or Idenix considers a bona fide offer from a Third Party to Develop or
Commercialize such Late-Stage In-Licensed ODC (each, a "License
Opportunity"), then Idenix shall provide written notice of such intent
to Novartis, which notice shall include, as applicable, all material
terms and conditions to be offered by Idenix or a copy of such bona
fide offer from such Third Party containing all material terms and
conditions (such material terms and conditions offered by Idenix or
contained in the Third Party bona fide offer, as appropriate, the
"License Terms"), and information reasonably necessary to enable
Novartis to make an informed decision with respect to such License
Opportunity (the "License Notice"). If
40
Novartis notifies Idenix in writing within [**] days after receipt of
the License Notice (the "License Response Period"; such notice, the
"License Response") that it wishes to accept such License Terms, the
Parties shall be bound by such License Terms and, without prejudice to
the binding nature of such License Terms, the Parties shall use
Commercially Reasonable Efforts to execute a definitive agreement (an
"ODC Late Stage Agreement") reflecting such License Terms within [**]
days after the date of the License Response. However, Novartis may
specify in the License Response terms other than the License Terms
which Novartis is willing to accept (the "Alternative License Terms"),
in which case the Parties shall not be bound to any terms unless and
until they enter into an ODC Late Stage Agreement on mutually agreed to
terms. For purposes of clarity, Idenix shall be free, without any
obligation to Novartis, to itself, to the exclusion of all Third
Parties (other than subcontractors of Idenix such as contract research
organizations, contract manufacturers, contract employees, consultants
and the like which merely conduct activities on behalf of Idenix and
subject to Idenix' supervision and control), Develop and Commercialize
anywhere in the world any Late-Stage In-Licensed ODC at any time during
or after the Term.
(ii) Idenix Rights. Subject to the provisions of
Section 3.4, if (A) Novartis does not respond during the License
Response Period, (B) Novartis indicates during the License Response
Period that it has no interest in accepting the License Terms, or (C)
Novartis specifies Alternative License Terms (and the Parties do not
enter into an applicable ODC Late Stage Agreement), then Idenix shall
be free thereafter, without any further obligation to Novartis, to
Develop and Commercialize such Late-Stage In-Licensed ODC and the Other
Products derived therefrom anywhere in the world, itself or through
Third Parties, which, if done in conjunction with [a] Third Party[ies],
shall be on terms not more favorable, taken as a whole, to such Third
Party[ies] than the License Terms (if Novartis did not propose
Alternative License Terms) or the Alternative License Terms (if
Novartis did propose Alternative License Terms).
3.4 Rejected Compounds. Except to the extent prohibited
by any other written agreement between the Parties, Idenix may, in its sole
discretion and without any obligation to Novartis, determine whether and how
(itself or through Third Parties) to develop, commercialize and/or manufacture
any Rejected Compound and products derived therefrom anywhere in the world;
provided, however, that if Novartis believes in good faith that Idenix did not
offer to Novartis the right to obtain a license to any compound Controlled by
Idenix as required hereunder, or that any license, or any option or other right
to obtain a license, granted hereunder to Novartis with respect to such compound
have not terminated or expired, then in each case the provisions of Section 13.6
shall apply and such compound shall not be deemed a Rejected Compound unless it
is so determined in accordance with the procedures set forth in Section 13.6.
41
ARTICLE 4.
DEVELOPMENT OF PRODUCTS
4.1 Idenix Development Activities.
(a) Pre-ESC Development. With respect to any Drug
Candidate that is neither an Early Selection Compound nor a Selected Drug
Candidate, Idenix alone may, in its sole discretion, determine whether and how
to Develop such Drug Candidate and corresponding products, and shall be
responsible for all related Development expenses; provided that Idenix shall
provide Novartis with quarterly written reports regarding the status of such
Development activities.
(b) Early Selection Compounds. Either Party may, at any
time and from time to time, in good faith provide written notice to the Joint
Steering Committee requesting that a Drug Candidate which is neither an Early
Selection Compound nor a Selected Drug Candidate be considered as an Early
Selection Compound. The Joint Steering Committee shall determine, in accordance
with criteria and procedures to be established by such committee, whether such
Drug Candidate shall be an Early Selection Compound. If the Joint Steering
Committee determines that such Drug Candidate shall not be an Early Selection
Compound, the provisions of Section 4.1(a) shall apply with respect to such Drug
Candidate; provided that either Party may again, with good reason and from time
to time, present such Drug Candidate to the Joint Steering Committee for
consideration as an Early Selection Compound under this Section 4.1(b).
4.2 Development Plan.
(a) Prior to Selection Date. Promptly after the
determination by the Joint Steering Committee that a particular Drug Candidate
is an Early Selection Compound, Idenix shall prepare, in consultation with
Novartis, a Development Plan for the Development of such Early Selection
Compound, and thereafter, until such Early Selection Compound becomes a Selected
Drug Candidate or a Rejected Compound, Idenix shall review, in consultation with
Novartis, such Development Plan on an annual basis and shall make any amendments
or modifications as Idenix deems necessary or appropriate. Idenix shall provide
to the Joint Manufacturing Committee technical development information regarding
Early Selection Candidates as reasonably requested by the Joint Manufacturing
Committee from time to time.
(b) From and After Selection Date. Promptly after the
Selection Date for each Product, and except to the extent covered by an
applicable Development Plan attached hereto as Exhibit H (as may be amended
pursuant to this Agreement), Idenix shall prepare a proposed Development Plan
for such Product for review and consideration by the Joint Operations Committee;
provided that if the Drug Candidate corresponding to such Product was an Early
Selection Compound, such proposed Development Plan may comprise an update of the
Development Plan for such Early Selection Compound. The Parties shall review and
consider, and approve or reject, through their representatives on the Joint
Operations Committee, each proposed Development Plan (excluding, in any event,
the related Development Budget) for a Product and any amendments and
modifications thereto on an expeditious basis, and no Development Plan or any
amendments or modifications thereto (excluding, in any event, the
42
related Development Budget) shall be considered final unless and until approved
by the Joint Operations Committee. The Joint Operations Committee shall review
any previously approved Development Plans (excluding, in any event, the related
Development Budgets) on an annual basis and shall consider and/or approve any
amendments or modifications as necessary or appropriate. The Development Plans
attached hereto as Exhibit H shall be considered initial Development Plans that
have been approved by the Joint Operations Committee. For purposes of this
Agreement, references to approval of a Development Plan or an approved
Development Plan (in each case, excluding the related Development Budget) shall
mean, respectively, approval by the Joint Operations Committee of a Development
Plan, or a Development Plan that has been approved by the Joint Operations
Committee, pursuant to this Section 4.2(b).
4.3 Development Budget.
(a) Proposals Prior to Selection Date. In connection with
the proposed Development Plans to be developed by Idenix for each Early
Selection Compound and related Product[s] in accordance with Section 4.2(a),
Idenix shall prepare and submit to Novartis for its review and approval,
pursuant to Section 4.3(c), a proposed Development Budget for each such Early
Selection Compound and related Product[s].
(b) Proposals From and After Selection Date. Promptly
after the Selection Date for each Product, the Joint Operations Committee shall
prepare a proposed Development Budget for such Product for review and approval
by Novartis pursuant to Section 4.3(c); provided that if the Drug Candidate
corresponding to such Product was an Early Selection Compound, such proposed
Development Budget may comprise an update of the Development Budget for such
Early Selection Compound.
(c) Approval. Novartis shall review, consider and, in its
reasonable discretion, approve or reject each proposed Development Budget for an
Early Selection Compound, and the related Product[s], and any proposed
amendments and modifications thereto on an expeditious basis. Novartis shall
review, consider and, in its sole discretion, approve or reject each proposed
Development Budget for a Selected Drug Candidate, and the related Product[s],
and any proposed amendments and modifications thereto on an expeditious basis.
Novartis may, in its reasonable discretion, amend or modify any proposed or
previously-approved Development Budget for an Early Selection Compound. Novartis
may, in its sole discretion, amend or modify any proposed or previously-approved
Development Budget for a Selected Drug Candidate. No Development Budget shall be
considered final unless and until approved by Novartis and, for purposes of this
Agreement, references to approval of a Development Budget or an approved
Development Budget shall mean, respectively, approval by Novartis of a
Development Budget, or a Development Budget that has been approved by Novartis,
pursuant to this Section 4.3(c). Notwithstanding the foregoing, Idenix shall be
under no obligation to undertake Development activities with respect to any
Product for which Novartis has not approved the relevant Development Budget,
and, in the event of any rejection by Novartis of any proposed amendments or
modifications to a Development Budget, Idenix may continue to operate under the
most-recently approved Development Budget until Novartis approves an amended or
modified Development Budget. The Development Budgets included in the Development
Plans attached hereto as Exhibit H shall be considered initial Development
Budgets that have been approved by Novartis.
43
4.4 Development Responsibilities. Except to the extent
specified to the contrary in the relevant approved Development Plan, Idenix
shall be responsible for administering and executing the Development of the
Early Selection Compounds and the Selected Drug Candidates, and the Products
derived therefrom, in accordance with, respectively, the Development Plans
developed in consultation with Novartis and the approved Development Plans. Each
Party shall use Commercially Reasonable Efforts to carry out the Development
activities assigned to such Party in such Development Plans and to conduct such
work in material compliance with all applicable Laws, including, without
limitation, Good Practices and export and import control laws.
4.5 Interferon. Novartis shall use Commercially
Reasonable Efforts to be in a position to provide, within twenty-four (24)
months after the Effective Date, a sustained release interferon formulation that
is comparable and not clinically inferior to the current standard once-a-week
pegylated interferon treatment for HCV ("Interferon") for inclusion in a
Combination Therapy either (a) as a fixed-dose Product containing as active
ingredients Interferon, on the one hand, and the Selected HCV Drug Candidate or
any Selected Other HCV Drug Candidate, on the other hand, or (b) as a separate
co-administration product sold together or promoted as a combination with a
Product containing as an active ingredient the Selected HCV Drug Candidate or
any Selected Other HCV Drug Candidate. Within such twenty-four (24) month
period, Novartis shall be deemed to be in a position to provide such Interferon
to Idenix at such time as Novartis determines, in its reasonable discretion
during such twenty-four (24) month period, that it has sufficient data to submit
an Investigational New Drug Application to the FDA for such Interferon.
Notwithstanding anything to the contrary contained herein, (a) Novartis, if it
does not exercise the Novartis HCV Option, or an ODC Option for an Other HCV
Product, shall not be liable for any failure to use such Commercially Reasonable
Efforts within the aforementioned twenty-four (24) month period, and (b)
Novartis shall in no event have any obligation to use such Commercially
Reasonable Efforts after the expiration of such twenty-four (24) month period.
If, subject to the provisions of the foregoing sentence, Novartis is in such a
position to provide an Interferon, whether internally developed by Novartis or
licensed or otherwise acquired by Novartis from a Third Party, within such time
period, Novartis shall provide notice thereof to Idenix (the "Interferon
Availability Notice") and Idenix shall have, subject to Novartis' exercise of
the Novartis HCV Option or an ODC Option for an Other HCV Product, the exclusive
option to obtain the Interferon License (notwithstanding the exclusive nature of
any license granted to Novartis pursuant to Sections 6.1(c) and (d) and subject
to the terms and conditions of this Agreement and the Supply Agreement). Idenix
may exercise such option by providing written notice to Novartis within ninety
(90) days after Novartis' provision of the Interferon Availability Notice (the
"Interferon Acceptance Notice"). If Idenix does not exercise such option within
such time period, then Novartis shall be thereafter free, without any further
obligation to Idenix, to, alone or with Third Parties, Develop, Commercialize,
and Manufacture such Interferon, and any products containing such Interferon
(other than the Products hereunder), anywhere in the world.
4.6 Global Harmonized Clinical Trials. The Parties shall
use Commercially Reasonable Efforts to design and conduct the Clinical Trials
with respect to the Drug Candidates and Products in accordance with the Global
Harmonized Clinical Trial Guidelines.
4.7 Regulatory Filings and Approvals.
44
(a) Major EU Countries and Novartis Territory. Subject to
the provisions of paragraph (g) below, Novartis shall be the Lead Regulatory
Party, and shall own all Registration Filings and Regulatory Approvals, with
respect to each Product in the Major EU Countries and in the Novartis Territory.
(b) U.S. Territory. Subject to the provisions of
paragraph (g) below, Idenix shall be the Lead Regulatory Party with respect to
each Product in the U.S. Territory, provided, however, that Novartis shall
perform the regulatory tasks set forth on Exhibit M with respect to each Product
in the U.S. Territory, or as otherwise deemed appropriate by the Joint
Operations Committee.
(c) Assistance. The Lead Regulatory Party shall license,
transfer, provide a letter of reference with respect to, or take other action
necessary to make available the relevant Registration Filings and resulting
Regulatory Approvals to the other Party.
(d) Regulatory Coordination.
(i) The Lead Regulatory Party shall oversee,
monitor and coordinate all regulatory actions, communications and
filings with and submissions, including filings and submissions of
supplements and amendments thereto, to each applicable Regulatory
Authority with respect to each Product. The Lead Regulatory Party shall
perform all such activities in accordance with the Joint Steering
Committee-approved Development Plan, relevant Country
Co-Commercialization Plans and pricing strategies and guidelines.
(ii) The Parties shall establish procedures to
ensure that the Parties exchange on a timely basis all necessary
information to enable the Lead Regulatory Party to comply with all
regulatory obligations on a global basis, including, without
limitation, filing updates, pharmacovigilance filings and investigator
notifications. The Parties shall provide to each other prompt notice of
any approved Registration Filing.
(e) Regulatory Meetings and Correspondence. The Lead
Regulatory Party shall be responsible for interfacing, corresponding and meeting
with the applicable Regulatory Authorities with respect to each Product. To the
extent practicable in the Novartis Territory and the Major EU Countries, and in
all cases in the U.S. Territory, the other Party shall have the right to have a
reasonable number of representatives participate in all material meetings and
telephone discussions between representatives of the Lead Regulatory Party and
applicable Regulatory Authorities with respect to each Product.
(f) Review of Correspondence. The Lead Regulatory Party
shall promptly provide to the other Party copies of any documents or other
correspondence received from the applicable Regulatory Authorities pertaining to
each Product (including, without limitation, any meeting minutes). To the extent
practicable, the Lead Regulatory Party shall, subject to applicable Law, provide
the other Party with drafts of any documents or other correspondence to be
submitted to Regulatory Authorities pertaining to each Product, sufficiently in
advance of submission so that such other Party may review and comment on such
documents and other correspondence and have a reasonable opportunity to
influence the substance of such submissions, as it may affect the Development or
Commercialization of such Product. The Lead
45
Regulatory Party agrees to consider all such comments in good faith, taking into
account the best interest of such Product on a global basis. If, after
considering in good faith the other Party's comments regarding the content of a
proposed submission to a Regulatory Authority, the Lead Regulatory Party
disagrees with such other Party's view, the Lead Regulatory Party shall notify
such other Party in writing (a "Notice of Disagreement"). If such other Party
believes that the Lead Regulatory Party's proposed submission is likely to have
a material adverse effect on the Development or Commercialization of such
Product on a global basis, it shall so notify the Lead Regulatory Party, and,
provided that such notification is delivered to the Lead Regulatory Party within
three (3) Business Days following receipt of the Notice of Disagreement, such
other Party shall have the right to request that the Joint Operations Committee
immediately convene, either in person or by telephone, in order to discuss the
matter, in which case such meeting shall occur within three (3) Business Days
following such other Party's request. If, after the discussions of the Joint
Operations Committee, the Parties remain in disagreement regarding the proposed
submission, the Lead Regulatory Party may file such submission as it reasonably
deems appropriate; provided, however, that any such submission shall not be
inconsistent with the best interest of such Product on a global basis, and shall
not be inconsistent with the relevant approved Development Plan. Notwithstanding
anything to the contrary contained herein, Idenix shall not file any submissions
with respect to any Early Selection Compound or Selected Drug Candidate
(including any corresponding Products) without the prior written consent of
Novartis.
(g) Review of Lead Regulatory Party Appointments. At
least six (6) months prior to the planned submission of the first Registration
Filing for each Product in each Co-Commercialization Country, the Joint Steering
Committee shall review the appointment of the Lead Regulatory Party for each
Co-Commercialization Country. In conducting such review, the Joint Steering
Committee evaluation shall be based upon the following factors: (i) the most
expeditious route to Regulatory Approval with the desired labeling for the
relevant Product in the relevant country; and (ii) each Party's ability to
certify that it is not presently subject to, and does not reasonably anticipate
becoming subject to, an FDA mandated application integrity program or other
equivalent form of regulatory review that would adversely affect such Party's
ability to obtain Regulatory Approval in the country in an expeditious manner.
At that time, the Joint Steering Committee shall have the right to modify the
Lead Regulatory Party appointment based upon such evaluation. In addition, if
the Lead Regulatory Party in a Co-Commercialization Country is different from
the Lead Commercialization Party in such country, then, following Regulatory
Approval for the relevant Product in such country, the Joint Steering Committee
may appoint a Party as both the Lead Regulatory Party and the Lead
Commercialization Party so that there is one lead party for all purposes in that
country; provided, however, that Idenix' right to record sales in the U.S.
Territory may be abridged only if Idenix has provided its prior written consent
thereto or if the Joint Steering Committee has made such a decision in which
Idenix concurred.
(h) Assistance.
(i) Each Party shall cooperate with the other
Party to provide all reasonable assistance and take all actions
reasonably requested by the other Party that are necessary or desirable
to enable the other Party to comply with any Law applicable to any
Product.
46
(ii) Such assistance and actions shall include,
among other things, keeping the other Party informed, commencing within
twenty-four (24) hours after notification of any action by, or
notification or other information which it receives (directly or
indirectly) from, any Regulatory Authority or other governmental
authority, which (A) raises any material concerns regarding the safety
or efficacy of any Product, (B) indicates or suggests a potential
material liability for either Party to Third Parties arising in
connection with any Product, or (C) is reasonably likely to lead to a
recall or market withdrawal of any Product. Information that shall be
disclosed pursuant to this Section 4.6(h)(ii) shall include, but not be
limited to:
(1) governmental or regulatory inspections of
Manufacturing, distribution or other related facilities used
for the Products;
(2) inquiries by Regulatory Authorities or other
governmental authorities concerning clinical investigation
activities (including inquiries of investigators, clinical
research organizations and other related parties) relating to
the Products;
(3) any communication from Regulatory
Authorities or other governmental authorities pertaining to
the Manufacture, sale, promotion or distribution of the
Products;
(4) any other Regulatory Authority or other
governmental authority reviews or inquiries relating to the
Products;
(5) receipt of a warning letter relating to a
Product; and
(6) an initiation of any Regulatory Authority or
other governmental authority investigation, detention, seizure
or injunction concerning any Product.
(i) Pharmacovigilance and Safety Data Exchange.
(i) Each Party shall designate a qualified
person responsible for pharmacovigilance in the countries in which such
Party owns a Regulatory Approval. Such qualified person shall be
responsible for (A) the collection of adverse event reports for the
relevant Product reported to its corresponding Party and Affiliates
thereof, (B) notification to the other Party of such reports in
accordance with paragraph (ii) below, (C) the preparation and timely
submission of individual written reports to the relevant Regulatory
Authority in compliance with applicable Law, (D) the preparation and
timely submission of periodic safety update reports, (E) answering
pharmacovigilance questions, and (F) all notifications and
communications with the appropriate Regulatory Authorities relating to
pharmacovigilance.
(ii) Each Party shall promptly notify the other
Party of all material information coming into its possession during the
Term concerning side effects, injury, toxicity or sensitivity
reactions, including non-trivial unexpected increased incidence and
severity thereof, associated with commercial or clinical uses, studies,
investigations or tests with the Products (animal or human), throughout
the world, whether or not determined to be attributable to a Product
("Adverse Reaction Reports"). Each Party and
47
its Affiliates shall assist the other Party and its Affiliates by
promptly obtaining any follow-up information to the initial report from
the reporter as reasonably requested by the other Party or its
Affiliate. Without limitation to the foregoing, the Parties shall
follow the specific procedures to coordinate the timing and handling of
Adverse Reaction Reports set forth in Exhibit G, to ensure prompt
communications of such notifications and compliance with reporting
obligations to Regulatory Authorities.
4.8 Manufacturing Capability Development. Promptly after
the Effective Date with respect to the Initial HCV Drug Candidate, and promptly
following the applicable Selection Date for any Product, the Parties shall
undertake development of the Manufacturing capability, including Technical
Development, for such Initial HCV Drug Candidate (and related Products) and
Products (and related Selected Drug Candidates) in accordance with the
respective Manufacturing Plan. The Joint Manufacturing Committee shall prepare,
review and (except with respect to the budget contained therein) approve each
Manufacturing Plan on at least an annual basis and shall prepare, review and
approve (except with respect to the budget contained therein) amendments,
including updates, to such Manufacturing Plan. The Joint Manufacturing Committee
shall submit the budget contained in each Manufacturing Plan, and any
amendments, including updates, to each such budget, to the Joint Steering
Committee for its review and approval; any such budgets and amendments,
including updates, thereto shall not become effective until approved by the
Joint Steering Committee. The Parties agree to review, consider and approve or
reject, through their representatives to the Joint Manufacturing Committee, the
Manufacturing Plans (excluding the budgets contained therein) and any
amendments, including updates, thereto on an expeditious basis. Except to the
extent specified to the contrary in the relevant Manufacturing Plan or in the
Supply Agreement, the Joint Manufacturing Committee shall be responsible for
administering and executing the development of the Manufacturing capability,
including Technical Development, with regard to APIs for the Products in
accordance with the Manufacturing Plans. Each Party shall use Commercially
Reasonable Efforts to carry out the activities assigned to such Party in the
Manufacturing Plans and to conduct such work in material compliance with all
applicable Laws, including, without limitation, Good Practices and export and
import control laws.
ARTICLE 5.
PRODUCT COMMERCIALIZATION
5.1 Supply of Product. Idenix (Cayman) Limited or an
Affiliate thereof shall supply, and Novartis shall purchase, and shall ensure
that its Affiliates and sublicensees purchase, exclusively from Idenix (Cayman)
Limited their complete requirements of Products (for clarification purposes, as
Packaged Products (as defined in the Supply Agreement, i.e., in final finished
form and including labeling, primary packaging and secondary packaging) in the
Territory, upon the terms and conditions contained in the Supply Agreement. Each
Party shall be liable for its own acts and omissions, and for those of its
Affiliates that perform obligations and exercise rights of such Party, under the
Supply Agreement.
5.2 Commercialization of Products in Co-Marketing
Countries. The following provisions of this Article 5 (such provisions, the
"Co-Commercialization Provisions") shall apply in each Co-Commercialization
Country. In the event (and for so long as) the Parties
48
are not permitted under local Law to Co-Promote or Co-Brand the Products in any
Major EU Country, but are permitted to Co-Market the Products in such country
(i.e., a "Co-Marketing Country"), then the Parties shall Co-Market the Products
in such Co-Marketing Country in accordance with the provisions of Exhibit K and,
to the extent not prohibited by applicable Law in such Co-Marketing Country or
inconsistent with the provisions of Exhibit K, in accordance with (a) the
obligations set forth in the Co-Commercialization Provisions applicable to the
Co-Commercialization Countries and (b) the other provisions of this Agreement
(including without limitation the provisions of Article 10) and the Supply
Agreement. In the event any such provisions of this Agreement or the Supply
Agreement are prohibited by applicable Law in a Co-Marketing Country and are not
covered by Exhibit K, then such provision shall be considered a Severed Clause
under Section 13.3 solely with respect to such Co-Marketing Country.
5.3 Commercialization of Products in Co-Commercialization
Countries. Novartis and Idenix (through their respective Affiliates where
appropriate) shall Co-Promote and Co-Brand the Products under the applicable
Product Trademarks in each Co-Commercialization Country during the Term in
accordance with the then-current Joint Steering Committee-approved Consolidated
Co-Commercialization Plan, Consolidated Co-Commercialization Budget, Country
Co-Commercialization Plans and Country Co-Commercialization Budgets. The Joint
Steering Committee shall determine general pricing strategy and guidelines for
the Products in the Co-Commercialization Countries. The relevant Joint Country
Commercialization Committee shall establish the actual terms and conditions of
sale for each Product in each Co-Commercialization Country in accordance with
the approved Country Co-Commercialization Plan and the pricing strategy and
guidelines established by the Joint Steering Committee. It is anticipated that
each Party will Co-Promote and Co-Brand, as applicable, the Products in each
Co-Commercialization Country using substantially equivalent quantity and quality
of efforts, resources and compensation to Sales Representatives; provided,
however, that, during the first two (2) years after the applicable Launch Date
of a Product in each Major EU Country, each Party shall be responsible for
undertaking its respective percentage of the total efforts to Co-Promote and
Co-Brand the Products in such country as is reflected in the Benefit Allocation.
Each Party may delegate any of its Co-Promotion or Co-Branding obligations or
responsibilities in any Co-Commercialization Country to its local Affiliate[s]
in such country. Each Party shall use or, if it has made an applicable
delegation to any local Affiliate[s], shall cause its local Affiliate[s] to use,
Commercially Reasonable Efforts in performing such obligations and fulfilling
such responsibilities.
5.4 Co-Commercialization Plans. The initial Consolidated
Co-Commercialization Plan and Consolidated Co-Commercialization Budget for each
Product will be prepared by the Joint Operations Committee for Joint Steering
Committee approval at least two (2) years before the anticipated first Launch
Date of such Product in any Co-Commercialization Country. The Consolidated
Co-Commercialization Plan and Consolidated Co-Commercialization Budget for each
subsequent calendar year shall be prepared by the Joint Operations Committee to
enable Joint Steering Committee approval at least four (4) months prior to end
of the then current calendar year. The initial and subsequent annual Country
Co-Commercialization Plans and Country Co-Commercialization Budgets will be
prepared by the applicable Joint Country Commercialization Committees and
submitted to the Joint Operations Committee in accordance with timelines to be
established by the Joint Operations Committee, so that they are available to the
Joint Operations Committee for use in preparing the annual
49
Consolidated Co-Commercialization Plan and Consolidated Co-Commercialization
Budget. Each Country Co-Commercialization Plan and Consolidated
Co-Commercialization Plan will set forth the detailed plan for Commercialization
of the Product in the Co-Commercialization Countries on a calendar-year basis,
including: (a) strategies for the Detailing and Co-Promotion or Co-Branding, as
applicable, of the Products, including recommended target Professionals for such
activities; (b) allocation between the Parties of responsibilities for marketing
activities; (c) anticipated marketing, sales and promotion efforts by each Party
(or its Affiliates) (including number and position of Details, and sampling
activities); (d) market and sales forecasts in a form to be agreed between the
Parties via the Joint Operations Committee; (e) advertising, public relations
and other promotional programs and sampling, to be used in the Co-Promotion and
Co-Branding; (f) medical affairs programs, including professional symposia and
other educational activities, and medical affairs studies based upon Joint
Operations Committee-approved protocols; (g) Phase IV Clinical Trials (based
upon Joint Operations Committee-approved protocols) in the Co-Commercialization
Countries relating to the Products; and (h) as appropriate, a training plan for
the Parties' Sales Representatives. In addition to the detailed plan and budget
for the current calendar year, each Country Co-Commercialization Plan, Country
Co-Commercialization Budget, Consolidated Co-Commercialization Plan and
Consolidated Co-Commercialization Budget will include an outline of the
projected plan and estimated budget for the next calendar year.
5.5 Distribution and Sale of Product. The Lead
Commercialization Party (or its designated local Affiliate) shall be responsible
for the distribution and sale of the Products and for invoicing and booking
sales in each Co-Commercialization Country for which it is responsible. Idenix
shall be the Lead Commercialization Party in the U.S. Territory and Novartis
shall be the Lead Commercialization Party in all other Co-Commercialization
Countries. Product pricing in the Co-Commercialization Countries, including,
without limitation, the timing of pricing changes, requests for reimbursement
and the offering of any discounts or rebates, shall be established in accordance
with the then-current approved Country Co-Commercialization Plan, and Joint
Steering Committee-approved pricing guidelines. In those Co-Commercialization
Countries where a Pricing Approval is required, the Lead Commercialization Party
will be solely responsible for negotiating such approvals, or any adjustments
thereto, with the relevant Regulatory Authority in accordance with the Joint
Steering Committee-approved Country Co-Commercialization Plan and pricing
strategies and guidelines. The Lead Commercialization Party shall promptly
provide the other Party with copies of all correspondence with Regulatory
Authorities with respect to such Pricing Approvals, and such other Party shall
be notified of and (except as precluded by applicable Law) be entitled to attend
all such negotiations. In the U.S. Territory, the Lead Commercialization Party
shall be responsible for negotiating pricing and contracts for the sale of
Product with managed care companies and Regulatory Authorities in accordance
with the Joint Steering Committee-approved Country Co-Commercialization Plan and
pricing strategies and guidelines. The Lead Commercialization Party will give
due consideration to the other Party's comments on any Pricing Approval
negotiations, and/or managed care and government pricing and contracts for the
Product, and may delegate certain responsibilities to the other Party so as to
take advantage of the respective strengths and expertise of the Parties.
