COLLABORATION AGREEMENT by and between GENZYME CORPORATION and OSIRIS THERAPEUTICS, INC.
EXHIBIT 10.56
by and between
GENZYME CORPORATION
and
ARTICLE 1: |
DEFINITIONS |
1 |
ARTICLE 2: |
GOVERNANCE OF THE PROGRAM |
12 |
2.1 |
Steering Committee |
12 |
2.2 |
Decisions |
14 |
ARTICLE 3: |
DEVELOPMENT ACTIVITIES |
15 |
3.1 |
Prochymal Development Activities |
15 |
3.2 |
Chondrogen Development Activities |
19 |
3.3 |
Development Plans |
19 |
3.4 |
Development Costs |
20 |
3.5 |
Consideration of Resources |
22 |
3.6 |
Primary Contact Persons |
22 |
3.7 |
Visit of Facilities |
22 |
3.8 |
Records |
23 |
3.9 |
Ownership and Use of Data |
23 |
ARTICLE 4: |
REGULATORY AND MANUFACTURING |
23 |
4.1 |
Regulatory |
23 |
4.2 |
Regulatory Expenses |
24 |
4.3 |
Safety Reporting |
24 |
4.4 |
Product Supply |
25 |
ARTICLE 5: |
COMMERCIALIZATION |
26 |
5.1 |
Xxxxxx Xxxxxxxxx |
00 |
5.2 |
Genzyme Notification Right Regarding Distribution Outsourcing |
27 |
5.3 |
Genzyme Responsibilities in the Xxxxxxx Xxxxxxxxx |
00 |
ARTICLE 6: |
CONSIDERATION |
27 |
6.1 |
Upfront Payments |
27 |
6.2 |
Prochymal Development Milestones |
27 |
6.3 |
Prochymal Sales Milestones |
29 |
6.4 |
Chondrogen Development Milestones |
30 |
6.5 |
Chondrogen Sales Milestones |
31 |
6.6 |
Royalties Payable to Osiris |
31 |
6.7 |
Royalties Payable to Genzyme |
33 |
6.8 |
Records; Audits |
33 |
6.9 |
Calculation of Payment |
34 |
6.10 |
Late Payments |
34 |
6.11 |
FIN 46 Cooperation |
34 |
ARTICLE 7: |
GRANT OF RIGHTS |
34 |
7.1 |
License to Genzyme |
34 |
7.2 |
Covenant Not to Xxx Osiris |
35 |
7.3 |
Additional Rights |
36 |
7.4 |
No Other Rights |
36 |
7.5 |
Rights to Exploit Intellectual Property Outside of Collaboration |
36 |
7.6 |
Rights to Exploit Joint Patent Rights and Joint Technology |
36 |
7.7 |
Exclusivity |
36 |
7.8 |
Right of Notification |
37 |
ARTICLE 8: |
INTELLECTUAL PROPERTY RIGHTS |
37 |
8.1 |
Ownership of Technology and Patent Rights; Prosecution of Patent Rights |
37 |
8.2 |
Filing, Prosecution, Maintenance and Enforcement of Patent Rights |
39 |
ARTICLE 9: |
CONFIDENTIALITY |
42 |
9.1 |
Nondisclosure Obligations |
42 |
9.2 |
Exceptions |
43 |
9.3 |
Disclosures Required by Law |
43 |
9.4 |
Disclosure of Agreement; Use of Name |
44 |
9.5 |
Publications |
44 |
ARTICLE 10: |
REPRESENTATIONS AND WARRANTIES |
45 |
10.1 |
Representations of the Parties |
45 |
10.2 |
Additional Representations of Osiris |
45 |
ARTICLE 11: |
INDEMNITY AND INSURANCE |
46 |
11.1 |
Indemnification by Genzyme |
46 |
11.2 |
Indemnification by Osiris |
47 |
11.3 |
Indemnification Procedure |
47 |
11.4 |
Limitation of Liability |
48 |
11.5 |
Insurance |
48 |
ARTICLE 12: |
TERM AND TERMINATION |
48 |
12.1 |
Term of Agreement |
48 |
12.2 |
Termination |
48 |
12.3 |
Effect of Termination by Osiris for Breach by Genzyme or at Genzyme’s Election |
49 |
12.4 |
Effect of Material Breach by Osiris |
50 |
12.5 |
Effects of Bankruptcy |
50 |
12.6 |
Effects of Termination upon Mutual Agreement |
51 |
12.7 |
Effects of Termination Generally |
51 |
ARTICLE 13: |
MISCELLANEOUS |
51 |
13.1 |
Interpretation |
51 |
13.2 |
Force Majeure |
51 |
13.3 |
Successors in Interest |
52 |
13.4 |
Severability |
52 |
13.5 |
Notices |
53 |
13.6 |
Applicable Law |
53 |
13.7 |
Compliance with Applicable Laws |
53 |
13.8 |
Dispute Resolution |
53 |
13.9 |
Entire Agreement |
56 |
13.10 |
Independent Contractors |
56 |
13.11 |
Waiver |
56 |
13.12 |
Counterparts |
56 |
13.13 |
Further Assurances |
56 |
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THIS COLLABORATION AGREEMENT (the “Agreement”) dated this 31st day of October, 2008 (the “Effective Date”) is made by and between Genzyme Corporation, a Massachusetts corporation having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (“Genzyme”) and Osiris Therapeutics, Inc., a Delaware corporation having its principal place of business at 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 (“Osiris”).
A. Osiris is a recognized stem cell therapeutic leader focused on developing and marketing products to treat medical conditions and possesses broad scientific and clinical leadership in the field of human mesenchymal stem cells (“MSCs”) and know-how, expertise and intellectual property rights pertaining to MSCs, including its Prochymal product and Chondrogen product.
B. Genzyme is a recognized biotechnology industry leader with broad scientific capabilities, including but not limited to expertise in the area of cell therapy, and commercial expertise engaged in the research, development, marketing, manufacturing and distribution of bio-pharmaceutical products.
C. Genzyme and Osiris desire to collaborate to develop and commercialize Prochymal and Chondrogen, subject to the terms and conditions set forth below.
ARTICLE 1: DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the meanings specified below, whether used in their singular or plural form:
1.1 “Accepted Indication” shall have the meaning set forth in Section 3.1.4(b).
1.2 “Additional Clinical Trial” shall have the meaning set forth in Section 3.1.3.
1.3 “Additional Rights” shall have the meaning set forth in Section 7.3.
1.4 “Affiliate” shall mean any corporation or other entity which controls, is controlled by, or is under common control with a Party to this Agreement. A corporation or other entity shall be regarded as in control of another corporation or entity if it directly or indirectly owns or controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other entity.
1.5 “Articulating Orthopedic Indication” shall mean the use of Chondrogen for preventing or treating diseases, defects or conditions of articulating joints, including cartilage and meniscus repair, osteoarthritis, osteochondral defect repair, and the treatment of acute and chronic orthopedic pain within an articulating joint. For clarity, the term Articulating Orthopedic Indication shall not include indications for bone growth such as fracture repair and fusion procedures.
1.6 “At-Risk Indication” shall have the meaning set forth in Section 3.1.4(c).
1.7 “Audited Party” shall have the meaning set forth in Section 6.8.
1.8 “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from time to time.
1.9 “BLA” shall mean a biologics license application (or any successor application) filed with the FDA after completion of human clinical trials to obtain Marketing Approval of a Product for an Indication in the United States.
1.10 “Business Day” shall mean each day of the week excluding Saturday, Sunday and U.S. federal holidays.
1.11 “Cardiac Indication” shall mean the use of Prochymal to treat or prevent acute myocardial infarction.
1.12 “Chairperson” shall have the meaning set forth in Section 2.1.1.
1.13 “Change of Control” means, with respect to a Party: (a) a merger, reorganization or consolidation involving such Party in which the stockholders of such Party immediately prior to such transaction cease to own collectively a majority of the voting equity securities of the successor entity; (b) a Person or group of Persons acting in concert acquires more than fifty percent (50%) of the voting equity securities of such Party, where “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership, or other business entity; or (c) the sale of all or substantially all of the assets of such Party.
1.14 “Chondrogen” shall mean (a) any formulation, dosage form or delivery system that contains culturally expanded, undifferentiated, unmodified human MSCs for local delivery for the Articulating Orthopedic Indication and (b) any Improvements thereto.
1.15 “Chondrogen Development Milestone Payment” shall have the meaning set forth in Section 6.4.
1.16 “Chondrogen Sales Milestone Payment” shall have the meaning set forth in Section 6.5.
1.17 “Chondrogen Trial” shall have the meaning set forth in Section 3.2.2(a).
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1.18 “Collaboration” shall mean generally the activities approved by the Steering Committee to execute the Development Plans.
1.19 “Combination Product” shall mean a product that contains a Product as one component and at least one other functional (whether it be drug, biologic or device) component.
1.20 “Commercial Manufacturing Cost” shall mean (a) where a Party is manufacturing Product on its own behalf or on behalf of the other Party, all costs actually incurred by a Party for activities associated with the manufacture of a Product including, without limitation, technology transfer costs and any royalties, fees or other consideration payable to a Third Party for a license of technology attributable to the manufacture of the Product; provided that Manufacturing Costs shall not exceed the actual manufacturing costs that could be obtained by a Third Party manufacturer in an arms-length transaction under similar terms and conditions, or (b) where a Third Party is manufacturing Product on behalf of a Party, the costs actually paid by such Party to such Third Party for the manufacture of Product under the relevant manufacturing agreement. All such cost determinations shall be made in accordance with GAAP.
