Exhibit 10.17
LICENSE AGREEMENT
by and between
BioTie Therapies Corp.
and
Somaxon Pharmaceuticals, Inc.
12 November 2004
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
TABLE OF CONTENTS
1. DEFINITIONS............................................................................ 2
2. LICENSE................................................................................ 6
2.1 License Grant................................................................... 6
2.2 After-Acquired Patents and Know-How............................................. 6
2.3 University of Minnesota; Ivax Corporation....................................... 7
2.4 Reservation of Rights........................................................... 7
2.5 Sublicense...................................................................... 7
3. TRADE MARKS............................................................................ 8
4. PAYMENTS............................................................................... 8
4.1 Milestone Payments.............................................................. 8
4.2 Royalties....................................................................... 8
4.2.1 Royalty for Products within the Scope of the Patents................. 8
4.2.2 Royalty in Case of Combination Products and Required Licenses........ 9
4.2.3 Other Indications.................................................... 10
4.2.4 Escrow in Case of Challenge.......................................... 10
4.2.5 Potential Offset for Clinical Trial Expenses......................... 10
4.3 Sublicensing Fees............................................................... 10
4.4 Calculations, Payment and Tax Withholding....................................... 12
5. SUPPLY OF MATERIAL..................................................................... 13
6. WARRANTIES............................................................................. 13
6.1 General......................................................................... 13
6.2 Corporate Existence and Power................................................... 13
6.3 Authority....................................................................... 14
6.4 Grant of Rights................................................................. 14
6.5 Intellectual Property........................................................... 14
7. DEVELOPMENT OF THE PRODUCTS AND REGULATORY MATTERS..................................... 15
7.1 Development Plan................................................................ 15
7.2 Steering Committee.............................................................. 15
7.3 Diligence....................................................................... 16
7.4 Clinical Trials and Regulatory Matters.......................................... 15
7.5 Pharmacovigilance............................................................... 16
8. SALES AND MARKETING EXPENDITURE PLAN; MINIMUM ROYALTIES................................ 17
8.1 Sales and Marketing Expenditure Plan............................................ 17
8.2 Minimum Royalties............................................................... 17
9. PATENT MAINTENANCE..................................................................... 18
9.1 IPR Defence..................................................................... 19
TABLE OF CONTENTS
9.2 Patent Infringements............................................................ 19
10. IMPROVEMENTS AND JOINT INVENTIONS...................................................... 20
10.1 Improvements.................................................................... 20
10.2 Joint Inventions................................................................ 21
11. TERMINATION............................................................................ 21
12. COMPETITION............................................................................ 23
13. RECORD KEEPING AND AUDITING............................................................ 23
14. LIABILITy AND INDEMNIFICATION.......................................................... 24
15. CONFIDENTIALITY........................................................................ 26
16. FORCE MAJEURE.......................................................................... 27
17. NOTICES................................................................................ 28
18. ASSIGNMENT............................................................................. 29
19. RELATIONSHIP OF PARTIES................................................................ 29
20. NO WAIVER.............................................................................. 29
21. COMPLIANCE WITH LAWS................................................................... 29
22. SEVERABILITY OF CLAUSES................................................................ 29
23. AMENDMENTS............................................................................. 30
24. ENTIRE AGREEMENT....................................................................... 30
25. GOVERNING LAW.......................................................................... 30
26. DISPUTE RESOLUTION..................................................................... 30
27. SPECIFIC PERFORMANCE................................................................... 30
28. EXPENSES............................................................................... 31
29. APPENDICES AND HEADINGS................................................................ 31
30. COUNTERPARTS OF THIS LICENSE AGREEMENT................................................. 31
LIST OF APPENDICES
APPENDIX 1.27 List of Patents
APPENDIX 2-A Minnesota Agreement
APPENDIX 2-B Ivax Agreement
APPENDIX 2-C Minnesota Tri-Party Agreement
APPENDIX 2-D Ivax Tri-Party Agreement
APPENDIX 4.2.3 Restrictions on Use of Know-How
APPENDIX 7.1 Responsibilities of the Parties
APPENDIX 7.5 Joint Operating Procedure on ADR reporting for Nalmefene
APPENDIX 15 Initial Press Release
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is entered into on this the 12th day of
November 2004, by and between
1. BIOTIE THERAPIES CORP., a corporation incorporated and existing
under the laws of Finland, having its registered domicile in Turku,
Finland and with business identity code 1475830-6 ("BTT")
and
2. SOMAXON PHARMACEUTICALS, INC., a corporation incorporated and
existing under the laws of the state of Delaware in the United
States of America and having its principal place of business in San
Diego, California ("Somaxon").
Each also referred to as "PARTY" or together as "PARTIES".
RECITALS
A. BTT is, amongst others, active in the research and development of
nalmefene for dependence disorders, such as alcohol dependence and
impulse control disorders (including pathological gambling,
kleptomania, pyromania, intermittent explosive disorders) for which
BTT has obtained certain patents.
B. BTT has obtained the patents referred to above through its own
development and in-licensing. In addition, BTT has licensed certain
rights from Ivax Corporation ("IVAX") to use certain preclinical
documentation and data relating to nalmefene for certain dependence
disorders. BTT has further developed and, by its own studies,
complemented the preclinical data as well as conducted clinical
studies with nalmefene. Through studies conducted or arranged by
BTT, BTT has obtained additional preclinical and clinical data and
know-how relating to nalmefene.
C. Somaxon has experience and know-how in the clinical development of
drug substances affecting the central nervous system.
D. Somaxon has expressed its interest in developing clinically,
obtaining a regulatory marketing approval for and commercialising
the IPR in the Territory.
E. The Parties have entered into a Co-operation and Option Agreement in
order to assess the feasibility of a license arrangement for the
purpose of commercialising the IPR in the Territory and with the aim
to fulfill the Goal within the Term and, upon fulfillment, to enter
into the License Agreement.
F. The Goal set forth in the Co-operation and Option Agreement has been
fulfilled and the Parties hereby enter into the License Agreement on
the terms and conditions as stipulated hereinbelow. A.
NOW THEREFORE, the Parties hereby agree as follows:
1. DEFINITIONS
As used in this License Agreement, unless expressly otherwise
stated or evident in the context, the following terms shall
have the meanings defined below. The singular (where
appropriate) shall include the plural and vice versa and
references to Appendices and Sections shall mean appendices
and sections of this License Agreement.
1.1 "AFFILIATE" shall mean any company or other entity which
directly or indirectly controls or is controlled by
or is under common control with a Party hereto by
means of ownership of at least fifty (50) percent of
the voting stock or similar interest in said company
or other entity.
1.2 "BTT INDEMNITEE" shall have the meaning as set forth in Section 14.
1.3 "BTT" shall mean BioTie Therapies Corp.