5.6 Field Forces(a) Field Force Activities. In
Co-Promoting and Co-Branding the Products in the Co-Commercialization Countries,
each Party (through its local Affiliates, as
50
appropriate) shall provide such internal administrative and logistical support
of its Sales Representative field force as is usual and customary in the
pharmaceutical industry in the relevant Co-Commercialization Countries,
consistent with its normal practices. Each Party (through its local Affiliates,
as appropriate) shall diligently Co-Promote or Co-Brand, as applicable, the
Product in such country in accordance with the then-applicable Joint Steering
Committee-approved Country Co-Commercialization Plans. Such efforts shall
include, without limitation, performing the following types of activities, each
in accordance with the approved Country Co-Commercialization Plan:
(i) training, maintaining and managing Sales
Representatives to Detail Professionals and potential purchasers,
including target physicians;
(ii) distributing Promotional Materials through
each Party's respective Sales Representatives or other customary
methods;
(iii) subject to Section 5.14, responding to
inquiries regarding the Products (other than consumer and medical
inquiries)
(iv) providing administrative support services
(such as an electronic territory management system, where applicable);
and
(v) setting, monitoring and implementing Sales
Representative incentives related to the Co-Promotion, Co-Branding and
sale of the Products.
(b) Cooperation. The Joint Country Commercialization
Committee that is responsible for a Product in each Co-Commercialization Country
shall coordinate the Co-Promotion or Co-Branding, as the case may be, of such
Product by Novartis, Idenix, their respective local Affiliates and their
respective Sales Representatives in such Co-Commercialization Country. The
Parties will cooperate in the conduct of such activities with respect to
scheduling, geographical allocation, alignment of the weighting of the
Product-related incentives within the Sales Representatives' overall incentives,
and Professional or other customer targeting in order to optimize sales and
profits under the Consolidated Co-Commercialization Plan and the relevant
Country Co-Commercialization Plan.
(c) Contract Sales Force. Neither Party shall be entitled
to discharge more than five percent (5%) of its annual Detailing obligations for
the Product in any Co-Commercialization Country by engaging a Contract Sales
Force. A Party (or its local Affiliate) desiring to retain a Contract Sales
Force to provide more than five percent (5%) of its annual Detailing obligations
for a Product in a Co-Commercialization Country shall notify the other Party to
that effect and may only do so with the prior written consent of the other
Party. Upon receipt of such notice, the other Party shall have the option,
exercisable in its sole discretion, to perform the additional PDEs (i.e., those
in excess of five percent (5%)) itself, in which case such Party will be
compensated for such additional PDEs in accordance with the provisions set forth
in Section 5.7(b). If a Party (or its local Affiliate) retains a Contract Sales
Force in a Co-Commercialization Country, that Party (or its local Affiliate)
will be responsible for all costs associated with retaining such Contract Sales
Force and for the Contract Sales Force's
51
compliance with this Agreement, including, without limitation, the training and
monitoring of such Contract Sales Force and ensuring compliance with all
applicable Laws.
5.7 Detailing
(a) Detailing. Each Party's (or its local Affiliate's)
Sales Representatives shall Detail the Products in each Co-Commercialization
Country in accordance with the approved Country Co-Commercialization Plan. Each
Party shall be obligated to perform at least the required number of PDEs for the
Products set forth in the Country Co-Commercialization Plan. During the first
twelve (12) months following the Launch Date of each Product in each
Co-Commercialization Country, at least seventy-five percent (75%) of all Details
by each Party or its local Affiliates in such Co-Commercialization Country shall
be Primary Product Presentations.
(b) Pre-Launch Date Commitment. At least eighteen (18)
months prior to the expected Launch Date of each Product in each
Co-Commercialization Country, each Party shall agree with the other Party to
commit to the Co-Promotion or Co-Branding of such Product in such
Co-Commercialization Country in accordance with the applicable Consolidated
Co-Commercialization Plan and Country Co-Commercialization Plan and as otherwise
agreed by the Parties (including through their representatives on the Joint
Steering Committee or any Joint Sub-Committee), or elect not to Co-Promote or
Co-Brand such Product in such Co-Commercialization Country, in which case the
Parties shall in good faith re-negotiate their respective applicable
Co-Promotion or Co-Branding rights and obligations with respect to such Product
in such Co-Commercialization Country.
(c) Projected PDE Shortfalls. There may be occasions,
including prior to an applicable Launch Date (but in all cases subject to
Section 5.7(b)), when a Party (or its local Affiliate) believes in good faith
that, notwithstanding Commercially Reasonable Efforts, it will be unable to
perform the number of Details for a Product in one or more Co-Commercialization
Countries for which it is responsible under the then-current Country
Co-Commercialization Plans. In such an event, such Party (or its local
Affiliate) (the "Shortfall Party") shall promptly give written notice to the
other Party (or its local Affiliate) and the Joint Country Commercialization
Committee for each such Co-Commercialization Country that it will not be able to
meet its Detailing obligations and the projected shortfall in PDEs. Upon receipt
of such notice, the other Party (or its local Affiliate) shall have the option,
exercisable in its sole discretion, to perform such additional PDEs. If the
other Party agrees to perform the additional PDEs, (i) the Shortfall Party's
minimum PDE obligation under the then-current Country Co-Commercialization Plan
for purposes of determining any penalties or additional compensation under
Section 5.7(f) shall be reduced by the number of additional PDEs agreed to be
performed by the other Party for that year, (ii) the Shortfall Party shall
reimburse the other Party for the cost of performing the additional PDEs during
the relevant calendar year at a fixed cost per PDE to be determined by the Joint
Steering Committee on a Product-by-Product and country-by-country basis, based
upon the average of each Party's actual PDE cost in the country, and (iii) the
then-current Benefit Allocation in each such Co-Commercialization Country for
the relevant calendar year to be paid pursuant to Section 5.13 will be adjusted
using the following formula:
52
Adjusted BA = [**] where the "Adjusted BA" is the adjusted Benefit Allocation
for [**] "current BA" is the then-current Benefit Allocation for [**]. For
purposes of clarity and avoidance of doubt, a sample calculation is set forth in
Exhibit L. Any payments to be made under this Section 5.7(c) shall be paid to
the local Affiliate of the other Party within thirty (30) days after
determination that such payments are due.
(d) Detailing; Record Keeping. Each Party (through its
local Affiliates where appropriate) shall maintain records of its Detailing of
the Products in the Co-Commercialization Countries in a manner sufficient to
permit the determination of the number and position of Details performed by such
Party with respect to the Products in each Co-Commercialization Country. Any
shortfall by a Party (or its Affiliates) in performing the number of annual PDEs
specified in the Joint Steering Committee-approved Country Co-Commercialization
Plan shall, at the end of each year, be addressed in accordance with the
provisions of Section 5.7(f). Each Party shall adopt a code of conduct for its
sales force strictly and explicitly prohibiting falsification of Detail
reporting and imposing penalties for non-compliance, which penalties shall be
enforced.
(e) PDE Reporting. Each Party (through its local
Affiliates where appropriate) shall provide the other Party and the relevant
Joint Country Commercialization Committee with periodic reports of the number
and position of Details actually performed by it for the Product in each
Co-Commercialization Country. Such PDE reports shall be provided quarterly,
within sixty (60) days after the close of the calendar quarter covered by the
report; provided that more frequent reporting may be required as determined by
the Joint Operations Committee. Notwithstanding the foregoing, during the first
two (2) years immediately following the Launch Date of each Product in each
Co-Commercialization Country, such PDE reports shall be provided by each Party
on a monthly basis, within sixty (60) days after the end of each month, with
respect to the relevant Co-Commercialization Country.
(f) Failure to Perform PDEs. In the event that either
Party (or its local Affiliate) fails to perform one hundred percent (100%) of
its agreed Detailing obligations for a Product in any Co-Commercialization
Country for any calendar year (as set forth in the then-current Joint Steering
Committee-approved Country Co-Commercialization Plan for such country), the
Party failing to perform (or its applicable local Affiliate) shall pay to the
other Party (or its applicable local Affiliate) a penalty and additional
compensation to be determined as follows, which payment shall be the exclusive
liability and sole remedy for such failure to perform:
53
Additional
Percentage [**] Penalty to be paid as a percentage [**] Compensation
--------------- --------------------------------------- ---------------
[**] [**]
[**]% to [**]% [**] [**] A
[**]% to [**]% [**]% [**]% greater of A or B
[**]% to [**]% [**]% [**]% greater of A or B
[**]% to [**]% [**]% [**]% greater of A or B
[**]% to [**]% [**]% [**]% greater of A or B
[**]% to [**]% [**]% [**]% greater of A or B
[**]% [**]% [**]% greater of A or B
Any penalty payments determined in accordance with this table will be
[**]
A = [**]
and
B = [**]
Adjusted BA = [**]
where the "Adjusted BA" is the adjusted Benefit Allocation [**] "current BA" is
the then-current Benefit Allocation [**] For purposes of clarity and avoidance
of doubt, a sample calculation is set forth in Exhibit N. In determining
whether or not a Party has performed its annual Detailing obligations for a
Co-Commercialization Country, such Party shall not receive credit for any PDEs
performed during a given calendar quarter in the relevant calendar year in
excess of [**] percent [**]%) of its PDE obligations for such calendar quarter,
as set forth in the approved Country Co-Commercialization Plan. In addition,
Secondary Product Presentations cannot be used by a Party to offset any
shortfall in the Primary Product Presentations required to be performed by the
Party under the approved Country Co-Commercialization Plan, unless otherwise
agreed by the Parties. Any penalty payments and/or additional compensation to be
paid under this Section 5.7(f) in respect of a PDE shortfall shall be paid to
the other Party (or its local Affiliate) within thirty (30) days after
determination that such payments are due. Notwithstanding the foregoing, neither
Party shall have any liability to the other Party under this Section 5.7(f) for
any actual shortfall with respect to any additional PDEs which the other Party
has agreed to perform pursuant to Section 5.7(c).
5.8 Training.
(a) Each Party (through its local Affiliates where
appropriate) shall, each at its own expense, comply with the training plan
contained in any Consolidated Co-Commercialization Plan or Country
Co-Commercialization Plan.
54
(b) Prior to the Launch Date for a Product in any
Co-Commercialization Country, the Parties (through their local Affiliates where
appropriate) shall jointly develop sales training materials for use in training
each Party's Sales Representatives. The Parties (through their local Affiliates
where appropriate) will thereafter cause their training personnel to train their
field Sales Representatives with such training materials and Promotional
Materials.
(c) If either Party (including through their respective
local Affiliates) organizes Product-related meetings of its employees (such as
launch meetings or periodic briefings of its Sales Representatives), it will
make reasonable efforts to give the other Party (or its local Affiliate) advance
notice of such meetings. If requested by the other Party (or its local
Affiliate), the Party (or its local Affiliate) organizing such meetings will
permit representatives of the other Party (or its local Affiliate) to attend and
participate in such meetings or such portions thereof which relate to the
Co-Promotion of the Products at their own cost. In such event, the Party
organizing such meeting shall keep the Product-related portions of such meetings
independent from other matters.
(d) In a manner determined by the relevant Joint Country
Commercialization Committee, the Parties (through their local Affiliates where
appropriate) will coordinate the Detailing, sales meetings, contacts with
wholesalers and retailers, targeting of healthcare organizations, speaker
programs and, as appropriate, medical affairs and/or support activities for
Phase IV Clinical Trials as provided in the Consolidated Co-Commercialization
Plan and relevant Country Co-Commercialization Plan.
5.9 Promotional Materials. The Parties and their
Affiliates shall only use approved Promotional Materials and only conduct
marketing and promotional activities for the Products which, in each case, are
provided for in the relevant approved Country Co-Commercialization Plan. The
Parties will jointly prepare Promotional Materials for the Products which are
intended for use within the Co-Commercialization Countries. The Lead
Commercialization Party will generally have primary responsibility for the
preparation of Promotional Materials intended for use in a Co-Commercialization
Country, and shall ensure that all such Promotional Materials are consistent
with the approved Consolidated Co-Commercialization Plan and Country
Co-Commercialization Plan, and comply with all applicable Laws. The Lead
Commercialization Party shall be responsible for the distribution of Promotional
Materials for use in the Co-Commercialization Country, shall ensure that the
other Party's local Affiliates have equal access to all Promotional Materials
for use in the Co-Commercialization Country, and shall treat its own Affiliates
and those of the other Party equally in connection with the distribution of
Promotional Materials in accordance with the approved Country
Co-Commercialization Plan. Promotional Materials which constitute Detail
hand-outs for distribution to Professionals shall be allotted according to each
Party's (or its local Affiliate's) Detail requirements under the approved
Country Co-Commercialization Plan. Promotional Materials for use in Detail
presentations and retained by the Sales Representatives shall be allotted
according to the number of Sales Representatives to be engaged by each Party (or
their respective local Affiliates) under the approved Country
Co-Commercialization Plan for the relevant country. The Parties shall jointly
own all rights to all Promotional Materials, including all copyrights thereto.
All locally generated Promotional Materials for a Co-Commercialization Country
shall be maintained in confidence and shall not be disclosed or distributed to
Third Parties, until such time as they have been reviewed and approved under a
55
core review process to be established by the relevant Joint Country
Commercialization Committee.
5.10 Promotional Claims/Compliance. Neither Party (nor any
of their respective Affiliates) shall make any medical or promotional claims for
any Products beyond the scope of the relevant Regulatory Approval[s] then in
effect for such Product or that are beyond the scope of or inconsistent with the
approved Consolidated Co-Commercialization Plan, Country Co-Commercialization
Plans and Promotional Materials. When distributing information related to any
Product or its use (including information contained in scientific articles,
reference publications and publicly available healthcare economic information),
each Party (and their respective Affiliates) shall comply with all applicable
Laws (and with respect to the U.S. Territory, in accordance with the
Pharmaceutical Research Manufacturers of America Code on Interactions with
Healthcare Professionals).
5.11 Reporting of Net Sales and Expenses. Each Party shall
provide to the other Party quarterly reports detailing its Net Sales (and
adjustments thereto), cost of goods sold, and Promotion Expenses with respect to
each Product in each Co-Commercialization Country. The Lead Commercialization
Party in each Co-Commercialization Country shall be responsible for preparing
Consolidated Net Sales and Expense Reports, based upon such country specific
reports and the reports provided by each Party pursuant to Section 5.7(d), for
all Co-Commercialization Countries for which it is responsible. All reports
generated pursuant to this Section 5.11 shall be in such level of detail so as
to enable each Party to independently verify each Party's rights and obligations
with respect to Benefit Allocation. The format and timing for such reports shall
be as recommended by the Joint Operations Committee and approved by the Joint
Steering Committee.
5.12 Country Co-Promotion Reports. Each Party (through its
local Affiliates where appropriate) shall provide to the other Party (or its
local Affiliate) and to the relevant Joint Country Commercialization Committee a
quarterly Country Co-Promotion Report for the relevant Products in each
Co-Commercialization Country. In addition, each Party (through its local
Affiliates where appropriate) shall keep the relevant Joint Country
Commercialization Committees informed regarding the activities of its (or its
local Affiliate's) Sales Representatives in Co-Promoting or Co-Branding, as
applicable, the Products in each Co-Commercialization Country, including
information relating to market developments, acceptance of the Products, Product
complaints and similar information. The foregoing reporting procedures may be
modified by the Joint Operations Committee.
5.13 Co-Promotion Payments(a) Benefit Allocation. Subject
to any adjustment in accordance with Section 5.7 or otherwise under this
Agreement or the Supply Agreement, the Parties shall share commercial benefits
arising from their and their Affiliates' respective activities in connection
with the Commercialization of the Products hereunder (the "Benefit Allocation")
(i) on an equal basis with respect to the U.S. Territory, and (ii) in accordance
with the percentages set forth in the table below with respect to each of the
Major EU Countries:
56
Percentage Allocation of Benefit for
the Major EU Countries
Period During the Applicable Country Term in each of ------------------------------------
the Major EU Countries Idenix Novartis
------------------------------------------------------ --------------- ---------------
The 12-month period beginning on the Launch Date in [**]% [**]%
such country
The 12-month period beginning on the first anniversary [**]% [**]%
of the Launch Date in such country
Each 12-month period beginning on the second and [**]% [**]%
subsequent anniversaries of the Launch Date in such
country through the end of the applicable Country Term
(b) With respect to each Co-Commercialization Country,
the Lead Commercialization Party shall pay, or shall cause its relevant local
Affiliate to pay, to the other Party or its relevant local Affiliate, such other
Party's share of Gross Margin for such Co-Commercialization Country. To the
extent that the Gross Margin received by each Party in the Co-Commercialization
Countries for a calendar quarter are not equal (with respect to Gross Margin for
the U.S. Territory) or not in accordance with the relevant assigned percentages
(with respect to Gross Margin in the Major EU Countries), the Party receiving
more than its assigned percentage/portion of Gross Margin (the "Overpaid Party")
shall make an equalizing payment to the other Party equal to, with respect to
the relevant calendar quarter, (i) the amount of Gross Margin received by such
Overpaid Party, minus (ii) the amount that corresponds to such Overpaid Party's
assigned percentage/portion of Gross Margin.
(c) Promotion Expense-Sharing. Novartis (or its relevant
local Affiliate) and Idenix (or its relevant local Affiliate) shall share
Promotion Expenses incurred in accordance with the relevant approved Country
Co-Commercialization Plan and Country Co-Commercialization Budget (i) on an
equal basis with respect to the U.S. Territory, and (ii) in accordance with the
percentages set forth in the table in Section 5.13(a) with respect to the Major
EU Countries. To the extent that Promotion Expenses incurred by each Party in
the Co-Commercialization Countries for a calendar quarter are not equal (with
respect to such expenses for the U.S. Territory) or not in accordance with the
relevant assigned percentages (with respect to such expenses in the Major EU
Countries), the Party incurring less than its assigned percentage/portion of
Promotion Expenses (the "Underpaying Party") shall make an equalizing payment to
the other Party equal to, with respect to the relevant calendar quarter, (iii)
an amount that corresponds to such Underpaying Party's assigned
percentage/portion of Promotion Expenses, minus (iv) the amount of Promotion
Expenses incurred by such Underpaying Party.
(d) Timing of Payments and Annual Reconciliation. All
payments due under Sections 5.13(b) or 5.13(c) shall be made quarterly, not more
than sixty (60) days after the end of the relevant calendar quarter. All such
payments shall be subject to annual reconciliation (including any adjustments
pursuant to Section 5.7(b)) in the manner agreed to by the Joint Steering
Committee. In the event that annual reconciliations reveal any overpayment or
underpayment with respect to Gross Margin or Promotion Expenses in any
Co-Commercialization Country, a payment will be made by one Party (or its local
Affiliate) to the
57
other Party (or its local Affiliate) to correct for such overpayment or
underpayment, such correction payment to be paid within thirty (30) days after
determination of the discrepancy amount.
(e) Invoices and Documentation. The Joint Steering
Committee shall, on a country-by-country basis, recommend the form of any
necessary documentation relating to sharing of Gross Margin, Promotion Expenses
and locally incurred Development and/or miscellaneous costs so as to afford the
Parties appropriate accounting treatment in relation to any of the transactions
or payments contemplated hereunder, which documentation may include, without
limitation, invoices, bills of account, work orders and purchase orders.
5.14 Medical and Consumer Inquiries. Each Party (through
its local Affiliates, as appropriate) shall be entitled to respond to routine
medical and consumer inquiries received by it concerning the Products; provided
that all such responses shall be in accordance with the approved Product
labeling information and, as appropriate, the recommendations of the applicable
Joint Country Commercialization Committee, and that all such inquiries and
responses shall be shared, as appropriate, with the other Party to the extent
not prohibited by applicable Law. Any non-standard inquiries should be directed
to the attention of such person[s] as is [are] designated pursuant to Section
4.7(i).
5.15 Commercially Reasonable Efforts in the Novartis
Territory. Novartis shall use, and shall ensure that its Affiliates and
sublicensees use, in each country in the Novartis Territory where Novartis
elects (which election shall be in Novartis' commercially reasonable discretion)
to launch a Product, Commercially Reasonable Efforts consistent with applicable
Laws to Commercialize such Product. In general, such efforts may include: (a)
keeping the Products reasonably available to the public following the applicable
Launch Date, (b) maintaining, at its own cost and expense, or causing its
Affiliates or sublicensees to maintain, marketing and sales organizations
adequate to enable Novartis, its Affiliates and sublicensees to promote, market,
distribute and sell the Product in accordance with the applicable global plan,
and (c) requiring its Affiliates or sublicensees in any country in the Novartis
Territory to use Commercially Reasonable Efforts to optimize the sales of
Products in such country.
5.16 Customer Referrals. Idenix shall promptly refer to
Novartis any solicitations or requests to purchase a Product which Idenix may
receive from any customer, prospective customer or sales prospect that has a
principal address or place of business within the Novartis Territory or which
Idenix knows or has reason to know intends to sell such Product to a Third Party
located in the Novartis Territory.
5.17 Compliance with Laws. Each Party shall use, and shall
ensure that its Affiliates and sublicensees use, Commercially Reasonable Efforts
to carry out its Commercialization activities with respect to the Products in
material compliance with all applicable Laws governing the conduct of such
activities, including, without limitation, all applicable export and import
control laws.
5.18 Pirate Goods. Novartis shall use Commercially
Reasonable Efforts to actively monitor the markets in the U.S. Territory and
each Major EU Country and in each country within the Novartis Territory, and
Idenix shall use Commercially Reasonable Efforts to
58
actively monitor the markets in the U.S. Territory and each Major EU Country.
Each Party (the "Monitoring Party") shall use Commercially Reasonable Efforts,
including legal action, to prevent the trade in Pirate Goods in the countries it
is obligated to monitor. Each Party shall use Commercially Reasonable Efforts,
at the Monitoring Party's expense, to cooperate with the Monitoring Party in
such actions. If the Monitoring Party becomes aware of the presence of any
Pirate Goods in any Co-Commercialization Countries it is obligated to monitor,
the Monitoring Party shall promptly notify the other Party of such presence and
the Joint Operations Committee shall promptly meet to discuss and propose to the
Joint Steering Committee appropriate actions to minimize the sale of Pirate
Goods in such countries, which actions may include, among other things, legal
actions, providing appropriate notices to customers, and encouraging government
action. All such actions in the Co-Commercialization Countries shall be subject
to the approval of the Joint Steering Committee, which shall meet promptly to
consider any actions proposed by the Joint Operations Committee.
5.19 Phase IV Clinical Trials. Subject to the provisions
of this Agreement, the Parties shall use Commercially Reasonable Efforts to
comply with any Phase IV Clinical Trial obligations, with respect to any Product
in any country in the Territory, imposed by applicable Law or pursuant to the
applicable Regulatory Approvals. The Parties shall use Commercially Reasonable
Efforts to conduct Phase IV Clinical Trials with respect to any Product in any
country in the Territory which has been recommended by the Joint Operations
Committee and which has been approved by the Joint Steering Committee.
5.20 Market Exclusivity Extensions. Each Party shall use
Commercially Reasonable Efforts to maintain and, to the extent available, extend
any Market Exclusivity Right (other than Patent Rights, for which the provisions
of Sections 10.1 through 10.6 shall apply), granted to [a] Party[ies] with
respect to a Product in any country in the Territory.
ARTICLE 6.
LICENSE GRANTS
6.1 Idenix Grants.
(a) Development License.
(i) Subject to the terms and conditions of this
Agreement, Idenix hereby grants to Novartis a right and license in the
Territory, with the right to grant sublicenses only as permitted under
Section 6.1(f), under Idenix' rights in the Idenix Intellectual
Property and in the Joint Intellectual Property, to perform Novartis'
Development obligations and to exercise Novartis' Development rights as
set forth in this Agreement.
(ii) The license granted to Novartis in
subsection (i) above shall be non-exclusive; provided, however, that
such license shall be co-exclusive with Idenix with respect to (A) each
HBV Drug Candidate, (B) the Initial HCV Drug Candidate, and (C) each
other Drug Candidate upon such Drug Candidate becoming an Early
Selection
59
Candidate, and provided, further, however, that such license shall
terminate with respect to any Drug Candidate upon such Drug Candidate
becoming a Rejected Compound.
(b) HBV License.
(i) Subject to the terms and conditions of this
Agreement (including the other subsections of this paragraph (b)),
Idenix hereby grants to Novartis a right and license (with the right to
grant sublicenses only as permitted under Section 6.1(f)) under Idenix'
rights in the Idenix Intellectual Property and in the Joint
Intellectual Property to use, market and promote, import and export,
offer for sale, sell and distribute HBV Products in the Field within
the Territory during the applicable Country Terms for such Products
(the "HBV License").
(ii) The license granted to Novartis in
subsection (i) above shall be exclusive (even with respect to Idenix)
as to the Novartis Territory, and shall be co-exclusive with Idenix
with respect to the Co-Commercialization Countries and the Co-Marketing
Countries; provided that during the effectiveness of such license on a
co-exclusive basis in each Co-Commercialization Country and
Co-Marketing Country, Idenix (A) shall use the co-exclusive rights
retained by it solely to market, promote, import, export, offer for
sale, sell or distribute HBV Products in such country as permitted in
accordance with the provisions of Article 5 or Exhibit K, as
applicable, and the Supply Agreement, and (B) shall not authorize, or
grant the right to, any Third Party (other than an Affiliate or a
sublicensee of Idenix to perform obligations or exercise rights under
this Agreement) to market, promote, import, export, offer for sale,
sell or distribute an HBV Product in such country, either directly or
indirectly, or expressly or by implication.
(iii) Novartis shall exercise the co-exclusive
rights granted to it in subsection (i) above solely to market, promote,
import, export, offer for sale, sell, or distribute HBV Products within
the Co-Commercialization Countries and Co-Marketing Countries as
permitted in accordance with the provisions of Article 5 or Exhibit K,
as applicable, and the Supply Agreement.
(c) HCV License.
(i) Subject to the terms and conditions of this
Agreement (including the other subsections of this paragraph (c)), and
effective upon (A) the relevant Selection Date for the HCV Product and
(B) Idenix' receipt of the payment from Novartis of the fee pursuant to
Section 8.1(b), Idenix shall grant to Novartis a right and license
(with the right to grant sublicenses only as permitted under Section
6.1(f)) under Idenix' rights in the Idenix Intellectual Property and in
the Joint Intellectual Property to use, market and promote, import and
export, offer for sale, sell and distribute the HCV Product for
treatment of human HCV infection as either a monotherapy and/or as part
of a Combination Therapy, within the Territory during the applicable
Country Terms for such Product (the "Novartis HCV License").
60
(ii) The license granted to Novartis in
subsection (i) above shall be exclusive (even with respect to Idenix)
as to the Novartis Territory and shall be co-exclusive with Idenix with
respect to the Co-Commercialization Countries and the Co-Marketing
Countries; provided that during the effectiveness of such license on a
co-exclusive basis in each Co-Commercialization Country and
Co-Marketing Country, Idenix (A) shall use the co-exclusive rights
retained by it solely to market, promote, import, export, offer for
sale, sell or distribute the HCV Product in such country as permitted
in accordance with the provisions of Article 5 or Exhibit K, as
applicable, and the Supply Agreement, and (B) shall not authorize, or
grant the right to, any Third Party (other than an Affiliate or a
sublicensee of Idenix to perform obligations or exercise rights under
this Agreement) to market, promote, import, export, offer for sale,
sell or distribute the HCV Product in such country, either directly or
indirectly, or expressly or by implication.
(iii) Idenix hereby covenants to Novartis that,
during the term of each license granted to Novartis pursuant to
subsection (i), Idenix shall not, and shall not license Third Parties
to, use, market and promote, import and export, offer for sale, sell
and distribute the HCV Product for treatment of any indication other
than human HCV infection as either a monotherapy and/or as part of a
Combination Therapy, within the Territory unless otherwise agreed by
the Parties.
(iv) Novartis shall exercise the co-exclusive
rights granted to it in subsection (i) above solely to market, promote,
import, export, offer for sale, sell, or distribute the HCV Product
within the Co-Commercialization Countries and Co-Marketing Countries as
permitted in accordance with the provisions of Article 5 or Exhibit K,
as applicable, and the Supply Agreement.
(d) Other Product License.
(i) Subject to the terms and conditions of this
Agreement (including the other subsections of this paragraph (d)), and
effective upon the relevant Selection Date for an Other Product, Idenix
shall grant to Novartis a right and license (with the right to grant
sublicenses only as permitted under Section 6.1(f)) under Idenix'
rights in the Idenix Intellectual Property and in the Joint
Intellectual Property:
(A) in the case such Other Product is an Other
HCV Product, to use, market and promote, import and export,
offer for sale, sell and distribute such Other Product for
treatment of human HCV infection as either a monotherapy
and/or as part of a Combination Therapy, within the Territory
during the applicable Country Terms for such Products; or
(B) in the case such Other Product is an Other
Non-HCV Product, to use, market and promote, import and
export, offer for sale, sell and distribute such Other Product
in the Field within the Territory during the applicable
Country Terms for such Products (the license granted in
subsection (A) or (B), as applicable to an Other Product, an
"ODC License").