1.21 “Commercial Post-Marketing Study” shall mean any study of a Product for an Indication conducted after receipt of Marketing Approval for that Indication which is not a Phase IV Study.
1.22 “Confidential Information” shall have the meaning set forth in Section 9.1.
1.23 “Control” or “Controlled by” shall mean, in the context of a license to or ownership of intellectual property, possession of the ability on the part of a Party to grant access to or a license or sublicense as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other Party such access or license or sublicense.
1.24 “COPD Indication” shall mean the use of Prochymal to treat chronic obstructive pulmonary disease.
1.25 “Cost of Goods Sold Percentage” or “COGS%” shall mean the per unit Commercial Manufacturing Cost (FOB shipping point) of a Product for an Indication divided by the per unit Net Sales of a Product for that same Indication. Further, Commercial Manufacturing Cost shall be computed under GAAP and shall be lowest cost per unit to produce the Product for an Indication of the commercially available Product.
1.26 “Crohn’s Indication” shall mean the use of Prochymal to treat Crohn’s disease.
1.27 “Crohn’s Indication Clinical Trials” shall have the meaning set forth in Section 3.1.2(b).
1.28 “Development Costs” shall mean all costs and expenses (including accruals legitimately chargeable against profits) actually incurred by a Party or a Third Party in connection with the research, development and manufacture of any Product for an Indication (all in accordance with GAAP), including without limitation the following costs and expenses to the extent such items are customary under industry practices:
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(a) costs and expenses for research and development activities;
(b) manufacturing costs for a Product for an Indication;
(c) all royalties and other fees paid after the Effective Date to any Third Party;
(d) G&A Costs as reasonably required to support the activities of the Parties hereunder; provided that during the Term, with respect to any activity for which the Parties are sharing Development Costs pursuant to Sections 3.4.5 or 3.4.8, both Parties will charge G&A Costs at the rate reasonably charged by Osiris; and
(e) other expenses agreed to by the Steering Committee during the Term.
1.29 “Development Plan” shall have the meaning set forth in Section 3.3.1.
1.30 “Development Plan Budget” shall have the meaning set forth in Section 3.4.1.
1.31 “Development Plan Term” shall mean, with respect to each Indication, the period commencing on the date a Development Plan for that Indication is developed pursuant to Section 3.3.1 and ending upon the earliest to occur of (a) last commercial sale with respect to the relevant Indication, (b) the termination by the Steering Committee or otherwise by mutual agreement of the Parties of the Development Plan with respect to such Indication, and (c) the termination of this Agreement.
1.32 “Diabetes Indication” shall mean the use of Prochymal for the prevention or treatment of Type I diabetes.
1.33 “Disclosing Party” shall have the meaning set forth in Section 9.1.
1.34 “Disease Modification” shall mean a clinically meaningful delay in structural progression of a disease or condition for which treatment is indicated over a period of at least one year. The progression must be determined by a measurement tool recognized by regulatory agencies (FDA and/or EMEA). Disease Modification would be independent of whether or not the delay in structural progression is accompanied by significant symptom relief; provided that if a patient experienced a Statistically Significant worsening of symptoms, then the delay in structural progression shall not constitute Disease Modification.
1.35 “EMEA” shall mean the European Medicines Agency or any successor agency with responsibilities comparable to those of the European Medicines Agency.
1.36 “Enforcing Party” shall have the meaning set forth in Section 8.2.1(c).
1.37 “FDA” shall mean the United States Food and Drug Administration or any successor agency with responsibilities comparable to those of the United States Food and Drug Administration.
1.38 “Field” shall mean (a) with respect to Prochymal, all applications for the prevention or treatment of diseases, defects, or conditions in humans, and (b) with respect to Chondrogen, the Articulating Orthopedic Indication.
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1.39 “First Commercial Sale” of any Product shall mean the first sale for financial consideration of such Product in a country or territory after Marketing Approval and, if required for commercial sale, Pricing Approval, has been granted by the governing health authority of such country.
1.40 “FIN 46” shall have the meaning set forth in Section 6.11.
1.41 “G&A Costs” shall mean any corporate overhead expenses of a Party, including without limitation expenses for general administration, business development, executive management, investor relations, legal, payroll, and general, corporate supervisory services.
1.42 “GAAP” shall mean the current United States generally accepted accounting principles, consistently applied.
1.43 “Genzyme Indemnitees” shall have the meaning set forth in Section 11.2.
1.44 “Genzyme Intellectual Property” shall mean collectively the Genzyme Patent Rights and the Genzyme Technology.
1.45 “Genzyme Opt-In Right” shall have the meaning set forth in Section 3.1.4(d).
1.46 “Genzyme Patent Rights” shall mean any and all Patent Rights (other than Joint Patent Rights) Controlled by Genzyme, its Affiliates or their respective successors, as of the Effective Date or at any time during the Term, that include a Valid Claim and are necessary or useful to make, have made, use, sell, offer to sell or import Product or any component thereof for an Indication.
1.47 “Genzyme Technology” shall mean any and all Technology (other than Joint Technology) Controlled by Genzyme, its Affiliates or their respective successors, as of the Effective Date or at any time during the Term, that relates to, or is useful for any component, method or aspect of the research, development, manufacture, use or commercialization of a Product for an Indication.
1.48 “Genzyme Territory” shall mean all countries and territories worldwide, but excluding (i) the Osiris Territory and, (ii) with respect to the GvHD Indication, Japan, unless Japan is added pursuant to Section 7.1.3.
1.49 “GvHD Indication” shall mean the use of Prochymal to treat or prevent graft versus host disease.
1.50 “Improvements” shall mean modifications to a Product where the resulting Product contains culturally expanded, undifferentiated, unmodified human MSCs. Illustrative examples of modifications that are not Improvements include deliberate genetic modifications, deliberate modifications to the cell membrane, deliberate modifications that cause significant over-expression of a specific cytokine growth factor, or other secreted factor, and other development strategies designed to deliberately change the characteristics such that the resulting Product no longer contains undifferentiated, unmodified human MSCs. Illustrative examples of modifications that are Improvements include modifications in dosage size, substitution or
5
addition of one or more excipients, the inclusion of a second active agent, and the identification, isolation or culture of subpopulations of the cell types found in Prochymal and Chondrogen. For clarity, if an improvement or modification results from a change in the manufacturing process for a Product, it shall constitute an Improvement, even if the resulting Product would be deemed sufficiently different by a Regulatory Agency to require additional clinical trials prior to receipt of Marketing Approval. If the Steering Committee cannot agree as to whether an improvement of modification to a Product constitutes an Improvement, the dispute will be resolved in accordance with Section 2.2.2, except that any arbitration resulting from the Steering Committee failing to agree shall be resolved under the arbitration provisions of Section 13.8.2 instead of the Baseball Arbitration provisions of Section 13.8.3.
1.51 “IND” shall mean an investigational new drug application, as defined in Title 21, Part 312, of the Code of Federal Regulations, filed with the FDA and/or any other similar application filed with an appropriate Regulatory Agency in a country or group of countries other than the United States.
1.52 “Indemnified Party” shall have the meaning set forth in Section 11.3.
1.53 “Indemnifying Party” shall have the meaning set forth in Section 11.3.
1.54 “Indication” shall mean (a) with respect to Prochymal, the GvHD Indication, all Major Indications and all Other Indications treated via Vascular Administration and (b) with respect to Chondrogen, the Articulating Orthopedic Indication. For clarity, the term Indication shall not include an At-Risk Indication unless and until either (i) Genzyme is the Pursuing Party pursuant to Section 3.1.4(c), or (ii) Genzyme exercises the Genzyme Opt-In Right pursuant to Section 3.1.4(d).
1.55 “Investigator Sponsored Trial” shall mean a clinical trial conducted by one or more Third Party investigators.
1.56 “Joint Patent Rights” shall mean any and all Patent Rights claiming any Joint Technology.
1.57 “Joint Program Data” shall mean data generated from conducting development activities under a Development Plan.
1.58 “Joint Technology” shall mean any and all (a) Technology that is discovered, made, conceived or reduced to practice jointly by employees, agents or consultants of Osiris and Genzyme as a result of the performance of a Development Plan and (b) Joint Program Data.
1.59 “Launch Period” shall have the meaning set forth in Section 5.1.2.
1.60 “Launch Support Services” shall have the meaning set forth in Section 5.1.2.
1.61 “Legal Requirements” shall mean any applicable present and future national, state, local, foreign or similar laws (whether under statute, rule, regulation or otherwise); applicable requirements under permits, orders, decrees, judgments or directives, and requirements of applicable Regulatory Agencies (including, without limitation, current good
6
manufacturing practices); and applicable regulations pertaining to INDs (as amended or revised from time to time).
1.62 “Losses” shall have the meaning in Section 11.1.
1.63 “Major Indication” shall mean the following indications for Prochymal (a) Crohn’s Indication, (b) Ulcerative Colitis Indication, (c) Diabetes Indication, (d) COPD Indication, (e) Cardiac Indication, and (f) any Accepted Indication which the Steering Committee determines to have a worldwide market potential for Net Sales of Prochymal in a calendar year that could reasonably be expected to equal or exceed Five Hundred Million Dollars (US $500,000,000) on an annual basis. Each Major Indication shall be listed on Exhibit D, which shall be updated by the Parties during the Term pursuant to a written document signed by both Parties.
1.64 “Market Exclusivity” in a designated country shall mean the possession of a right granted by any Regulatory Agency providing the holder of such right the exclusive right to market and sell a Product for one or more Indications in that designated country, including, without limitation, data exclusivity, or the existence of a Legal Requirement in connection with a Product which precludes the Regulatory Agency in that designated country from granting Marketing Approval for another product because the application for the other product contains the same active ingredient as that which is contained in the applicable Product.