1.4 "BUDGET" shall have the meaning as set forth in Section 8.1
1.5 "DAMAGES" shall mean any liabilities, damages, losses, costs,
claims or expenditures as set forth in Section 14.
1.6 "EFFECTIVE DATE" shall mean the date of the License Agreement.
1.7 "FDA" shall mean the United States Food and Drug
Administration of the United States Department of
Health and Human Services.
1.8 "FIELD" shall mean the treatment of impulse control
disorders, (including pathological gambling,
kleptomania, pyromania and intermittent explosive
disorders), alcohol dependence, obsessive compulsive
disorders, eating disorders and nicotine dependence.
1.9 "COMPETITIVE PRODUCT" shall mean any product that (i) contains nalmefene
as an active ingredient and/or (ii) is labeled for
the treatment of an indication within the Field.
1.10 "CONFIDENTIAL shall mean all information, Know-How, data,
INFORMATION" memoranda, reports, interpretations, forecasts and
records (whether written or in any other form)
containing or otherwise reflecting information
relating to BTT's as well as BTT's licensors'
business activity and Somaxon's business or any
other matter or thing which is not available to the
general public and which has been disclosed by or on
behalf of BTT and/or Somaxon, whether before or
after the date of this License Agreement.
1.11 "EIGHTH YEAR DATE" shall mean the eighth (8th) anniversary of the first
commercial sale of the Product by Somaxon in the
Territory.
1.12 "FORCE MAJEURE EVENT" shall have the meaning as set forth in Section 16.
1.13 "GENERIC APPROVAL shall mean the date of first regulatory or marketing
DATE" approval in the Territory of a product containing
nalmefene and which is frequently and customarily
prescribed or used for treatment of one or more of
the approved indications set forth in the Initial
NDA or subsequent regulatory approvals in the U.S.
(or any equivalent regulatory approval or
marketing authorization filed with any equivalent
agency or governmental authority in any other
country in the Territory), including, but not
limited to, (i) a product covered by an Abbreviated
New Drug Application (ANDA) in the U.S. by the FDA
(or equivalent regulatory approval or marketing
authorisation filed with any equivalent agency or
governmental authority in any other country in the
Territory) which references the Initial NDA or (ii)
a product with frequent and customary "off label"
use for one or more of such approved indications.
1.14 "IMPROVEMENTS" shall mean any uses, inventions, discoveries,
modifications, reformulations or results, whether
patentable or not, developed by either or both of
the Parties relating to nalmefene or a chemical
entity within the scope of a valid claim under the
Patents, including, but not limited to:
- any new use of nalmefene;
- any new combination product that contains
nalmefene; and
- any derivative, prodrug, hydrate, salt,
ester, isomer, polymorph or analogue of
nalmefene.
For the avoidance of doubt, the term "Improvements"
shall exclude any product that does not contain
nalmefene or a chemical entity within the scope of a
valid claim under the Patents.
1.15 "INITIAL NDA" shall mean the New Drug Application and all
amendments and supplements thereto filed with the
FDA relating to the Patents or for which the
Know-How is being used.
1.16 "IPR" shall mean the Patents and Know-How.
1.17 "IVAX" shall mean Ivax Corporation.
1.18 "IVAX AGREEMENT" shall mean the Exclusive License Agreement attached
hereto as Appendix 2-B.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
1.19 "KNOW-HOW" shall mean information and know-how needed for
obtaining a regulatory approval for any medicinal or
pharmaceutical product in the Field generated by BTT
or licensed in by BTT before or during the term of
this License Agreement from third parties of
whatever nature, whether or not patentable,
including ideas, discoveries, documentation,
invention, data, formulae, techniques, methods,
procedures for experiments and tests, protocols,
technical information, specifications, formulas,
results of experiments and tests (including, but not
limited to preclinical and clinical data), designs,
sketches, records, drugs and analyses. Any
information and know-how licensed in by BTT after
the date of this License Agreement shall be included
into this definition subject to that BTT has the
right, based on the agreement with the third party,
to license out such information and know how in the
Territory.
1.20 "LICENSE AGREEMENT" shall mean this License Agreement and the Appendices
hereto.
1.21 "MARKET EXCLUSIVITY shall mean the termination of regulatory market
TERMINATION DATE" exclusivity period provided by the FDA and its
applicable data protection rules and regulations
for the Product in the Territory.
1.22 "MINIMUM ROYALTY" shall have the meaning as defined in Section 8.2.
1.23 "MINIMUM ROYALTY shall have the meaning as defined in Section 8.2.
DEADLINE"
1.24 "MINNESOTA AGREEMENT" shall mean License Agreement attached hereto as
Appendix 2-A.
1.25 "NDA" shall mean a New Drug Application and all amendments
and supplements thereto filed with the FDA (as more
fully defined in 21 C.F.R. 314.5 et seq.).
1.26 "NET SALES" shall mean the total gross amount invoiced by
Somaxon or its Affiliates from the sale of any
Product to third parties less the sum of (a)
returns, credits and allowances to third parties
actually allowed or paid, (b) wholesale or cash or
trade or quantity discounts, refunds, rebates,
charge-backs or retroactive price adjustments,
actually allowed or paid, (c) sales, use or excise
taxes or duties imposed on the transaction and paid
by Somaxon, (d) bad debts actually allowed or
incurred, and (e) charges for freight,
transportation, warehousing and insurance directly
related to the sale and distribution of the Products
(excluding amounts reimbursed by third party
customers). "Net Sales" shall not include sales by
Sublicensees, the fees for which are set forth in
Section 4.3.
1.27 "NEW PRODUCT" shall have the meaning as set forth in Section 10.1.
1.28 "PARTY" shall mean BTT or Somaxon and "Parties" both BTT and
Somaxon.
1.29 "PATENTS" shall mean impulse control disorder related patent
granted in the United States and identified with No.
5,780,479 and alcoholism related patents No.
4,882,335, No. 5,086,058, No. 5,096,715 as well as
any patent application or patent relating to the
Field to which BTT has or acquires any right, title
or interest during the term of the License
Agreement, and all possible divisions, renewals,
continuations, continuations-in-part, reissues,
extensions and substitutions thereof and all foreign
counterparts in countries within the Territory. The
Patents as of the Effective Date of this License
Agreement, including the current applications are
identified in Appendix 1.27 to this License
Agreement.
1.30 "PATENT EXPIRATION shall mean the earlier of (i) the expiration of the
DATE" last to expire of the patents covering the Product
(including Patents, if applicable) or (ii) the date
that all remaining unexpired patent(s) covering the
Product (including Patents, if applicable) have been
invalidated in a decision by a court of competent
jurisdiction for which no appeal has been sought.
1.31 "PATHEON" shall mean Patheon Inc.