61
(ii) The licenses granted to Novartis in
subsection (i) above shall be exclusive (even with respect to Idenix)
as to the Novartis Territory and shall be co-exclusive with Idenix with
respect to the Co-Commercialization Countries and the Co-Marketing
Countries; provided that during the effectiveness of such licenses on a
co-exclusive basis in each Co-Commercialization Country and
Co-Marketing Country, Idenix (A) shall use the co-exclusive rights
retained by it solely to market, promote, import, export, offer for
sale, sell or distribute the Other Products in such country as
permitted in accordance with the provisions of Article 5 or Exhibit K,
as applicable, and the Supply Agreement, and (B) shall not authorize,
or grant the right to, any Third Party (other than an Affiliate or a
sublicensee of Idenix to perform obligations or exercise rights under
this Agreement) to market, promote, import, export, offer for sale,
sell or distribute an Other Product in such country, either directly or
indirectly, or expressly or by implication.
(iii) Idenix hereby covenants to Novartis that,
during the term of the license granted to Novartis pursuant to
subsection (i)(A) above, Idenix shall not, and shall not license Third
Parties to, use, market and promote, import and export, offer for sale,
sell and distribute the Other HCV Product for treatment of any
indication other than human HCV infection as either a monotherapy
and/or as part of a Combination Therapy, within the Territory unless
otherwise agreed by the Parties.
(iv) Novartis shall exercise the co-exclusive
rights granted to it in subsection (i) above solely to market, promote,
import, export, offer for sale, sell, or distribute Other Products
within the Co-Commercialization Countries and Co-Marketing Countries as
permitted in accordance with the provisions of Article 5 or Exhibit K,
as applicable, and the Supply Agreement.
(e) Other Interferon. Notwithstanding any provisions to
the contrary contained in Sections 6.1(c) or 6.1(d), each Party may, alone or
through Third Parties and without any further obligation to the other Party,
use, market and promote, import and export, offer for sale, sell and distribute
in the Co-Commercialization Countries and the Co-Marketing Countries one (1) and
only one (1) interferon product (other than Interferon subject to the Interferon
License, if any) which receives approval from the relevant Regulatory Authority
to be labeled for co-administration with the HCV Product and/or an Other HCV
Product and provided that such co-administration labeling is Covered by Idenix
Intellectual Property. For clarification purposes, the foregoing provision shall
not restrict any of Novartis' rights with respect to any interferon products
within the Novartis Territory, or any Party's rights with respect to any
interferon products that are not labeled for co-administration with the HCV
Product or an Other HCV Product.
(f) Sublicensing and Extension of Rights.
(i) With Idenix' approval on a case-by-case
basis (such approval not to be unreasonably withheld or delayed),
Novartis may grant to Third Parties sublicenses under the licenses
granted to Novartis pursuant to Section 6.1; provided that any such
sublicense is granted pursuant to a written agreement that subjects the
sublicensee to all relevant restrictions, limitations and obligations
in this Agreement, including without
62
limitation those set forth in Sections 5.3, 6.1(f) and 8.10 and Article
9, and provided further that any such sublicensee shall not further
sublicense except on terms consistent with this Section 6.1(f). No
consent or any agreement from Idenix shall be required for Novartis to
extend to its Affiliates the rights licensed to it pursuant to this
Section 6.1.
(ii) Novartis shall be jointly and severally
responsible with each of its sublicensees and Affiliates for failure by
such sublicensee or Affiliate to comply with, and Novartis guarantees
to Idenix the compliance by each of its sublicensees and Affiliates
with, all relevant restrictions, limitations and obligations in this
Agreement.
(iii) Novartis shall provide Idenix with a copy of
each executed sublicense agreement within ninety (90) days after
execution in the case of any sublicense agreements that Idenix is
required, pursuant to a written agreement with its applicable
licensor[s], to provide to such licensor[s].
(g) Technology Transfer. To the extent reasonably
necessary for Novartis to exercise its rights and perform its obligations under
this Agreement, Idenix shall provide to Novartis one (1) copy of each physical
embodiment of the Idenix Intellectual Property Controlled by Idenix on the
Effective Date promptly after the Effective Date (and, from time to time
thereafter during the Term, promptly after Idenix obtains Control of any
additional Idenix Intellectual Property). Without limiting the generality of any
other provision of this Agreement, Idenix shall make its scientific and
technical personnel available to Novartis to answer any questions or provide
instruction as determined by the Joint Operations Committee with respect to the
Idenix Intellectual Property.
(h) Survival of Licenses. Upon the expiration of the
Country Term with respect to each Product in each country, the licenses granted
to Novartis pursuant to Section 6.1(b), (c) and (d) shall be deemed to be
perpetual, fully paid up, but non-exclusive, with respect to such Product in
such country.
6.2 Novartis Grants.
(a) Development and Commercialization License.
(i) Subject to the terms and conditions of this
Agreement (including the other provisions of this Section 6.2),
Novartis hereby grants to Idenix the right and license (with the right
to grant sublicenses only as permitted under Section 6.2(c)) under
Novartis' rights in the Joint Intellectual Property:
(A) to use and Develop Early Selection Compounds
and Selected Drug Candidates, and Products derived therefrom,
during the Term; and
(B) to market and promote, import and export,
offer for sale, sell and distribute Selected Drug Candidates
and Products within the Co-Commercialization Countries and the
Co-Marketing Countries during the applicable Country Terms for
such Products pursuant to this Agreement.
63
(ii) Novartis may, in its sole discretion from
time to time during the Term, grant to Idenix the right and license
under Novartis' rights in the Novartis Intellectual Property (with the
right to grant sublicenses to the extent and as determined by Novartis
at the time of grant):
(C) to use and Develop Early Selection Compounds
and Selected Drug Candidates, and Products derived therefrom,
during the Term; and
(D) to market and promote, import and export,
offer for sale, sell and distribute Selected Drug Candidates
and Products within the Co-Commercialization Countries and
Co-Marketing Countries during the applicable Country Terms for
such Products pursuant to this Agreement.
Notwithstanding anything to the contrary contained herein, the licenses
that Novartis may grant in accordance with the above provisions shall
not include any Novartis Intellectual Property that relates solely to a
product or compound that Novartis may develop or commercialize
independent of Idenix without violating any provisions of this
Agreement.
(iii) The license granted to Idenix in subsection
(i) above, and any licenses that Novartis may grant to Idenix in
subsection (ii) above, shall be co-exclusive with Novartis; provided
that during the effectiveness of such licenses on a co-exclusive basis
in each Co-Commercialization Country and Co-Marketing Country
(respectively, in the case of the license granted in subsection (i)
above and, in the event and to the extent Novartis grants any license
to Idenix under subsection (ii) above), Novartis (A) shall use the
co-exclusive rights retained by it solely to Develop, market, promote,
import, export, offer for sale, sell or distribute Selected Drug
Candidates or Products in such country as permitted in accordance with
the provisions of Article 5 or Exhibit K, as applicable, and the Supply
Agreement, and (B) shall not authorize, or grant the right to, any
Third Party (other than an Affiliate or a sublicensee of Novartis to
perform obligations or exercise rights under this Agreement) to
Develop, market, promote, import, export, offer for sale, sell or
distribute Early Selection Compounds, Selected Drug Candidates or
Products derived therefrom in such country, either directly or
indirectly, or expressly or by implication.
(iv) Idenix shall exercise the co-exclusive
rights granted to it under subsection (i) above, and any co-exclusive
rights that Novartis may grant to Idenix in subsection (ii) above,
solely to Develop Early Selection Compounds, Selected Drug Candidates
and Products derived therefrom in accordance with this Agreement and
the Supply Agreement, and to market, promote, import, export, offer for
sale, sell, or distribute Products within the Co-Commercialization
Countries and Co-Marketing Countries as permitted in accordance with
the provisions of Article 5 or Exhibit K, as applicable, and the Supply
Agreement.
(b) Interferon License.
(i) Subject to the terms and conditions of this
Agreement and the Supply Agreement, and effective upon Idenix'
provision to Novartis of the Interferon
64
Acceptance Notice in accordance with Section 4.5, Novartis shall grant
to Idenix a right and license, co-exclusive with Novartis, with the
right to grant sublicenses only as permitted under Section 6.2(c),
under Novartis' rights in any intellectual property Controlled by
Novartis and relating to Interferon, to develop and commercialize
Interferon for inclusion in a Combination Therapy within the
Co-Commercialization Countries and the Co-Marketing Countries either
(A) as a fixed-dose Product containing as active ingredients
Interferon, on the one hand, and the Selected HCV Drug Candidate or any
Selected Other HCV Drug Candidate, on the other hand, or (B) as a
separate co-administration product sold together or promoted as a
combination with a Product containing as an active ingredient the
Selected HCV Drug Candidate or any Selected Other HCV Drug Candidate
(the "Interferon License").
(ii) With respect to the development or
commercialization of Interferon for inclusion in a Combination Therapy
approved for the treatment of HCV infection, Novartis, in the event
Idenix has been granted the Interferon License and Novartis has
exercised the Novartis HCV Option or an ODC Option for an Other HCV
Product, during the effectiveness of the license granted in subsection
(i) above on a co-exclusive basis in each Co-Commercialization and
Co-Marketing Country, (A) shall use the co-exclusive rights retained by
it under such license in such country solely to develop and
commercialize Interferon for inclusion in a Combination Therapy as
described in subsection (i) above in accordance with this Agreement and
the Supply Agreement, and (B) shall not authorize, or grant the right
to, any Third Party (other than an Affiliate or a sublicensee of
Novartis to perform obligations or exercise rights under this
Agreement) to develop or commercialize Interferon within such country
for inclusion in a Combination Therapy as described in subsection (i)
above, either directly or indirectly, or expressly or by implication.
(iii) Idenix shall exercise the co-exclusive
rights granted to it in subsection (i) above solely to develop and
commercialize Interferon within the Co-Commercialization Countries and
the Co-Marketing Countries for inclusion in a Combination Therapy as
described in subsection (i) above in accordance with this Agreement and
the Supply Agreement.
(c) Sublicensing.
(i) With Novartis' approval on a case-by-case
basis (such approval not to be unreasonably withheld or delayed),
Idenix may grant to Third Parties sublicenses under the licenses
granted to Idenix pursuant to Section 6.2(a)(i); provided that any such
sublicense is granted pursuant to a written agreement that subjects the
sublicensee to all relevant restrictions, limitations and obligations
in this Agreement, including without limitation those set forth in
Sections 5.3, 6.2(c) and 8.10 and Article 9, and provided further that
any such sublicensee shall not further sublicense except on terms
consistent with this Section 6.2(c). No consent or any agreement from
Novartis shall be required for Idenix to extend to its Affiliates the
rights licensed to it pursuant to Section 6.2(a)(i).
65
(ii) Idenix shall be jointly and severally
responsible with each of its sublicensees and Affiliates for failure by
such sublicensee or Affiliate to comply with, and Idenix guarantees to
Novartis the compliance by each of its sublicensees and Affiliates
with, all relevant restrictions, limitations and obligations in this
Agreement.
(iii) Idenix shall provide Novartis with a copy of
each executed sublicense agreement within ninety (90) days after
execution in the case of any sublicense agreements that Novartis is
required, pursuant to a written agreement with its applicable
licensor[s], to provide to such licensor[s].
(d) Technology Transfer. To the extent reasonably
necessary for Idenix to exercise its rights and perform its obligations under
this Agreement with respect to any Novartis Intellectual Property that Novartis
may determine to license to Idenix pursuant to Section 6.2(a)(ii), and from time
to time during the Term as applicable, Novartis shall provide to Idenix one (1)
copy of each physical embodiment of the applicable Novartis Intellectual
Property Controlled by Novartis promptly after Novartis grants to Idenix such a
license. Without limiting the generality of any other provision of this
Agreement, Novartis shall make its scientific and technical personnel available
to Idenix to answer any questions or provide instruction as determined by the
Joint Operations Committee with respect to any Novartis Intellectual Property
licensed by Novartis to Idenix.
(e) Survival of Licenses. Upon the expiration of the
Country Term with respect to each Product in each country, the licenses that
Novartis grants or may grant to Idenix pursuant to Sections 6.2(a)(i) and
6.2(b), respectively, shall be deemed to be perpetual, fully paid up, but
non-exclusive, with respect to such Product in such country.
6.3 Additional License Provisions
(a) Covenant Intellectual Property. Novartis agrees that
neither it nor any of its Subject Affiliates will bring a claim for infringement
of any Covenant Intellectual Property against Idenix or any of its Affiliates or
permitted sublicensees with respect to actions by Idenix or any of its
Affiliates or permitted sublicensees which (i) are solely in connection with the
Development or Commercialization of the Products, and (ii) which would, but for
this Section 6.3, give rise to such a claim. Notwithstanding anything contained
herein to the contrary: (A) this Section 6.3(a) shall have no further force or
effect upon termination of this Agreement by Novartis pursuant to Section 12.3
(or, in the event of a Country-Specific Termination by Novartis pursuant to
Section 12.3, no further force or effect with respect to the Covenant
Intellectual Property relating to the relevant Product[s] within the relevant
country[ies], or in the event of a Product/Drug-Specific Termination by Novartis
pursuant to Section 12.3, no further force or effect with respect to Covenant
Intellectual Property relating to the relevant Product or Drug Candidate, as
applicable); and (B) the right set forth in this Section 6.3(a) may be assigned
only in connection with an assignment in accordance with Section 13.8, and
provided that in connection with such an assignment the obligation of Novartis
and its Subject Affiliates under this Section 6.3(a) shall apply only with
respect to that portion of the assignee's business represented by Idenix'
business succeeded to by such assignee.
66
(b) Limitation. Notwithstanding any other provision to
the contrary contained in this Agreement but subject to the express grant of any
right or license by Novartis pursuant to Section 6.2(a)(ii), Novartis and its
Affiliates do not and shall not grant hereunder any rights or licenses under, or
covenant not to xxx with respect to, any intellectual property of Novartis or
its Affiliates that is not first developed by Novartis or one of its Subject
Affiliates primarily in connection with, and used primarily in connection with,
the activities of Novartis or one of its Subject Affiliates pursuant to this
Agreement.
ARTICLE 7.
EXCLUSIVITY
7.1 Competing Products.
(a) Novartis Obligations. During the Non-Competition
Period, Novartis shall not, and shall ensure that its Affiliates do not, either
alone or in conjunction with a Third Party, directly or indirectly, market, sell
or promote, or license any Third Party to market, sell or promote, any Competing
Product anywhere in the world. Notwithstanding the foregoing, if Novartis or any
of its Affiliates seeks, either alone or in conjunction with a Third Party, to,
directly or indirectly, market, sell or promote, or license any Third Party to
market, sell or promote, any Competing Product anywhere in the world (the
"Competing Product Opportunity"), Novartis shall first provide written notice
thereof to Idenix (the "Competing Product Opportunity Notice"), whereupon the
provisions of Section 7.1(b) shall apply:
(b) Process.
(i) If, within thirty (30) days of Idenix'
receipt of the Competing Product Opportunity Notice (the "Initial
Response Period"), Idenix notifies Novartis in writing that it has a
bona fide interest in discussing with Novartis such Competing Product
Opportunity, then the Parties shall, for a period not to exceed sixty
(60) days (the "Competing Product Negotiation Period"), enter into
exclusive good faith negotiations with respect to the Competing Product
Opportunity.
(ii) If: (A) Idenix indicates during the Initial
Response Period that it has no interest in the Competing Product
Opportunity; (B) Idenix fails to engage in good faith negotiations
during the Competing Product Negotiation Period; (C) despite good faith
negotiations, the Parties are unable, during the Competing Product
Negotiation Period, to reach mutual agreement on material terms with
respect to the Competing Product Opportunity; or (D) despite good faith
efforts, the Parties have failed to conclude definitive agreements
incorporating such terms within sixty (60) days of reaching such mutual
agreement, then Novartis and its Affiliates shall be thereafter free,
without any further obligation to Idenix, to either alone or in
conjunction with a Third Party, directly or indirectly, market, sell or
promote, or license any Third Party to market, sell or promote, any
Competing Product anywhere in the world.
7.2 Limitation of Restrictions. Idenix acknowledges that
Novartis is in the business of developing, manufacturing and selling medical
processes and products and, subject
67
to the specific provisions of this Agreement (including, without limitation,
Sections 2.1, 5.3 and 5.15), nothing in this Agreement shall be construed as
restricting such business or imposing on Novartis a duty to market and/or sell
and exploit the Products to the exclusion of, or in preference to, any other
product or process, or in any way other than in accordance with its normal
commercial practices.
ARTICLE 8.
FINANCIAL PROVISIONS
8.1 License Payment
(a) HBV License. In consideration of the grant by Idenix
of the HBV License, Novartis shall make a non-refundable, non-creditable license
payment to Idenix of U.S.$75,000,000 on the Selection Date for the HBV Products
(i.e., the Effective Date); provided, however, that such amount shall be reduced
by set-off in an amount equal to the aggregate of such amounts owing by Idenix
to Novartis under, and as contemplated by, Section 2.2(a) of the Credit
Agreement.
(b) HCV License. In consideration of the grant by Idenix
of the Novartis HCV License, Novartis shall [**].
8.2 Operating Funds. Novartis shall make the payments to
Idenix set forth below (the "Operating Payments") not later than thirty (30)
days after the date on which it receives written notice from Idenix that the
corresponding event has been achieved for the HCV Product for the primary
indication and patient population for which the HCV Product is intended;
provided, however, that Novartis shall have no obligation to pay any such
Operating Payments if the corresponding event has not been achieved for the HCV
Product, if Idenix has not granted to Novartis the Novartis HCV License or, in
the event Idenix has granted to Novartis the Novartis HCV License, if any notice
of termination has been given to terminate this Agreement in its entirety or
with respect to the HCV Product or if the Novartis HCV License is terminated
before the achievement of the corresponding event for the HCV Product. Idenix
agrees that it shall use any and all amounts it receives under this Section 8.2
solely in accordance with an annual operating plan and budget that has been
authorized in accordance with Section 3.3 of the Stockholders' Agreement, if
applicable.
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Event Payment Amount
----- --------------
(a) [**] US$[**]
(b) [**] US$[**]
(c) [**] US$[**]
(d) [**] US$[**]
Each of the Operating Payments shall only be payable once, regardless of how
many times the corresponding event is achieved. Achievement of the events above
may be based on Registration Filings filed by either Party or any Affiliate of
either Party.
8.3 Development Expenses. Except as specifically provided
to the contrary in this Section 8.3, Novartis shall pay all Development Expenses
incurred for a Product on or after the relevant Selection Date (but not before
the relevant Selection Date, including with respect to any corresponding Drug
Candidates, whether or not such Drug Candidates are determined to be Early
Selection Candidates), but only if such Development Expenses are incurred in
accordance with an approved Development Budget and an approved Development Plan.
(a) HBV Drug Candidates. Novartis shall be solely
responsible for all Development Expenses incurred with respect to the
Development of the HBV Drug Candidates and the HBV Products anywhere in the
world on or after the applicable Selection Date.
(b) HCV Drug Candidate.
(i) Initial HCV Drug Candidate. Novartis shall
be solely responsible for all Development Expenses incurred with
respect to the Development of the Initial HCV Drug Candidate and the
HCV Product anywhere in the world on and after the
69
applicable Selection Date, and for all Development Expenses incurred
with respect to Technical Development of the Initial HCV Drug Candidate
on and after the Effective Date.
(ii) Backup HCV Drug Candidate. Notwithstanding
the provisions of Section 8.3(b)(i), if there is an HCV Failure, then,
within sixty (60) days after the HCV Failure, Idenix shall notify
Novartis and the Joint Operations Committee in writing (the "Backup HCV
Drug Candidate Notice") of another HCV Drug Candidate for which a
corresponding Selection Date has not occurred (the "Backup HCV Drug
Candidate"). The Backup HCV Drug Candidate Notice shall include a
written proposed Development Plan and Development Budget for such
Backup HCV Drug Candidate (the Development Expenses set forth in the
proposed Development Budget, the "Backup HCV Development Expenses") for
consideration and approval by, respectively, the Joint Operations
Committee in accordance with Section 4.2(b) and Novartis in accordance
with Section 4.3(c).
(A) If the Backup HCV Development Expenses are
budgeted to be less than or equal to U.S.$[**], the proposed
Development Budget shall reflect the full amount of the Backup
HCV Development Expenses and Novartis shall pay the full
amount of the Backup HCV Development Expenses in accordance
with the provisions of Section 8.3(d), and such amounts paid
by Novartis shall be credited against the Sales Milestone
Payment otherwise due from Novartis to Idenix pursuant to
Section 8.6(a)(ii)(A).
(B) If the Backup HCV Development Expenses are
budgeted to be greater than U.S.$[**], the proposed
Development Budget shall reflect the full amount of the Backup
HCV Development Expenses but Novartis shall pay only the first
U.S.$[**] of the Backup HCV Development Expenses in accordance
with the provisions of Section 8.3(d); provided that Novartis
will have no obligation to pay any of the Backup HCV
Development Expenses unless Idenix is able to fund the entire
amount of the Backup HCV Development Expenses in excess of
U.S.$[**] (the "Excess Amount"). Any such amounts paid by
Novartis shall be credited against the Sales Milestone Payment
otherwise due from Novartis to Idenix pursuant to Section
8.6(a)(ii)(A).
For purposes of clarity and avoidance of doubt, sample
calculations of the foregoing are set forth on Exhibit Q.
(iii) Notwithstanding anything to the contrary
contained in this Section 8.3(b), Novartis shall have no obligation to
pay any of the Backup HCV Development Expenses unless it approves the
Development Budget for the Backup HCV Drug Candidate.
(c) Other Drug Candidates. Novartis shall be solely
responsible for all Development Expenses incurred with respect to the
Development of each Selected Other Drug Candidate and the corresponding Other
Products anywhere in the world on or after the applicable Selection Date, and,
if Novartis elects in accordance with Section 2.4(a) of the Supply
70
Agreement, for all Development Expenses incurred with respect to Technical
Development of any other HCV Drug Candidate on and after the Effective Date,
except that:
(i) Idenix shall be responsible for fifty
percent (50%) of the Development Expenses incurred with respect to
those Development activities for each Selected Other Drug Candidate
supporting only Registration Filings in the U.S. Territory; and
(ii) With respect to the Development Expenses
relating to the Development activities for each Selected Other Drug
Candidates supporting Registration Filings in the U.S. Territory and
other countries, Idenix shall bear the Idenix NPV Proportionate
Development Expense Share. For purposes hereof, the Idenix NPV
Proportionate Development Expense Share shall be calculated for each
Selected Other Drug Candidate in the following manner: Projected NPV in
the United States of such Selected Other Drug Candidate multiplied by
fifty percent (50%), divided by the Global Projected NPV of such
Selected Other Drug Candidate, multiplied by the total Development
Expense relating to such Selected Other Drug Candidate. An example of
the foregoing calculations is set forth on Exhibit P.
(d) Payment.
(i) Within thirty (30) days following the end of
each calendar quarter, Idenix shall submit to Novartis an invoice
setting forth in reasonable detail the Development Expenses incurred by
or on behalf of Idenix during such calendar quarter for which Novartis
is responsible pursuant to this Section 8.3. In submitting such
invoice, Idenix shall submit costs and expenses for inclusion in the
reconciliation of Development Expenses only to the extent such costs
and expenses were made or incurred in accordance with the budget
contained in the relevant approved Development Plan, as amended from
time to time by the relevant Joint Steering Committee.
(ii) Novartis shall pay Idenix such Development
Expenses within thirty (30) days after receipt of such invoice. In the
event of a dispute with respect thereto, (A) Novartis shall remit on a
timely basis all amounts not disputed and shall provide written notice
within such thirty (30) day period after receipt of the invoice,
specifying in detail the amounts in dispute and the basis for such
dispute, (B) the matter shall be referred to the Joint Steering
Committee for resolution, and (C) interest shall be payable on any
additional amounts determined to be due in the same manner as provided
for in Section 8.15.
8.4 Registration Expenses.
(a) Responsibilities.
(i) Each Party shall bear fifty percent (50%) of
the Registration Expenses with respect to each Product in the
Co-Commercialization Countries.
(ii) Novartis shall bear all Registration
Expenses with respect to each Product in the Novartis Territory.
71
(b) Payment.
(i) Within thirty (30) days following the end of
each calendar quarter, each Party shall submit to the other Party a
report setting forth in reasonable detail the Registration Expenses
incurred by or on behalf of the submitting Party during such calendar
quarter for which such other Party is responsible pursuant to Section
8.4(a). In submitting such report, the submitting Party shall submit
costs and expenses for inclusion in the reconciliation of Registration
Expenses only to the extent such costs and expenses were made or
incurred in accordance with the budget contained in the relevant
approved Development Plan, as amended from time to time by the relevant
Joint Steering Committee.
(ii) The Parties shall reconcile the reports
within sixty (60) days after the end of each calendar quarter. To the
extent that one Party must make a payment to the other Party to ensure
that each Party bears the appropriate responsibility with respect to
the Registration Expenses in accordance with Section 8.4(a), the paying
Party shall pay the other Party such Registration Expenses within
thirty (30) days after reconciliation of such reports. In the event of
a dispute with respect thereto, (A) the paying Party shall remit on a
timely basis all amounts not disputed and shall provide written notice
within such thirty (30) day period after reconciliation of such
reports, specifying in detail the amounts in dispute and the basis for
such dispute, (B) the matter shall be referred to the Joint Steering
Committee for resolution, and (C) interest shall be payable on any
additional amounts determined to be due in the same manner as provided
for in Section 8.15.
8.5 Approval Milestones
(a) Novartis shall make the non-refundable,
non-creditable payments ("Approval Milestone Payments") to Idenix set forth
below not later than thirty (30) days after the date on which it receives
written notice from Idenix that the corresponding milestone event set forth
below has been achieved for a Product for the primary indication and patient
population for which such Product is intended:
72
(i) HBV Products.
Milestone Event for HBV Products Payment Amount
(A) [**] US$[**]
(B) [**] US$[**]
(C) [**] US$[**]
(D) [**] US$[**]
(ii) HCV Product.
Milestone Event for HCV Products Payment Amount
(A) [**] US$[**]
(B) [**] US$[**]
(C) [**] US$[**]
(D) [**] US$[**]
With respect to the milestone payment due to Idenix pursuant to Section
8.5(a)(ii)(A), (a) NM-283 shall be deemed to be safe upon the satisfaction of
those regulatory standards in the U.S. Territory and the Major EU Countries
which are necessary to allow NM-283 to enter into Phase IIB Clinical Trials or
Pivotal Clinical Trials, and (b) NM-283 shall be deemed to be effective if data
collected during the Phase I/IIA Clinical Trial for NM-283 demonstrates a mean
reduction of not less than 1.0 log of virus in patients infected with the
genotype I strain of HCV who are resistant to treatment with a combination of
once weekly pegylated interferon plus ribavirin, in accordance with the
applicable approved Development Plan.
73
(iii) Other Products. The timing and amount of the
milestone payments for Other Products based on obtaining Regulatory
Approvals will be determined in accordance with Section 8.8.
(b) Each of the Approval Milestone Payments shall only be
payable once, regardless of how many times the corresponding milestone event is
achieved. Achievement of the milestone events above may be based on Registration
Filings filed by either Party or any Affiliate of either Party.
8.6 Sales Milestones
(a) In addition to all other amounts payable under this
Agreement, Novartis shall make the non-refundable, non-creditable (except as
provided in Section 8.3(b)(ii)) payments ("Sales Milestone Payments") to Idenix
set forth below not later than thirty (30) days after the date on which it
receives written notice from Idenix that the corresponding milestone event set
forth below has been achieved for a Product:
(i) HBV Products.
Milestone Event for HBV Products Payment Amount
(A) [**] US$[**]
(B) [**] US$[**]
(C) [**] US$[**]
(D) [**] US$[**]
(E) [**] US$[**]
(F) [**] US$[**]
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(ii) HCV Product.
Milestone Event for HCV Products Payment Amount
(A) [**] US$[**]
(B) [**] US$[**]
(C) [**] US$[**]
(D) [**] US$[**]
(E) [**] US$[**]
(iii) Other Products. The timing and amount of the
milestone payments for Other Products based on commercial sales will be
determined in accordance with Section 8.8.
(b) Each of the Sales Milestone Payments shall only be
payable once, regardless of how many times the corresponding milestone is
achieved. More than one of the Sales Milestone Payments may be earned
concurrently based on the Net Sales of Products during the same twelve (12)
month period or any portion thereof.