1.65 “Marketing Approval” shall mean the receipt of all approvals, licenses, registrations or authorizations of any federal, state or local Regulatory Agency, department, bureau or other governmental entity, necessary for the sale of a Product for an Indication in a country or region.
1.66 “Mesenchymal Stem Cells” or “MSCs” shall mean the human formative pluripotential blast cells found inter alia in bone marrow, blood, dermis and periosteum that are capable of differentiating into any of the specific types of mesenchymal or connective tissues.
1.67 “Negotiation Period” shall have the meaning set forth in Section 5.1.3(b).
1.68 “Net Sales” shall mean the gross invoiced sales amount billed by Genzyme, its Affiliates licensees or sub-licensees or Osiris or its Affiliates or Third Party licensees or Third Party sub-licensees to Third Party customers, including Third Party distributors, as applicable, in each case less the following items (“Net Sales Adjustments”) to the extent such items are actually taken or incurred and customary under industry practices:
(a) credits or allowances granted upon returns, rejections or recalls (due to spoilage, damage, expiration of useful life or otherwise), retroactive price reductions, or billing corrections;
(b) invoiced freight, postage, shipping and insurance, handling and other transportation costs actually incurred;
(c) taxes (including without limitation sales, value-added or excise taxes, but excluding withholding taxes), tariffs, customs duties, surcharges and other governmental charges
7
incurred in connection with the production, sale, transportation, delivery, use, exportation or importation of Product that are incurred at time of commercial sale or are directly related to the commercial sale;
(d) allowances for bad debt;
(e) quantity discounts, standard and customary cash discounts in the ordinary course of business, or other trade discounts, refunds, rebates, charge backs, fees, credits or allowances, including without limitation amounts incurred in connection with government-mandated rebate and discount programs, and distribution fees to Third Parties, invoiced or incurred and which effectively reduce the selling price.
All in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied in accordance with GAAP.
The transfer of any Product by a distributor or one of its Affiliates to another Affiliate of a distributor shall not be considered a sale; in such cases, Net Sales shall be determined based on the gross invoiced sales price by the Affiliate to its customer, less the deductions allowed under this Section.
In the case of Combination Products, Net Sales means the gross amount billed or invoiced on sales of such a Combination Product less the deductions set forth above, multiplied by a proration factor. The prorated component value shall be mutually agreed upon by the Parties in writing prior to product launch of such a Combination Product. If all components of the Combination Product were sold separately during the same or immediately preceding royalty period, the proration factor shall be determined by the following formula: A / (A+B), where A is the aggregate gross sales price of all royalty-bearing Product components during such period when sold separately from the other essential functional components, and B is the aggregate gross sales price of the other essential functional components during such period when sold separately from the royalty-bearing Product components.
1.69 “Non-Program Data” shall have the meaning set forth in Section 7.5.
1.70 “No Participation Decision” shall have the meaning set forth in Section 3.2.2(a).
1.71 “Osiris Collaborator” shall have the meaning set forth in Section 7.2.
1.72 “Osiris Event” shall have the meaning set forth in Section 7.8.1.
1.73 “Osiris Funded Trials” shall have the meaning set forth in Section 3.1.2.
1.74 “Osiris Indemnitees” shall have the meaning set forth in Section 11.1.
1.75 “Osiris Intellectual Property” shall mean, collectively, the Osiris Patent Rights and Osiris Technology.
1.76 “Osiris Opt-In Right” shall have the meaning set forth in Section 3.1.4(e).
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1.77 “Osiris Patent Challenge” shall have the meaning set forth in Section 8.1.5.
1.78 “Osiris Patent Rights” shall mean any and all Patent Rights (other than Joint Patent Rights) Controlled by Osiris, its Affiliates and their respective successors, as of the Effective Date or at any time during the Term, that include a Valid Claim and are necessary or useful to make, have made, use, sell, offer to sell, or import Product or any component thereof for an Indication.
1.79 “Osiris Technology” shall mean any and all Technology (other than Joint Technology) Controlled by Osiris, its Affiliates and their respective successors, as of the Effective Date or at any time during the Term, that relates to, or is useful for, any component, method or aspect of the research, development, manufacture, use or commercialization of a Product for an Indication.
1.80 “Osiris Territory” shall mean the United States and Canada, and their respective territories and possessions.
1.81 “Other Indication” shall mean any Accepted Indication which the Steering Committee determines to have worldwide market potential for Net Sales of Prochymal in a calendar year that could reasonably be expected to be less than Five Hundred Million Dollars (US $500,000,000) on an annual basis. The term Other Indication shall not include the GvHD Indication or any Major Indication. Each Other Indication shall be listed on Exhibit E, which shall be updated by the Parties during the Term pursuant to a written document signed by both Parties.
1.82 “Pain Therapeutic” shall mean use of Chondrogen for the mitigation or relief of orthopedic pain with a Statistically Significant duration of relief of at least one (1) year.
1.83 “Participation Decision” shall have the meaning set forth in Section 3.2.2(a).
1.84 “Party” shall mean Osiris or Genzyme.
1.85 “Patent Rights” shall mean any United States or foreign patent applications, provisional patent applications, and any patents issuing therefrom anywhere in the world, together with any extensions, registrations, confirmations, reissues, continuations, divisions, continuations-in-part, reexamination certificates, certificates of invention and applications for certificates of invention, revalidations, renewals, substitutions, supplementary protection certificates, additions, or term restorations thereof.
1.86 “Phase II Clinical Trial” shall mean a clinical trial as defined in 21 C.F.R. 312.21(b), as may be amended from time to time, or any foreign equivalent thereto. Unless otherwise agreed by the Steering Committee, a Phase I/II clinical trial shall not be considered a Phase II Clinical Trial.
1.87 “Phase III Clinical Trial” shall mean a clinical trial as defined in 21 C.F.R. 312.21(c), as may be amended from time to time, or any foreign equivalent thereto, that is designed to seek Marketing Approval.
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1.88 “Phase IV Study” shall have the meaning set forth in 21 C.F.R. 312.85, as may be amended from time-to-time, or any foreign equivalent thereto. For clarity, any post-marketing study that is not conducted at the request of, and with the agreement of, a Regulatory Agency shall be a “Commercial Post-Marketing Study” and not a “Phase IV Study”.
1.89 “Pricing Approval” shall mean, with respect to any country in which the price at which Genzyme or its Affiliate or sublicensee sells Product must be approved by a governmental or Regulatory Agency for reimbursement or payment purposes, the receipt of the approval by the applicable authority with respect to such price.
1.90 “Primary Contact Person” shall have the meaning set forth in Section 3.6.
1.91 “Prochymal” shall mean (a) any formulation, dosage form or delivery system suitable for Vascular Administration that contains culturally expanded, undifferentiated, unmodified human MSCs , and (b) any Improvements thereto.
1.92 “Prochymal Development Milestone Payment” shall have the meaning set forth in Section 6.2.1.
1.93 “Prochymal Sales Milestone Payment” shall have the meaning set forth in Section 6.3.
1.94 “Product” shall mean, collectively and individually, Prochymal and Chondrogen.
1.95 “Proposal Notice” shall have the meaning set forth in Section 7.8.2.
1.96 “Proposed Indication” shall have the meaning set forth in Section 3.1.4(a).
1.97 “Proposing Party” shall have the meaning set forth in Section 3.1.4(a).
1.98 “Publishing Party” shall have the meaning set forth in Section 9.5.
1.99 “Pursuing Party” shall have the meaning set forth in Section 3.1.4(c).
1.100 “Receiving Party” shall have the meaning set forth in Section 9.1.
1.101 “Regulatory Agency” shall mean, with respect to the United States, the FDA, and, in the case of a country other than the United States, such other appropriate regulatory agency or authority with similar responsibilities, including, without limitation, the EMEA.
1.102 “Regulatory Approval” shall mean any approval from Regulatory Agencies in any country or region required to lawfully conduct clinical trials or to manufacture and market a Product for an Indication in such country or region, including, without limitation, any approved IND or Marketing Approval.
1.103 “Regulatory Expenses” shall mean all costs and expenses actually incurred by a Party in direct connection with obtaining Marketing Approval or in connection with conducting any Commercial Post-Marketing Study. Regulatory Expenses shall not include any Development Costs.
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1.104 “Response Period” shall have the meaning set forth in Section 5.1.3(a).
1.105 “Reviewing Party” shall have the meaning set forth in Section 9.5.
1.106 “Right of Negotiation” shall have the meaning set forth in Section 5.1.3(b).
1.107 “Right of Notification” shall have the meaning set forth in Section 7.8.1.
1.108 “Secretary” shall have the meaning set forth in Section 2.1.1.
1.109 “Statistical Significance” shall mean, with respect to (i) each of the Osiris Funded Trials and the Chondrogen Trial, the achievement of the endpoint(s) set forth next to each such clinical trial’s name on Exhibit C hereto, and (ii) each Additional Clinical Trial, the achievement of each mutually agreed upon endpoint from a Phase II Clinical Trial or Phase III Clinical Trial, as applicable, in each case at a significance level of p<0.05 as determined under a statistical analysis plan prepared by the Parties and deemed acceptable by the FDA, and in both (i) and (ii) above, the absence of any clinical event that FDA determines would preclude initiation of the next phase of development.
1.110 “Steering Committee” shall mean the body organized and acting pursuant to Section 2.1 hereof.