1.32 "PRODUCT" shall mean a pharmaceutical product which consists
of nalmefene hydrochloride and the manufacture, use,
sale or importation of which would infringe a valid
claim under the Patents but for the licenses
contemplated hereby or for which Know-How is
required.
1.33 "SALES AND MARKETING shall mean the sales and marketing plan for the
PLAN" Products in the Territory prepared and confirmed in
accordance with Section 8 of this License Agreement.
1.34 "SOMAXON" shall mean Somaxon Pharmaceuticals, Inc.
1.35 "SOMAXON ANALOGUE/ shall mean any product containing any analogue,
DERIVATIVE" derivative prodrug, hydrate, salt, ester, isomer or
polymorph of nalmefene as an active ingredient, in
any formulation and through any mode of
administration, developed or in-licensed by Somaxon.
1.36 "SOMAXON INDEMNITEE" shall have the meaning as set forth in Section 14.
1.37 "STEERING COMMITTEE" shall mean a committee consisting of two (2)
representatives of each Party.
1.38 "SUBLICENSEE" shall have the meaning as set forth in Section 4.3.
1.39 "SUBLICENSING shall have the meaning as set forth in Section 4.3.
REVENUES"
1.40 "TARGET SALES CALLS" shall have the meaning as set forth in Section 8.1
1.41 "TERRITORY" shall mean North America comprised of the United
States, Canada, Mexico and their territories and
possessions (including but not limited to, the
Commonwealth of Puerto Rico).
1.42 "TRADE MARKS" shall mean BTT's trademarks "Xxxxxxx" and "Cessal"
registered in the United States and any other
countries within the Territory.
2. LICENSE
2.1 LICENSE GRANT
In partial consideration of the payments referred to in
Section 4 below and subject to the terms and conditions of
this License Agreement, BTT hereby grants to Somaxon an
exclusive (even as to BTT), royalty-bearing license, with
the right to sublicense, under the Patents and Know-How as
well as Improvements developed or acquired by BTT during
the term of the License Agreement, which are necessary or
useful to develop, make, have made, use, sell, have sold,
offer for sale, import, or otherwise commercialise Products
in the Territory. Subject to earlier termination under
Section 11 below, the license set forth herein shall expire
as to the Patents upon the expiration of the last to expire
patent within the Patents. The royalties payable during the
validity of the Patents and after the expiration of the
Patents are set forth in Section 4 below. After the
termination of all relevant royalty periods set forth in
Section 4 below, Somaxon shall have a fully paid-up and
exclusive license under the Know-How for the Field in the
Territory.
2.2 AFTER-ACQUIRED PATENTS AND KNOW-HOW
Any Patents and Know-How acquired by BTT during the term of
this License Agreement shall be automatically included in
the license set forth above, provided that BTT has the
right based on the applicable agreement ("Third Party
Agreement") with the third party(ies) from whom such rights
have been acquired, to grant a sublicense in the Territory
to such rights. If and to the extent BTT is required to pay
to such third party(ies) any payments, and Somaxon wants to
exploit such rights acquired by BTT after the signing of
this License Agreement, the remuneration payable by Somaxon
to BTT under Section 4 below shall be adjusted in good
faith negotiations by the Parties so that BTT is able to
make such payments to the third party(ies) and receive
reasonable compensation for such sublicensing. If and when
any Third Party Agreement is executed under which Somaxon
receives a sublicense from BTT, BTT agrees that it shall
not do anything to terminate nor make any amendment,
supplement or other modification to the applicable Third
Party Agreement which
would adversely affect the rights of BTT and/or Somaxon,
except with the prior written consent of Somaxon (not to be
unreasonably withheld).
2.3 UNIVERSITY OF MINNESOTA; IVAX CORPORATION
The license set forth above shall include the sublicense of
all of BTT's rights with respect to the Territory under (i)
its License Agreement with the University of Minnesota
dated April 17, 2000, a correct and complete copy of which
is attached hereto as Appendix 2-A (the "MINNESOTA
AGREEMENT"), and (ii) its Exclusive License Agreement with
Ivax Corporation ("Ivax") dated April 28, 1998, as amended
by the First Amendment thereto dated February 1, 1999 and
the Second Amendment thereto dated ______, 2004, a correct
and complete copy of which is attached hereto as Appendix
2-B (as amended, the "IVAX AGREEMENT"). BTT agrees that it
shall not do anything to terminate nor make any amendment,
supplement or other modification to the Minnesota Agreement
or the Ivax Agreement which would adversely affect the
rights of BTT and/or Somaxon under such agreements as of
the date hereof, except with the prior written consent of
Somaxon (not to be unreasonably withheld).
In connection with this License Agreement, the parties have
entered into Tri-Party Agreements related to the sublicense
of rights under the Minnesota Agreement and the Ivax
Agreement. A copy of the Tri-Party Agreement with the
University of Minnesota is attached hereto as Appendix 2-C,
and a copy of the Tri-Party Agreement with Ivax is attached
hereto as Appendix 2-D.
2.4 RESERVATION OF RIGHTS
Each Party expressly acknowledges and agrees that other
than (i) the license granted by BTT to Somaxon in this
License Agreement, including the Improvements of BTT
contemplated above, (ii) the sale and transfer of the
Trademarks in the Territory set forth in Section 3 below
and (iii) the rights with respect to Improvements and
inventions set forth in Section 10 below, neither Party
will acquire or will have a right to claim any other rights
in, or to the use of other patents, know-how or
intellectual property rights owned, controlled, adopted or
used by the other Party. Subject to the non-competition
covenant set forth in Section 12, it is also agreed and
understood that nothing in this License Agreement shall
restrict BTT from developing the IPR or entering into
license negotiations or license agreement(s) with third
parties concerning IPR and/or Improvements in territories
other than the Territory.
2.5 SUBLICENSE
Somaxon may grant sublicenses hereunder to any third party,
which (i) is independent from and not an Affiliate of
Somaxon, and (ii) would in Somaxon's good faith judgment
serve to increase the commercial potential of the IPR
and/or Products. However, such sublicenses shall not
relieve Somaxon of its obligations to BTT under this
License Agreement. Until the expiration of the Minnesota
Agreement, Somaxon shall give BTT at least fifteen (15)
days advance notice of the major terms of any sublicense
agreement, with sufficient
detail to support BTT's required notice to the University
of Minnesota under Section 4.4 of the Minnesota Agreement.
Although Somaxon shall retain sole discretion over the
terms of any such sublicense agreement, Somaxon shall
consider in good faith any reasonable comments made by BTT
(including comments from the University of Minnesota which
maybe relayed by BTT to Somaxon) prior to entering into the
sublicense agreement.