(c) Within thirty (30) days following the end of each
calendar month after the First Commercial Sale of any Product in any country in
the Territory, (i) Novartis shall submit to Idenix a written report setting
forth in reasonable detail, on a Product-by-Product and country-by-country
basis, to the extent made or incurred by Novartis, its Affiliates or
sublicensees, information regarding the Net Sales made during such calendar
month and (ii) Idenix shall submit to Novartis a written report setting forth in
reasonable detail, on a Product-by-Product and country-by-country basis, to the
extent made or incurred by Idenix, its Affiliates or sublicensees, information
regarding the Net Sales made during such calendar year.
8.7 Payments for Third Party Intellectual Property.
Notwithstanding any funding or payment obligations of Novartis hereunder or
under the Supply Agreement, Idenix shall be solely responsible for any
royalties, fees or other amounts payable to Third Parties to obtain rights under
any Blocking Third Party Intellectual Property Rights with respect to the HBV
Drug Candidates, HBV Products, Initial HCV Drug Candidate and the HCV Product
(solely if it contains the Initial HCV Drug Candidate), whether such royalties,
fees or other amounts were paid prior to or become payable from and after the
Effective Date. Without limiting the generality of the foregoing, Idenix shall
be solely responsible for all royalties, fees or other amounts payable pursuant
to the agreements set forth in Exhibit J with respect to the HBV
75
Drug Candidates, HBV Products, Initial HCV Drug Candidate and the HCV Product
(solely if it contains the Initial HCV Drug Candidate). Novartis and Idenix
shall have equal responsibility for any royalties, fees or other amounts payable
to Third Parties to obtain rights under any Blocking Third Party Intellectual
Property Rights with respect to any other Selected Drug Candidates or
corresponding Products, or under any other Third Party intellectual property
rights that may be reasonably necessary for the Development, Commercialization
or Manufacture of any Selected Drug Candidate or Product. Notwithstanding the
foregoing, Idenix shall be solely responsible for any royalties, fees or other
amounts payable to Third Parties to obtain rights under any Blocking Third Party
Intellectual Property Rights with respect to the Backup HCV Drug Candidate and
any Product[s] derived therefrom if Novartis pays the Backup HCV Development
Expenses in accordance with Section 8.3(b). In the event any royalties, fees or
other amounts referenced in this Section 8.7 are required to be paid, the
Parties shall mutually determine in good faith how each Party's responsibility
may be reconciled, reflected and/or credited, as the case may be, in connection
with payments to be made hereunder or under the Supply Agreement.
8.8 Milestones for Other Products(a) Idenix shall
prepare, in connection with providing its Completion Notice with respect to an
Other Drug Candidate, projections of total NPV on projected net sales of the
corresponding Other Product based upon available information.
(b) Novartis shall consider the milestone payments
(including milestones relating to commercial sales and Regulatory Approvals) and
payment schedules proposed by Idenix for the relevant Other Drug Candidate and
corresponding Other Product in the Completion Notice. The Parties shall meet as
necessary to discuss Idenix' proposals and Idenix' underlying projections of NPV
of the corresponding Other Product, and any proposals and projections that
Novartis may prepare and provide. If the Parties cannot agree on projections,
milestone payments and/or payment schedules, the matter will be arbitrated in
accordance with Section 13.6.
(c) The Parties have agreed on: (i) the NPV (the
"Hepatitis Products License Fees NPV") of the weighted average of the payments
with respect to the HBV Products and the Initial HCV Product under Section 8.1;
(ii) the NPV (the "Hepatitis Products Approval Milestone NPV") of the weighted
average of the payments with respect to the HBV Products and the Initial HCV
Product under Section 8.5 (a); and (iii) the NPV of the projected weighted
average earnings, adjusted as set forth in Exhibit F ("Adjusted Earnings"), from
sales of the HBV Products and the Initial HCV Product (the "Hepatitis Products
NPV"). The Parties have also agreed on the following ratios expressed as
percentages, as set forth in Exhibit F (collectively, the "Hepatitis Product
Payment Percentages"):
A
B
where A is the Hepatitis Products License Fees NPV
and B is the Hepatitis Products NPV (such ratio, expressed as a percentage, the
"License Fee Percentage"; and
C
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B
where C is the Hepatitis Products Approval Milestone
NPV and B is the Hepatitis Products NPV (such ratio, expressed as a percentage,
the "Approval Milestone Percentage").
(d) The license fees and Regulatory Approval-based
milestone payments payable on each Other Product shall be based on the same
percentages of the projected NPV of the Adjusted Earnings from sales of such
Other Product as the Hepatitis Product Payment Percentages. The commercial
sales-based milestone payments payable on each Other Product shall be mutually
agreed upon by the Parties.
8.9 Sumitomo Payments. With respect to any amounts that
Idenix B.V. is obligated to pay to Sumitomo Pharmaceuticals Co., Ltd. pursuant
to Section 2.1 or 2.2 of the Sumitomo Settlement Agreement, Novartis shall
reimburse Idenix for each such payment not later than thirty (30) days after
Idenix provides Novartis with written evidence of such payment having been made
to Sumitomo Pharmaceuticals Co., Ltd. by Idenix B.V. or by Idenix on behalf of
Idenix B.V. Novartis shall reimburse Idenix for such payments up to an aggregate
amount of [**].
8.10 Audits. Each Party shall keep, and shall cause its
Affiliates and sublicensees to keep, complete and accurate records of the
underlying Development Expenses, Registration Expenses and Annual Net Sales data
relating to the reports and payments required by Sections 8.3, 8.4 and 8.6,
respectively, and all sales and promotion efforts in the Co-Commercialization
Countries pursuant to this Agreement. Each Party will annually have the right at
its own expense to have an independent, certified public accountant, selected by
such Party and reasonably acceptable to the other Party, review any such records
of the other Party, its Affiliates and sublicensees in the location[s] where
such records are maintained by the other Party, its Affiliates and sublicensees
upon reasonable notice and during regular business hours and under obligations
of confidence, for the sole purpose of verifying the basis and accuracy of
payments made under Sections 8.3, 8.4 and 8.6, or the quality and quantity of
sales and promotion efforts of such other Party in the Co-Commercialization
Countries, its Affiliates and sublicensees, in each case within the prior
thirty-six (36) month period. If the review of such records reveals that the
audited Party has failed to accurately report information pursuant to Sections
8.3, 8.4 and 8.6, or failed to accurately report or perform its sales and
promotion efforts in the Co-Commercialization Countries, then the audited Party
shall promptly pay to the auditing Party any resulting amounts due under
Sections 8.3, 8.4 and 8.6, or amounts due as a result of any failure to
accurately report or perform its sales and promotion efforts in the
Co-Commercialization Countries, together with interest calculated in the manner
provided in Section 8.15. If any such under-payments are greater than ten
percent (10%) of the amounts actually due for the reviewed period under Sections
8.3, 8.4 and/or 8.6, as applicable, or reflect a material failure to accurately
report or perform its sales and promotion efforts in the Co-Commercialization
Countries, the audited Party shall pay all of the costs of such review.
8.11 Tax Matters. The Parties shall use all reasonable and
legal efforts to reduce or optimize tax withholding, to the extent permitted by
applicable Law, on payments made pursuant to this Agreement. Each Party agrees
to cooperate in good faith to provide the
77
other Party with such documents and certifications as are reasonably necessary
to enable such other Party to minimize any withholding tax obligations and/or
liabilities. The Parties will reasonably cooperate in providing one another with
documentation of the payment of any withholding taxes paid pursuant to this
Section 8.11 and in completing and filing documents required under the
provisions of any applicable tax laws or under any other applicable Law in
connection with the making of any required tax payment or withholding payment,
or in connection with any claim to a refund of or credit for any such payment.
8.12 United States Dollars. All dollar ($) amounts
specified in this Agreement are United States Dollar amounts.
8.13 Currency Exchange. With respect to Net Sales invoiced
and/or expense incurred, all amounts shall be expressed in U.S. dollars. Such
U.S. dollar amounts shall be retrieved from Novartis' official reporting systems
(which official reports are in U.S. dollars). The currency conversion for Net
Sales invoiced and/or expenses incurred in currencies other than U.S. dollars
shall be based on Novartis' applicable standard SWAER (Sales Weighted Average
Exchange) rates. All payments hereunder shall be made in U.S. dollars.
8.14 Certain Payment Procedures. Either Party may
designate an Affiliate thereof as the recipient of any amounts payable hereunder
to such Party. If at any time legal restrictions in any country in the Territory
prevent the prompt remittance of any payments due pursuant to this Agreement,
the paying Party shall have the right and option to make such payments by
depositing the amount thereof in local currency to the receiving Party's account
in a bank or depository in such country designated by the receiving Party, or,
if none is designated by the receiving Party within thirty (30) days, in a
recognized banking institution selected by the paying Party, its Affiliates or
sublicensees, as the case may be, and identified in a written notice given to
the receiving Party.
8.15 Late Payments. The paying Party shall pay interest to
the receiving Party on the aggregate amount of any payments that are not paid on
or before the date such payments are due under this Agreement at a rate per
annum equal to the lesser of one percent (1%) per month or the highest rate
permitted by applicable Law, compounded monthly, calculated on the number of
days such payments are paid after the date such payments are due.
ARTICLE 9.
CONFIDENTIAL INFORMATION
9.1 Confidential Information. All Confidential
Information disclosed by a Party to the other Party during the term of this
Agreement shall not be used by the receiving Party except in connection with the
activities contemplated by this Agreement, shall be maintained in confidence by
the receiving Party (except to the extent reasonably necessary for Regulatory
Approval of the Products or for the filing, prosecution and maintenance of
Patent Rights), and shall not otherwise be disclosed by the receiving Party to
any other person, firm, or agency, governmental or private, without the prior
written consent of the disclosing Party, except to the extent that the
Confidential Information (as determined by competent documentation):
78
(a) was known or used by the receiving Party prior to its
date of disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to
the receiving Party, is lawfully disclosed to the receiving Party by sources
other than the disclosing Party rightfully in possession of the Confidential
Information; or
(c) either before or after the date of the disclosure to
the receiving Party, becomes published or generally known to the public
(including information known to the public through the sale of products in the
ordinary course of business), without the receiving Party or its sublicensees
violating this Article 9; or
(d) is independently developed by or for the receiving
Party without reference to or reliance upon the Confidential Information.
Notwithstanding anything set forth herein to the contrary, this Article 9 shall
not prohibit the receiving Party from disclosing Confidential Information of the
disclosing Party that is required to be disclosed by the receiving Party to
comply with applicable Laws, to defend or prosecute litigation or to comply with
governmental regulations; provided that, to the extent practicable, the
receiving Party provides prior written notice of such disclosure to the
disclosing Party and assists the disclosing Party in its reasonable and lawful
efforts to avoid and/or minimize the degree of such disclosure. Notwithstanding
anything set forth herein to the contrary, this Article 9 shall not prohibit
Idenix or Idenix SARL from disclosing the terms of this Agreement and the Supply
Agreement to Universita di Cagliari, Le Centre National de la Recherche
Scientifique and L'Universite Montpellier II as required under the agreements
between or among Idenix, Idenix SARL and/or such parties that are set forth on
Exhibit J, as such agreements may be amended from time to time as permitted
hereunder.
9.2 Employee and Advisor Obligations. Each Party agrees
that it shall provide Confidential Information received from the other Party
only to its employees, consultants and advisors, and to the employees,
consultants and advisors of such Party's Affiliates, who have a need to know and
have an obligation to treat such information and materials as confidential under
terms no less restrictive than those set forth herein.
9.3 Term. All obligations of confidentiality imposed
under this Article 9 shall expire five (5) years following termination or
expiration of this Agreement.
9.4 Publications. The Parties acknowledge that scientific
lead time is a key element of the value of the collaboration and further agree
that scientific publications must be strictly monitored to prevent any adverse
effect of the premature publication of results of the collaboration. The Parties
shall establish a procedure for publication review and approval and each Party
shall first submit to the other Party an early draft of all such publications,
whether they are to be presented orally or in written form, at least sixty (60)
days prior to submission for publication. Each Party shall review each such
proposed publication in order to avoid the unauthorized disclosure of a Party's
Confidential Information and to preserve the patentability of inventions arising
from the collaboration. If, as soon as reasonably possible but no longer than
sixty (60) days following receipt of an advance copy of a Party's proposed
publication, the other
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Party informs such Party that its proposed publication contains Confidential
Information of the other Party, then such Party shall delete such Confidential
Information from its proposed publication. If, as soon as reasonably possible
but no longer than sixty (60) days following receipt of an advance copy of a
Party's proposed publication, the other Party informs such Party that its
proposed publication could be expected to have a material adverse effect on any
Patent Rights or Know-How of such other Party, then such Party shall delay such
proposed publication for a period of reasonable length to permit the timely
preparation and first filing of Patent Application[s] on the information
involved.
9.5 Publicity. Each Party intends to issue a press
release after the execution of this Agreement, subject to the provisions of the
following sentence. Neither Party shall issue any press release or public
announcement relating to any Products in the Territory or this Agreement without
the prior written approval of the other Party, which approval shall not be
unreasonably withheld, except that a Party may issue such a press release or
public announcement if required by Law, including without limitation by the
rules or regulations of the United States Securities and Exchange Commission or
similar regulatory agency in a country other than the United States or of any
stock exchange or Nasdaq; provided that the other Party has received prior
notice of such intended press release or public announcement if practicable
under the circumstances and the Party subject to the requirement includes in
such press release or public announcement only such information relating to the
Product[s] or this Agreement as is required by such Law. The rights of approval
and notice granted to a Party in accordance with the preceding sentence shall
only apply for the first time that specific information is to be disclosed, and
shall not apply to the subsequent disclosure of substantially similar
information that has previously been disclosed.
ARTICLE 10.
INTELLECTUAL PROPERTY OWNERSHIP,
PROTECTION AND RELATED MATTERS
10.1 Ownership of Inventions
(a) Sole Inventions. Each Party shall exclusively own all
inventions made solely by such Party, its employees, agents and consultants
("Sole Inventions"). Sole Inventions made solely by Novartis, its employees,
agents and consultants are referred to herein as "Novartis Sole Inventions".
Sole Inventions made solely by Idenix, its employees, agents and consultants are
referred to herein as "Idenix Sole Inventions".
(b) Joint Inventions. The Parties shall jointly own all
inventions made jointly by employees, agents and consultants of Novartis, on the
one hand, and employees, agents and consultants of Idenix, on the other hand, on
the basis of each Party having an undivided interest in the whole ("Joint
Inventions").
(c) Inventorship. For purposes of determining whether an
invention is a Novartis Sole Invention, an Idenix Sole Invention or a Joint
Invention, questions of inventorship shall be resolved in accordance with United
States patent laws.
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10.2 Prosecution and Maintenance of Patent Rights
(a) Solely-Owned Patent Rights. Idenix and Novartis shall
use Commercially Reasonable Efforts to prepare, file, prosecute and maintain
Patents and Patent Applications (as applicable) throughout the Territory for the
Idenix Patent Rights (to the extent permitted in accordance with the terms of
Third Party licenses to Idenix of Idenix Patent Rights) or Novartis Patent
Rights, respectively. Each Party shall confer with and keep the other Party
informed regarding the status of such Patent Right activities. In the event
Idenix elects not to prosecute or maintain any Idenix Patent Rights, Novartis
will have the right to do so at Novartis' sole expense. In the event Novartis
elects not to prosecute or maintain any Novartis Patent Rights, Idenix will have
the right to do so at Idenix' sole expense. Except as provided in the foregoing,
each Party shall have the exclusive right and option, at its own cost and
expense, to file and prosecute any Patent Rights Covering Sole Inventions owned
by it.
(b) Joint Patent Rights. With respect to any Joint Patent
Rights, the Parties shall consult with each other regarding the filing,
prosecution and maintenance of any Patents and Patent Applications, and
responsibility for such activities shall be the obligation of the Controlling
Party. If the Controlling Party agrees to accept such responsibility, it shall
undertake such filings, prosecutions and maintenance in the names of both
Parties as co-owners. The Parties shall share all reasonable Out-Of-Pocket Costs
(including legal fees and expenses) in accordance with the applicable Benefit
Allocation with respect to such Joint Patent Rights in the Co-Commercialization
Countries and the Co-Marketing Countries, and Novartis shall bear all
Out-Of-Pocket Costs (including legal fees and expenses) with respect to such
Joint Patent Rights in the Novartis Territory. The Controlling Party shall have
the following obligations with respect to the filing, prosecution and
maintenance of Patent Applications and Patents on any such Joint Patent Rights:
(i) the Controlling Party shall permit the non-Controlling Party to review and
comment at least two (2) weeks prior to the filing of any priority Patent
Application by the Controlling Party; (ii) the Controlling Party shall notify
the non-Controlling Party within thirty (30) days after the filing of a Patent
Application by the Controlling Party, (iii) the Controlling Party shall notify
the non-Controlling Party within eight (8) months from the filing of the
priority Patent Application whether and in which countries it intends to file
convention Patent Applications; (iv) the Controlling Party shall provide the
non-Controlling Party promptly with copies of all communications received from
or filed in patent offices with respect to such filings; and (v) the Controlling
Party shall provide the non-Controlling Party, a reasonable time prior to taking
or failing to take action that would affect the scope or validity of rights
under any Patent Applications or Patents (including but not limited to
substantially narrowing or canceling any claim without reserving the right to
file a continuing or divisional Patent Application, abandoning any Patent or not
filing or perfecting the filing of any Patent Application in any country), with
notice of such proposed action or inaction so that the non-Controlling Party has
a reasonable opportunity to review and make comments, and take such actions as
may be appropriate in the circumstances. In the event that the Controlling Party
materially breaches the foregoing obligations and such breach is not cured
within thirty (30) days of a written notice from the non-Controlling Party to
the Controlling Party describing such breach, or in the event that the
Controlling Party fails to undertake the filing of a Patent Application within
ninety (90) days of a written request by the non-Controlling Party to do so, the
non-Controlling Party may assume the Controlling Party's responsibility for
filing, prosecution and maintenance of any such
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Joint Patent Right, and will thereafter be deemed the Controlling Party for
purposes hereof. Notwithstanding the foregoing, the Controlling Party may
withdraw from or abandon any Patent or Patent Application relating to any Joint
Patent Rights on thirty (30) days prior notice to the other Party, providing a
free-of-charge option to assume the prosecution or maintenance thereof; the
Out-Of-Pocket Costs (including legal fees and expenses) for which, with respect
to such Joint Patent Rights in the Novartis Territory, shall be shared equally.
The Parties agree that any of the periods of time specified in this Section
10.2(b) shall be shortened as may be required to ensure that rights in the
relevant Joint Patent Right are not lost.
(c) Cooperation. Each Party agrees to cooperate with the
other with respect to the preparation, filing, prosecution and maintenance of
Patents and Patent Applications pursuant to this Section 10.2, including,
without limitation, the execution of all such documents and instruments and the
performance of such acts (and causing its relevant employees to execute such
documents and instruments and to perform such acts) as may be reasonably
necessary in order to permit the other Party to continue any preparation,
filing, prosecution or maintenance of Joint Patent Rights that such Party has
elected not to pursue as provided for in Section 10.2(b). The Joint Operations
Committee shall agree on which of the Novartis Patent Rights, Idenix Patent
Rights and Joint Patent Rights for which to seek an extension of term and the
Parties shall bear the costs thereof in the same manner as the Parties bear the
expenses for the filing, prosecution and maintenance of such Patent Rights in
accordance with the provisions of this Section 10.2.
(d) Regulatory Matters and Extensions. Each Party shall
provide to the other Party (A) notice of Patents relevant to a Registration
Filing, prior to the time such Registration Filing is filed, and (B) prompt
notice of the issuance of any Patent which may be relevant to a Product, giving
the date of issue and patent number for each such Patent and the Parties will
jointly decide within twenty (20) days after the Patent issues if the Patent is
to be listed pursuant to any Registration Filing for such Product. Similarly,
the Parties shall provide to each other prompt notice of Patent term extensions
in any country. The Joint Operations Committee shall determine whether to
proceed in the filing of appropriate listing documents, and Parties shall
cooperate in the preparation and filing of any Patent listings. Each Party will
provide prompt notice to the other of any inquiries as to any relevant Patent
which has claims to Manufacturing processes, which inquiries are provided
pursuant to 35 USC Section 271(g) or the equivalent foreign Law, and will
cooperate with respect to responses thereto. The Joint Operations Committee
shall agree on which of the Novartis Patent Rights, Idenix Patent Rights and
Joint Patent Rights for which to seek an extension of term, and the Parties
shall cooperate and bear the costs thereof in the same manner as the Parties
bear the expenses for the filing, prosecution and maintenance of such Patent
Rights in accordance with the provisions of this Section 10.2.
10.3 Third Party Infringement
(a) Notice. If either Party or its Affiliates shall learn
that any Third Party is violating the Collaboration Intellectual Property, then
the Party (or its Affiliate) becoming so informed shall promptly notify the
other Party in writing of this claim or assertion and shall provide such other
Party with all available evidence supporting such known or suspected
infringement or unauthorized use.
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(b) Co-Commercialization Countries and Co-Marketing
Countries. The Parties shall use Commercially Reasonable Efforts to protect the
Collaboration Intellectual Property from infringement in the
Co-Commercialization Countries and Co-Marketing Countries. The Parties shall
cooperate and shall mutually agree upon an appropriate course of action with
respect to the institution and direction of legal proceedings against any Third
Parties in the Co-Commercialization Countries and Co-Marketing Countries who are
infringing the Collaboration Intellectual Property. If only one Party initiates
(and pursues) a Third Party action, the other Party and its Affiliates shall
assist and cooperate in any such infringement litigation at the initiating
Party's (or its Affiliates') reasonable request, including joining in such
action as a named party to the extent necessary or appropriate for such action
to be pursued. Neither Party shall settle or compromise any claim or proceeding
relating to the Collaboration Intellectual Property without obtaining the prior
written consent of the other Party, such consent not to be unreasonably
withheld. The costs of, and any and all damages (including punitive damages),
fees and other amounts (including settlement amounts) recovered in connection
with, any Third Party infringement action relating to any Product[s] in a
Co-Commercialization Country or Co-Marketing Country, whether enforced by
Novartis and/or Idenix (or its Affiliates), shall be shared by the Parties in
proportion to the applicable Benefit Allocation, provided that for purposes of
such sharing, the Benefit Allocation for the Co-Marketing Countries shall be
deemed to be the same as for the Major EU Countries that are
Co-Commercialization Countries.
(c) Novartis Territory. Novartis shall use Commercially
Reasonable Efforts, including legal actions, to protect the Collaboration
Intellectual Property from infringement in the Novartis Territory, and may bring
such action in Idenix' name, if necessary. The costs of any such Third Party
infringement action shall be borne solely by Novartis, and any and all damages
(including punitive damages), fees and other amounts recovered in connection
with any such Third Party infringement action shall be retained solely by
Novartis.
10.4 Claimed Infringement. The provisions of this Section
10.4 shall be subject to the provisions of Section 11.5, which shall govern as
to both costs and procedures in the event of infringement actions relating to
the Products brought by a Third Party against Novartis and/or Idenix in which
the Third Party claim[s], if true, would constitute a breach of representation,
warranty or obligation covered by Section 11.5.
(a) Notice. If either Party or its Affiliates shall learn
of a claim or assertion that the Development, Manufacture, use, marketing,
promotion, importation, exportation, offer for sale, sale or distribution of the
Products infringes or otherwise violates the intellectual property rights of any
Third Party (a "Claimed Infringement"), then the Party (or its Affiliate)
becoming so informed shall promptly notify the other Party of such Claimed
Infringement in writing.
(b) Procedures. The Parties (or through the Parties'
Affiliates, as appropriate) shall cooperate and shall mutually agree upon an
appropriate course of action with respect to any Claimed Infringement brought in
any country. If only one Party defends such a Claimed Infringement action, the
other Party and its Affiliates shall assist and cooperate in any such
infringement litigation at the defending Party's (or its Affiliates') reasonable
request. Each Party shall provide to the other Party copies of any notices it
receives from Third Parties regarding any patent nullity actions or any
declaratory judgment actions. Such notices shall be provided
83
promptly, but in no event after more than fifteen (15) days following receipt
thereof. For clarification purposes and without limitation to any other
provisions of this Agreement, the rights and obligations of the Parties under
this paragraph shall be subject to the provisions of Sections 8.7 and 11.5.
10.5 Patent Invalidity Claim. If a Third Party at any time
asserts a claim that any Collaboration Intellectual Property is invalid or
otherwise unenforceable (an "Invalidity Claim"), whether as a defense in an
infringement action brought by [a] Party[ies] pursuant to Section 10.3, in an
action brought against [a] Party[ies] under Section 10.4 or otherwise, the Party
becoming aware of such assertion shall promptly notify the other Party in
writing of such claim. The Parties shall cooperate with each other in the
preparation and formulation of such response, and in taking other steps
reasonably necessary to respond, to such Invalidity Claim. Neither Party shall
settle or compromise any Invalidity Claim without the consent of the other
Party, which consent shall not be unreasonably withheld.
10.6 Patent Marking. Each Party shall comply with the
patent marking statutes in each country in which a Product is made, offered for
sale, sold or imported by such Party, its Affiliates and/or sublicensees.
10.7 Third Party Licenses. Each Party shall use
Commercially Reasonable Efforts to ensure that any licenses or other rights
obtained from Third Parties existing as of the Effective Date and necessary or
material to the Manufacture, Development, promotion or sale of the Products may
be licensed or sublicensed to the other Party under the licenses granted in
Article 6 and to each Party's Affiliates or Third Parties engaged to
manufacture, Develop, promote or sell the Products to the extent necessary
hereunder. Subject to the provisions of Section 8.7, the Parties agree to
coordinate as reasonably necessary to determine the necessity and availability
of any new material Third Party licenses related to the manufacture,
Development, promotion or sale of Products, and any such agreement shall be
approved in advance by the Joint Steering Committee.
10.8 Trademarks.
(a) Each Party and its Affiliates shall retain all right,
title and interest in and to its and their respective corporate names and logos.
(b) The Joint Operations Committee shall develop and
propose, and the Joint Steering Committee shall consider and approve, one or
more Product Trademarks (including [a] global trademark[s] and back-up
trademarks) for use throughout the Co-Commercialization Countries and the
Novartis Territory. The Products shall be promoted and sold, in accordance with
the provisions of this Agreement, in the Co-Commercialization Countries and the
Novartis Territory under the Product Trademark[s]. Idenix (or its local
Affiliates, as appropriate) shall own and retain all rights to Product
Trademarks, and all goodwill associated therewith, in or specific to the U.S.
Territory. Novartis (or its local Affiliates, as appropriate) shall own and
retain all rights to Product Trademarks, and all goodwill associated therewith,
in or specific to the Co-Commercialization Countries (except for the U.S.
Territory) and in or specific to the Novartis Territory. The Joint Operations
Committee shall determine which Party shall own
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rights to any Internet domain names incorporating the applicable Product
Trademark[s] or any variation or part of such Product Trademark[s] as its URL
address or any part of such address.
(c) Novartis hereby grants to Idenix a royalty-free
license to use the Product Trademarks owned by Novartis in connection with
Idenix' Co-Promotion and Co-Branding activities for the Products. Idenix hereby
grants to Novartis a royalty-free license to use the Product Trademarks owned by
Idenix in the U.S. Territory in connection with Novartis' Co-Promotion and
Co-Branding activities for the Products. Each of the Parties' licenses and
rights to the Product Trademarks under this Section 10.7(c) may be sublicensed,
but only to their Affiliates for the purposes, and subject to the terms and
conditions, of this Agreement.
(d) Each Party agrees that the quality of the Products
and the Manufacture, marketing, sale and distribution thereof shall be
consistent with the highest standards of quality in the biopharmaceuticals
industry. In addition, each licensor Party shall adopt such particular style or
usage standards as set forth by the Joint Operations Committee with respect to
the usage of the Product Trademarks, and the licensee Party shall comply
strictly with such standards or make any applicable modifications as soon as
commercially practicable. The licensee Party shall at its own expense, at the
request of the licensor Party from time to time, submit to the licensor Party
for approval a reasonable number of production samples of the relevant Products
and related packaging materials. In the event that the licensor Party reasonably
objects to the usage of the Product Trademarks owned by it in connection with
any sample, it shall give written notice of such objection to the licensee Party
within sixty (60) days of receipt by the licensor Party of the sample,
specifying the way in which such usage of its Product Trademarks fails to meet
the style or usage standards or, if the licensor Party is not the manufacturer
of the Product, the way in which such sample fails to meet the quality standard
for the Product set forth in the first sentence of this Section 10.7(d); and the
licensee Party shall immediately cease sale and distribution of such Products.
If the licensee Party wishes to continue to distribute and sell the relevant
Products rejected by the licensor Party, it must remedy the failure and submit
further samples to the licensor party for approval.
(e) With respect to each Co-Commercialization Country and
except to the extent prohibited by local Law, each Party (through its
Affiliates, as appropriate) shall include the other Party's name (or its local
Affiliate's name) with equal prominence on all Product packaging and other
materials related to the Products.