1.111 “Technology” shall mean any and all ideas, trade secrets, information, know-how, data (including preclinical and clinical data), research results, writings, inventions, discoveries, modifications, improvements and other technology (including without limitation any proprietary biological or other materials, compounds or reagents and computer software), whether or not patentable or copyrightable and any intellectual property rights therein (other than Patent Rights).
1.112 “Term” shall have the meaning set forth in Section 12.1.
1.113 “Territory” shall mean the Genzyme Territory with respect to Genzyme and the Osiris Territory with respect to Osiris.
1.114 “Third Party” shall mean any entity other than Osiris, Genzyme or their respective Affiliates.
1.115 “Ulcerative Colitis Indication” shall mean the use of Prochymal for the treatment or prevention of ulcerative colitis.
1.116 “Valid Claim” shall mean a claim of (a) an issued and unexpired patent which has not been withdrawn, cancelled, abandoned, disclaimed, or held revoked, unenforceable or invalid by a final decision of a court or other governmental agency of competent jurisdiction and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) any patent application which shall not have been cancelled, withdrawn, or abandoned, or been pending for more than six (6) years from the priority date from which such claim takes priority, unless and until such claim becomes an issued claim of an issued patent. For the avoidance of doubt, any issued or granted claim which is revoked or held invalid or
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unenforceable, or any patent application which is pending for more than six (6) years, shall cease to be a Valid Claim, unless and until such holding is reversed or such claim is reinstated on appeal, or until such patent application becomes an issued patent. If any such issued or granted claim which is revoked or held invalid or unenforceable is thereafter reinstated on judicial appeal, back royalties, if any, shall become due upon such reinstatement.
1.117 “Vascular Administration” shall mean (a) administration by any means to the circulatory system, or (b) administration by any means through vasculature to an organ.
1.118 “Verifying Party” shall have the meaning set forth in Section 6.8.
ARTICLE 2: GOVERNANCE OF THE PROGRAM
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each meeting of the Steering Committee, subject to the right of any member of the Steering Committee to add additional agenda items at any meeting; (d) to prepare comments to the draft minutes prepared by the Secretary of the Steering Committee and communicate with the Secretary to finalize the draft minutes prior to circulation to all members of the Steering Committee; and (e) to execute, along with the Secretary of the Steering Committee, the final minutes of the meetings of the Steering Committee.
(a) design, prepare and finalize Development Plans for development of a Product for an Indication, including formulating the clinical development strategy, designing each clinical trial protocol and any modification thereto and agreeing upon the primary and secondary endpoints for all clinical trials of Product for all Indications conducted as part of the Collaboration;
(b) on an annual basis during any Development Plan Term, no later than October 1 of the relevant calendar year, review, amend, and approve each Development Plan and respective budget;
(c) oversee and monitor each Development Plan and coordinate and direct the strategy and management of the Development Plans;
(d) review and evaluate progress under any Development Plan; provided that the Steering Committee shall not have the authority to make any determination that either Party is in breach of its obligations under the Development Plan;
(e) serve as the initial forum for discussion of and resolution of any dispute or disagreement between the Parties relating to any Development Plan that is unresolved by the Primary Contact Persons;
(f) except with respect to intellectual property matters set forth in Article 8, decide how the Parties shall resolve or defend against disputes or claims of any kind with Third Parties relating to the Collaboration;
(g) establish any subcommittees pursuant to Section 2.1.1 and resolve any dispute or disagreement arising in any such subcommittee; and
(h) perform any other activities related to the Collaboration as the Parties may agree from time to time, other than deciding that a Party is in breach of an obligation under this Agreement.
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meetings to all members of the Steering Committee no less than ten (10) Business Days before the date of the meeting (or such other times as the Parties may agree). The Steering Committee may also convene or be polled or consulted from time to time by means of telecommunications, video conferences or correspondence, as deemed necessary or appropriate in order to fulfill its obligations under this Agreement.
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ARTICLE 3: DEVELOPMENT ACTIVITIES
3.1 Prochymal Development Activities.
(a) the ongoing Phase III Clinical Trials of Prochymal for the GvHD Indication entitled “A Phase III, Randomized, Double-Blind, Placebo-Controlled Study to
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Evaluate the Efficacy and Safety of Prochymal® (Ex-vivo Cultured Adult Human Mesenchymal Stem Cells) Infusion for the Treatment of newly diagnosed Acute GVHD” (265) and entitled “A Phase III, Randomized, Double Blind, Placebo-Controlled Study to Evaluate the Efficacy and Safety of Prochymal® (Ex-vivo Cultured Adult Human Mesenchymal Stem Cells) Infusion for the Treatment of Patients Who Have Failed to Respond to Steroid Treatment for acute GvHD” (280) that were initiated by Osiris prior to the Effective Date, through completion of such clinical trial and completion of any commercially reasonable additional extension studies or modified studies necessary to file for Marketing Approval with the FDA for the GvHD Indication;
(b) the ongoing Phase III Clinical Trials of Prochymal for the Crohn’s Indication entitled “A Phase III, multicenter, placebo-controlled, randomized, double-blind study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal stem cells) intravenous infusion for the induction of remission in subjects experiencing treatment-refractory moderate-to-severe Crohn’s disease” (603) and entitled “A Phase III, multicenter, placebo-controlled, randomized, double-blind retreatment study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal stem cells) intravenous infusion for the re-induction of remission in subjects experiencing treatment-refractory moderate-to-severe Crohn’s disease” (610) that were initiated by Osiris prior to the Effective Date, and any commercially reasonable additional extension studies or modified studies necessary to file for Marketing Approval with the FDA for the Crohn’s Indication (the “Crohn’s Indication Clinical Trials”);
(c) the ongoing Phase II Clinical Trial of Prochymal for the COPD Indication entitled “A Phase II, multicenter, randomized, double-blind, placebo-controlled study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal stem cells) intravenous infusion for the treatment of subjects with moderate to severe Chronic Obstructive Pulmonary Disease (COPD)” (801), through completion;
(d) the ongoing Phase II Clinical Trial of Prochymal for the Diabetes Indication entitled “A Phase II, multicenter, randomized, double-blind, placebo-controlled study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal stem cells) for the treatment of recently diagnosed type 1 diabetes mellitus (T1DM)” (901) through completion; and
(e) the proposed Phase II Clinical Trial of Prochymal for the Cardiac Indication entitled “A Phase II, multi-center, randomized, double-blind, placebo-controlled study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal stem cells) intravenous infusion following acute myocardial infarction” through completion.
Notwithstanding any provision in this Agreement to the contrary, Osiris shall have the right to suspend or terminate any clinical trial because of (i) any significant trend relating to any serious adverse event, (ii) any request from a Regulatory Agency to suspend or terminate such trial, (iii) triggering the stopping rules for the study as defined in the Indication’s protocol, or (iv) upon receipt of data or results that fail to demonstrate the Product’s potential to be safe or effective for the applicable Indication. Premature stopping of a Clinical Trial will be performed
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in compliance with current Good Clinical Practices as codified in 21 C.F.R. 312, as amended from time to time.
3.1.4 Additional Indications for Prochymal.
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Indication”) in its Territory. The Pursuing Party shall be responsible for one hundred percent (100%) of (i) the Development Costs incurred in developing Prochymal for the At-Risk Indication, and (ii) the Regulatory Expenses in obtaining Marketing Approval in its Territory for Prochymal for the At-Risk Indication. In the event Genzyme is the Pursuing Party for any At-Risk Indication, such At-Risk Indication shall be considered an Indication for purposes of Articles 7 and 8 of this Agreement; provided that, Genzyme shall have no obligation to make any Prochymal Development Milestone Payment with respect to such Indication.
(d) Genzyme Opt-In Right. In the event Osiris is the Pursuing Party under Section 3.1.4(c) and obtains Marketing Approval from a Regulatory Agency in the Osiris Territory for Prochymal for any At-Risk Indication, Genzyme shall have the right (“Genzyme Opt-In Right”), at its discretion, to seek an expanded label for Prochymal for such At-Risk Indication with one or more Regulatory Agencies in the Genzyme Territory. At Genzyme’s request, Osiris shall provide to Genzyme full access to the data associated with Osiris obtaining Marketing Approval for the At-Risk Indication. After receipt of such data, Genzyme shall notify Osiris in writing of its decision to seek an expanded label. In the event Genzyme obtains such label expansion for Prochymal for the At-Risk Indication in the Genzyme Territory, then such At-Risk Indication shall be considered an Indication and Genzyme shall commercialize Prochymal for such Indication in the Genzyme Territory as set forth in this Agreement, and shall make the payments to Osiris as set forth in Sections 3.4.6 and 6.2.2.
(e) Osiris Opt-In Right. In the event Genzyme is the Pursuing Party under Section 3.1.4(c) and obtains Marketing Approval from a Regulatory Agency in the Genzyme Territory for Prochymal for any At-Risk Indication, Osiris shall have the right (“Osiris Opt-In Right”), at its discretion, to seek an expanded label for Prochymal for such At-Risk Indication with one or more Regulatory Agencies in the Osiris Territory. At Osiris’s request, Genzyme shall provide to Osiris full access to the data associated with Genzyme obtaining Marketing Approval for the At-Risk Indication. After receipt of such data, Osiris shall notify Genzyme in writing of its decision to seek an expanded label. In the event Osiris obtains such label expansion for Prochymal for the At-Risk Indication in the Osiris Territory, then such At-Risk Indication shall be considered an Indication and Osiris shall commercialize Prochymal for such Indication in the Osiris Territory as set forth in this Agreement, and shall make the payments to Genzyme as set forth in Section 3.4.7.