3. TRADE MARKS
In partial consideration of the payments referred to in
Section 4 below, BTT hereby transfers all rights, title,
and interest in the Trade Marks, and all goodwill
associated therewith, in the Territory to Somaxon. In
furtherance of such transfer, BTT shall execute and deliver
to Somaxon appropriate instruments of assignment of trade
marks to facilitate the recording of the transfer of the
Trade Marks in the Territory.
4. PAYMENTS
In consideration of entering into this License Agreement,
Somaxon agrees to pay BTT the milestone payments and
royalties based on the Net Sales of the Products, as set
out below.
4.1 MILESTONE PAYMENTS
Somaxon shall make the following non-refundable fixed
payments to BTT upon the occurrence of the indicated
milestones:
(a) U.S. $3,000,000 (three million) as a signing fee for
this License Agreement;
(b) U.S.$[***] upon acceptance for filing by the FDA of
the Initial NDA;
(c) U.S.$[***] upon FDA approval of the Initial NDA;
and
(d) U.S.$[***] upon FDA approval of any subsequent
indications covered by a Patent owned or controlled
by BTT and licensed to Somaxon hereunder, and a
U.S.$[***] upon FDA approval of any subsequent
indications outside the scope of the Patents but for
which Know-How is necessary to obtain regulatory
approval.
Such milestone payments shall, unless otherwise mutually
and explicitly agreed in writing, be paid within fifteen
(15) days after the occurrence of the milestones set forth
above. Notwithstanding the foregoing, the above milestone
payments are subject to reduction under the limited
circumstances described in Section 7.4 below.
4.2 ROYALTIES
4.2.1 ROYALTY FOR PRODUCTS WITHIN THE SCOPE OF THE PATENTS
Subject to the remainder of this Section 4.2, Somaxon will
pay to BTT the following royalty amounts on Net Sales
within the Territory on the indicated
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
Product type on a country-by-country basis for the
applicable period set forth below:
ROYALTY
PRODUCT TYPE* RATE START DATE END DATE
-------------------------------------- ------ ---------------------------- -------------------------------
Product covered by a Patent within the [***]% Effective Date Later of (i) Patent Expiration
IPR; and any Improvements to such Date or (ii) Market Exclusivity
Patent Termination Date
[***]% Later of (i) Patent Generic Approval Date or until
Expiration Date or (ii) May 2011, whichever is later
Market Exclusivity
Termination Date
Product not covered by a Patent within [***]% Effective Date Patent Expiration Date
the IPR, but covered by another valid,
issued patent and dependent upon the
Know-How; and any Improvements thereto
[***]% Patent Expiration Date Generic Approval Date or
until May 2011, whichever is later
Product not covered by a Patent within [***]% Effective Date Generic Approval Date or until
the IPR or any other valid, issued May 2011, whichever is later
patent but dependent upon the
Know-How; and any Improvements thereto
* The Parties agree that any determination of the type of Product for
purposes of the foregoing table and the quantity or percentage of Net
Sales of the Product related to one or more indications, including, but
not limited to off-label indications or uses, shall be determined by one
of the following methods, at Somaxon's election: (i) marketing and sale
under a distinct brand or tradename or (ii) review of IMS Health sales
data (or similar third party prescription market research data).
4.2.2 ROYALTY IN CASE OF COMBINATION PRODUCTS AND REQUIRED LICENSES
The foregoing royalty for Products for which the [***]
percent ([***]%) royalty is being applied may be reduced by
any amounts actually paid by Somaxon to a third party in
the form of a royalty or other additional cost of goods, up
to a maximum of [***] percent ([***]%) of the royalty
otherwise due, if, and only if, Somaxon is required to pay
such amounts to the third party due to (i) any license of
intellectual property rights due to the potential or
alleged infringement by the Product or any Improvements of
such third-party intellectual property rights, or (ii) the
presence in the Product or any Improvements of a
proprietary dosage delivery system and/or active ingredient
which alone would be outside the scope of a valid claim
under the Patents. In connection with any such reduced
royalty, Somaxon shall raise at the next regularly
scheduled meeting of the Steering Committee any potential
or alleged infringement or alternate delivery system or
active ingredient giving rise to the reduced royalty and
the Parties shall cooperate with one another in good faith
in connection with the negotiation and implementation of
any related license(s) from one or more third party(ies);
provided, however, that the Parties understand and agree
that Somaxon shall have sole discretion over the ultimate
determination of whether any license(s) and the amounts
payable to a third party thereunder are "required" for
purposes of
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
this Section 4.2.2; provided, further, however, that the
maximum cumulative reduction of the royalties under (i) and
(ii) above shall not exceed [***] percent ([***]%).
4.2.3 OTHER INDICATIONS
BTT acknowledges and agrees that Somaxon shall have the
right to negotiate directly with Ivax with respect to a
license to the clinical data for additional indications for
the Product. BTT shall provide reasonable cooperation to
Somaxon in any effort to license or otherwise acquire
rights to clinical data for additional indications for the
Product from Ivax.
BTT has set forth on Appendix 4.2.3 to this License
Agreement a complete and accurate description of any
restrictions as to the use of such Know-How for indications
outside the Field. Somaxon acknowledges that a portion of
the Know-How is licensed in by BTT and confirms that it
will comply with restrictions described on Appendix 4.2.3.
4.2.4 ESCROW IN CASE OF CHALLENGE
BTT shall notify Somaxon in writing of any challenges to
the validity or enforceability of any Patent, whether in an
administrative or judicial forum, within five (5) business
days of BTT's first receipt of notice of such challenge. In
case the validity or enforceability of a Patent is
challenged by a third party, Somaxon shall deposit
royalties which may otherwise be due to BTT hereunder which
are in excess of [***] percent ([***]%) of Net Sales, or in
case BTT is liable to pay royalty amounts based on sales of
products in excess of this amount under the Minnesota
Agreement or the Ivax Agreement, such amount, of applicable
Net Sales in an interest bearing escrow account until the
final determination of the validity or enforceability of
such Patent. If the challenge to the validity or
enforceability of any Patent is successful, Somaxon shall
cancel the escrow and retain all funds, royalties and
accrued interest deposited in such escrow, and the royalty
percentage shall be adjusted to take into account the new
categorization of the Product type set forth in Section
4.2.1 above. If the challenge to the validity or
enforceability of such Patent is unsuccessful, Somaxon
shall release the escrowed funds, including the interest
accrued, to BTT, and thereafter, continue paying the
royalties directly to BTT as contemplated in Section 4.2.1
above.
4.2.5 POTENTIAL OFFSET FOR CLINICAL TRIAL EXPENSES
Notwithstanding the foregoing, the above royalty payments
are subject to reduction under the limited circumstances
described in Section 7.4 below.