(f) To the extent permitted by applicable Law, the
labeling on each Product in the Territory shall identify both Parties, which
shall include, without limitation, identifying Idenix as the or an inventor or
innovator of such Product in a manner reasonably agreed to by the Parties.
(g) Each Party will each use Commercially Reasonable
Efforts to establish, maintain and enforce the Product Trademarks owned by it
pursuant to Section 10.7(b) during the Term, and the costs of such efforts in
the Co-Commercialization Countries shall be included within Promotion Expenses.
(h) Upon request by Novartis or Idenix (as the case may
be), each Party shall (or shall cause its Affiliates, as appropriate, to)
execute such documents as may reasonably be
85
required by the other Party for the purpose of recording the license set forth
in Section 10.7(c) above with any relevant governmental authority.
(i) Idenix shall not have any right, title or interest or
other license (except to the extent expressly set forth herein) in or to any of
the Product Trademarks owned by Novartis, and all uses of such Product
Trademarks by Idenix shall inure solely to the benefit of Novartis. Novartis
shall not have any right, title or interest (except to the extent expressly set
forth herein) or other license in or to any of the Product Trademarks owned by
Idenix, and all uses of such Product Trademarks by Novartis shall inure solely
to the benefit of Idenix.
(j) Novartis shall not acquire any rights under this
Agreement in any trademark, service xxxx or Internet domain name including the
word "idenix" or any other trademarks or trade dress of Idenix (except to the
extent expressly set forth herein) and Idenix shall not acquire any rights under
this Agreement in any trademark, service xxxx or Internet domain name including
the word "novartis" or any other trademarks or trade dress of Novartis (except
to the extent expressly set forth herein).
(k) In the event Idenix becomes aware of any infringement
of any Novartis-owned Product Trademark in any country by a Third Party, Idenix
shall promptly notify Novartis and the Parties shall consult with each other and
jointly determine the best way to prevent such infringement, including, without
limitation, by the institution of legal proceedings against such Third Party. In
the event Novartis becomes aware of any infringement of any Idenix-owned Product
Trademark in any country by a Third Party, Novartis shall promptly notify Idenix
and the Parties shall consult with each other and jointly determine the best way
to prevent such infringement, including, without limitation, by the institution
of legal proceedings against such Third Party.
ARTICLE 11.
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANT;
INDEMNIFICATION
11.1 Representations and Warranties of Idenix Idenix U.S.
and Idenix Cayman hereby jointly and severally represent and warrant, as of the
Effective Date, to Novartis as follows, except as set forth herein or in the
Company Disclosure Schedule (as indicated by references to specific sections and
subsections in such Schedule):
(a) Organization, Good Standing and Qualification. Each
of Idenix U.S. and Idenix Cayman is, respectively, a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and a company duly organized, validly existing and in good standing under the
laws of the Cayman Islands. Each of Idenix U.S. and Idenix Cayman has all
requisite corporate power and corporate authority to own and operate its
properties and assets, to carry on its business as now conducted and as
currently proposed to be conducted, to enter into this Agreement and, solely
with respect to Idenix Cayman, the Supply Agreement and to carry out its
obligations hereunder. Each of Idenix U.S. and Idenix Cayman is duly qualified
to transact business and is in good standing in each jurisdiction in which the
nature
86
of its business or property makes such qualification necessary, except where the
failure to be so qualified would not reasonably be expected to result in a
Company Material Adverse Effect.
(b) Authorization, Execution and Delivery. All corporate
action on the part of each of Idenix U.S., Idenix Cayman and their respective
officers and directors necessary for the (i) authorization, execution and
delivery of this Agreement and, solely with respect to Idenix Cayman and its
officers and directors, the Supply Agreement, and (ii) performance of the
obligations of each of Idenix U.S. and Idenix Cayman contemplated hereby and,
solely with respect to Idenix Cayman, thereby, in the case of clauses (i) and
(ii) above, have been taken. This Agreement has been validly executed, delivered
and authorized by each of Idenix U.S. and Idenix Cayman, and the Supply
Agreement has been validly executed, delivered and authorized by Idenix Cayman.
This Agreement and the Supply Agreement, assuming they constitute valid and
legally binding obligations of Novartis, constitute valid and legally binding
obligations of each of Idenix U.S. (solely with respect to this Agreement) and
Idenix Cayman, enforceable against each of Idenix U.S. (solely with respect to
this Agreement) and Idenix Cayman in accordance with their terms, except as the
enforcement hereof or thereof may be limited by (A) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally or (B) equitable
principles, including those limiting the availability of specific performance,
injunctive relief and other equitable remedies and those providing for equitable
defenses.
(c) No Conflict. Neither the execution, delivery and
performance by Idenix U.S. or Idenix Cayman of this Agreement, or by Idenix
Cayman of the Supply Agreement, nor the consummation by Idenix U.S. or Idenix
Cayman of the transactions contemplated hereby or thereby (as applicable), nor
the compliance by Idenix U.S. or Idenix Cayman with any of the provisions hereof
or thereof (as applicable), will:
(i) violate or conflict with any Applicable Law
applicable to Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries, or Judgment applicable to Idenix U.S., Idenix Cayman or
any of their respective Subsidiaries;
(ii) conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any right
of termination, cancellation or acceleration) under any material
Contract to which Idenix U.S. or Idenix Cayman is a party or under
which Idenix U.S., Idenix Cayman or any of their respective assets, is
bound or affected; or
(iii) conflict with or violate any provision of
the current applicable Restated Certificate or Amended and Restated
By-laws, or of the Certificate of Incorporation, Memorandum of
Association or Articles of Association of Idenix Cayman.
(d) Consents. No Consents of, (i) or registration,
qualification, designation, declaration, notification or filing with, any
Governmental Entity or (ii) any party to any Contract to which Idenix U.S.,
Idenix Cayman or any of their respective Subsidiaries is a party or by which it
is bound, in the case of clauses (i) and (ii) above, is required in connection
with the valid execution, delivery or performance of this Agreement by Idenix
U.S. or Idenix Cayman, or in connection with the valid execution, delivery or
performance of the Supply Agreement by
87
Idenix Cayman, or the consummation of the transactions contemplated hereby or
thereby, except such Consents of (x) or registrations, qualifications,
designations, declarations, notifications or filings with, any Governmental
Entity or (y) any parties to any Contract to which Idenix U.S., Idenix Cayman or
any of their respective Subsidiaries, is a party or by which Idenix U.S. or
Idenix Cayman is bound, in the case of clauses (x) and (y), the failure of which
Consents to obtain, or registrations, qualifications, designations,
declarations, notifications or filings to make, would not reasonably be expected
to result in a Company Material Adverse Effect.
(e) Litigation. Since January 1, 2000, there have been
no, and there currently are no, material actions, suits, hearings, grievances,
arbitrations, proceedings or investigations of, in or before any court or
quasi-judicial or administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator ("Proceedings") or, to Idenix' knowledge,
currently threatened against Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries, or any assets or properties of Idenix U.S., Idenix
Cayman or any of their respective Subsidiaries. There is no Proceeding pending,
or to Idenix' knowledge, currently threatened against a stockholder, officer,
director, key employee or founder of Idenix U.S. or Idenix Cayman in his, her or
its capacity as such. To the knowledge of Idenix, there has not occurred any
event nor does there exist any condition on the basis of which any material
Proceeding involving Idenix U.S. or Idenix Cayman might properly be instituted
and there is no reasonable basis for any such Proceeding. To Idenix' knowledge,
there are no, and since January 1, 2000 there have not been any, Proceedings
involving the employment by or with Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries of any current or former employees, their use in
connection with the business of Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries of any information or techniques allegedly proprietary
to any of their former employers, or their obligations under any agreements with
prior employers or alleging a violation of any Applicable Law with respect to
their relationship with Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries. There is no material Proceeding by Idenix U.S. or Idenix Cayman
currently pending and neither Idenix U.S. nor Idenix Cayman currently intends to
initiate any material Proceeding.
(f) Intellectual Property.
(i) For purposes of this Agreement: (A)
"Intellectual Property" shall mean, collectively: (1) all U.S. and
non-U.S. registered, unregistered and pending (I) trademarks, trade
dress, business and assumed names and internet domain names, and all
registrations and applications therefor, (II) copyrights (including,
without limitation, those in Computer Software (as defined below)) and
all grants, registrations and applications therefor, (III) patents and
registered designs, and all registrations and applications therefor
(collectively, "Subject Patents"); (2) all computer software (including
source and object code), programming tools and interfaces, web sites
and web pages, data files and other specifications and documentation
relating thereto (collectively, "Computer Software"); and (3) Trade
Secrets; (B) "IP Contracts" shall mean, collectively, all license,
assignment, distribution, development or other agreements relating to
any Intellectual Property; (C) "Company Property" shall mean all (1)
Intellectual Property in which Idenix U.S., Idenix Cayman or any of
their respective Subsidiaries has an ownership interest ("Owned
Property"), and (2) all Intellectual Property (other than the Owned
Property) which is used or is currently intended to be
88
used in the business of Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries as now conducted or as intended to be conducted
pursuant to this Agreement or the Supply Agreement; (D) "Company
Patents" shall mean (1) all Subject Patents included in the Owned
Property, and (2) all other Subject Patents included in the Company
Property which Idenix U.S. or Idenix Cayman has the responsibility to
prosecute and maintain pursuant to IP Contracts; (E) "Candidates" shall
mean the HBV Drug Candidates or the Initial HCV Drug Candidate; (F)
"Candidate Intellectual Property" shall mean all Company Property
covering or used in connection with the Candidates or their therapeutic
use or manufacture; (G) "Registered Intellectual Property" shall mean
any and all U.S. and non-U.S. (1) Subject Patents, (2) trademark and
service xxxx registrations and applications therefor, (3) copyright
registrations and applications therefor, (4) internet domain names, and
(5) any other Intellectual Property that is the subject matter of an
application, certificate, filing, registration or other document issued
by, filed with, or recorded by any Governmental Entity; (H)
"Non-Material IP" shall mean Company Property which is not material to
the business of Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries as now conducted or as intended to be conducted pursuant
to this Agreement, it being understood that none of the Candidate
Intellectual Property is included in "Non-Material IP"; (I) "Trade
Secrets" shall mean proprietary inventions, processes, formulae,
know-how, concepts, designs, business plans, strategies, marketing and
other information and customer lists; and (J) "Material Owned Property"
shall mean Owned Property that is not Non-Material IP, excluding Trade
Secrets.
(ii) Section 4.11(b) of the Company Disclosure
Schedule sets forth a complete and accurate list of all Registered
Intellectual Property that is Owned Property, indicating the owner
thereof, and all material IP Contracts (other than standard employment
agreements and short-form Subject Patent inventor assignments included
in filed Subject Patents) with respect to the Company Property
specifically indicating, as applicable, each amendment to each original
agreement included in such IP Contracts.
(iii) Except as set forth in Section 4.11(c) of
the Company Disclosure Schedule, Idenix U.S., Idenix Cayman or one of
their respective Subsidiaries, is the sole and exclusive owner of each
item of Material Owned Property and is listed in the records of the
appropriate U.S. and/or, to the knowledge of Idenix, non-U.S.
Governmental Entity, as the sole and exclusive owner of record for each
registration, grant and application listed in Section 4.11(b) of the
Company Disclosure Schedule.
(iv) To the knowledge of Idenix, no act has been
done or omitted to be done by Idenix U.S., Idenix Cayman or any of
their respective Subsidiaries, or by any direct or indirect licensee,
distributor or collaborator of Idenix U.S., Idenix Cayman or any of
their respective Subsidiaries, or any Person or Governmental Entity
with which Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries is a co-owner of any Material Owned Property, which has,
had or is reasonably likely to have the effect of canceling,
forfeiting, abandoning or dedicating to the public, or entitling any
U.S. or non-U.S. Governmental Entity or any other Person to cancel,
forfeit, modify or consider abandoned, any Material Owned Property, or
give any Person or Governmental Entity any rights with respect thereto
(other than pursuant to an IP Contract listed in Section
89
4.11(b) of the Company Disclosure Schedule). To the knowledge of
Idenix, all of the issued claims in the Company Patents included among
the Candidate Intellectual Property, and Idenix U.S.', Idenix Cayman's
and each of their respective Subsidiaries' rights therein, are valid,
enforceable and free of defects. Neither Idenix U.S., Idenix Cayman nor
any of their Subsidiaries has any knowledge of any facts or claims
which cause or would cause any Material Owned Property to be invalid or
unenforceable, other than as described in Section 4.11(d) of the
Company Disclosure Schedule. Neither Idenix U.S., Idenix Cayman nor any
of their Subsidiaries has received any written notice that any Person
or Governmental Entity may bring a claim which would cause any Material
Owned Property to be invalid or unenforceable.
(v) With respect to the Company Patents included
among the Candidate Intellectual Property, and, to the knowledge of
Idenix, with respect to the other Company Patents, except as indicated
in Section 4.11(e) of the Company Disclosure Schedule: (A) all
necessary registration, maintenance and renewal fees have been paid and
all necessary documents and certificates have been filed with the
relevant Governmental Entities for the purpose of maintaining such
Company Patents; (B) there are no inventorship challenges or
interferences declared or provoked with respect to such Company
Patents; (C) each of Idenix U.S., Idenix Cayman and their respective
Subsidiaries have complied with the required duty of candor and good
faith in dealing with the U.S. Patent and Trademark Office and similar
Governmental Entities (collectively, "Patent Offices"), including the
duty to disclose to the Patent Offices all information required to be
disclosed under all Applicable Laws; and (D) other than through an IP
Contract listed in Section 4.11(b) of the Company Disclosure Schedule,
no third party, including any academic organization or Governmental
Entity, possesses rights to such Company Patents which, if exercised,
could enable such party to develop any of the Candidates or would
otherwise have a Company Material Adverse Effect.
(vi) Except as set forth in Section 4.11(f) of
the Company Disclosure Schedule, Idenix U.S., Idenix Cayman and each of
their respective Subsidiaries owns, free and clear of any lien or
encumbrance, or otherwise has the valid right to use through an IP
Contract listed in Section 4.11(b) of the Company Disclosure Schedule,
the terms of which have been fully disclosed to Novartis, all Candidate
Intellectual Property and, to the knowledge of Idenix, all other
Company Property and third party Intellectual Property which, in each
case, is either used in or currently intended to be used in, or is
reasonably necessary for, the conduct of the business of Idenix U.S.,
Idenix Cayman or any of their respective Subsidiaries as now conducted,
or as intended to be conducted pursuant to this Agreement or the Supply
Agreement.
(vii) Except as indicated in Section 4.11(g) of
the Company Disclosure Schedule: (A) none of the Idenix U.S., Idenix
Cayman or any of their respective Subsidiaries, nor the business of
Idenix U.S., Idenix Cayman or any of their respective Subsidiaries as
previously conducted, as now conducted or as intended to be conducted
pursuant to this Agreement or the Supply Agreement with respect to
Candidates, or, to the knowledge of Idenix, any other activity, product
or service of Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries, is in violation or infringement of, or has violated or
infringed any rights or asserted rights of any other Person or
Governmental
90
Entity with respect to any Intellectual Property of such other Person
or Governmental Entity; (B) neither Idenix U.S., Idenix Cayman nor any
of their respective Subsidiaries has received any notice of any
conflict with or violation or infringement of, nor are Proceedings or
claims pending with respect to any conflict with or violation or
infringement of, nor have any such Proceedings or claims been
instituted or asserted in writing against Idenix U.S., Idenix Cayman or
any of their respective Subsidiaries, nor are any Proceedings
threatened, alleging any violation of any rights or asserted rights of
any other Person or Governmental Entity with respect to any
Intellectual Property of such other Person or Governmental Entity; and
(C) to the knowledge of Idenix, there is no valid basis for any such
Proceeding or claim against Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries of any rights or asserted rights of any other
Person or Governmental Entity with respect to any Intellectual Property
of such other Person or Governmental Entity.
(viii) No Proceedings or claims in which Idenix
U.S., Idenix Cayman or any of their respective Subsidiaries alleges
that any Person or Governmental Entity is infringing upon, or otherwise
violating, any Trade Secrets relating to the business of Idenix U.S. or
Idenix Cayman as intended to be conducted pursuant to this Agreement or
the Supply Agreement ("Subject Trade Secrets") or Material Owned
Property, or, to Idenix' knowledge, any Company Property or Subject
Trade Secrets which are not Material Owned Property, are pending, and
none have been served by, instituted or asserted by Idenix U.S., Idenix
Cayman or any of their respective Subsidiaries, nor are any Proceedings
threatened alleging any such violation or infringement, nor does Idenix
U.S., Idenix Cayman or any of their respective Subsidiaries know of any
valid basis for any such proceeding or claim, other than as described
in Section 4.11(h) of the Company Disclosure Schedule.
(ix) All key personnel employed by Idenix U.S.,
Idenix Cayman any their respective Subsidiaries have signed an
enforceable agreement of confidentiality. Idenix U.S. or Idenix Cayman
has obtained from all individuals who are or have been involved in the
development or invention of any Candidate Intellectual Property which
is Owned Property (as employees of Idenix U.S., Idenix Cayman or any of
their respective Subsidiaries, as consultants, as employees of
consultants or otherwise) and, to the knowledge of Idenix, any other
Owned Property, assignments of any and all rights of such individuals
with respect thereto. No officer or, to the knowledge of Idenix,
employee of Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries, is subject to any agreement with any other Person or
Governmental Entity which requires such officer or employee to assign
any interest in inventions or other Intellectual Property or to keep
confidential any Trade Secrets, proprietary data, customer lists or
other business information, or which restricts such officer or employee
from engaging in competitive activities or solicitation of customers.
(x) Except as disclosed in Section 4.11(j) of
the Company Disclosure Schedule: (A) Idenix U.S., Idenix Cayman or one
of their respective Subsidiaries is the sole and exclusive owner of all
Subject Trade Secrets; (B) neither Idenix U.S., Idenix Cayman nor any
of their respective Subsidiaries has any knowledge of any facts or
claims which cause or would cause any Subject Trade Secret to be
unenforceable, nor has Idenix
91
U.S., Idenix Cayman or any of their respective Subsidiaries received
any written notice that any Person or Governmental Entity may bring a
claim which would cause any Subject Trade Secret to be unenforceable;
and (C) to Idenix' knowledge, neither Idenix U.S., Idenix Cayman nor
any of their respective Subsidiaries has, prior to the date hereof,
divulged, furnished to or made accessible to any Person or Governmental
Entity, any material Trade Secrets without prior thereto having
obtained an enforceable agreement of confidentiality from such Person
or Governmental Entity.
(xi) Each of Idenix U.S., Idenix Cayman and their
respective Subsidiaries has taken and will take all actions which are
necessary or reasonable in order to protect the Company Property in a
manner consistent with prudent commercial practice in the
biopharmaceuticals industry.
(xii) To Idenix U.S.' knowledge, the inventors
named on PCT patent application WO 01/90121 are the first inventors of:
(A) the method for treating HCV comprising administering an effective
amount of 2'-C-methyl-cytidine, or pharmaceutically acceptable salts or
esters thereof, to a patient in need of such treatment, (B) a method
patentably indistinct from (A), and (C) a method generic to (A) that is
patentable based on U.S. patent law.
(xiii) No Licensed Technology (as defined in the
UAB License) or Intellectual Property Rights (as defined in the UAB
License) (A) has or have been used in the business of Idenix U.S.,
Idenix Cayman or any of their respective Subsidiaries as previously
conducted or as now conducted nor (B) will be used in the business of
Idenix U.S., Idenix Cayman or any of their respective Subsidiaries as
intended to be conducted pursuant to this Agreement or the Supply
Agreement, in each of clauses (A) and (B), with respect to the
Development, Commercialization or Manufacture of the Candidates (unless
Novartis consents thereto).
(g) Compliance with Other Instruments. Neither Idenix
U.S., Idenix Cayman nor any of their respective Subsidiaries has taken any
action that conflicts with, constitutes a default under, or results in a
violation of, any provision of the current applicable Restated Certificate or
Amended and Restated By-laws, the Certificate of Incorporation, Memorandum of
Association or Articles of Association of Idenix Cayman, or any similar
organizational or operational documents of any such Subsidiary, or a Judgment
applicable to Idenix U.S., Idenix Cayman or any of their respective
Subsidiaries.
(h) Environmental Matters.
(i) Neither Idenix U.S., Idenix Cayman nor any
of their respective Subsidiaries is in material violation of any
Environmental Law and, to Idenix' knowledge, no material expenditures
are or will be required in order to comply with any Environmental Law.
As used in this Agreement, "Environmental Law" shall mean any
applicable federal, state and local law, ordinance, rule or regulation
of any nation or government whether federal, state, municipal, local,
provincial, regional or other political subdivision thereof that
regulates, fixes liability for, or otherwise relates to, the
environment or workplace health and safety, including, without
limitation, the handling,
92
use (including use in industrial processes, in construction, as
building materials, or otherwise), treatment, storage presence, actual
Release (as defined below) or threatened Release (whether by disposal,
a discharge into any water source or system or into the air, or
otherwise) of any Hazardous Materials (as defined below). The term
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating,
dumping or disposing into the environment.
(ii) Neither Idenix U.S., Idenix Cayman nor any
of their respective Subsidiaries has used, generated, manufactured,
refined, treated, transported, stored, handled, transferred, produced,
processed or Released any Hazardous Materials on, from or affecting any
Property in any manner or by any means in material violation of any
Environmental Laws and, to Idenix' knowledge, there is no threat of
such use, generation, manufacture, refining, treatment, transportation,
storage, handling, transfer, production, processing or Release. As used
herein, the term "Property" shall include, without limitation, land,
buildings and laboratory facilities owned or leased or otherwise used
by Idenix U.S., Idenix Cayman or any of their respective Subsidiaries
or as to which Idenix U.S., Idenix Cayman or any such Subsidiary now
has any duties, responsibilities (for cleanup, remedy or otherwise) or
liabilities under any Environmental Laws, or as to which Idenix U.S.,
Idenix Cayman or any such Subsidiary may have such duties,
responsibilities or liabilities because of past acts or omissions of
Idenix U.S., Idenix Cayman or any such Subsidiary, or any of their
predecessors, or because Idenix U.S., Idenix Cayman or any such
Subsidiary, or any of their predecessors, in the past was such an owner
or operator of, or bore some other relationship with, such land,
buildings or laboratory facilities. The term "Hazardous Materials"
shall mean any flammable explosives, petroleum products, petroleum
by-products, radioactive materials, hazardous wastes, hazardous
substances, toxic substances, pollutants, contaminants, or other
materials regulated or defined as such by Environmental Laws.
(iii) Neither Idenix U.S. nor Idenix Cayman has
received written notice that Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries is a party potentially responsible for
environmental cleanup costs incurred at a site or for corrective action
under any Environmental Laws. Neither Idenix U.S. nor Idenix Cayman has
received any written requests for information in connection with any
inquiry by any Governmental Entity concerning disposal sites or other
environmental matters.
(iv) The stockholders of Idenix U.S. or Idenix
Cayman have had no control over, or authority with respect to, and have
not exercised control over the waste disposal operations of Idenix
U.S., Idenix Cayman or any of their respective Subsidiaries. Neither
Idenix U.S. nor Idenix Cayman has exercised control over the waste
disposal operations of any of their respective Subsidiaries.
(v) This Section 11.1(h) shall not be deemed to
be a representation and warranty with respect to the subject matter of
Section 11.1(j) (Regulatory Authority Matters), and in no event shall
this Section 1.11(h) be deemed to constitute a representation and
warranty relating to the administration of any Regulated Product.
(i) Licenses and Other Rights; Compliance with Laws.
93
(i) Each of Idenix U.S., Idenix Cayman and their
respective Subsidiaries has all licenses, permits, franchises,
Consents, concessions, registrations or similar rights and other
authorizations of Governmental Entities (collectively, "Permits"),
required to own and lease its properties and assets and to conduct its
business as now conducted, except for such Permits the failure of which
to obtain would not reasonably be expected to result in a Company
Material Adverse Effect. Section 4.27(a) of the Company Disclosure
Schedule sets forth a list of each material Permit so required or used
by each of Idenix U.S., Idenix Cayman and their respective Subsidiaries
in the operation or conduct of its business. No registrations, filings,
applications, notices, transfers, Consents, audits, qualifications or
other action of any kind is required by virtue of the execution and
delivery of this Agreement by Idenix U.S. and Idenix Cayman, or the
execution and delivery of the Supply Agreement by Idenix Cayman, or of
the consummation by Idenix U.S. and Idenix Cayman of the transactions
contemplated hereby or thereby (as applicable) (A) to avoid the loss of
any such Permit or any material asset, property or right pursuant to
the terms thereof or (B) to enable Idenix U.S., Idenix Cayman or any of
their respective Subsidiaries to hold and enjoy such Permit after the
Effective Date in the operation or conduct of its business as conducted
prior to the Effective Date. To Idenix' knowledge, no event has
occurred which (X) is reasonably likely to result in the finding that
Idenix U.S., Idenix Cayman, or any of their respective Subsidiaries is
unqualified to hold any material Permit, (Y) permits, or after notice
or lapse of time or both would permit, the revocation or termination of
any of the material Permits or the denial of an application for the
renewal thereof or (Z) would result in any impairment of the rights of
Idenix U.S., Idenix Cayman or any of their respective Subsidiaries, as
holder of any such material Permit.
(ii) Each of Idenix U.S., Idenix Cayman and their
respective Subsidiaries has been and is in compliance with all material
Applicable Laws including, without limitation, all such rules, laws and
regulations relating to fair employment practices. Since January 1,
2000, neither Idenix U.S., Idenix Cayman nor any of their respective
Subsidiaries has entered into or been subject to any material Judgment
or Consent with respect to any aspect of the business, affairs,
properties or assets of Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries, or received any request for information,
notice, demand letter, administrative inquiry or formal or informal
complaint or claim from any Governmental Entity with respect to any
material aspect of the business, affairs, properties or assets of
Idenix U.S., Idenix Cayman or any of their respective Subsidiaries.
(iii) Neither Idenix U.S., Idenix Cayman nor any
of their respective Subsidiaries: (A) has made any contributions,
payments or gifts of its property to or for the private use of any
official, employee or agent of any Governmental Entity or educational
institution where either the payment or the purpose of such
contribution, payment or gift is illegal under any Applicable Law, (B)
has established or maintained any unrecorded fund or asset for any
purpose other than promotional funds, or intentionally made any false
or artificial entries on its books or records for any reason, (C) has
made any payments to any Person or Governmental Entity where Idenix
U.S., Idenix Cayman or any such Subsidiary intended or understood that
any part of such payment was to be used for any other purpose other
than that described in the documents
94
supporting the payment or (D) has made any contribution, or reimbursed
any political gift or contribution made by any other Person, to
candidates for public office, whether federal, state or local, where
such contribution would be in violation of Applicable Law.
(iv) Sections 11.1(i)(i) and 11.1(i)(ii) do not
relate to Regulatory Authority or Regulatory Law matters, which are the
subject of Section 11.1(j) (Regulatory Authority Matters).
(j) Regulatory Authority Matters.
(i) Each of Idenix U.S., Idenix Cayman and their
respective Subsidiaries possesses the Regulatory Authority approvals
and applications required as of the date hereof based on the current
development and marketing status of the Candidates under applicable
Regulatory Laws to conduct its current businesses, to manufacture
Regulated Products and to use and occupy the property used in the
operation and conduct of the business of Idenix U.S., Idenix Cayman or
such Subsidiary. All such Regulatory Authority approvals and
applications are in full force and effect.
(ii) There are no facts or circumstances known to
Idenix that would reasonably be expected to lead to any Regulatory
Authority approvals and applications possessed by and material to
Idenix U.S., Idenix Cayman or any of their respective Subsidiaries
being revoked, suspended, canceled or not renewed. Each of Idenix U.S.,
Idenix Cayman and their respective Subsidiaries have submitted all
necessary reports and filings to all Regulatory Authorities.
(iii) The execution and delivery of this Agreement
and the Supply Agreement, and the consummation of the transactions
contemplated hereby or thereby, will not adversely affect the validity
or require the transfer of any Regulatory Authority approvals and
applications held by Idenix U.S., Idenix Cayman or any of their
respective Subsidiaries.
(iv) Each of Idenix U.S., Idenix Cayman and their
respective Subsidiaries is in material compliance with, and has
materially complied with, all applicable Regulatory Laws and has not
received any notice citing action or inaction by Idenix U.S., Idenix
Cayman or any of their respective Subsidiaries that would constitute
any material non-compliance with any Regulatory Laws within the past
three (3) years.