(f) Pre-Clinical Trials. Osiris shall be responsible for conducting all pre-clinical safety and toxicology trials necessary for the initiation of clinical trials for Indications. Osiris shall be responsible for one hundred percent (100%) of the costs associated therewith; provided that if the preclinical safety and toxicology trials are for an Accepted Indication, Osiris shall be responsible for sixty percent (60%) of the costs associated therewith and Genzyme shall be responsible for forty percent (40%) of the costs associated therewith; provided further, that Genzyme shall reimburse Osiris for the incremental additional costs associated with Osiris’s performance of pre-clinical studies conducted to fulfill regulatory requirements in the Genzyme Territory beyond those required in the Osiris Territory.
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under the Development Plan. Notwithstanding anything in this Agreement to the contrary, the Steering Committee shall accept the design and plan for the Osiris Funded Trials and shall not cause such trials to be revised without the consent of Osiris.
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ARTICLE 4: REGULATORY AND MANUFACTURING
(a) Osiris will be the sponsor of pre-clinical and clinical trials of a Product for an Indication in the Osiris Territory and shall be responsible for holding and managing the IND, but shall reasonably consult with Genzyme on strategic planning matters related thereto;
(b) Genzyme will be Osiris’s legal representative within the meaning of Directive 2001/20/EC of pre-clinical and clinical trials of a Product for an Indication in the Genzyme Territory and shall be responsible for holding and managing all regulatory filings, but shall reasonably consult with Osiris on strategic planning matters related thereto;
(c) Osiris will be responsible for filing the BLA and CTD supporting marketing authorization for a Product for an Indication with the appropriate Regulatory Agencies
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in the Osiris Territory; but shall reasonably consult with Genzyme on strategic planning matters related to such filings. Osiris shall have the right to use all data related to a Product for an Indication, to reference the CTD and to incorporate by reference any and all parts of regulatory submissions made by Genzyme for any Indication;
(d) Genzyme will be responsible for filing the BLA and CTD supporting marketing authorization for a Product for an Indication with the appropriate Regulatory Agencies in the Genzyme Territory, but shall reasonably consult with Osiris on strategic planning matters related to such filings. Genzyme shall have the right to use all data related to a Product for an Indication, to reference the CTD and to incorporate by reference any and all parts of regulatory submissions made by Osiris for any Indication;
(e) The Parties shall be jointly involved in the strategic planning and in the review of all written and meeting related regulatory communications concerning the Products. For clarity, this shall not include review of SAE reporting, which is governed by Section 4.3. Each Party shall use its commercially reasonable efforts to permit the other Party to attend and participate in all planned meetings or discussions with Regulatory Agencies pertaining to a Product for an Indication and such other Party shall receive written notice as soon as reasonably possible after notification of the meeting or discussion, but in any event sufficiently in advance of any such meetings or discussions so that each Party may attend and participate. The applicable Party shall circulate to the other Party within five (5) Business Days draft minutes of such meeting. Each Party shall provide any written correspondence received from a Regulatory Agency related to a Product to the other Party within seventy-two (72) hours after receipt;
(f) The Parties will collaborate wherever possible to utilize the services and expertise of the other Party in developing all written and meeting related regulatory submissions to any Regulatory Agency. Each Party shall provide the opportunity to the other Party to review any written and meeting related Regulatory Agency communications related to a Development Plan and all material Regulatory Agency communications following Regulatory Approval and shall consider incorporating any reasonable comments with regard to such correspondence; and
(g) Each Party will maintain all records, including without limitation batch records and supporting documentation, required by Regulatory Agencies with respect to a Product developed pursuant to a Development Plan for the periods of time required by such authorities and shall provide a copy of all such records to the other Party.
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demonstrating that the Product presents a significant and unexpected hazard to humans. Each of the Parties shall, through its Primary Contact Person, promptly (but no later than twenty-four (24) hours after such Party becomes aware of the serious adverse event and as necessary for compliance with regulatory requirements) notify the other Party’s Primary Contact Person of all such serious adverse event information. Expeditable events will be handled in accordance with the applicable United States regulations (21 C.F.R. 312, 314, 600) and/or any controlling foreign equivalent Regulatory Agency regulations, as applicable. Osiris shall be responsible for filing all safety reports with the appropriate Regulatory Agency in the Osiris Territory, and shall furnish copies to Genzyme in advance of filing to the extent practicable in compliance with applicable laws and regulations. Genzyme shall be responsible for filing all safety reports with the appropriate Regulatory Agency in the Genzyme Territory, and shall furnish copies to Osiris in advance of filing to the extent practicable in compliance with applicable laws and regulations.
4.4.1 Clinical Supplies. Osiris shall be responsible for manufacturing or procuring sufficient quantities of Product for use in preclinical or clinical trials in the Osiris Territory and the Genzyme Territory. In the event non-human MSCs are required for pre-clinical trials or scientific experiments, Genzyme shall assist Osiris in identifying a suitable source for such MSCs.
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ARTICLE 5: COMMERCIALIZATION
5.1.1 Osiris Responsibilities in the Osiris Territory. Osiris will have sole responsibility for sales, marketing, manufacturing and distribution activities for Prochymal and Chondrogen in the Osiris Territory and will book all revenues resulting from such sales in the Osiris Territory. Subject to Section 5.1.2, Osiris shall also have sole responsibility for deploying a sales force in the Osiris Territory.
5.1.3 Genzyme Right of Negotiation For Commercialization Rights.
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executing a definitive written agreement memorializing such transaction. Osiris’ obligation to negotiate with Genzyme shall terminate ****
5.3 Genzyme Responsibilities in the Genzyme Territory. Genzyme shall: (i) have sole responsibility for sales, marketing and distribution activities for Product in the Genzyme Territory; (ii) exercise commercially reasonable efforts to sell, market and distribute Prochymal for Indications that have received Marketing Approval in the Genzyme Territory; (iii) exercise commercially reasonable efforts to sell, market and distribute Chondrogen after a Genzyme Participation Decision and after receipt of Marketing Approval in the Genzyme Territory; and (iv) book all revenues resulting from such sales in the Genzyme Territory. Genzyme shall also have sole responsibility for deploying a sales force in the Genzyme Territory.
ARTICLE 6: CONSIDERATION
(a) Seventy-Five Million Dollars (US $75,000,000) within fifteen (15) Business Days after the Effective Date; and
(b) Fifty-Five Million Dollars (US $55,000,000) on July 1, 2009.
6.2 Prochymal Development Milestones.
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(each, a “Prochymal Development Milestone Payment”) to Osiris for the achievement of each of the following milestone events. Each Prochymal Development Milestone Payment shall be made within thirty (30) days after the date Osiris provides written documentation to Genzyme of the achievement of each milestone event.
(i) Twenty-Five Million Dollars (US $25,000,000) upon Marketing Approval by the FDA of Prochymal for the GvHD Indication; and
(ii) Twenty-Five Million Dollars (US $25,000,000) upon Marketing Approval by the EMEA of Prochymal for the GvHD Indication.
(i) Fifty Million Dollars (US $50,000,000) upon demonstration in (y) the Crohn’s Indication Clinical Trials or (z) any other double blinded, placebo controlled Phase II Clinical Trial or Phase III Clinical Trial conducted and funded by Osiris, of Statistical Significance of the primary endpoint(s) of either a 100 point reduction in the Crohn’s disease activity index (“CDAI”) or remission as evidenced by a CDAI of less than 150; and
(ii) One Hundred Million Dollars (US $100,000,000) upon Marketing Approval by the EMEA of Prochymal for the Crohn’s Indication.
(c) Ulcerative Colitis Indication
(i) Ten Million Dollars (US $10,000,000) upon demonstration of the achievement of Statistical Significance of a mutually agreed upon endpoint(s) (as previously set by the Steering Committee) in a Phase II Clinical Trial or Phase III Clinical Trial of Prochymal for the Ulcerative Colitis Indication; and
(ii) Twenty Million Dollars ($20,000,000) upon Marketing Approval by the EMEA of Prochymal for the Ulcerative Colitis Indication.
(i) Forty Million Dollars (US $40,000,000) upon Marketing Approval by the EMEA of Prochymal for the COPD Indication.
(e) Each Additional Major Indication. With respect to each Major Indication (other than the Crohn’s Indication, the Ulcerative Colitis Indication and the COPD Indication, which are separately addressed in (b), (c) and (d) above):
(i) Twenty Million Dollars (US $20,000,000) upon demonstration of Statistical Significance of a mutually agreed upon endpoint(s) (as previously set by the Steering Committee) in a Phase II Clinical Trial or a Phase III Clinical Trial of Prochymal for such Major Indication; and
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(ii) Forty Million Dollars (US $40,000,000) upon Marketing Approval by the EMEA of Prochymal for such Major Indication.
(i) Five Million Dollars (US $5,000,000) upon demonstration of Statistical Significance of a mutually agreed upon endpoint(s) (as previously set by the Steering Committee) in a Phase II or III Clinical Trial of Prochymal for each Other Indication; and
(ii) Fifteen Million Dollars (US $15,000,000) upon Marketing Approval by the EMEA of Prochymal for each Other Indication.
For clarity, if any particular milestone specified in this Section 6.2.1 is achieved in both a Phase II and a Phase III trial for the same Indication, that milestone shall only be paid once.