4.3 SUBLICENSING FEES
If Somaxon sublicenses its rights hereunder to a third
party (a "SUBLICENSEE"), Somaxon shall pay to BTT within
thirty (30) days of receipt, the following portion of the
Sublicensing Revenues (defined below) actually received by
Somaxon from the Sublicensee:
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
(a) With respect to Sublicensing Revenues composed of up-front
or milestone fees not characterized as a royalty or
primarily derived from net sales: [***] percent ([***]%)of
the Sublicensing Revenues.
Notwithstanding the foregoing, in connection with Somaxon's
receipt of any Sublicensing Revenue composed of a milestone
payment from the Sublicensee that is triggered by an event
comparable to any event set forth in Section 4.1 above,
Somaxon shall pay to BTT only the greater of (i) the amount
due as a result of the applicable milestone under this
Section 4.3 (i.e., [***]% of the Subleasing Revenues) or
(ii) the amount due as a result of the applicable milestone
under Section 4.3 (i.e., U.S. $[***] upon acceptance for
filing by the FDA of the Initial NDA or U.S. $[***] upon
FDA approval of the Initial NDA, etc.), but not both.
(b) With respect to Sublicensing Revenues composed of royalties
or similar payments derived from net sales:
(i) If Somaxon receives [***] percent ([***]%) or less
of the Sublicensee's net sales revenues from the
sales of the Product, Somaxon shall pay to BTT an
amount equal to [***] percent ([***]%) of the
Sublicensing Revenues.
(ii) If Somaxon receives more than [***] percent ([***]%)
of the Sublicensee's net sales revenues from the
sales of the Product, Somaxon shall pay to BTT an
amount equal to (i) [***] percent ([***]%) of the
first [***] percent ([***]%) of the Sublicensing
Revenues, and (ii) an additional [***] percent
([***]%) of the portion in excess of [***] percent
([***]%) of the Sublicensing Revenues.
For purposes of illustration only, if Somaxon
receives [***] percent ([***]%) of the
Sublicensee's net revenues from the sale of
Products, BTT shall be entitled to receive an amount
equal to [***] percent ([***]%) of the Sublicensing
Revenues received by Somaxon.
It is, however, agreed and understood that the royalty payable by
Somaxon to BTT based on Somaxon sublicensing any rights hereunder
shall be at least an amount which BTT is liable to pay under the
Minnesota Agreement and/or the Ivax Agreement for the licenses BTT
has obtained and further licensed to Somaxon in this License
Agreement plus a [***] percent ([***]%) share of the sales of the
Products by the Sublicensee net of the deductions set forth in
clauses (a) through (e) of the definition of Net Sales in Section
1 above.
As used herein, "SUBLICENSING REVENUES" shall mean any up-front,
milestone, royalty or other amounts received by Somaxon from a
Sublicensee with respect to the sublicense of this License
Agreement multiplied by a fraction where (i) the numerator is the
applicable royalty rate set forth in Section 4.2.1 above based on
the applicable Product type and (ii) the denominator is [***]
percent ([***]%); provided however that "Sublicensing Revenues"
shall not include any amounts
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provided by a Sublicensee to Somaxon (a) primarily for research,
development, sales and/or marketing support or (b) in the form of
debt financing or bona fide equity investments in Somaxon made in
connection with a corporate partnership, collaboration,
co-promotion or similar arrangement; provided that (i) such debt
financing or equity investments are on terms that are consistent
with independent third party valuation of such debt or equity
securities, or (ii) the proceeds of such debt financing or equity
investment are substantially used for the commercialization of the
IPR.
For purposes of illustration only, if the applicable royalty rate
under Section 4.2.1 for the Products sold by the Sublicensee is
[***] percent [***]%), the Sublicensing Revenues shall be equal
to [***] percent [***]%) of the amount received by Somaxon based
on a fraction the numerator of which is [***] percent [***]%) and
the denominator of which is [***] percent [***]%).
All payments of amounts under this Section 4.3 shall be paid by
Somaxon to BTT within thirty (30) days of Somaxon's receipt of the
applicable Sublicensing Revenues from the Sublicensee and Somaxon
shall provide a calculation of the milestone or royalties due
under this Section 4.3 contemporaneously with the related payment
to BTT.
4.4 CALCULATIONS, PAYMENT AND TAX WITHHOLDING
Somaxon shall provide calculations of Net Sales in the Territory
and related royalty due on a quarterly basis within sixty (60)
days after the end of every calendar quarter.
Somaxon shall pay royalties based on the calculations referred to
above contemporaneously with the delivery of the required
calculation (i.e., within sixty (60) days of the end of each
calendar quarter) to a bank account designated by BTT.
Any and all payments payable under this License Agreement shall be
payable in U.S. dollars.
Somaxon has the right to withhold any tax which according to the
applicable tax treaty between the U.S. and Finland shall be
withheld from royalties and Somaxon shall pay the amounts so
withheld to the proper tax authorities as required by applicable
laws. In case of such withholding, Somaxon shall inform BTT in due
course, maintain official receipts of such payments and, upon
BTT's reasonable request, execute any customary documents which
are necessary for BTT to receive proper reimbursement or reduction
under the applicable regulations. At BTT's written request,
Somaxon shall make the milestone payments and/or royalty payments
based on sales of products, which BTT is obliged to make under the
Ivax Agreement and Minnesota Agreement directly to such parties
and deduct such payments from the royalty or other reimbursements
payable to BTT.
Interest on arrears on any late payments shall, after notice to
Somaxon from BTT, be assessed at the rate of [***] percent [***]%)
per month.
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5. SUPPLY OF MATERIAL
BTT shall supply one hundred percent (100%) of Somaxon's
requirements of the Product for clinical trial purposes. The price
for such supply of Products shall equal the direct costs from
third parties charged to BTT, including, but not limited to, the
costs charged by Patheon Inc. ("Patheon") and the manufacturer of
the active product ingredient, and shipping charges, without
xxxx-up in all cases.
BTT shall cooperate in good faith with Somaxon in its efforts to
negotiate and establish a direct supply agreement with Patheon and
any alternative supplier requested by Somaxon, in each case, for
the supply of commercial quantities of Products.
6. WARRANTIES
Somaxon has reviewed the Minnesota Agreement and the Ivax
Agreement attached hereto as Appendices 2-A and 2-B, respectively,
in the course of its due diligence investigation. The below
representations and warranties are qualified by the substance of
such agreements and Somaxon shall not be entitled to claim
indemnification for any breach of the representations and
warranties set forth below if a fact or event causing the breach
is set forth in text of such agreements.
6.1 GENERAL
Other than for a breach of the representations, warranties and
covenants of BTT herein and for the indemnification obligations
set forth in Section 14 below, BTT shall not be liable to Somaxon
in any respect or in any manner whatsoever for any damages or
losses which may be incurred by Somaxon in using the Patents or
the Know-How licensed to Somaxon hereunder, or in failing to
obtain results anticipated by Somaxon.