(v) There is no civil, criminal or
administrative action, suit, demand, claim, complaint, hearing, notice
of violation, investigation, notice, demand letter, proceeding or
request for information pending or any liability (whether actual or
contingent), in each case, for failure to comply with any Regulatory
Laws that requires any material change in any manufacturing procedures
by Idenix U.S. or Idenix Cayman, or any of their respective
Subsidiaries, or any material repair, reinstatement or clean-up of any
property, assets or equipment used in the operation and conduct of the
business of Idenix U.S. or Idenix Cayman, or any of their respective
Subsidiaries. There is no act, omission, event or circumstance of which
Idenix has knowledge that would reasonably be expected to give rise to
any such action, suit, demand, claim, complaint, hearing, notice
95
of violation, investigation, notice, demand letter, proceeding or
request for information or any such liability (A) against, involving or
of Idenix U.S. or Idenix Cayman, or any of their respective
Subsidiaries, or (B) against, involving or of any other Person or
Governmental Entity (including, without limitation, any Company
Contractor) which would reasonably be expected to result in a material
liability to Idenix U.S. or Idenix Cayman.
(vi) There has not been any material violation of
any Regulatory Laws by Idenix U.S. or Idenix Cayman, or by any of their
respective Subsidiaries, in their prior product developmental efforts,
clinical studies, submissions or reports to Regulatory Authorities (or
any failure to make any such submission or report) that could
reasonably be expected to require investigation, corrective action or
enforcement action.
(vii) Idenix U.S., Idenix Cayman and their
respective Subsidiaries, and the respective agents of Idenix U.S.,
Idenix Cayman and their respective Subsidiaries (in their capacities as
such agents), have registered with Regulatory Authorities all
facilities required to be registered and have listed all Regulated
Products required to be listed with Regulatory Authorities, in each
case, based on the current development status of the Candidates.
11.2 Representations and Warranties of Novartis Novartis
hereby represents and warrants to Idenix as follows:
(a) Organization, Good Standing and Qualification.
Novartis is an aktiengesellschaft duly organized, validly existing and in
compliance with the laws of Switzerland. Novartis has all requisite corporate
power and corporate authority to own and operate its properties and assets, to
carry on its business as now conducted and as currently proposed to be
conducted, to enter into this Agreement and the Supply Agreement and to carry
out its obligations hereunder and thereunder. Novartis is duly qualified to
transact business and is in good standing in each jurisdiction in which the
nature of its business or property makes such qualification necessary, except
where the failure to be so qualified would not reasonably be expected to
materially adversely affect the ability of Novartis to consummate the
transactions contemplated hereby.
(b) Authorization, Execution and Delivery. All corporate
action on the part of Novartis and its officers and directors necessary for the
(i) authorization, execution and delivery of this Agreement and the Supply
Agreement, and (ii) performance of the obligations of Novartis contemplated
hereby or thereby, in the case of clauses (i) and (ii) above, have been taken.
This Agreement and the Supply Agreement have been validly executed, delivered
and authorized by Novartis. This Agreement and the Supply Agreement, assuming
they constitute valid and legally binding obligations of each of Idenix U.S.
(solely with respect to this Agreement) and Idenix Cayman, constitute valid and
legally binding obligations of Novartis, enforceable against Novartis in
accordance with their terms, except as the enforcement hereof or thereof may be
limited by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally or (B) equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses.
96
(c) No Conflict. Neither the execution, delivery and
performance by Novartis of this Agreement or the Supply Agreement, nor the
consummation by Novartis of the transactions contemplated hereby or thereby, nor
the compliance by Novartis with any of the provisions hereof or thereof, will:
(i) violate or conflict with any Applicable Law
applicable to Novartis or any of its Subsidiaries, or Judgment
applicable to Novartis or any of its Subsidiaries;
(ii) conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any right
of termination, cancellation or acceleration) under any material
Contract to which Novartis is a party or under which Novartis or any of
its Subsidiaries is bound or affected; or
(iii) conflict with or violate any provision of
the Articles of Incorporation or by-laws of Novartis.
(d) Consents. No Consents of, (i) or registration,
qualification, designation, declaration, notification or filing with, any
Governmental Entity or (ii) any party to any Contract to which Novartis is a
party or by which it is bound, in the case of clauses (i) and (ii) above, is
required in connection with the valid execution, delivery or performance of this
Agreement or the Supply Agreement by Novartis or the consummation of the
transactions contemplated hereby or thereby, except such Consents of (x) or
registrations, qualifications, designations, declarations, notifications or
filings with, any Governmental Entity or (y) any parties to any Contract to
which Novartis is a party or by which Novartis is bound, in the case of clauses
(x) and (y), the failure of which Consents to obtain, or registrations,
qualifications, designations, declarations, notifications or filings to make,
would not be reasonably likely to materially and adversely affect the ability of
the Parties to consummate the transactions contemplated hereby or thereby.
11.3 Additional Covenants.
(a) Health Safety and Environmental Matters. Idenix
hereby covenants and agrees that (i) all waste arising out of Idenix' operations
(including, but not limited to, all research and development, manufacturing and
commercialization operations) will be disposed of in compliance with all
applicable Environmental Laws, (ii) all research, development and manufacturing
by Idenix shall be conducted in compliance with applicable Environmental Laws,
(iii) upon at least two (2) weeks' prior written notice from Novartis, Idenix
shall allow Novartis to inspect, audit, and/or monitor Idenix' operations for
the purpose of evaluating compliance with Environmental Law and adherence to
best practices in the areas of health, safety and environment; provided,
however, that any such inspection, audit, and/or monitoring shall not interfere
with Idenix' operations, and, provided further, that such inspection, audit,
and/or monitoring shall not render Novartis responsible for any aspect of
Idenix' operations, and (iv) Idenix shall inform Novartis, without delay, of any
material violation of any Environmental Law arising from Idenix' operations.
Promptly upon Novartis' completion of an inspection or audit as set forth in
clause (iii) of this Section 11.3(a), Novartis shall meet with Idenix to discuss
its findings and recommendations (the "Audit Meeting") and, to the extent such
audit or investigation reveals instances of non-compliance with Environmental
Law, Idenix shall
97
promptly cure such non-compliance and, if required by applicable Environmental
Laws, report such non-compliance to the applicable Governmental Entity. Within
thirty (30) days of the Audit Meeting, Novartis shall deliver to Idenix a
written report (the "Audit Report") of its findings and recommendations. Within
thirty (30) days of Idenix' receipt of such Audit Report, Idenix shall provide
Novartis with a written plan summarizing (I) actions it has taken or will take
to cure any non-compliance with Environmental Law; (II) any reports it has made
or will make to any Governmental Entity in response to the Audit Report; and
(III) actions taken by Idenix to improve health, safety and environmental
practices.
(b) Novartis HSE Standards. Novartis shall provide Idenix
with a document setting forth the occupational health, safety and environmental
protection standards to which Novartis adheres in its operations (the "Novartis
HSE Standards"), and may provide updates of that document from time to time.
Idenix shall implement standards at least as stringent as the Novartis HSE
Standards in its operations, and shall cause any Third Party under its control
and any of its Affiliates to execute an undertaking in which the Third Party or
Affiliate agrees to adhere to standards at least as stringent as the Novartis
HSE Standards in connection with all work relating to Idenix.
(c) Certain Agreements. Idenix shall comply with all
material terms and conditions of, and shall not, without Novartis' prior written
consent, accelerate, terminate, cancel, amend or modify, or waive any claims or
rights under, the agreements set forth on Exhibit J, except, in the case of each
such agreement, to the extent required (i) to be amended pursuant to the terms
of the Stock Purchase Agreement and (ii) in order to effectuate the transactions
and arrangements contemplated under this Agreement.
11.4 Disclaimer of Warranty. Subject to the provisions of
Section 11.1(f), nothing in this Agreement shall be construed as a
representation made or warranty given by either Party that any Patents will
issue based on pending Patent Applications or that any such pending Patent
Applications or Patents issued thereon will be valid. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN SECTIONS 11.1 OR 11.2, OR IN THE STOCK PURCHASE
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY, INCLUDING ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
11.5 Indemnification.
(a) By Idenix. Idenix shall defend, indemnify and hold
harmless Novartis, its Affiliates and their respective directors, officers,
employees and agents, at Idenix' cost and expense, from and against any
liabilities, losses, costs, damages, fees or expenses (including reasonable fees
and expenses of legal counsel) arising out of (i) any breach by Idenix of any of
its representations, warranties or obligations pursuant to this Agreement,
provided that with respect to any breach of the covenants set forth in Sections
11.3(a) and 11.3(b), Idenix' indemnification and hold harmless obligations shall
also include liabilities, losses, costs, damages, fees or expenses (including
reasonable fees and expenses of legal counsel) incurred by Novartis and any
related Indemnified Party[ies] arising out of Novartis' capacity as a direct or
indirect stockholder of Idenix, or (ii) the negligence or willful misconduct of
Idenix or its
98
Affiliates or sublicensees, or any of their respective directors, officers,
employees and agents, in the performance of obligations or exercise of rights
under this Agreement.
(b) By Novartis. Novartis shall defend, indemnify and
hold harmless Idenix, its Affiliates and their respective directors, officers,
employees and agents at Novartis' cost and expense, from and against any
liabilities, losses, costs, damages, fees or expenses (including reasonable fees
and expenses of legal counsel) arising out of (i) any breach by Novartis of any
of its representations, warranties or obligations pursuant to this Agreement or
(ii) the negligence or willful misconduct of Novartis or its Affiliates or
sublicensees, or any of their respective directors, officers, employees and
agents, in the performance of obligations or exercise of rights under this
Agreement (except to the extent caused by a breach by Idenix of its
representations, warranties or obligations pursuant to the Supply Agreement).
(c) Claims for Indemnification with respect to Third
Parties.
(i) With regard to any Third Party claim (for
which indemnification may be sought under this Section 11.5) against a
person entitled to indemnification under this Section 11.5 (an
"Indemnified Party"), the Indemnified Party shall give prompt written
notification to the person from whom indemnification is sought (the
"Indemnifying Party") of the commencement of any action, suit or
proceeding relating to such Third Party claim or, if earlier, upon the
assertion of any such claim by a Third Party (it being understood and
agreed, however, that the failure by an Indemnified Party to give
notice of a Third-Party claim as provided in this Section 11.5(c) shall
not relieve the Indemnifying Party of its indemnification obligation
under this Agreement except and only to the extent that such
Indemnifying Party is actually prejudiced as a result of such failure
to give notice).
(ii) Within thirty (30) days after delivery of
such notification, the Indemnifying Party may, upon written notice
thereof to the Indemnified Party, assume control of the defense of such
action, suit, proceeding or claim with counsel reasonably satisfactory
to the Indemnified Party. If the Indemnifying Party does not assume
control of such defense, the Indemnified Party shall control such
defense.
(iii) The Party not controlling such defense may
participate therein at its own expense; provided that if the
Indemnifying Party assumes control of such defense and the Indemnified
Party reasonably concludes, based on advice from counsel, that the
Indemnifying Party and the Indemnified Party have conflicting interests
with respect to such action, suit, proceeding or claim, the
Indemnifying Party shall be responsible for the reasonable fees and
expenses of counsel to the Indemnified Party solely in connection
therewith; provided further, however, that in no event shall the
Indemnifying Party be responsible for the fees and expenses of more
than one counsel in any one jurisdiction for all Indemnified Parties.
(iv) The Party controlling such defense shall
keep the other Party advised of the status of such action, suit,
proceeding or claim and the defense thereof and shall consider
recommendations made by the other Party with respect thereto.
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(v) The Indemnified Party shall not agree to any
settlement of such action, suit, proceeding or claim without the prior
written consent of the Indemnifying Party, which shall not be
unreasonably withheld. The Indemnifying Party shall not agree to any
settlement of such action, suit, proceeding or claim or consent to any
judgment in respect thereof that does not include a complete and
unconditional release of the Indemnified Party from all liability with
respect thereto or that imposes any liability or obligation on the
Indemnified Party without the prior written consent of the Indemnified
Party.
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ARTICLE 12.
TERM AND TERMINATION
12.1 Term Unless terminated earlier in accordance with
this Article 12, this Agreement shall remain in force for the period commencing
on the Effective Date and ending on the last day of the latest-to-expire of all
Country Terms with respect to any Product (the "Term").
12.2 Extension of Country Terms Prior to the end of the
Country Term for each Product in any country, the Parties will meet to determine
if and on what terms and conditions the Parties may wish to extend such Country
Term. If the Parties agree to extend such Country Term, the Parties shall
document such extension in a writing executed by both Parties.
12.3 Termination For Material Breach Upon any material
breach of this Agreement by a Party (the "Breaching Party"), the other Party
(the "Non-Breaching Party") may, by providing thirty (30) days' prior written
notice to the Breaching Party, terminate this Agreement (a) with respect to [a]
Product[s] in [a] particular country[ies] (a "Country-Specific Termination"), if
the material breach relates to such Product[s] in such country[ies], (b) with
respect to each particular Product or Drug Candidate throughout the Territory (a
"Product/Drug Specific Termination"), if the material breach relates to such
Product[s] throughout the Territory, or (c) in its entirety (an "Entire
Agreement Termination") if the material breach is not limited to [a] specific
Product[s], Drug Candidate[s] or country[ies]. Such termination shall become
effective at the end of the aforementioned thirty (30) day notice period unless
the Breaching Party cures such breach during such notice period; provided,
however, that in the event of a breach by Idenix of any representation or
warranty set forth in Section 11.1(f)(vii) that is curable by Idenix' obtaining
rights under applicable Blocking Third Party Intellectual Property Rights in
accordance with Section 8.7, the length of such notice period shall be increased
from thirty (30) days to one hundred-twenty (120) days, with termination
becoming effective upon the expiration of such one hundred-twenty (120) day
period unless Idenix cures such breach prior to such expiration by obtaining
rights under applicable Blocking Third Party Intellectual Property Rights in
accordance with Section 8.7. Notwithstanding the foregoing, if such breach, by
its nature, is incurable, the Non-Breaching Party may terminate this Agreement
to the extent permitted above immediately upon written notice to the Breaching
Party.
12.4 Termination by Novartis Novartis may terminate this
Agreement on a Country-Specific Termination basis or a Product/Drug Specific
Termination basis, from time to time in its sole discretion, by providing six
(6) months' prior written notice to Idenix. For clarification purposes, neither
Party shall be released from any of its obligations hereunder, including with
respect to funding and payment obligations, during the aforementioned six (6)
month notice period; provided, however, that Novartis shall not be obligated to
make any Operating Payments, Approval Milestone Payments or Sales Milestone
Payments, or any similar Regulatory Approval- or commercial sales-based
milestone payments with respect to Other Products, if the applicable triggering
event occurs after the date of delivery of notice of termination by Novartis (in
accordance with Section 13.2) pursuant to this Section 12.4.
12.5 Termination for Insolvency Either Party may terminate
this Agreement in its entirety upon thirty (30) days' prior written notice to
the other Party (the "Insolvent Party")
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if the Insolvent Party files in any court pursuant to any statute of any
government in any country a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver or
trustee of the Insolvent Party or of its assets; or if any Person proposes a
written agreement of composition for extension of the Insolvent Party's debts;
or if the Insolvent Party shall be served with an involuntary petition against
it, filed in any insolvency proceeding, and such petition shall not be dismissed
within sixty (60) days after filing thereof; or if the Insolvent Party shall be
a party to any dissolution or liquidation; or if the Insolvent Party shall make
a general assignment for the benefit of its creditors; or if the Insolvent Party
is subject to any final order regarding bankruptcy or insolvency which can be
expected to have a material adverse effect on the Development or
Commercialization of the Products.
12.6 Effect of Termination.
(a) Upon termination of this Agreement by Novartis
pursuant to Section 12.3 or Section 12.5:
(i) all licenses (or, in the event of a
Country-Specific Termination, all licenses with respect to the relevant
terminated Product[s] in the relevant country[ies], or in the event of
a Product/Drug-Specific Termination, all licenses with respect to the
relevant Product or Drug Candidate, as applicable) granted by Novartis
to Idenix hereunder shall terminate;
(ii) at the election of Novartis, all licenses
(or, in the event of a Country-Specific Termination, all licenses with
respect to the relevant terminated Product[s] in the relevant
country[ies], or in the event of Product/Drug-Specific Termination, all
licenses with respect to the relevant Product or Drug Candidate, as
applicable) granted hereunder by Idenix to Novartis shall remain in
effect on an irrevocable, perpetual and exclusive basis; provided, that
if such election is not made on or before the effective date of
termination, all such licenses shall terminate;
(iii) if Novartis timely makes the election set
forth in subparagraph (ii) above, Idenix shall assign to Novartis all
of its right, title and interest in and to all Registration Filings and
Regulatory Approvals, and all clinical, technical and other relevant
reports, records, data, information and materials, relating to each
Product in the Territory (or, in the event of a Country-Specific
Termination or Product/Drug-Specific Termination, all Registration
Filings and Regulatory Approvals, and all clinical, technical and other
relevant reports, records, data, information and materials, with
respect to the relevant terminated country[ies], Product or Drug
Candidate, as applicable), to the extent Novartis theretofore held no
right, title and interest therein (and Idenix shall deliver to Novartis
one (1) copy of each physical embodiment of the aforementioned items
within sixty (60) days after termination); and
(iv) if this Agreement is terminated in its
entirety, Idenix shall promptly return to Novartis all records and
materials in Idenix' possession or control containing Confidential
Information of Novartis.
102
(b) Upon termination of this Agreement by Idenix pursuant
to Section 12.3 or Section 12.5, or by Novartis pursuant to Section 12.4:
(i) all licenses (or, in the event of a
Country-Specific Termination, all licenses with respect to the relevant
terminated Product[s] in the relevant country[ies], or in the event of
a Product/Drug Specific Termination, all licenses with respect to the
relevant Product or Candidate, as applicable) granted by Idenix to
Novartis hereunder shall terminate;
(ii) at the election of Idenix, all licenses (or,
in the event of a Country-Specific Termination, all licenses with
respect to the relevant terminated Product[s] in the relevant
country[ies], or in the event of a Product/Drug-Specific Termination,
all licenses with respect to the relevant Product or Drug Candidate, as
applicable) granted hereunder by Novartis to Idenix shall remain in
effect on an irrevocable, perpetual and exclusive basis; provided, that
if such election is not made on or before the effective date of
termination, all such licenses shall terminate;
(iii) if Idenix timely makes the election set
forth in subparagraph (ii) above, Novartis shall assign to Idenix all
of its right, title and interest in and to all Registration Filings and
Regulatory Approvals, and all clinical, technical and other relevant
reports, records, data, information and materials, relating to each
Product in the Territory (or, in the event of a Country-Specific
Termination or Product/Drug-Specific Termination, all Registration
Filings and Regulatory Approvals, and all clinical, technical and other
relevant reports, records, data, information and materials, with
respect to the relevant terminated country[ies], Product or Drug
Candidate, as applicable), to the extent Idenix theretofore held no
right, title and interest therein (and Novartis shall deliver to Idenix
one (1) copy of each physical embodiment of the aforementioned items
within sixty (60) days after termination); and
(iv) if this Agreement is terminated in its
entirety, Novartis shall promptly return to Idenix all records and
materials in Novartis' possession or control containing Confidential
Information of Idenix.
Notwithstanding the foregoing, in the event the relevant
termination by Idenix under Section 12.3 or by Novartis under Section 12.4 is
with respect to any country[ies] in the Novartis Territory, the licenses that
Idenix may elect to remain in effect under clause (ii) above shall be deemed to
be licenses in such country[ies] under Joint Intellectual Property and, as
applicable, Novartis Intellectual Property to the extent (A) Idenix holds an
effective license under corresponding rights in the Co-Commercialization
Countries and Co-Marketing Countries at the time of such termination, and (B)
Novartis Controls such Joint Intellectual Property and, as applicable, Novartis
Intellectual Property in such terminated country[ies] in the Novartis Territory.
(c) In the event that this Agreement is terminated in its
entirety, or on a Country-Specific Termination or Product/Drug-Specific
Termination basis, pursuant to Section 12.3 (or pursuant to Section 12.4 in
which event, for purposes of this paragraph, Idenix shall be treated as the
Non-Breaching Party and Novartis shall be treated as the Breaching Party, or
103
pursuant to Section 12.5 in which event, for purposes of this paragraph, the
Insolvent Party will be treated as the Breaching Party and the other Party shall
be treated as the Non-Breaching Party), and the Non-Breaching Party elects to
obtain the licenses and/or the assignment pursuant to Sections 12.6(a)(ii) and
(iii) or 12.6(b)(ii) and (iii), as applicable, such license shall be subject to
the payment of a royalty to the Breaching Party and such assignment shall be
subject to a payment to the Breaching Party, which royalty and payments shall be
negotiated in good faith by the Parties, and shall be based on an analysis of
factors relevant on the effective date of termination, including, without
limitation, the Parties' relative contributions to the Development and
Commercialization of the relevant Product[s], the Development and
Commercialization status of the Product[s] at the time of termination, the
nature, circumstances and significance of the breach (as applicable) leading to
such termination and the actual damages, if any, suffered by the Non-Breaching
Party; provided, however, that in no event shall the rate of the aforementioned
royalty and such payments, taken as a whole, permit the Breaching Party to
receive more than ninety percent (90%) of the net benefit the Breaching Party
was entitled to receive under this Agreement and the Supply Agreement prior to
termination with respect to the relevant Product[s]. In the event that the
Parties do not reach an agreement with respect to such royalty and payments
within sixty (60) days after the receipt by the Breaching Party of the notice of
such election, the provisions of Section 13.6 shall apply. Notwithstanding the
foregoing provisions of this Section 12.6(c), and the provisions of Sections
12.6(a)(ii) and 12.6(b)(ii), upon the expiration of the Country Term with
respect to each relevant Product in each applicable country, any licenses that
remain in effect in accordance with this Section 12.6 subsequent to a
termination shall be deemed to be non-exclusive and fully paid-up, with no
further royalty or payment obligations on the part of the Non-Breaching Party
with respect to such license.
12.7 Survival. In the event of any expiration or
termination of this Agreement, (a) all financial obligations under Article 8
owed as of the effective date of such expiration or termination shall remain in
effect (subject to the provisions of Section 12.6) and (b) the provisions set
forth in Sections 10.1, 11.4, 11.5, 12.6, 12.7 and 12.8 and in Articles 9 and 13
shall survive such expiration or termination. The provisions of Section 6.3(a)
shall survive any expiration or termination of this Agreement except in the
event of a termination by Novartis pursuant to Section 12.3. Notwithstanding any
full or partial expiration or termination of this Agreement or the Supply
Agreement, or any other provision of this Agreement, the representations and
warranties set forth in Sections 11.1 and 11.2 shall survive the execution of
this Agreement for, and expire upon the expiration of, a period of eighteen (18)
months commencing upon the Effective Date, except that the representations and
warranties set forth in Sections 11.1(f) (Intellectual Property) and 11.1(h)
(Environmental Matters) shall survive the execution of this Agreement with no
such expiration date.
12.8 Non-Exclusive Remedy. Termination of this Agreement,
and any benefit accruing to a Non-Breaching Party from any reduction in the net
benefit, in accordance with Section 12.6(c), that a Breaching Party was entitled
to receive under this Agreement and the Supply Agreement prior to termination,
shall be in addition to, and shall not prejudice, the Parties' remedies at law
or in equity.
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ARTICLE 13.
MISCELLANEOUS
13.1 Choice of Law. This Agreement shall be governed by
and interpreted under the laws of the State of New York, excluding: (a) its
conflicts of laws principles; (b) the United Nations Convention on Contracts for
the International Sale of Goods; (c) the 1974 Convention on the Limitation
Period in the International Sale of Goods (the "1974 Convention"); and (d) the
Protocol amending the 1974 Convention, done at Vienna April 11, 1980.
13.2 Notices. Any notice or report required or permitted
to be given or made under this Agreement by one of the Parties to the other
shall be in writing and shall be deemed to have been delivered upon personal
delivery or (a) in the case of notices provided between Parties in the
continental United States, four (4) days after deposit in the mail or the
Business Day next following deposit with a reputable overnight courier and (b)
in the case of notices provided by telecopy (which notice shall be followed
immediately by an additional notice pursuant to clause (a) above if the notice
is of a default hereunder), upon completion of transmissions to the addressee's
telecopier, as follows (or at such other addresses or facsimile numbers as may
have been furnished in writing by one of the Parties to the other as provided in
this Section 13.2):
If to Idenix: Idenix Pharmaceuticals, Inc.
000 XxxxxxxxxXxxx Xxxxx
Xxxxxxxxx, XX 00000
X.X.X.
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
With a copy to: Idenix (Cayman) Limited
c/o Walkers SPV Limited
Xxxxxx House
Xxxx Street
P.O. Box 908GT
Xxxxxx Town
Grand Cayman
Cayman Islands
Attention: Secretary
Facsimile No.: (000) 000-0000
If to Novartis: Novartis Pharma AG
XX-0000
Xxxxx
Xxxxxxxxxxx
Attention: Head of Global Business
Development and Licensing
Facsimile No.: [41] 61 324 2100
105
With a copy to: Novartis Pharma AG
XX-0000
Xxxxx
Xxxxxxxxxxx
Attention: General Counsel
Facsimile No.: [41] 61 324 6859
13.3 Severability. If, under applicable law or regulation,
any provision hereof is invalid or unenforceable, or otherwise directly or
indirectly affects the validity of any other material provision[s] of this
Agreement ("Severed Clause"), then, it is mutually agreed that this Agreement
shall endure except for the Severed Clause. The Parties shall consult and use
their best efforts to agree upon a valid and enforceable provision which shall
be a reasonable substitute for such Severed Clause in light of the intent of
this Agreement.
13.4 Captions. All captions herein are for convenience
only and shall not be interpreted as having any substantive meaning.
13.5 Integration. This Agreement, the Stock Purchase
Agreement and the other Ancillary Agreements (including any exhibits and other
attachments hereto and thereto) constitute the entire agreement between the
Parties with respect to the within subject matter and supersedes all previous
agreements, whether written or oral, except that the Confidentiality Agreements
dated February 1, 2002, September 6, 2002 and October 8, 2002, between the
Parties shall survive the execution of this Agreement. Unless otherwise
expressly indicated, references herein to articles, sections, subsections,
paragraphs and the like are to such items within this Agreement. This Agreement
may be amended only in writing signed by properly authorized representatives of
each of Idenix and Novartis. The Parties acknowledge that this Agreement is
being executed and delivered simultaneously with the execution and delivery by
the Parties and/or their Affiliates of the Supply Agreement.
13.6 Dispute Resolution. The Parties shall negotiate in
good faith and use reasonable efforts to settle any dispute arising from or
related to this Agreement or the breach thereof. If the Parties do not fully
settle, and a Party wishes to pursue the matter, each such dispute shall be
resolved as follows:
(a) Executive Officers. The Executive Officers shall meet
to attempt to resolve such dispute, except where the Executive Officers have
already met with respect to an unresolved issue or dispute in accordance with
procedures expressly set forth elsewhere in this Agreement (a "Prior Meeting"),
in which case the provisions of paragraph (b) shall immediately apply.
(b) Arbitration.
(i) If the Executive Officers do not resolve
such dispute within ten (10) Business Days after either Party requests
such a meeting or if there has already been a Prior Meeting and an
unresolved issue or dispute still exists, either Party may make a
written demand for formal dispute resolution and such dispute shall be
settled by
106
arbitration administered by the American Arbitration Association
("AAA") under its Commercial Arbitration Rules, in each case, not
inconsistent with the terms of this Agreement, and judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
(ii) The arbitration shall be conducted in
English in New York, New York, if initiated by Idenix, or Boston,
Massachusetts, if initiated by Novartis, by a panel of three (3)
persons experienced in the pharmaceutical business: within thirty (30)
days after initiation of arbitration, each Party shall select one (1)
person to act as arbitrators and the two (2) Party-selected arbitrators
shall select a third arbitrator within five (5) days of their
appointment. If the arbitrators selected by the Parties are unable or
fail to agree upon the third arbitrator, the third arbitrator shall be
appointed by the AAA as soon as practicable.
(iii) Within ten (10) days after the designation
of the arbitrators pursuant to Section 13.6(b)(ii) (the "Proposed
Resolution Deadline"), each Party shall submit to the arbitrators and
to the other Party a statement of all disputed issues and a proposed
ruling on the merits of each such issue together with a brief or other
written memorandum supporting the merits of its resolution.
(iv) The arbitrators and the Parties shall then
meet within five (5) days after the Proposed Resolution Deadline, at
which time each Party shall have one hour to argue in support of its
proposed resolution. The Parties shall not call any witnesses in
support of their arguments. The Parties shall have the right to be
represented by counsel.
(v) The arbitrators shall use their best efforts
to rule on the dispute within two (2) Business Days thereafter. The
arbitrators shall resolve the dispute by a vote of the majority of the
arbitrators selecting one of the two (2) proposed resolutions in its
entirety, without substitution, deletion, addition or amendment. Such
selected resolution shall be binding and conclusive upon the Parties.
All rulings of the arbitrators shall be in writing and shall be
delivered to the Parties. The arbitrators shall have no authority to
award punitive or any other type of damages not measured by a Party's
compensatory damages and demanded in its proposed resolution.