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Aggregate Annual Net Sales of |
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Equal to or greater than Five Hundred Million Dollars (US $500,000,000) |
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One Hundred Million Dollars (US $100,000,000) |
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Equal to or greater than One Billion Dollars (US $1,000,000,000) |
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One Hundred Fifty Million Dollars (US $150,000,000) |
6.4.1 Phase II Clinical Trial or Phase III Clinical Trial.
(a) Ten Million Dollars (US $10,000,000) upon Genzyme making a Participation Decision pursuant to Section 3.2.2(b); and
(b) Ten Million Dollars (US $10,000,000) upon demonstration of Statistical Significance of Disease Modification in a Phase II Clinical Trial or Phase III Clinical Trial (including a clinical trial designated as a Phase II/III Clinical Trial) of Chondrogen.
(c) For clarity, if Genzyme makes a Participation Decision and a Phase II Clinical Trial, Phase II/III Clinical Trial or a Phase III Clinical Trial demonstrates Chondrogen’s Disease Modification characteristics, then both payments in Sections 6.4.1(a) and 6.4.1(b) shall be payable by Genzyme.
6.4.2 Marketing Approval.
(a) Forty Million Dollars (US $40,000,000) upon Marketing Approval by the FDA or EMEA of Chondrogen with a label that allows Chondrogen to be marketed as a Pain Therapeutic; and
(b) Forty Million Dollars (US $40,000,000) upon Marketing Approval by the FDA or EMEA of Chondrogen with a label that allows Chondrogen to be marketed for Disease Modification.
(c) For clarity, if the FDA or EMEA grants Marketing Approval that allows Chondrogen to be marketed both as a Pain Therapeutic and for Disease Modification, then both payments in Sections 6.4.2(a) and (b) above shall be payable by Genzyme to Osiris.
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Aggregate Annual Net Sales of |
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Payment |
Equal to or greater than Five Hundred Million Dollars (US $500,000,000) |
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One Hundred Million Dollars (US $100,000,000) |
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Equal to or greater than One Billion Dollars (US $1,000,000,000) |
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One Hundred Fifty Million Dollars (US $150,000,000) |
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Equal to or greater than Two Billion Dollars (US $2,000,000,000) |
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One Hundred Fifty Million Dollars (US $150,000,000) |
6.6 Royalties Payable to Osiris.
Aggregate Annual Net Sales per |
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Annual Net Sales less than **** |
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Annual Net Sales equal to or greater than **** |
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(a) ****
(c) ****
(a) Prochymal. Royalties shall be payable with respect to Net Sales of Prochymal in the Genzyme Territory by Genzyme, its Affiliates and sublicensees hereunder on a country-by-country basis commencing upon the First Commercial Sale of Prochymal in any country in the Genzyme Territory and continuing until the later of ****.
(b) Chondrogen. Royalties shall be payable with respect to Net Sales of Chondrogen in the Genzyme Territory by Genzyme, its Affiliates and sublicensees hereunder on a country-by-country basis commencing upon the First Commercial Sale of Chondrogen in any country in the Genzyme Territory and continuing until the later of ****.
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Genzyme may use an estimate of Net Sales and Net Sales Adjustments in such territory or territories based on the Net Sales in the applicable territory during the previous calendar quarter. Each subsequent quarterly report shall reconcile any estimates included in a previous report.
6.7 Royalties Payable to Genzyme.
(a) ****
(b) ****
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dispute as to the conclusions set forth in such written report, in which case the audited Party shall provide written notice to the Verifying Party within such twenty (20) Business Day period of the nature of its disagreement with such written report. The Parties shall thereafter, for a period of forty (40) Business Days, attempt in good faith to resolve such dispute and if they are unable to do so then the matter will be submitted to dispute resolution in accordance with Section 2.2.2 hereof. The fees charged by such accounting firm shall be paid by the Verifying Party unless the audit discloses that adjustments in favor of the Verifying Party for the period ****
ARTICLE 7: GRANT OF RIGHTS
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Development Plan. After expiration of all royalty obligations under Section 6.6 to Osiris for any Product in a country in the Genzyme Territory, (i) no further royalties shall be payable in respect of sales of such Product on a country-by-country basis, and (ii) all licenses granted to Genzyme pursuant to this Section 7.1 with respect to such Product shall become fully paid-up, perpetual, irrevocable, royalty-free, non-exclusive, worldwide licenses.
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Property (subject to Osiris’ compliance with Section 5.1.3) that is researching, developing, making, having made, using or selling Product for an Indication in the Osiris Territory or (b) subcontractor of Osiris that is conducting development activities in the Osiris Territory in accordance with the terms of this Agreement.
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Chondrogen. During the Term, in no event shall Genzyme, itself or through a Third Party, commercialize any Product in the Field in the Osiris Territory. ****
ARTICLE 8: INTELLECTUAL PROPERTY RIGHTS
8.1 Ownership of Technology and Patent Rights; Prosecution of Patent Rights.
8.1.1 Disclosure of Technology. During the Term, (a) each Party shall promptly disclose to the other Party all Joint Technology, (b) Genzyme shall promptly disclose to Osiris all Genzyme Technology under its Control that is necessary to develop the Product for an Indication under a Development Plan, and (c) Osiris shall promptly disclose to Genzyme all Osiris Technology under its Control that is necessary to develop a Product for an Indication under a Development Plan.
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8.1.2 Ownership of Osiris Technology and Patent Rights. All right, title and interest in all Osiris Technology owned or Controlled by Osiris, together with all Osiris Patent Rights that claim the foregoing, shall remain the sole and exclusive property of Osiris.
8.1.3 Ownership of Genzyme Technology and Patent Rights. All right, title and interest in all Genzyme Technology owned or Controlled by Genzyme, together with all Genzyme Patent Rights that claim the foregoing, shall remain the sole and exclusive property of Genzyme.
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connection with the prosecution, enforcement or defense of any Patent Rights which are not Osiris Patent Rights shall not be considered to be an Osiris Patent Challenge.
8.2 Filing, Prosecution, Maintenance and Enforcement of Patent Rights.
8.2.1 Osiris Intellectual Property.
(a) Osiris (or its licensors) shall have sole responsibility for and control over the filing, prosecution, maintenance, defense and enforcement of the Osiris Intellectual Property and Osiris shall be responsible for all costs and expenses associated with such filing, prosecution, maintenance, defense and enforcement.
(b) If Osiris fails to file any application, other than a provisional patent application, or intends to abandon (other than in favor of a continuing or related patent application) any Osiris Patent Right in the Genzyme Territory, then Osiris will provide written notice of such intention to Genzyme within sufficient time for Genzyme to undertake or continue the preparation of any filing, prosecution or maintenance of such Osiris Patent Right and Genzyme will thereafter have the right, but not the obligation, at its sole expense, to prepare, file, prosecute and maintain such Osiris Patent Right in Osiris’ name, and Osiris shall provide reasonable assistance to Genzyme with respect to such Osiris Patent Rights, at the sole expense of Genzyme. Upon Osiris’ election not to prepare, file, prosecute or maintain or to abandon any Osiris Patent Rights in any country in the Genzyme Territory previously requested by Genzyme, such Osiris Patent Rights in such country shall not be considered in determining the applicable royalty rate for Net Sales of Product in such country pursuant to Section 6.6.
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(c) If Osiris fails to use commercially reasonable efforts to initiate a suit or take other appropriate action with respect to a suspected infringement of the Osiris Patent Rights or Joint Patent Rights in the Genzyme Territory within ninety (90) days after becoming aware of the basis for such suit or action, then Genzyme may, in its discretion, provide Osiris with written notice of Genzyme’s intent to initiate a suit or take other appropriate action. If Genzyme provides such notice and Osiris fails to use commercially reasonable efforts to initiate a suit or take such other appropriate action within thirty (30) days after receipt of such notice from Genzyme, then Genzyme shall have the right to initiate a suit or take other appropriate action that it believes is reasonably required to protect the Osiris Patent Rights covering a Product in the Field in the Genzyme Territory, and Osiris hereby consents to be joined as a named party in such suit or action, if required by law. The Party actually initiating suit or taking other appropriate action under this Section 8.2.1 shall be referred to as the “Enforcing Party.” In the event that Genzyme does not have standing as an Enforcing Party to initiate a suit or take other appropriate action with respect to suspected infringement of an Osiris Patent Right or Joint Patent Rights, then Osiris agrees to cooperate by initiating suit pursuant to decisions made by the Steering Committee. Any recovery obtained by any Enforcing Party as a result of any proceeding described in this Section 8.2.1, by settlement or otherwise, shall be applied in the following order of priority: (i) first, to reimburse each Party for all litigation costs in connection with such proceeding paid by that Party and not otherwise recovered (on a pro rata basis based on each Party’s respective litigation costs, to the extent the recovery was less than all such litigation costs); and (ii) second, (A) as to recoveries based on lost profits, Osiris will receive an amount commensurate with the royalty it would have received if Genzyme had earned such profits through the sale of Products in the Genzyme Territory and Genzyme shall retain the balance; and (B) as to recoveries based on other than lost profits, the recovery shall be split 50:50 between the Parties.
During the preparation and pendency of any proceedings pursuant to this Section 8.2.1 the Enforcing Party will: (i) keep the other Party reasonably informed as to the status of such proceeding, including providing copies of all documents filed in, and written communications, depositions and hearing transcripts relating to, such proceeding to the extent the interests of Osiris and Genzyme are not adverse; and (ii) consult with the other Party regarding the strategy for, and status of, such proceeding, including providing the other Party with an opportunity to make suggestions and comments regarding such proceeding, which the Enforcing Party shall consider in good faith. Each of the foregoing obligations will be subject to each Party’s desire or need to preserve any attorney-client privilege, or work-product privilege, which will take precedence.