Except as expressly set forth below, BTT does not make, and hereby
excludes, any and all express or implied representations and
warranties against patent infringement with respect to the
Patents, the Know-How or Products manufactured, marketed and sold
under this License Agreement.
6.2 CORPORATE EXISTENCE AND POWER
Each Party represents and warrants to the other that it (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated,
and (ii) has full corporate power and authority and the legal
right to own and operate its property and assets and to carry on
its business as it is now being conducted and is contemplated in
this License Agreement, including, without limitation, the right
to grant the licenses granted hereunder.
6.3 AUTHORITY
Each Party represents and warrants to the other that it (i)
has the corporate power and authority and the legal right
to enter into this License Agreement and perform its
obligations hereunder; (ii) has taken all necessary
corporate action on its part required to authorize the
execution and delivery of this License Agreement and the
performance of its obligations hereunder; (iii) this
License Agreement has been duly executed and delivered on
behalf of such Party, and constitutes a legal, valid and
binding obligation of such Party and is enforceable against
it in accordance with its terms; and (iv) all necessary
consents, approvals and authorizations of all governmental
authorities and other persons or entities required to be
obtained by such party in connection with entry into this
License Agreement have been obtained.
6.4 GRANT OF RIGHTS
Each Party represents and warrants to the other that it has
not, and will not during the term of this License
Agreement, grant any right to any third party that would
conflict with the rights granted to the other Party
hereunder, and that it has (or will have at the time
performance is due) maintained and will maintain and keep
in full force and effect all agreements (including license
agreements) and filings (including patent filings)
necessary to perform its obligations hereunder, including,
in the case of BTT, the applicable license agreements with
the University of Minnesota and Ivax.
6.5 INTELLECTUAL PROPERTY
BTT represents and warrants to Somaxon that:
(a) it is not aware of any pending or threatened
litigation (and has not received any communication
relating thereto) which alleges that the practice of
a method claimed in any of the Patents or the use of
any Trade Xxxx infringes or misappropriates the
intellectual property rights of any third party;
(b) to the best of BTT's knowledge, there is no
unauthorized use, infringement or misappropriation
of any of the IPR or Trade Marks by any third party;
(c) no present or former collaborator, partner, employee
or consultant of BTT, or inventor under any of the
Patents, owns or has any proprietary, financial or
other interest, direct or indirect, in the IPR
(other than the monetary rights of Ivax, the
University of Minnesota and Alko Corporation) or any
Trade Xxxx, and no third party's confidential
information is included in the IPR; and
(d) to the best of BTT's knowledge, neither the practice
of the IPR, the use of any Trade Xxxx, nor the
development, manufacture or commercialization of the
Product, infringes any intellectual prop-
erty rights of any third party; and BTT has not
received notice or communication alleging that the
practice of the IPR infringes or may infringe the
rights of any third party, nor is BTT aware of any
reasonable basis for any such allegation.
7. DEVELOPMENT of the products AND REGULATORY MATTERS
7.1 DEVELOPMENT PLAN
The development of the Products will be undertaken at the
cost, expense and risk of Somaxon substantially in
accordance with the agreed development plan. However, BTT
shall cooperate with Somaxon in connection with the
research and development efforts for the Products. The
Parties' duties are listed in more detail in Appendix 7.1
hereto.
7.2 STEERING COMMITTEE
The Parties shall nominate two (2) persons to a steering
committee ("Steering Committee") which shall oversee and
co-ordinate the Product development work under Section 7.1
and, after regulatory approval, the sales and marketing
efforts described in Section 8.1 below . The Steering
Committee shall hold meetings when appropriate on one
Party's written request to the other Party and generally
once each calendar quarter. Unless the members of the
Steering Committee otherwise consent, a meeting of the
Steering Committee shall not be held sooner than within two
(2) weeks from the Party's notice to the other Party. The
Steering Committee may, in its discretion take action by
physical meeting, video-conference, tele-conference or
written consent. All decisions by the Steering Committee
shall be made by unanimous vote or written consent signed
by each member of the Steering Committee, with BTT and
Somaxon each having, collectively, one vote in all
decisions.
7.3 DILIGENCE
Subject to Somaxon's right to terminate this License
Agreement, Somaxon shall use commercially reasonable
efforts to develop a Product and to commercialise such
Product in the Territory, consistent with accepted business
practices and legal requirements, and not less than the
efforts typically used in the pharmaceutical industry to
develop products at comparable stages of development with
similar market potential. Notwithstanding the foregoing,
however, should it, based on objective data, be
commercially unreasonable to commercialise the Product in
countries within the Territory other than the United
States, the Steering Committee shall discuss the issue in
good faith and it shall release Somaxon from the foregoing
requirement to commercialise the Product in such other
countries outside the United States.
7.4 CLINICAL TRIALS AND REGULATORY MATTERS
With respect to the Product in Territory, Somaxon will be
responsible for conducting all future clinical trials and
for all regulatory filings and interactions
with necessary authorities in accordance with all
applicable laws and regulatory requirements in the
Territory and payment of filing fees and all other
associated costs for regulatory prosecution in any country
of the Territory, including without limitation the Phase 3
clinical program, application for a marketing authorisation
and all pharmacovigilance.
BTT shall be responsible for the pre-clinical studies
required by the FDA, and the payment of all other
associated costs for such pre-clinical studies; except
that, in the event (i) the FDA requires a patient
population in the pivotal Phase 3 studies for the Product
which exceeds 1,000 patients or (ii) the FDA requires the
use of an end point in addition to, or other than, the
Xxxx-Xxxxx Obsessive Compulsive Scale modified for
pathological gambling in connection with the pivotal phase
3 studies for the Product, BioTie shall bear [***] percent
([***]%) of all incremental costs and expenses associated
with such additional non-budgeted clinical and development
activities up to a maximum of U.S.$ [***], which
incremental costs and expenses [***] shall be deducted from
and offset against, on a pro rata basis, any milestone
payments otherwise due to BioTie from Somaxon under Section
4.1 above and the other [***] from the future royalties for
the Products due to BioTie from Somaxon under Section 4.2
above. In connection with the deduction of any such
incremental costs and expenses, Somaxon shall submit to
BioTie a calculation and written summary of the costs and
expenses in reasonable detail for BioTie to verify the
accuracy of the milestone and royalty deduction.
BTT shall actively consult with Somaxon on the design and
implementation of any such clinical trials as may be
reasonably requested by Somaxon. Any related NDA and other
foreign regulatory filings in the Territory shall be
submitted solely in the name of Somaxon.