(vi) Either Party may apply to the arbitrators
for interim injunctive relief until the arbitration award is rendered
or the dispute is otherwise resolved. Either Party also may, without
waiving any remedy under this Agreement, seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect
the rights or property of that Party pending the arbitration award.
(vii) The Party whose proposed resolution was not
selected by the majority vote of the arbitrators shall pay the full
costs of the arbitration and the reasonable costs and expenses of the
prevailing Party, including, without limitation, reasonable attorneys'
fees and travel and lodging costs.
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(viii) Except to the extent necessary to confirm an
award or as may be required by law, neither a Party nor an arbitrator
may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties.
(ix) In no event shall an arbitration be
initiated after the date when commencement of a legal or equitable
proceeding based on the dispute, controversy or claim would be barred
by the applicable New York statute of limitations.
13.7 Independent Contractors; No Agency. Neither Party
shall have any responsibility for the hiring, firing or compensation of the
other Party's employees or for any employee benefits. No employee or
representative of a Party shall have any authority to bind or obligate the other
Party to this Agreement for any sum or in any manner whatsoever, or to create or
impose any contractual or other liability on the other Party without said
Party's written approval. For all purposes, and notwithstanding any other
provision of this Agreement to the contrary, Novartis' legal relationship under
this Agreement to Idenix shall be that of independent contractor.
13.8 Assignment; Successors. Without limitation to the
provisions of Sections 6.1(f)(i) and 6.2(c)(i) or any other provision in this
Agreement that contemplates an Affiliate of a Party performing the obligations
or exercising the rights hereunder of a Party, neither Idenix nor Novartis may
assign this Agreement in whole or in part without the consent of the other
Party; provided that either may assign this Agreement (a) to an Affiliate on the
condition that the assigning Party shall remain primarily liable hereunder for
the prompt and punctual payment and performance of all obligations of the
assignee, or (b) to a Third Party in connection with a sale or transfer of all
or substantially all of the assigning Party's business to which this Agreement
relates. This Agreement shall be binding upon, and shall inure to the benefit
of, all permitted successors and assigns.
13.9 Execution in Counterparts; Facsimile Signatures. This
Agreement may be executed in counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument even
if both Parties have not executed the same counterpart. Signatures provided by
facsimile transmission shall be deemed to be original signatures.
13.10 Waivers. No failure on the part of Novartis or Idenix
to exercise and no delay in exercising any right, power, remedy or privilege
under this Agreement, or provided by statute or at law or in equity or
otherwise, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.
13.11 No Consequential or Punitive Damages. NEITHER PARTY
HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
EXEMPLARY OR MULTIPLE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF
ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH
OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE
108
OF SUCH DAMAGES. NOTHING IN THIS SECTION 13.11 IS INTENDED TO LIMIT OR RESTRICT
THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY WITH RESPECT TO THIRD
PARTY CLAIMS UNDER SECTIONS 11.5(a) OR 11.5(b).
13.12 Bankruptcy. Except with respect to trademarks, all
rights and licenses granted pursuant to this Agreement are, for purposes of
Section 365(n) of Title 11 of the United States Code or any foreign equivalents
thereof ("Title 11"), license of rights to "intellectual property" as defined in
Title 11. Each Party in its capacity as a licensor hereunder agrees that, in the
event of the commencement of bankruptcy proceedings by or against such Party
under Title 11, the other Party, in its capacity as a licensee of rights under
this Agreement, shall retain and may fully exercise all of such licensed rights
under this Agreement (including the license granted hereunder) and all of its
rights and elections under Title 11.
[Remainder of Page Intentionally Left Blank]
109
IN WITNESS WHEREOF, Idenix and Novartis have caused this Agreement to
be duly executed by their authorized representatives, as of the date first
written above.
IDENIX PHARMACEUTICALS, INC.
By: /s/ Xxxx - Xxxxxx Sommadossi
----------------------------------------
Name: Xxxx - Xxxxxx Sommadossi
Title: Chief Executive Officer
IDENIX (CAYMAN) LIMITED
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Director
NOVARTIS PHARMA AG
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Title: General Counsel
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Head Operational Treasury
110
EXHIBIT A
LdC Description
[**]
A-1
EXHIBIT B
LdT Description
[**]
B-1
EXHIBIT C
Idenix Patent Rights
Idenix Patent Rights in which Idenix has an ownership interest:
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX 1000 PROV
[**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 CON [**] [**] [**] [**] [**] [**] [**]
IDX 1000 CIP [**]
[**] [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 CIP CON [**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
IDX 1000 [**] [**] [**] [**] [**] [**]
C-1
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX 1003 [**] [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1003 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004CON [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
C-2
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1004 [**] [**] [**] [**] [**] [**]
IDX 1005 PROV
[**] [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
C-3
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX 1005 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
C-4
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1006 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
C-5
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1007 [**] [**] [**] [**] [**] [**]
IDX1008
[**] [**] [**] [**] [**] [**] [**]
C-6
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1008 [**] [**] [**] [**] [**] [**]
IDX1009 [**] [**] [**] [**] [**] [**] [**]
IDX1009 [**] [**] [**] [**] [**] [**]
IDX1009CON [**] [**] [**] [**] [**] [**]
IDX1009 [**] [**] [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
C-7
PATENT / ISSUE /
TITLE FILING SERIAL PUBLICATION PUB.
& DOCKET NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS TREATMENT
------------- ------- ----- ---- ------ ------ ---- ------ ---------
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1013 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1014 [**] [**] [**] [**] [**] [**]
IDX1015 [**] [**] [**] [**] [**] [**] [**]
IDX1016 [**] [**] [**] [**] [**] [**] [**]
C-8
TITLE PATENT / ISSUE /
& DOCKET FILING SERIAL PUBLICATION PUB. TREAT-
NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS MENT
-------- ------- ----- ------ ------ ----------- ------ ------ ------
IDX 1017 [**] [**] [**] [**] [**] [**] [**]
IDX 1018 [**] [**] [**] [**] [**] [**] [**]
IDX 1019 PROV [**] [**] [**] [**] [**] [**] [**]
IDX 1019 [**] [**] [**] [**] [**] [**]
IDX 1019 [**] [**] [**] [**] [**] [**]
IDX 1019 [**] [**] [**] [**] [**] [**]
IDX 1020 [**] [**] [**] [**] [**] [**] [**]
IDX 1021 PROV
[**] [**] [**] [**] [**] [**] [**]
IDX 1022 [**] [**] [**] [**] [**] [**] [**]
IDX 1024 PROV
[**] [**] [**] [**] [**] [**] [**]
C-9
TITLE PATENT / ISSUE /
& DOCKET FILING SERIAL PUBLICATION PUB. TREAT-
NAME COUNTRY OWNER DATE NUMBER NUMBER DATE STATUS MENT
-------- ------- ----- ------ ------ ----------- ------- ------ ------
IDX 1025 PROV
[**] [**] [**] [**] [**] [**] [**]
C-10
Idenix Patent Rights licensed by Idenix:
TITLE PATENT
& DOCKET FILING SERIAL PATENT ISSUE TERM & TREAT-
NAME COUNTRY DATE OWNER NUMBER LICENSOR NUMBER DATE STATUS MENT
-------- ------- ------ ----- ------ -------- ------ ----- ------ ------
[**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**]
C-11
TITLE PATENT
& DOCKET FILING SERIAL PATENT ISSUE TERM & TREAT-
NAME COUNTRY DATE 0WNER NUMBER LICENSOR NUMBER DATE STATUS MENT
-------- ------- ------ ----- ------ -------- ------ ---- ------ ------
[**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**] [**] [**]
C-12
EXHIBIT D
Supply Agreement
Filed Separately as
Exhibit 10.25
D-1
EXHIBIT E
Principles and Methods for Calculation of Net Present Value
The Parties will independently calculate their projected NPV in accordance with
the standard cash flow modeling, netting income against expense for each product
plan:
[**]
[**]
I. NET CASH FLOW PROJECTIONS
Cash flows will be estimated in accordance with standard project cost accounting
and forecasting as are regularly applied in the pharmaceutical industry for
their own internal planning and management purposes in accordance with GAAP,
including but not limited to standard cost accounting principles including
direct costs and fully allocated overheads assessed in accordance with best
accounting principles and industry standards.
A. Spending/Expense
1. Development and Registration
2. Manufacturing
3. Marketing, Sales and Distribution
4. Administration
5. Capital and
6. Finance Costs
B. Revenues
1. Projected Sum of Product Revenues Presuming Success
Based Upon Product and Marketing Forecasting
Assumptions.
a. Population
i. Patients with disease
ii. Patients Seeking Care
iii. Patients diagnosed
iv. Diagnosed Patients with access to
care
E-1
v. Patient Compliance with Care
vi. Duration of Care
vii. Frequency of Care for Relapse or
Supplemental Therapy
viii. Competitive Entry Date Adjustment
to Above
b. Product Profile
i. Safety
ii. Side effects
iii. Efficacy
iv. Duration of Care
v. Convenience of Compliance
vi. Relapse or Supplemental Therapy
above standard
vii. Superiority to Alternatives
1. First in class
2. Best in class
3. First-in-class with me-too
competition
4. Me-too competition to
First, Second or Third in
class
c. Price
i. Setting New Treatment Therapy
without reference to existing
therapy
ii. Setting New Treatment Therapy with
reference to existing therapy
iii. Premium to existing therapy
iv. Matching Existing Therapy
v. Discount to Existing Therapy
d. Penetration
E-2
i. Market Dominant (>60% Market Share)
ii. Market Leader (35% to 60% Market
Share)
iii. Significant Market Participation
(20% to 35% Market Share)
iv. Market Participant (10% to 20%
Market Share)
v. Marginal Participant (1% to 10%
Market Share)
vi. Timing to Market
vii. Competition
2. Risk Adjustment
a. Development Risk
i. As compared to similar products
1. at similar stages of
development,
2. in similar classes of
chemicals,
3. with similar pre-clinical
and clinical profiles
4. for similar clinical end
points
b. Manufacturing Risk
i. As compared to similar products
1. at similar stages of
development,
2. in similar classes of
chemicals,
3. with similar pre-clinical
and clinical profiles
4. for similar clinical end
points
c. Commercialization Risk
i. As compared to similar products
1. at similar stages of
market development by
competition,
2. in similar classes of
chemicals,
E-3
3. with similar labeling
4. with similar side effects
and dosing
5. for similar clinical end
points
E-4
EXHIBIT F
Financial Considerations for Other Products
1. Hepatitis Product Payment Percentages
[**] Percentage = [**]%
[**] Percentage* = [**]%
2. Method for calculating Adjusted Earnings for a Product
Adjusted Earnings shall mean Net Sales less:
(a) cost of goods sold;
(b) marketing costs (including expenses relating to field force,
advertising and promotion, and Product-specific FTE's (brand
manager, etc.));
(c) distribution costs (calculated as [**] percent ([**]%) [**]);
(c) Development Expenses;
(d) general and administrative expenses (calculated as [**]
percent [**]%) [**]); and
(e) working capital calculated as [**] percent ([**]%) [**].
The Adjusted Earnings shall be calculated [**]
* The Approval Milestone Payments on which this percentage is based exclude the
$[**] payment under Section 8.5(a)(ii)(A).
F-1
EXHIBIT G
Procedures for Adverse Event and Other Safety Data Exchange
Notification and Reporting
1. PURPOSE
The purpose of this Exhibit is to describe the procedures and define
the responsibilities which Idenix and its Affiliates, together with
Novartis and its Affiliates, will employ to ensure that adverse event
notification and reporting requirements meet current health agency
regulations and guidelines worldwide.
Idenix and Novartis understand and agree that these procedures are
intended to comply with 21 CFR 310.305(a), 312.32, 314.80(b), and
314.98 concerning standard written procedures for adverse event
reporting in the United States, and all analogous Law applicable to
Adverse Event (AE) and Adverse Drug Reaction (ADR) reporting outside
the United States. References within this Exhibit to AEs also include
ADRs as appropriate. These procedures may be amended by the Parties at
any time by mutual written agreement to ensure that they fully and
accurately reflect the procedures in place for surveillance, receipt,
evaluation and reporting of adverse drug experiences by the
Pharmacovigilance departments of the Parties and comply with applicable
Law in the countries in which the Products are marketed and/or are
being Developed. In that regard, upon the written request of either
Party, the Parties shall meet to renegotiate in good faith, all or some
of these procedures. Notwithstanding the foregoing, the procedures set
forth in this Exhibit shall not be construed as restricting either
Party's ability to take any action that it deems to be appropriate or
required of it under applicable Law.
All defined terms used in this Exhibit are intended to be interpreted
in a manner consistent with the corresponding definitions in ICH E2A(1)
and E2C, and with FDA regulations and guidelines (as set forth in
Appendix 1 to this Exhibit).
2. EXCHANGE OF ADVERSE EVENT INFORMATION
The language of all exchanges of AE information will be English. Each
Party can also elect not to receive documents. If both Parties have the
capabilities, by mutual agreement, data exchange can be done
electronically.
2.1. Spontaneous Reports - Marketed Product
a) Each Party will send the other Party for all Serious
Adverse Events reported to it regardless of source
(other than from disclosure by or on behalf of the
other Party) a completed CIOMS/MEDWATCH within three
(3) Business Days after the first person in the
receiving Party is first made
---------------------
1 Directive 00/000 XXX chapter Va - Pharmacovigilance and EC valid guidelines
such as Notice to Marketing Authorization Holders - Pharmacovigilance
guide, and CPMP/ICH-guidelines - CPMP/ICH/287/95 (E2A), CPMP/ICH/377/95
(E2B) CPMP/ICH/288/95 (E2C).
G-1
aware of it, or source documents within two (2)
calendar days after the first person in the receiving
Party is made aware of it by fax. This applies to
initial and all follow-up information.
b) Each Party will send the other party for all
Non-Serious Adverse Events regardless of source
(other than from disclosure by or on behalf of the
other Party) a CIOMS/MEDWATCH line listing, by fax or
courier mail, for all initial and follow-up
Non-Serious adverse events on a monthly basis. If
both Parties have the capabilities, by mutual
agreement, data exchange can be done electronically.
2.2. Serious Adverse Events (SAEs) from Clinical Studies
a) For Fatal or Life-threatening adverse events reported
to a Party regardless of source (other than from
disclosure by or on behalf of the other Party) the
Party will send to the other Party a completed
CIOMS/MEDWATCH within three (3) calendar days after
the first person in the receiving Party is first made
aware of it, or if by fax or source documents within
two (2) calendar days after the first person in the
receiving Party is first made aware of it via fax.
This applies to initial and all follow-up
information. If both Parties have the capabilities,
by mutual agreement, data exchange can be done
electronically.
b) Each Party will send the other party for all Serious
Adverse Events reported to it regardless of source
(other than from disclosure by or on behalf of the
other Party) a completed CIOMS/MEDWATCH within three
(3) Business Days after the first person in the
receiving Party is first made aware of it, or source
documents within two (2) calendar days after the
first person in the receiving Party is first made
aware of it by fax. This applies to initial and all
follow-up information. If both Parties have the
capabilities, by mutual agreement, data exchange can
be done electronically.
c) Non-serious AE reports from Clinical Studies will not
be exchanged between the Parties' Pharmacovigilance
departments.
2.3. Pregnancy Reports
All reports of drug exposure to a pregnancy (male or female partner
using the Product) received by either Party, including both, those
reports associated with an adverse event and those reports not
associated with an adverse event, will be exchanged. Serious AEs will
be treated as explained in Sections 2.1 and 2.2 of this Exhibit. If a
non-serious AE or no adverse event is involved and the report is simply
one of a pregnancy in a patient or partner on the Product the report is
to be sent to DSS within seven (7) calendar days. The pregnancy will be
followed to term by the reporting group and/or DSS to obtain the
outcome of the pregnancy (Pregnancy Register).
G-2
2.4. Animal Studies
A written report for AEs for animal studies which suggest a potential
significant risk for humans taking the Product shall be forwarded to
the other Party via fax within two (2) Business Days of receipt by the
Party making the report.
3. ASSESSMENT OF ADVERSE EVENTS
3.1. Spontaneous Reports - Marketed Product
N/A
3.2. Serious AEs from Clinical Studies
Causality: Each Party will be responsible for the causality
assessment of AEs in their own clinical studies.
4. REPORTING RESPONSIBILITIES
Each party will send via fax to the other Party a copy of all reports sent to
Governmental Authorities within one (1) calendar day of transmission to the
Governmental Authority, except for those already sent to the other Party. For
example, but not limited to, PSUR, Periodic reports, etc.
4.1. Spontaneous Reports - Marketed Product
Except as otherwise expressly set forth in this Agreement or
as otherwise agreed by the Parties in writing, each Party will
have the responsibility for the reporting of AEs to Regulatory
Authorities where it or its Affiliate owns the Regulatory
Approvals for the relevant Product.
4.2. Product in Clinical Trials
Except as otherwise expressly set forth in this Agreement or
as otherwise agreed by the Parties in writing, each Party will
have the responsibility for the reporting of AEs to Regulatory
Authorities and its investigators in those countries in the
Territory where they are conducting clinical trials with the
relevant Product. Alterations in this procedure may be agreed
upon by both Parties in writing at any time during the term of
this agreement.
5. QUESTIONS FROM HEALTH AUTHORITIES
Each Party will be responsible for responding to Regulatory Authorities where
they hold the Regulatory Approvals for the relevant Product. Each party will
immediately (within two (2) Business Days) advise the other Party of any Product
safety communication received from a Regulatory Authority and consult with the
other Party with respect to any proposed change to product warnings, labeling or
an Investigator's Brochure involving safety issues, including, but
G-3
not limited to, safety issues agreed to by the Parties. Each Party will send the
other Party a copy of any correspondence sent to the Regulatory Authority when
sent to the Regulatory Authority.
6. LITERATURE REVIEW
Each Party will be responsible for reviewing all published/unpublished articles
in the countries where they are the Approval holder or are conducting clinical
trials. All adverse events identified in the literature will be processed as
described in Section 2.1 and Section 2.2.
7. SIGNALING
Each Party will signal unexpected adverse events from their databases. Each
Party will notify the other in writing of any proposed safety changes in the
United States, or any other country in the Territory, and/or core labeling
documents for discussion and comment prior to implementation of the label
change.
8. AUDIT
Each Party agrees to maintain accurate and complete records of all adverse
events relating to the Product and submissions to Regulatory Authorities
relating thereto (collectively, "AE Records"). Each Party agrees to permit
representatives of the other Party to examine and audit the AE Records, during
normal business hours and at no charge, upon reasonable written notice;
provided, however, that such audit must be reasonable in scope and in
relationship to the adverse events for the relevant Product. Both Parties shall
have the opportunity to participate in any post-audit meeting and receive a copy
of any audit report relating thereto; and provided further that, if either Party
seeks to use the services of a Third Party in such an audit, the Third Party
must be acceptable to both Parties and be willing to comply with reasonable
requirements of the party being audited, such as signing a confidentiality
agreement.
9. TERM
This Exhibit will become active as of the Effective Date and supersedes all
previous agreements between the Parties for the exchange of AE information for
the Products.
This Exhibit will remain in effect until such time that a new agreement is
negotiated and entered into by the Parties. This Exhibit will survive the
termination of this Agreement that it is attached to up until the point that the
Products are no longer being sold in the Territory.
10. MISCELLANEOUS
10.1. Definitions
Each Party accepts the definitions in Appendix 1 to this
Exhibit for the interchange AE information.
G-4
10.2. Contact List
Each Party will supply the required information found in
Appendix 2 to this Exhibit and will notify the other Party
within five (5) Business Days via fax of any changes to this
information.
10.3. Amendments to this Exhibit
Both Parties by mutual agreement may add written amendments to
this Exhibit covering arrangements for the handling of other
safety issues (e.g., labeling, periodic safety update report
preparation, exceptional issues in one or more countries,
etc.).
G-5
Appendix 1 to Exhibit G
DEFINITIONS
A. "Marketed Drug" - Refers to a human drug, biological product, or device
that is being commercialized anywhere in the world. This includes
products sold "under license".
B. "Adverse Event" or "AE"
1. Any undesirable medical occurrence (and for devices, any
malfunction with or without an accompanying untoward medical
occurrence), in a patient or clinical investigation subject
administered a pharmaceutical product/biologic (at any dose),
or device. An AE can therefore be any unfavorable and
unintended sign (including an abnormal laboratory finding, for
example), symptom or disease temporally associated with the
use of a medicinal product whether or not considered related
to the medicinal product:
- occurring in the course of the use of a drug,
biological product or device;
- associated with, or observed in conjunction with
product overdose, whether accidental or intentional;
- associated with, or observed in conjunction with
product abuse; and/or
- associated with, or observed in conjunction with
product withdrawal.
2. Any failure of expected pharmacological or biologic
therapeutic action (with the exception of such failure
occurring in a clinical trial).
C. "Adverse Drug Reaction" or "ADR"
1. Post-marketing: A response to a drug which is noxious and
unintended and which occurs at doses normally used in man for
prophylaxis, diagnosis, or therapy of disease or for the
modification of physiological functions.
2. In the pre-approval clinical experience with a new medicinal
product or its new usages: any response to a medicinal product
which is noxious or unintended, and which occurs at any dose
used or tested in humans for prophylaxis, diagnosis, or
therapy of disease, or for the modification of physiologic
function.
D. "Serious Adverse Event" or "SAE" is an event meeting one or both of the
following definitions:
1. Definition = FDA Definition Serious
Any adverse drug experience occurring at any dose that results
in any of the following outcomes: Death, a life-threatening
adverse drug experience, inpatient
G-6
hospitalization or prolongation of existing hospitalization, a
persistent or significant disability/incapacity, or a
congenital anomaly/birth defect. Important medical events that
may not result in death, be life-threatening, or require
hospitalization may be considered serious when, based upon
appropriate medical judgment, they may jeopardize the patient
or subject and may require medical or surgical intervention to
prevent one of the outcomes listed in this definition.
Examples of such medical events include allergic bronchospasm
requiring intensive treatment in an emergency room or at home,
blood dyscrasias or convulsions that do not result in
inpatient hospitalization, or the development of drug
dependency or drug abuse.
2. "Serious Adverse Event (experience) or Reaction Definition"
from ICH E2A
Any untoward medical occurrence that at any dose:
- results in death,
- is life-threatening,
- requires inpatient hospitalization or prolongation of
existing hospitalization,
- results in persistent or significant
disability/incapacity, or is a congenital
anomaly/birth defect.
E. "Non-serious Adverse Event" - Any AE which does not meet the criteria
for serious.
F. "Unexpected Adverse Event (unlabeled)"
1. Marketed Product
Any AE, the nature, severity or frequency of which is
inconsistent with the most current SmPC for within the EU;
U.S. PI for within the U.S.; or Local Package Insert for
countries outside the EU/U.S. This includes reports of adverse
events which add significant information on the specificity of
an already known adverse event. Events considered more severe
or specific than those in the SmPC, U.S. PI or Local PI
constitute unexpected events. For example:
a) Acute renal failure is labeled, with a report of
interstitial nephritis (nephritis is not labeled).
b) Hepatitis with new report of fulminant hepatitis
(fulminant hepatitis is not labeled).
2. Product in Clinical Trials
a) Based on the Investigator Brochure (IB)
G-7
b) Any adverse event, the nature, severity or frequency
of which is not consistent with information in the
most current SmPC (Phase IV studies for indications
approved in the SmPC) or IB (Phase I-III or Phase IV
studies for indications not approved in the SmPC), as
described above.
G. "Study Duration"
Adverse events will be collected for the duration of all studies. Study
completion (closure) is defined as later of:
- the last dose of the study medication,
- the last visit by the subject or patient or,
- the last subject or patient contact (e.g., phone
contact) with the Investigator or designee as defined
in the protocol.
SAEs that occur within thirty (30) days after this closure must be
reported. For survival studies, only deaths (not all serious AEs), that
occur after the thirty (30) day period (study completion for each
patient) need be reported.
H. Related or possibly or probably related to the "biomedical research" -
for the purposes of this agreement, all events attributed to the trial
or study or imposed by it, including drugs (study drugs, placebo,
concomitant drugs given for the study or "no treatment"),
investigations performed and the conditions in which they are carried
out. Events which are not related to the biomedical research are those
which are due to the underlying disease being treated. That is, events
are considered possibly or probably related to the biomedical research
if they cannot be clearly attributed to the underlying disease. Thus,
any event in the trial which is due to the study drug, to placebo, to
concomitant medications, to a trial procedure, to a trial investigation
or any other "constraint" imposed by the trial is to be reported as an
adverse event.
I. "Investigational Drug, Biological Product, or Device" - A drug,
biological product or device in clinical trials. This includes clinical
trials being conducted for new indications with marketed products.
J. "Clinical Investigation/Trial/Study" - All experiments or systematic
studies in which a drug is administered or dispensed to or used in
dosing one or more human subjects.
K. "Signaling" - The purpose of signaling is to identify "possible
signals" which need further review and consideration for possible label
changes. These events are generally unexpected (unlabeled). These
events may or may not be serious and may or may not be due to or caused
by the drug.
L. "Initial Receipt Date" - The day the regulatory clock starts and is the
earliest date that an employee, agent, representative etc. of either
Party, first becomes aware of the event.
G-8
Appendix 2 to Exhibit G
CONTACT PEOPLE FOR EXCHANGE OF SAFETY INFORMATION:
Idenix or Affiliate
Company Name:
PRIMARY BACK-UP
---------------------------------------------------------------------------
Name
Title
Phone Number 1
Phone Number 2
Fax Number 1
Fax Number 2
E-mail 1
E-mail 2
Mailing
Address
Novartis or Affiliate
Company Name:
PRIMARY BACK-UP
---------------------------------------------------------------------------
Name
Title
Phone Number 1
Phone Number 2
Fax Number 1
Fax Number 2
E-mail 1
E-mail 2
Mailing
Address
G-9
EXHIBIT H
Development Plans
[To be provided]
H-1
EXHIBIT I
Promotion Expenses
The Promotion Expenses to be shared by the Parties in accordance with
this Agreement shall include the following types of costs and expenses:
(a) costs incurred in promoting and marketing the Products, including
without limitation, advertising (including agency fees), market research,
meetings, pre-Launch Date activities and expenses relating to launch of the
Products, and managed markets/health authority liaisons (but excluding Detailing
expenses);
(b) monitoring of adverse drug reactions;
(c) medical affairs costs, medical/scientific liaisons (including regional
scientific directors), medical education and publications, professional
symposia, speaker and activity programs;
(d) costs of Phase IV Clinical Trials in the Co-Commercialization Countries
(excluding costs associated with any Phase IV Clinical Trials intended to
support indications beyond the respective initial indications (as agreed upon by
the Parties) for the Products, to support expanded labeling for the Products, or
to satisfy requirements imposed by Regulatory Authorities in connection with
Regulatory Approvals for the Products, all of which are included in Development
Expenses) and pharmacoeconomic studies;
(e) costs of fully dedicated marketing personnel working on the Products;
(f) costs of materials and programs for the training of sales force,
regional sales management and marketing management;
(g) costs of Promotional Materials, telemarketing, e-marketing, field and
headquarters' grants, exhibits, direct mail and sample alternative programs;
(h) costs (whether incurred before or after the Effective Date) associated
with obtaining or maintaining the Product Trademarks in the Co-Commercialization
Countries, and any costs incurred pursuant to Section 10.3(c); and
(i) costs associated with global sales force training agreed by the Joint
Operations Committee; provided, however, that each Party will train its own
sales force (and that of its Affiliates) at its own expense.
The foregoing shall not include any Out-of-Pocket Costs or other costs which (i)
are incurred prior to the Effective Date, (ii) are incurred in connection with
the Manufacture of the Products, or (iii) have been included in Development
Expenses or Registration Expenses. In addition, in the event a Party is engaging
in a specific activity in connection with the Co-Promotion of the Products and
such Party engages any Third Party to provide services in connection with such
activity where the equivalent services are usually provided by such Party's (or
its Affiliate's)
I-1
internal resources, any payments to such Third Party for the services provided
by such Third Party shall not be included in Promotion Expenses.