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maintenance of the Joint Patent Rights. The Party responsible for preparation, filing, prosecution and maintenance of any Joint Patent Rights agrees to furnish the other Party with copies of all documents relevant to such filing, prosecution and maintenance with respect to such Joint Patent Rights in sufficient time to allow for review by such other Party, to incorporate in good faith the comments of the other Party prior to taking any action to implement such decisions and to otherwise keep the other Party reasonably informed of the status of the preparation, filing, prosecution and maintenance of such Joint Patent Rights in the Genzyme Territory or Osiris Territory, as applicable. Notwithstanding the foregoing, in the event that the Party responsible for such preparation, filing, prosecution and maintenance elects to abandon or not to prosecute or maintain any Joint Patent Right in any country (other than in favor of a continuing patent application and except in the event the Parties mutually decide to abandon or not to maintain or enforce such Joint Patent Right), the other Party may elect to assume responsibility for preparation, filing, prosecuting and maintaining such Joint Patent Right in such country, at its sole discretion and expense, in which case, all rights in such Joint Patent Right in such country shall be promptly assigned to that Party. Either Party may choose at any time not to continue to pay patent costs with respect to any Joint Patent Right, and shall thereafter assign all of its rights in such Joint Patent Right to the other Party and the other Party shall pay all future patent costs for rights it pursues in its sole discretion. In the event that a Party elects, at any time, not to participate in the filing and prosecution of any Joint Patent Right, such Party shall provide reasonable assistance to the other Party, and shall be reimbursed by the other Party for its reasonable cost of providing said assistance.
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Party elects to seek patent term extension or restoration (or its equivalent) for any Patent Right as provided in this Section, the Parties shall reasonably cooperate with each other in obtaining such patent term extension or restoration (or its equivalent) which cooperation shall include, without limitation, providing information, executing those documents that may be necessary for the Party to seek and obtain such patent term extension or restoration (or its equivalent), and seeking patent term extension or restoration of a Patent Right if requested.
ARTICLE 9: CONFIDENTIALITY
9.1 Nondisclosure Obligations. Except as otherwise provided in this Article 9, during the Term of this Agreement and for a period of five (5) years thereafter, each Party (“Receiving Party”) shall maintain Confidential Information of the other Party (the “Disclosing Party”) in confidence and shall not disclose such Confidential Information to any Third Party or use such Confidential Information except as specifically authorized in this Article 9 or as specifically agreed in writing by the Disclosing Party; provided, however, with respect to any Confidential Information that is designated in writing as a trade secret (as determined under Delaware law), such restrictions on disclosure and/or use shall survive the termination or expiration of this Agreement for as long as such Confidential Information remains a trade secret but, subject to the exceptions set forth in this Article 9, in no event shall such restrictions on disclosure and/or use cease prior to the expiration of five (5) years following the termination or expiration of the Term of this Agreement; further provided, that the comparative use of Confidential Information of the Disclosing Party in the course of internal technology evaluations and/or data shall not be considered a violation of this Article so long as the obligations of nondisclosure to a Third Party are maintained. The term “Confidential Information” shall mean (i) with respect to a Party, any written, electronic, visual, verbal or other form of technical or business information and data received by the Receiving Party including without limitation, with respect to Genzyme, the Joint Program Data and with respect to Osiris, the Joint Program Data, and (ii) the terms and
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conditions of this Agreement (including information contained in any Exhibit or Schedule hereto).
The Receiving Party or its Third Party licensees may disclose the Confidential Information of the Disclosing Party to its subcontractors, Affiliates, Third Party licensees, sublicensees, consultants, legal counsel, outside contractors and clinical investigators, on a need-to-know basis to the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement on condition that such entities or persons agree in writing, prior to the disclosure, to keep the Confidential Information confidential for the same time periods and to the same extent as the Receiving Party is required to keep the Confidential Information confidential.
The confidentiality provisions set forth herein shall be applied in conjunction with the confidentiality provisions of that certain Collaboration Agreement by and between the Parties dated July 25, 2007, and shall supersede and replace any other previous confidentiality and non-disclosure agreements between the Parties with respect to the subject matter hereof and shall be deemed to cover all information disclosed or obtained by a Party under any other previous confidentiality or non-disclosure agreements, including without limitation the Confidential Disclosure Agreement between the Parties dated August 6, 2008. As to the treatment of trade secrets and disclosures to government or other regulatory agencies, Section 9.1 herein shall control and the Parties agree to amend the July 25, 2007 Collaboration Agreement to make it consistent herewith.
Upon the termination of this Agreement, the Receiving Party shall, at the request of the Disclosing Party, return or destroy the Confidential Information of the Disclosing Party, retaining only one copy thereof for purposes of compliance with this Agreement. An officer of the Receiving Party shall certify its compliance with this provision in writing upon the request of the Disclosing Party.
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required to make such disclosure (a) provides the other Party with prior written notice (unless prohibited by law) and (b) takes all reasonable and lawful actions to obtain confidential treatment for such disclosure and, if possible, to minimize the extent of such disclosure.
If the Reviewing Party requests such a delay, the Publishing Party shall delay submission or presentation of the publication for a period not to exceed sixty (60) days from the date of such request to enable patent applications protecting each Party’s rights in such information to be filed and/or to allow the Parties to agree to a modification of the publication so as not to disclose the
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ARTICLE 10: REPRESENTATIONS AND WARRANTIES
(a) (i) the Osiris Patent Rights exist and, to its knowledge, are not invalid or unenforceable, in whole or in part, (ii) Osiris is (a) the sole owner of all right, title and interest in and to; or, (b) with respect to U.S. Patent numbers 5,226,914; 5,197,985; 5,486,359; 5,733,542; 5,811,094; 5,837,539; 6,010,696; 6,087,113; 5,591,625; 5,643,736; 5,736,396; 5,855,619; 5,908,784; 5,942,225; 6,174,333; 6,482,231; 6,835,377, and all foreign counterparts has the right to sublicense the Osiris Patent Rights that are licensed to Genzyme hereunder, and (iii) to Osiris’ knowledge, the development, manufacture, use, offer for sale, sale, or import of Prochymal for the GvHD Indication or any Major Indication (as of the Effective Date) or Chondrogen in the Genzyme Territory does not infringe any valid and enforceable Third Party patents issued as of the Effective Date or any pending claim of a Third Party patent application published as of the Effective Date were such claim to issue in substantially its published form;
(b) except for the oppositions of EP 0592521 and EP 01007631, Osiris has not received notice of any interference or opposition proceeding relating to the Osiris Patent Rights;
(c) the Osiris Intellectual Property licensed to Genzyme hereunder is free and clear of any liens, charges, encumbrances and rights of any Third Party, contingent or otherwise;
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(d) all Osiris Intellectual Property licensed to Genzyme hereunder that is subject to the rights of the U.S. Government under 35 U.S.C § 202 et seq and the regulations pertaining thereto is listed on Exhibit H;
(e) there are no claims, judgments or settlements against or owed by Osiris or any of its Affiliates or, to its knowledge, pending or threatened claims or litigation against Osiris or any of its Affiliates, in either case relating to the Osiris Intellectual Property licensed to Genzyme hereunder;
(f) there are no agreements between Osiris and any Affiliate or Third Party with respect to the Osiris Intellectual Property licensed to Genzyme hereunder that would prevent Osiris from granting to Genzyme the licenses in Section 7.1;
(g) there are no agreements between Osiris and any Affiliate or Third Party that obligate or under which Osiris is liable for the payment of any royalties, fees or other payments with respect to any of the Osiris Intellectual Property licensed to Genzyme hereunder;
(h) other than the Osiris Patent Rights, Osiris and its Affiliates do not own or have any license or other right to any Patent Rights that are necessary for Genzyme, its Affiliates or sublicensees to exercise the rights granted to Genzyme hereunder to develop, make, have made, use, offer to sell, sell and import Prochymal for the Major Indications and Chondrogen in the Genzyme Territory;
(i) to its knowledge, Osiris has made available to Genzyme all data, results or other information derived from or regarding any preclinical or clinical study which would be reasonably expected to be relevant to an evaluation of any safety risks associated with Prochymal and Chondrogen; and
(j) “Prochymal” and “Chondrogen” (Collectively, the “Trademarks”) are validly existing, trademarks allowed by the U.S. Patent & Trademark Office under the Intent to Use provisions solely owned by Osiris and Osiris has the right to grant to Genzyme the right to use, such trademarks. Osiris shall have the right to exercise quality control over Genzyme’s use of the Trademarks and Licensed Products to a degree reasonably necessary to maintain the validity of and to protect the goodwill associated with the Trademarks. In order to verify compliance with this Section, Osiris may from time to time require Genzyme to submit samples of use of the Trademarks including Product, Product packaging and marketing and promotional materials bearing the Trademarks.
ARTICLE 11: INDEMNITY AND INSURANCE
11.1 Indemnification by Genzyme. Genzyme will indemnify, defend and hold harmless Osiris and its Affiliates and their respective directors, officers, employees, consultants and agents (the “Osiris Indemnitees”) from and against any and all claims, damages, liabilities, losses, costs (including reasonable attorneys’ fees and expenses) and expenses (collectively, “Losses”) arising from: (a) any Third Party claim arising from a breach by Genzyme of any representation or warranty expressly made by Genzyme under this Agreement; or (b) any Third Party claim arising or commenced on or after the Effective Date that the practice of the Genzyme
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Intellectual Property licensed to Osiris hereunder infringes any intellectual property rights or other proprietary rights of a Third Party or (c) any Third Party claim of death, bodily injury or property damage arising from (i) the development, manufacture, use, distribution or sale of a Product for an Indication by Genzyme, its Affiliates, sublicensees, employees, consultants or agents or (ii) the negligence or willful misconduct of Genzyme or its Affiliates, sublicensees, employees or agents; provided, however, that such indemnification shall not apply to any Losses to the extent such Losses arise from a breach by Osiris of any representation or warranty expressly made by Osiris under this Agreement or the negligence or willful misconduct of any Osiris Indemnitee.