Somaxon is aware that BTT has entered or shall enter into
agreement negotiations with third party(ies), under which
BTT entitles such third party/parties to conduct
development on and/or to commercialise the IPR outside of
the Territory. Somaxon agrees that it shall make available
and entitle such third party and/or parties to use the
pre-clinical and clinical studies conducted by Somaxon on
reasonable commercial terms to enable efficient development
and rapid market launch of the Products outside the
Territory; provided that Somaxon shall have no such
obligation with respect to clinical data or other
information or know-how related to (i) any Improvement of
Somaxon unless the Parties agree to a license for the
Improvement under the right of first refusal and
negotiation provisions of Section 10.1 or (ii) any Somaxon
Analogue/Derivative. The terms of such license agreement
with the third party and Somaxon shall include customary
provisions of agreements of such type and be on terms
reasonable for both parties.
7.5 PHARMACOVIGILANCE
The parties' respective obligations concerning
pharmacovigilance, adverse event reporting and related
matters are set forth in the "Joint Operating Pro-
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cedure on ADR reporting for Nalmefene" in the form attached
hereto as Appendix 7.5.
8. SALES AND MARKETING EXPENDITURE PLAN; MINIMUM ROYALTIES
8.1 SALES AND MARKETING EXPENDITURE PLAN
Somaxon shall draft a Sales and Marketing Expenditure Plan
to be submitted to BTT for its review and comment not later
than three (3) months prior to the planned commercial
launch of the Product in the Territory. Thereafter, Somaxon
shall prepare annual updates to the Sales and Marketing
Expenditure Plan for each calendar year before September 15
of the prior year. Each draft of the Sales and Marketing
Expenditure Plans shall be reviewed by the Steering
Committee, and Somaxon shall in good faith take into
account any comments from the Steering Committee in
connection with the finalization of each Sales and
Marketing Expenditure Plan. Following the receipt of
comments, if any, from the Steering Committee, Somaxon
shall finalize the Sales and Marketing Expenditure Plan
with the terms and expenditures, including (i) a budget for
aggregate annual sales and marketing expenditures (the
"BUDGET") and (ii) the targeted number of sales calls to
physicians ("TARGET SALES CALLS"), determined appropriate
by Somaxon in its sole discretion. Somaxon shall submit
each such final Sales and Marketing Expenditure Plan to the
Committee for its official records retention (which, in the
case of annual updates, shall be submitted not later than
November 15 of the prior year); provided, however that
Somaxon may amend and revise any such final Sales and
Marketing Expenditure Plan to reflect any material change
in condition not reasonably within the control of Somaxon
(including, but not limited to, Product safety issues,
recalls, changes in regulatory requirements, interruption
of supply and backorders).
With respect to each final or amended Sales and Marketing
Plan submitted hereunder, Somaxon, itself or through its
Affiliates, Sublicensees or contract sales force, if
applicable, shall spend not less than [***] percent
([***]%) and conduct not less than [***] percent ([***]%).
Upon written request from BTT, Somaxon shall affirm to BTT
its compliance with the foregoing minimum marketing
expenditures and sales calls. If, however, Somaxon fails to
spend the minimum Budget amount or conduct such minimum
Target Sales Calls, and Somaxon further fails to cure such
deficiencies within the first six (6) months of the
following period, BTT may elect to convert the license
granted under Section 2 of this License Agreement to
non-exclusive in the Territory by providing written notice
to Somaxon within thirty (30) days' of BTT's discovery of
Somaxon's non-compliance with this Section 8.
8.2 MINIMUM ROYALTIES
In order to maintain the exclusivity of the license granted
under Section 2 above, Somaxon may, at its option, make the
following minimum royalty payments to BTT with respect to
each year specified below (the "MINIMUM ROYALTY"):
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(a) Year 2009: U.S. $ [***];
(b) Year 2010: U.S. $ [***];
(c) Year 2011: U.S. $ [***];
(d) Year 2012: U.S. $ [***]; and
(e) Year 2013: U.S. $ [***].
Unless an extension is required to be granted pursuant to the
following paragraph, there shall be no [***] for any years
after the year [***].
Notwithstanding the foregoing, in the event of an unexpected
or extraordinary delay in the clinical development program as
a result of the FDA's review of the NDA or related clinical
activities, Somaxon may request an extension to the start date
of its obligation to pay the Minimum Royalty and BTT may not
unreasonably withhold its consent to such extension. If such
an extension is required, Somaxon's obligation to pay Minimum
Royalties shall begin instead upon the conclusion of such
unexpected or extraordinary delay and the annual schedule of
Minimum Royalties set forth above shall be correspondingly
delayed.
Any royalty payments made by Somaxon in accordance with
Sections 4.2 and 4.3 above shall be credited toward the
Minimum Royalty for the applicable year and, in the event the
royalty payment otherwise required with respect to such period
is less than Minimum Royalty for the applicable year, Somaxon
may, at its option, pay the remaining amount to BTT within
sixty (60) days after the conclusion of the applicable year
(the "MINIMUM ROYALTY DEADLINE").
If Somaxon fails to pay to BTT the Minimum Royalty for any
year specified above, BTT may elect to convert the license
granted under Section 2 of this License Agreement to
non-exclusive in the Territory by providing written notice to
Somaxon within sixty (60) days after the Minimum Royalty
Deadline subject to Somaxon's right to cure by paying the
Minimum Royalty to BTT within five (5) business days of BTT's
notice.
9. PATENT MAINTENANCE
Subject to the licensed rights granted to Somaxon under this
License Agreement, BTT retains ownership of all IPR.
Subject to the rights and obligations set forth in the
Minnesota Agreement, each Party shall maintain, at its own
expense, any patents and patent applications held in its name
and shall have the primary right and obligation to control the
prosecution, maintenance and defend against infringement with
respect to such patents and patent applications. BTT shall
provide written notice to Somaxon from time to time as BTT
and/or the University of Minnesota makes
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any required maintenance payments with respect to the Patents
and as any new material information relating to the
preparation, filing, prosecution or maintenance of the IPR
comes to its attention, including, but not limited to, similar
notifications received by BTT from the University of Minnesota
or Ivax.
In the event the responsible party fails to make any required
payments or take any action required for the proper
preparation, filing, prosecution or maintenance of the
applicable patents and patent applications, the other Party
shall have the right to make any such required payments or
take any such required action. The Parties shall provide
reasonable assistance to one another in any such activities.
9.1 IPR DEFENCE
In the event of a material infringement or misappropriation in
the Territory by a third party of any IPR, Somaxon shall have
the sole and exclusive right (but not the obligation) to
pursue any and all injunctive, compensatory and other remedies
and relief against such third party unless the license under
this License Agreement has become non-exclusive. In the event
that Somaxon chooses to pursue its rights hereunder, BTT shall
use all reasonable efforts to assist and co-operate with
Somaxon, and Somaxon shall reimburse BTT for its out-of-pocket
expenses resulting from such assistance. Somaxon shall bear
the costs and expenses relating to such pursuit. In the event
Somaxon recovers any damages or other amounts, after deducting
for BTT's out-of-pocket expenses and Somaxon's costs and
expenses relating to such pursuit, Somaxon shall pay to BTT an
amount equal to applicable royalty under Section 4.2 applied
to the remaining recovery.