I-2
EXHIBIT J
Third Party Intellectual Property
Cooperative Agreement, dated as of January 4, 1999, by and among Idenix SARL, as
successor to Novirio SARL, acting on behalf of Idenix U.S. (as successor to
Novirio Pharmaceuticals Limited), Le Centre National de la Recherche
Scientifique and L'Universite Montpellier II, as amended
Co-operative Antiviral Research Activity Agreement, dated as of January 4, 1999,
by and among Idenix SARL, as successor to Novirio SARL, on behalf of itself and
Idenix U.S. (as successor to Novirio Pharmaceuticals Limited), and the
Dipartimento di Biologia Sperimentale "Xxxxxxxx Xxxxx" dell'Universita di
Cagliari, as amended
License Agreement, dated as of December 14, 2000, by and between Idenix U.S., as
successor to Novirio Pharmaceuticals Limited, and the Dipartimento di Biologia
Sperimentale "Xxxxxxxx Xxxxx" dell'Universita di Cagliari, as amended
License Agreement, dated as of June 20, 1998, by and among Idenix U.S., as
successor to Novirio Pharmaceuticals Ltd., TherapX Pharmaceuticals, L.L.C. and
Xx. Xxxxxxx Xxxxxxxx
License Agreement, dated as of June 20, 1998, by and between Idenix U.S., as
successor to Novirio Pharmaceuticals Limited, and UAB Research Foundation, as
amended
J-1
EXHIBIT K
Co-Marketing of Products
Co-Marketing in General. Subject to the provisions of the paragraph below
entitled "Product Registration and Launch" and approval by the Joint Steering
Committee, each Party will be entitled to Commercialize each Product in each
Co-Marketing Country for the applicable indication[s] from and after such time
that Regulatory Approval for such Product has been obtained in such Co-Marketing
Country. Each Party will conduct such Commercialization activities, and may
introduce multiple brands of each Product, in the Co-Marketing Countries
independent of the other Party under its own separate and distinct Product
Trademarks. Each Party shall independently select and approve and, at its own
expense, establish, maintain and enforce, its own Product Trademarks in the
Co-Marketing Countries; provided, however, that Novartis will have the sole
right in the Co-Marketing Countries to use the global Product Trademark[s] that
is [are] otherwise used for each Product outside the Co-Marketing Countries.
Without limitation to the foregoing, each Party shall, with respect to the
Products in the Co-Marketing Counties and independent of the other Party, (a)
distribute, sell, book sales and invoice customers for the Products, (b) be
responsible for its own Product pricing, including, without limitation, the
timing of any pricing changes, handling requests for reimbursement and offering
any discounts or rebates, (c) Detail the Products, and (d) train, maintain,
manage and provide administrative and logistical support to its own Sales
Representative field force, in each of case (c) and (d), in a manner as is usual
and customary in the pharmaceutical industry, consistent with its normal
practices. In those Co-Marketing Countries where a Pricing Approval is required,
each Party will be solely responsible for negotiating and obtaining its own
approvals, or any adjustments thereto, with the relevant Regulatory Authority.
Without limitation to the foregoing, the Parties shall in no event jointly
establish or coordinate any pricing of the Products in the Co-Marketing
Countries.
Use of Local Distributors. Each Party may sell each Product for re-sale and
distribution in any Co-Marketing Country to those distributors (a) in which it
owns, directly or indirectly, at least fifty-one percent (51%) of the voting
equity securities of such distributor on a Fully-Diluted Basis (as defined
below) as of the date in which such distributor commences the marketing and sale
of such Product in such Co-Marketing Country, or (b) that the Joint Steering
Committee has approved as a distributor. However, if at any time a Party
reasonably believes that the performance by the other Party's distributor in the
applicable Co-Marketing Country is unsatisfactory, then, upon such first Party's
written request setting forth the reasons for its concerns, the Joint Steering
Committee shall review and discuss such distributor's performance in the
applicable Co-Marketing Country. If, following such Joint Steering Committee
discussion, the requesting Party continues to hold its reasonable belief that
the distributor's performance in the applicable Co-Marketing Country is
unsatisfactory, then it shall provide the other Party with further written
notice, setting forth in reasonable detail the basis for such determination.
Thereafter, the Party receiving such further notice shall have sixty (60) days
to demonstrate to the requesting Party that such distributor has cured the
specified unsatisfactory performance. If, during such period, the Party
receiving such further notice fails to demonstrate to the requesting Party, in
its reasonable determination, that the distributor has cured such unsatisfactory
performance, then such matter shall be referred to the Joint Operations
Committee
K-1
for resolution. Solely for purposes of this Exhibit, "Fully-Diluted Basis" shall
mean, with respect to the calculation of equity securities of an entity, all
issued and outstanding (a) common stock of such entity ("Common Stock"), (b)
evidences of indebtedness, shares or other securities of such entity directly or
indirectly convertible into or exchangeable for Common Stock (collectively,
"Convertible Securities"), assuming conversion of such outstanding Convertible
Securities, and (c) rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities (collectively, "Equity
Options"), assuming the exercise of such outstanding Equity Options.
Product Registration. Each Party will independently seek in the Co-Marketing
Countries the Regulatory Approval of its brand[s] of the Products in accordance
with the Development Plan and the commercial guidelines for such Products
approved by the Joint Steering Committee for Co-Marketing Countries, provided
that Novartis shall be the Lead Regulatory Party and shall provide Idenix with
identical health registration packages for the Products for use in filing
Registration Filings in such Co-Marketing Countries. Each Party shall be
responsible for its own Registration Expenses in the Co-Marketing Countries.
Promotional Materials. With respect to each Product in all Co-Marketing
Countries, each Party will have, for informational purposes only, full and equal
access to the Promotional Materials developed by the Parties for use in the
Co-Commercialization Countries. In the Co-Marketing Countries, each Party will
have responsibility for the preparation of its own Promotional Materials
intended for use therein, and shall ensure that all such Promotional Materials
are consistent with the approved Consolidated Co-Commercialization Plan, Country
Co-Commercialization Plans and the Joint Steering Committee-approved guidelines,
and comply with all applicable Laws. Each Party shall be responsible for the
distribution of Promotional Materials to its local Affiliates, Sales
Representative field force and/or distributors, as applicable, for use in the
Co-Marketing Countries.
Gross Margin and Expenses. Each Party shall retain all Gross Margin received by
such Party on its sales of the Products in the Co-Marketing Countries, and no
Benefit Allocation shall apply with respect to the Co-Marketing Countries. Each
Party shall be responsible for its own Promotion Expenses incurred with respect
to the Products in the Co-Marketing Countries. Each Party shall provide the
Joint Steering Committee on an annual basis with a detailed report of Annual Net
Sales by such Party in the Co-Marketing Countries.
Additional Provisions. For clarification purposes, the supply of Products to
each Party for sale in the Co-Marketing Country will be as set forth in the
Supply Agreement.
K-2
EXHIBIT L
Example of Benefit Allocation Adjustment
Example of benefit allocation adjustment [**].
[**]
In addition [**] is adjusted as follows:
Adjusted BA = [**]
[**]
Adjusted BA = [**]
L-1
EXHIBIT M
Regulatory Tasks in U.S. Territory
Preparation and formatting of the NDA via electronic submission
Provision of electronic study templates and documents
Quality check on all documents/data for submission
Quality check on datasets prior to final study report
Coordination of pharmacoviligence activities and submission of reports via
electronic submission, if possible
M-1
EXHIBIT N
Example of Adjustment for Failure to Perform PDEs
Example of [**] failure to perform PDEs [**]
[**]
[**]
[**]
[**]
Calculation 1- [**]
[**]
[**]
In addition to the [**] to additional compensation as follows:
The greater of A or B:
A = [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
B = [**]
Original BA = [**]
Adjusted BA = [**]
Adjusted BA = [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
Total Payment [**]
N-1
EXHIBIT O
Commercialization and Marketing Guidelines
It is the intention of the Parties to optimize the product potential of Selected
Drug Candidates and Products derived therefrom. To this end, the Parties will
work together to:
- with respect to the HBV Products and HCV Product if such Products
achieve market leader status, to market and promote such Products in a
manner consistent with standards within the pharmaceutical industry for
products that have achieved such prominence;
- promote the use of [a] global Product Trademark[s] wherever possible;
- develop Consolidated Co-Commercialization Plans to achieve the goal of
obtaining a comparable share of market voice as compared to the
then-current market leader for the indication if the Product has a
competitive product profile, or, in the event the Product has a
superior product profile to the market leader, a share of market voice
equal or superior to all competitive products;
- implement the Consolidated Co-Commercialization Plan as approved by the
Joint Steering Committee;
- ensure alignment of sales force activities, including appropriate
compensation;
- have sales forces share relevant information, including records of all
Detailing activities, both written and electronic;
- agree to the extent specialty or primary care sales forces are
implemented; and
- review all reasonable measures of sales force effectiveness.
O-1
EXHIBIT P
Example of Idenix NPV Proportionate Development Expense Share
Assumptions of example for the Selected Other Drug Candidate:
[**] [**]
[**] [**]
[**] [**]
Calculation:
1. [**] [**]
2. [**] [**]
3. [**] [**]
P-1
EXHIBIT Q
Examples of Backup HCV Development Expenses
Example 1 - Backup HCV Development Expenses [**]
[**] Backup HCV Development Expenses. [**]Backup HCV Development Expenses[**]
Example 2 - Backup HCV Development Expenses [**]
[**] Backup HCV Development Expenses.[**].
[**]
Q-1
EXHIBIT R
Sumitomo Settlement Agreement
Filed Separately as
Exhibit 10.13
R-1
CONFIDENTIAL
AMENDMENT NO. 1 TO
DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT
This Amendment No. 1 ("Amendment No. 1") to the Development, License and
Commercialization Agreement is made and effective as of the 30th day of April
2004 by and among Idenix Pharmaceuticals, Inc., with offices at 00 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX ("Idenix U.S."), Idenix (Cayman)
Limited, with offices at c/o Walkers SPV Limited, Xxxxxx House, Xxxx Street,
Xxxxxx Town, Grand Cayman, Cayman Islands (together with Idenix U.S., "Idenix"),
and Novartis Pharma AG, with offices at Xxxxxxxxxxx 00, 0000 Xxxxx, Xxxxxxxxxxx
("Novartis").
INTRODUCTION
A. Novartis and Idenix are parties to the Development, License and
Commercialization Agreement made as of May 8, 2003 (the "Development
Agreement").
B. Novartis and Idenix have collaboratively developed
pharmacovigilence arrangements with respect to the clinical development of
telbivudine.
C. Such specific arrangements are for purposes of the clinical
development of telebivudine intended to supercede the general arrangements
provided in Exhibit G to the Development Agreement.
D. The principal offices of Idenix U.S. have relocated to a new
address and as a result, Idenix U.S. desires to update the addresses and
facsimile number to which notices required or permitted under the Development
Agreement are given.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Idenix and Novartis hereby agree as follows:
1. Section 13.2 of the Development Agreement is hereby amended by
deleting the Idenix U.S. address and telecopier number and restating such
information as follows:
Idenix Pharmaceuticals, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
U.S.A.
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
2. Exhibit G attached to the Development Agreement is hereby amended as
follows:
(i) The following paragraph is to be inserted at the end of Exhibit G
Section 1 captioned "Purpose"
The procedures for surveillance, receipt, evaluation and
reporting of serious adverse events relating to or resulting from the
clinical development of telbivudine are further delineated in Exhibit
G-1. To the extent of any inconsisentcy in the procedures detailed in
this Exhibit G and those detailed in Exhibit G-1, the procedures in
Exhibit G-1 shall control.
(ii) Exhibit G-1 attached to this Amendment No. 1 is to be inserted in
the Development Agreement immediately after Exhibit G.
3. This Amendment No. 1 amends and supplements the Development Agreement.
Except as otherwise provided for herein, the Development Agreement remains in
full force and effect unaffected hereby. This Amendment No. 1 shall be deemed
incorporated into and become a part of the Development Agreement and shall be
subject to the terms thereof.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, Idenix and Novartis have caused this Agreement to be
duly executed by their authorized representatives, as of the date first written
above.
IDENIX PHARMACEUTICALS, INC.
By: [illegible]
------------------------------------
Name:
Title:
IDENIX (CAYMAN) LIMITED
By: /s/Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
NOVARTIS PHARMA AG
By: /s/Surmano Saxena
------------------------------------
Name: Surmano Saxena
Title: Head Infectious Disease
Business Franchise
By: /s/Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: General Counsel
PHARMACOVIGILANCE AGREEMENT
--------------------------------------------------------------------------------
PARTIES:
(1) IDENIX PHARMACEUTICALS INC. IDENIX
(CAYMAN) LIMITED CORPORATION,
(2) NOVARTIS PHARMA AG ("NOVARTIS"),
XXXXXXXXXXXX 00, XX-0000, XXXXX,
XXXXXXXXXXX.
--------------------------------------------------------------------------------
Scope: All pharmacovigilance data on Product Version: DATE:
required by the regulatory authorities worldwide
during clinical development. FINAL 29 March 2004
--------------------------------------------------------------------------------
"PRODUCT": LDT (TELBIVUDINE)
Effective date of this Safety Agreement: 30th April 2004
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 PURPOSE.................................................................6
2 SCOPE...................................................................6
3 LANGUAGE OF ALL EXCHANGE AND TERMINOLOGY................................6
4 CONTACT PERSONS.........................................................6
5 DATABASE(S).............................................................7
6 EXCHANGE OF ADVERSE EVENT INFORMATION...................................7
6.1 Timelines.........................................................7
6.2 Serious adverse event reports from clinical studies:..............7
7 LITERATURE REVIEW AND SPECIAL SCENARIO REPORTS..........................8
7.1 Literature Review.................................................8
7.2 Pregnancy.........................................................8
8 FOLLOW-UP INFORMATION AND ASSESSMENT OF ADVERSE EVENTS..................8
8.1 Follow-up of initial reports......................................8
8.2 Assessment of expectedness........................................8
8.3 Assessment of causality...........................................9
9 SAFETY ISSUES/SIGNALS, INVESTIGATOR NOTIFICATIONS AND UNBLINDING........9
9.1 Safety Issues/Signals.............................................9
9.2 Investigator Notifications........................................9
9.3 Unblinding.......................................................10
10 REGULATORY AUTHORITY INTERACTION.......................................10
10.1 Expedited reporting responsibilities.............................10
10.2 Periodic Reporting...............................................10
10.3 Regulatory Authority Questions...................................10
11 STANDARD REFERENCE DOCUMENTS...........................................11
11.1 Investigator's Brochure..........................................11
11.2 Product Information/Core Data Sheet..............................11
11.3 Study Protocols..................................................11
12 TERM AND TERMINATION...................................................11
13 PERIODIC MEETINGS, AUDITS AND AMENDMENTS TO THIS AGREEMENT.............11
Appendix 1 - List of contact people
Appendix 2- Countries for which Novartis hold the Regulatory Authority
Authorisation and are responsible for Pharmacovigilance reporting,
ARTICLE 1. PURPOSE
This Pharmacovigilance Agreement is made pursuant to the Development, License
and Commercialization Agreement by and among Indenix Pharmaceuticals Inc.,
Idenix (Cayman) Limited and Novartis Pharma AG on May 8th, 2003 (the "Master
Agreement") and shall form an integral part thereof replacing the current
Exhibit G. This Pharmacovigilance Agreement is to be construed in the context of
the Master Agreement.
The purpose of this Pharmacovigilance Agreement is to describe the procedures
and define the responsibilities which Novartis (Clinical Safety & Epidemiology
(CS&E)) and Idenix shall employ to ensure that at all times adverse event
notification and reporting requirements for LdT (telbividine) meets applicable
regulatory authority regulations and guidelines worldwide.
ARTICLE 2. SCOPE
This Pharmacovigilance agreement shall cover:
All serious adverse events (SAEs) occurring in clinical trials of telbivudine
(phase I to IIIb), sponsored by Idenix.
All other clinical safety-related information requested by the Regulatory
Authorities worldwide.
SRs (Spontaneous Reports) and literature reports concerning the Products are
outside the scope of this current Pharmacovigilance Agreement. This current
Agreement shall be updated by the Parties sufficiently in advance of Product
launch to enable the Parties to continue to comply with applicable regulatory
authority guidelines and regulations.
Nothing in this Pharmacovigilance Agreement shall affect either of the Parties'
obligations under applicable laws, regulations and guidelines.
Nothing in this Pharmacovigilance Agreement shall prevent either of the Parties
from taking any action that it reasonably considers to be necessary to comply
with applicable laws, regulations and guidelines.
ARTICLE 3. LANGUAGE OF ALL EXCHANGE AND TERMINOLOGY
The language of all communications and exchanges under this Pharmacovigilance
Agreement shall be English.
The definitions of terms used in this agreement are in accordance with the ICH
E2A and ICH E2C guidelines.
ARTICLE 4. CONTACT PERSONS
The contact persons in each company for handling SAEs and Pharmacovigilance
issues are identified in Appendix 1.
Either party may change its contact persons and shall notify the other party in
writing as soon as possible.
ARTICLE 5. DATABASE(S)
Idenix has currently outsourced Pharmacovigilance for telbivudine (LdT) to a
Contract Research Organisation, Quintiles (Idenix designee).
Quintiles, in Dublin, shall hold and maintain the central safety database for
LdT, into which it shall enter information on SAEs in association with LdT
occurring anywhere in the world and reported to Quintiles Dublin and Quintiles
Singapore. For the term of this Agreement, this shall be the reference database
for regulatory use. Idenix or its designee shall grant Novartis access to the
data from the reference database upon reasonable request for pharmacovigilance
related issues. In addition, Novartis CS&E shall maintain a duplicate safety
database of SAEs. To set-up the duplicate database, Idenix shall provide to
Novartis information on all SAEs reported prior to signature of this agreement
in the format indicated in section 6. No regulatory reporting forms shall be
created or submitted from the Novartis database.
ARTICLE 6. EXCHANGE OF ADVERSE EVENT INFORMATION
6.1. Timelines
The times below are given in calendar days.
6.2. Serious adverse event reports from clinical studies:
For purposes of maintaining a duplicate database of SAEs at Novartis (no
regulatory reporting forms shall be created or submitted from this database)
Idenix or its designee shall provide Novartis Central CS&E (Horsham) with
(a) a fax copy of the completed CIOMS for Causally Suspected fatal or
Life-threatening unexpected SAEs within 5 (five) calendar days of first
notification of the event to any employee of Idenix or its designee.
(b) a fax copy of the completed CIOMS for other serious Causally Suspected
unexpected SAEs within 12 (twelve) calendar days of first notification of
the event to any employee of Novartis or its designee.
(c) A regular output of all cases entered into or modified in the database in
the preceding calendar month from the Quintiles database by mail on cd-rom on a
monthly basis at the end of each month. This shall include the SAE form and
CIOMS form for each case. Every effort shall be made to minimize the delay
between first notification of the report to the sponsor and entry of the case
into the database.
In addition, Novartis CS&E have a responsibility to meet the 7/15 day regulatory
reporting timeframes for reports from countries where they hold the Regulatory
Authority Authorisation (see Appendix 2). To enable Novartis to achieve this,
Idenix or it's designee must fax a copy of the completed CIOMS form to Novartis
in the countries where they hold the Regulatory Authority Authorisation,
according to the following timelines:
(a) Causally Suspected fatal or Life-threatening unexpected SAEs within 5
(five) calendar days of first notification of the event to any employee of
Idenix or its designee.
(b) Other serious Causally Suspected unexpected SAEs within 12 (twelve)
calendar days of first notification of the event to any employee of
Novartis or its designee.
These timelines apply to both initial and follow-up information.
Non-serious adverse event reports from Clinical studies will not be forwarded to
Novartis CS&E.
ARTICLE 7. LITERATURE REVIEW AND SPECIAL SCENARIO REPORTS
7.1. Literature Review
The exchange of published information constituting adverse event reports is
outside the scope of this agreement.
7.2. Pregnancy
All reports of drug exposure during pregnancy (whether male or female partner
receiving the product), whether or not the case was associated with an adverse
event, shall be exchanged between the Parties within the same timelines as
causally unsuspected SAEs as above. The pregnancy should be followed up by the
Party first receiving the report to obtain a pregnancy outcome.
8 FOLLOW-UP INFORMATION AND ASSESSMENT OF ADVERSE EVENTS
8.1 Follow-up of initial reports
The party first receiving the report shall be responsible for obtaining any
follow-up information from the reporter. Either party may request follow-up
information from the other, which shall use its best efforts to obtain such
information. Follow-up information shall be processed as described for SAEs in
Section 6.
8.2 Assessment of expectedness
Idenix or its designee shall make the initial SAE assessment of expectedness
against the Investigator's Brochure. Novartis will monitor the assessments in
the incoming reports and in case of concern, the Parties shall enter into
discussion and issue an agreed follow-up report with a re-assessment, if
necessary.
8.3 Assessment of causality
The causality assessment shall be undertaken by the responsible investigator and
Idenix or its designee, for SAEs for all investigational products (and/or
concomitant products) from all clinical trials. Should Idenix or it's designee
assess causality as "suspected" (also referred to as "associated with" or
"related to" the use of the drug) when the investigator has made an assessment
of "not suspected", the "higher" causality (suspected) shall be applied for
purposes of expedited and periodic reporting. Novartis will monitor the
assessments in the incoming reports and in case of concern, the Parties shall
enter into discussion and issue an agreed follow-up report with a re-assessment,
if necessary. Any differences in the causality assessment must be documented on
the SAE report.
9 SAFETY ISSUES/SIGNALS, INVESTIGATOR NOTIFICATIONS AND UNBLINDING
9.1 Safety Issues/Signals
In case either of the Parties becomes aware of:
(a) identified signals for potential new adverse reactions
(b) increased incidence of known adverse reactions
(c) increased severity of known adverse reactions
(d) major findings from newly completed animal studies, considered by the
originating party to potentially warrant an IND information amendment
(under CFR 312.31) or an IND safety report (under CFR 312.32)
(e) any proposed changes in the Investigator Brochure
that Party shall promptly notify the other Party in writing, for discussion and
comment and to decide whether any further action is required.
9.2 Investigator Notifications
Idenix or its designee shall prepare all Investigator Notifications (INs) for
suspected, unexpected SAEs, or animal studies suggesting a potential significant
risk, according to its SOP. Idenix or its designee should distribute the final
IN to Novartis by day 12. Novartis will monitor the incoming INs and in case of
concern, the Parties shall enter into discussion and issue an agreed follow-up,
if necessary. Idenix or its designee will distribute the INs in all Territories
including those in Novartis Territory (see Appendix 2).
9.3 Unblinding
After study completion/termination Idenix or its designee is responsible for
informing Novartis of the actual study treatments of the study subjects within 2
weeks of completion of the unblinding of all SAEs on the central safety
database.
Idenix or its designee will break the treatment code of an individual study
subject and inform Novartis of the treatment given only in case of a safety
concern or in the case of serious, related unexpected SAEs for regulatory
reporting purposes.
10 REGULATORY AUTHORITY INTERACTION
10.1 Expedited reporting responsibilities
The Party holding the Regulatory Authority Authorisation for clinical trials in
a country shall be responsible for submitting expedited SAE reports to the
Regulatory Authority in that country according to the current applicable laws,
regulations and guidelines, regardless of whether the report originated from
that Party or not. According to the agreements governing the transaction to
which this Pharmacovigilance Agreement relates, for the telbivudine project this
will be Idenix or its designee in the USA, Canada and the rest of the world
apart from certain countries in SE Asia, for which Novartis shall hold the
Regulatory Authority Authorisation and be responsible (see Appendix 2).
10.2 Periodic Reporting
Idenix or its designee shall prepare such Periodic Update Reports as may be
required by the Regulatory Authorities and shall provide these to Novartis for
information and/or submission. The party holding the Regulatory Authority
Authorisation for clinical trials in a country shall be responsible for
submitting such Periodic Reports to the Regulatory Authority as maybe required
in that country according to the current regulations.
10.3 Regulatory Authority Questions
On the telbivudine project, Idenix or its designee will be responsible for
responding to Regulatory Authority questions worldwide apart from certain
country/countries in SE Asia, for which Novartis shall hold the Regulatory
Authority Authorisation and be responsible (see Appendix 2).
The Parties shall promptly notify each other of any safety communication
received from a Regulatory Authority and Idenix shall inform Novartis of any
proposed change to the Investigator Brochure for discussion and agreement. All
responses to significant questions will be reviewed by both Parties prior to
submission to a Regulatory Authority unless there is a public
health need to respond immediately. In addition, the Parties must send to each
other a copy of any correspondence sent to the Regulatory Authority at the time
the correspondence is sent out.
Responses to any safety-related questions received from a Regulatory Authority
in SE Asia in which Novartis holds the Regulatory Authority Authorization shall
be the responsibility of Novartis. The content of the response will be reviewed
by Idenix prior to submission to a Regulatory Authority unless there is a public
health need to respond immediately; assistance in writing a response shall be
provided by Idenix when information from the central safety database is
required.
11 STANDARD REFERENCE DOCUMENTS
11.1 Investigator's Brochure
For each clinical development project, Novartis and Idenix shall use an
Investigator's Brochure with a common core safety section to assess the
expectedness of adverse events.
11.2 Product Information/Core Data Sheet
The Product Information/Core Data Sheet are outside the scope of this current
agreement.
11.3 Study Protocols
At the first occurrence of an SAE in a particular clinical trial, the Party
reporting the SAE shall make available to the other Party a copy of the relevant
Study Protocol. This is to provide a clear understanding of the nature of the
exposure to the Product and to allow a meaningful interpretation of the SAE.
12 TERM AND TERMINATION
This Safety Agreement shall commence on the effective date and continue to be in
force for as long as both of the parties have a legitimate interest in receiving
the information, reports, and notifications provided for herein in order to
comply with existing and new regulatory requirements.
13 PERIODIC MEETINGS, AUDITS AND AMENDMENTS TO THIS AGREEMENT
All sections and appendices of this Pharmacovigilance Agreement may be modified
only by written agreement of the parties as necessary to assure that both
parties are able to comply with current worldwide regulatory authority
requirements. In case of merger or reorganisation of either party hereto, the
parties agree that the duties herein shall be assumed by their successors
and agree to obtain from such successor companies an undertaking for the benefit
of the other party hereto to honour this agreement.
The parties shall have meetings to discuss safety issues and/or replacement of,
or changes to, this Agreement on Drug Safety Information Exchange when deemed
necessary.
Signatures / Dates: This Safety Agreement has been agreed and signed in
duplicate by the following respective Parties.
NOVARTIS, BASEL, SWITZERLAND IDENIX/QUINTILES
/s/ S. C. Mah /s/ Xxxxx Xxxxxxxx
------------------------------------ -------------------------------------
S. C. Mah, PhD Xxxxx Xxxxxxxx, PhD
Global Head CS&E Vice President,
Novartis Pharma AG Regulatory Affairs
/s/ X. X. Xxxxxxx /s/ Xxxxxxxxx X. Xxxxx, M.D.
------------------------------------ -------------------------------------
X. X. Xxxxxxx, MD Xxxxxxxxx X. Xxxxx, M.D.
Head, Global Clinical Safety Chief Medical Officer
Operations
Novartis Pharma AG
CONFIDENTIAL
APPENDIX 1
LIST OF CONTACT PERSONS: IDENIX
----------------------------------------------------------------------------------------------------------------------------------
WHO TO CONTACT ADDRESS FAX NO. TEL. NO. E-MAIL
----------------------------------------------------------------------------------------------------------------------------------
MEDICAL ISSUES Xxxxxxxxxxx Xxxx, MD Idenix Pharmaceuticals Inc. XXXX.XXXXXXXXXXX@XXXXXX.XXX
Including SAEs,safety-related Associate Director,
questions / answers to RAs Clinical Research,
----------------------------------------------------------------------------------------------------------------------------------
PRIMARY LIAISON Xxxxxxx Xxxxx, PhD Idenix Pharmaceuticals Inc. mailto:
for contractual /procedural Sr Vice President, XXXXX.XXXXXXX@XXXXXX.XXX
issues Clinical Research
----------------------------------------------------------------------------------------------------------------------------------
REGULATORY LIASON Xxxxx Xxxxxxxx, PhD Idenix Pharmaceuticals Inc XXXXXXXX.XXXXX@XXXXXX.XXX
Vice President,
Regulatory Affairs
----------------------------------------------------------------------------------------------------------------------------------
LIST OF CONTACT PERSONS: NOVARTIS
-----------------------------------------------------------------------------------------------------------------------------------
WHO TO CONTACT ADDRESS FAX NO. TEL. NO. E-MAIL
-----------------------------------------------------------------------------------------------------------------------------------
SAES HORSHAM SAFETY DESK Novartis Pharmaceuticals UK Ltd, ---
fax transmission (Xxxxxxxxx Xxxxxx) Horsham Research Centre
Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx XX00 0XX
XX
MEDICAL ISSUES XXXXX XXXXXXX Novartis Pharmaceuticals UK Ltd, COLIN.XXXXXXX@
Including safety-related Senior Medical Safety Expert, Horsham Research Centre XXXXXX.XXXXXXXX.XXX
questions Medical Function, CS&E Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx XX00 0XX
XX
PRIMARY LIAISON XXXXXX XXXXX Novartis Pharma AG XXXXXX.XXXXX@
for contractual /procedural Drug Safety Licensing Manager, WSJ-27 XXXXXX.XXXXXXXX.XXX
issues CS&E Xxxxxxxxxxxx 00,
XX-0000, Xxxxx, Xxxxxxxxxxx
-----------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL
APPENDIX 2
COUNTRIES FOR WHICH NOVARTIS HOLD THE
REGULATORY AUTHORITY AUTHORISATION
AND ARE RESPONSIBLE FOR PHARMACOVIGILANCE REPORTING
(STATUS 8TH JANUARY 2004 - TO BE UPDATED IF NECESSARY)
INDIA (STUDY 007)
KOREA (STUDY 011)
SINGAPORE (STUDY 011)