11.2 Indemnification by Osiris. Osiris will indemnify, defend and hold harmless Genzyme and its Affiliates and their respective directors, officers, employees and agents (the “Genzyme Indemnitees”) from and against all Losses arising from: (a) any Third Party claim arising from a breach by Osiris of any representation or warranty expressly made by Osiris under this Agreement; (b) any Third Party claim arising or commenced on or after the Effective Date that the practice of the Osiris Intellectual Property licensed to Genzyme hereunder infringes any intellectual property rights or other proprietary rights of a Third Party; (c) any Third Party claim of death, bodily injury or property damage arising from (i) the development, manufacture, use, distribution or sale of a Product for an Indication by Osiris, its Affiliates, licensees (other than Genzyme, its Affiliates, sublicensees, employees, consultants or agents), employees or agents, or (ii) the negligence or willful misconduct of Osiris or its Affiliates, sublicensees, employees, consultants or agents, or (d) any Third Party claim based on, relating to, or in connection with Genzyme’s obligations or responsibilities under this Agreement in its capacity as Osiris’s legal representative within the meaning of Directive 2001/20/EC; provided however, that such indemnification shall not apply to any Losses to the extent such Losses arise from a breach by Genzyme of any representation or warranty expressly made by Genzyme under this Agreement or the negligence or willful misconduct of any Genzyme Indemnitee
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ARTICLE 12: TERM AND TERMINATION
**** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.
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12.3 Effect of Termination by Osiris for Material Breach by Genzyme or at Genzyme’s Election. In the event that (i) Osiris terminates this Agreement for uncured material breach by Genzyme under Section 12.2.1 (for which Osiris shall retain all legal remedies) ****, or (ii) Genzyme terminates this Agreement pursuant to Section 12.2.2, then the following consequences shall apply:
**** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.
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(a) the license under Osiris Intellectual Property granted to Genzyme under Section 7.1 shall terminate, except as necessary to exercise its surviving rights and fulfill its surviving obligations under Section 12.7.2;
(b) the covenant not to xxx granted to Osiris under Section 7.2 shall terminate and Genzyme agrees to grant and hereby grants Osiris an exclusive right and license, with the right to sublicense, under Genzyme Intellectual Property to develop, make, have made, use, offer for sale, sell and import Products for Indications which are being developed or commercialized as of the effective date of termination. In the event the effective date of termination under this Section 12.3 occurs prior to the date of receipt of the first Marketing Approval for a Product, then the license to Osiris hereunder shall be royalty-free (except with respect to royalty and other financial obligations of Genzyme to any Third Party, which obligations shall be responsibility of Osiris). In the event the effective date of termination under this Section 12.3 occurs on or after the date of receipt of the first Marketing Approval for a Product, then the license to Osiris hereunder shall be royalty-bearing at a rate of ****
(c) Genzyme shall assign (or exclusively license if an assignment is prohibited) to Osiris as soon as practicable any applicable Regulatory Approval, applications for Regulatory Approvals and other filing filed in Genzyme’s name with a Regulatory Agency as of the effective date of termination; and
(d) Genzyme’s payment obligations that had accrued prior to the effective date of termination shall survive.
(a) terminate this Agreement, in which case ****
(b) allow this Agreement to remain in effect, in which case ****
**** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.
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by reason of force majeure. The Parties shall mutually seek a resolution of the delay or the failure to perform as noted above.
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Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid provisions.
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XxXxxxx Long & Xxxxxxxx LLP |
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Genzyme Corporation |
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Attention: Senior Vice President, Corporate Development |
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Genzyme Corporation |
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000 Xxxxxxx Xxxxxx |
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Xxxxxxxxx, Xxxxxxxxxxxxx 00000 |
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Attention: General Counsel |
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13.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction.
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arising out of (a) any matter that is subject to the Steering Committee’s decision-making authority (including where a final determination by Osiris with respect to such matter would have the effect described in Section 2.2.2), or (b) any matter relating to or arising out of this Agreement that is outside the Steering Committee’s decision-making authority, shall be submitted to dispute resolution and shall be resolved as follows:
13.8.2 Arbitration. Except as set forth in Section 13.8.4, if the Parties are not able to settle any dispute, controversy or claim with respect to a matter referenced in Section 13.8.1 above within forty (40) days of receipt of a Dispute Notice, the matter shall be settled by arbitration before a single arbitrator in accordance with the Commercial Arbitration Rules of the AAA then pertaining (available at xxx.xxx.xxx), except where those rules conflict with this provision, in which case this provision controls. Any court with jurisdiction shall enforce this Section and enter judgment on any award. The arbitrator shall be an attorney who has at least 15 years of experience with a law firm or corporate law department of over 25 lawyers or who was a judge of a court of general jurisdiction and is independent of the Parties. Additionally, if the issues in dispute involve scientific or technical matters, any arbitrator chosen hereunder shall have not less than five (5) years of educational training and/or experience sufficient to demonstrate a reasonable level of relevant scientific and/or technical knowledge related to scientific issues or technical matters that are the subject of the dispute. The arbitrator shall be selected within ten (10) days of commencement of the arbitration from the AAA’s National Roster of Arbitrators pursuant to agreement or through selection procedures administered by the AAA. The arbitration shall be held in the State of Delaware and in rendering the award the arbitrator must apply the substantive law of Delaware (except where that law conflicts with this clause), except that the interpretation and enforcement of this arbitration provision shall be governed by the Federal Arbitration Act. Within forty-five (45) days of initiation of arbitration, the Parties shall reach agreement upon and thereafter follow procedures assuring that the arbitration will be concluded and the final award rendered within no more than eight months from selection of the arbitrator. Failing such agreement, the AAA will design and the Parties will follow procedures that meet such a time schedule. A final arbitration decision shall be rendered in writing and shall be binding on both Parties and not appealable to any court in any jurisdiction. The arbitrator shall render a final decision within eight (8) months of the selection of the arbitrator as provided above. Each Party has the right before or, if the arbitrator cannot hear the matter within an acceptable period, during the arbitration to seek and obtain from the
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appropriate court provisional remedies such as attachment, preliminary injunction, replevin, etc., to avoid irreparable harm, maintain the status quo or preserve the subject matter of the arbitration. The arbitrator shall not be prohibited from, in his discretion, awarding the prevailing party with attorneys’ costs and expenses incurred in connection with the underlying cause for arbitration and the resulting arbitration procedure. EXCEPT AS PROVIDED IN SECTION 11.3, THE ARBITRATOR SHALL NOT AWARD ANY PARTY PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES. NO PARTY MAY SEEK OR OBTAIN PREJUDGMENT INTEREST.
(a) The Baseball Arbitration shall be held in a location mutually agreeable to the Parties, or if no such location can be agreed, in New York City, according to the then-current commercial arbitration rules of the American Arbitration Association (“AAA”), except to the extent such rules are inconsistent with this Section 13.8.3;
(b) The Baseball Arbitration will be conducted by one (1) arbitrator who shall be reasonably acceptable to the Parties and who shall be appointed in accordance with AAA rules. If the Parties are unable to select an arbitrator, then the arbitrator shall be appointed in accordance with AAA rules. Any arbitrator chosen hereunder shall have educational training and industry experience sufficient to demonstrate a reasonable level of scientific, financial, medical and industry knowledge relevant to the particular dispute;
(c) Within twenty (20) days after the selection of the arbitrator, each Party shall submit to the arbitrator and the other Party a proposed resolution of the dispute that is the subject of the arbitration, together with any relevant evidence in support thereof (the “Proposals”). Within ten (10) Business Days after the delivery of the last Proposal to the arbitrator, each Party may submit a written rebuttal of the other Party’s Proposal and may also amend and re-submit its original Proposal. The Parties and the arbitrator shall meet within ten (10) Business Days after the Parties have submitted their Proposals, at which time each Party shall have one (1) hour to argue in support of its Proposal. The Parties shall not have the right to call any witnesses in support of their arguments, nor compel any production of documents or take any discovery from the other Party in preparation for the meeting. Within twenty (20) days after such meeting, the arbitrator shall select one of the Proposals so submitted by one of the Parties as the resolution of the dispute, but may not alter the terms of either Proposal and may not resolve the dispute in a manner other than by selection of one of the submitted Proposals. If a Party fails to submit a Proposal within the initial twenty (20) day time frame set forth in the first sentence of this Section 13.8.3(c), the arbitrator shall select the Proposal of the other Party as the resolution of the Steering Committee Dispute. Any time period set forth in this Section 13.8.3(c) may be extended by mutual agreement of the Parties;
(d) No arbitrator shall have the power to award punitive damages under this Agreement regardless of whether any such damages are contained in a Proposal, and such award is expressly prohibited. The proceedings and decisions of the arbitrator shall be confidential,
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final and binding on the Parties. Judgment on the award so rendered may be entered in a court having jurisdiction thereof.
13.9 Entire Agreement. This Agreement, together with the Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made, are expressly superseded hereby. In the event of any conflict or inconsistency between any provision of any Exhibit hereto and any provision of this Agreement, the provisions of this Agreement shall prevail. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties hereto. The Parties expressly acknowledge that the Collaboration Agreement between the Parties dated July 25, 2007, shall remain in full force and effect.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties have executed this Collaboration Agreement as of the date first set forth above.
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