In the event that Somaxon takes no action within six (6)
months of notice of any such infringement or misappropriation,
BTT shall have the right, but not the obligation, to take
action in its own name and its own expense to secure the
cessation of any such infringement or misappropriation or to
institute, prosecute and control legal proceedings to prevent
or restrain such infringement or misappropriation concerning
the IPR in the Territory. If requested by BTT, Somaxon agrees
to join any action or legal proceeding to enforce the IPR
against any third party. If BTT takes action or prosecutes
legal proceedings relating to the infringement or
misappropriation of the IPR in the Territory, after payment of
Somaxon's out-of-pocket costs, all other damages and costs
recovered in any action or proceedings or by way of settlement
shall belong to BTT.
9.2 PATENT INFRINGEMENTS
Upon knowledge of the commencement of any suit against BTT or
Somaxon which is based in whole or in part on a claim that the
IPR or any Products marketed, sold or distributed by Somaxon
under this License Agreement constitute an infringement of any
third party's patent, BTT or Somaxon, as the case may be,
shall promptly notify the other in writing.
With respect to any such suit outside the Territory, BTT or
its licensee in territories outside the Territory shall, at
its cost and with counsel reasonably acceptable to Somaxon,
assume and conduct the defence of any suit or claims brought
or asserted, or demand made, against BTT or Somaxon insofar as
it is based on and would affect the IPR in the Territory.
Somaxon shall be entitled to participate in any such
proceeding with separate counsel at Somaxon's own expense.
With respect to any such suit within the Territory, Somaxon
shall, at its cost and with counsel reasonable acceptable to
BTT, assume and conduct the defence of any suit or claims
brought or asserted, or demand made, against BTT or Somaxon
insofar as it is based on the IPR.
10. IMPROVEMENTS AND JOINT INVENTIONS
10.1 IMPROVEMENTS
During the life of the proprietary nature of the IPR, each
Party shall disclose any Improvements (but excluding any
Somaxon Analogue/Derivative) to the other Party, whether
patentable or not, without delay in accordance with this
Section 10.1.
Any Improvement of BTT shall be deemed to be automatically
included in the IPR and the license set forth in Section 2
above with respect to the Territory. BTT shall take measures
within its discretion to seek patent or to otherwise protect
such Improvement(s) and should BTT not be willing to protect
the Improvements within the Territory it shall forthwith
inform Somaxon thereof and Somaxon shall then have the right
to seek patents or to otherwise protect the improvement in its
own name.
Somaxon hereby agrees to grant BTT an exclusive right of first
refusal and negotiation (with the right to sublicense) on
reasonable commercial terms to utilize outside the Territory
any Improvement of Somaxon other than a Somaxon
Analog/Derivative (each such Improvement, a "NEW PRODUCT") as
follows:
If during the term of this License Agreement, Somaxon
makes or acquires rights to a New Product, Somaxon shall
notify BTT of such New Product. Somaxon shall, during
the following ninety (90) days, if requested by BTT,
make appropriate representatives available to meet with
BTT's representatives to provide a xxxxxx description of
the data and information then available to Somaxon with
respect to such New Product, and to answer the Receiving
Party's questions in that regard. In addition, Somaxon
shall engage in good faith negotiations with BTT over a
period of at least one hundred twenty (120) days
following the end of such ninety (90)-day evaluation
period, in an attempt to reach agreement with BTT with
respect to the exclusive development and
commercialization by BTT of such New Product outside the
Territory. If no such agreement is reached during that
period, thereafter, Somaxon shall give BTT at least
sixty (60) days' written notice prior to signing any
agreement with any third party
(either as a definitive agreement or a mutually signed
term sheet) with respect to such New Product, and during
such sixty (60) day period, BTT may accept and agree to
such agreement on such terms offered to the third party
in lieu of such third party.
The right of first refusal and first negotiation set forth in
this Section 10.1 shall include rights for any joint invention
under Section 10.2 below but shall not apply to any Somaxon
Analogues/Derivatives. Somaxon shall retain all worldwide
right, title and interest to any Somaxon Analogue/Derivative
and have no obligation to disclose the same to BTT. However,
Somaxon acknowledges that, in order to commercialize any
Somaxon Analogue/Derivative that would infringe a valid claim
under the Patents in any territory outside the Territory,
Somaxon would be required to obtain a license under the
applicable Patents.
10.2 JOINT INVENTIONS
For all inventions, if any, made jointly by the Parties or in
which IPR and Somaxon's proprietary rights and/or technologies
are combined and which are patentable only on the basis of
such combination, the Parties shall apply for the patent
protection thereto upon the written request of either Party.
Patent protection for such invention(s) shall be applied for
in the name of the Parties as co-assignees and co-owners of
such invention(s). Somaxon shall take lead responsibility for
patent protection on such joint inventions in the Territory
and BTT outside the Territory.
If either Party does not wish to join in such patent
application (the wish to be expressed in writing), then the
other Party may seek, obtain and maintain such patent(s) in
its own name and at its sole expense and shall have sole and
exclusive rights to control and use the inventions covered by
such patents(s) without any compensation to the other Party.
11. TERMINATION
Somaxon will have the right to terminate the License upon not
less than thirty (30) days' written notice to BTT if continued
product development poses an unacceptable safety risk to
patients or if the product fails to achieve a satisfactory
level of efficacy. For the period before the applicable
marketing authorisation (i.e., NDA) has been granted,
Somaxon's right to terminate based on the aforesaid must be
evidenced by objective data. For the period after the
applicable marketing authorisation (i.e., NDA) has been
granted, Somaxon's right to terminate based on the aforesaid
must be evidenced by objective FDA concerns concerning Product
safety or efficacy.
BTT may terminate the License Agreement upon not less than
thirty (30) days' written notice to Somaxon if Somaxon, either
directly or through its Affiliate, contractor or agent,
challenges the validity of any Patents or Patent Rights or
contests the secrecy of the know how licensed to Somaxon under
the License
Agreement and does not cease such challenge within thirty (30)
days of the receipt of written notice from BTT.
Either Party shall have the right, without prejudice to any
other rights or remedies available to it, to terminate the
License Agreement by a written notice to the other Party in
the event that:
(a) The other Party becomes insolvent, is adjudged bankrupt,
applies for settlement with its creditors, makes an
assignment for the benefit of its creditors, voluntarily
files for bankruptcy or has a receiver or a trustee (or
equivalent) in bankruptcy appointed by reason of its
insolvency, or in the event an involuntarily bankruptcy
action is commenced against the other Party and it is
not dismissed within (90) days, or if the other Party
becomes the subject of liquidation or dissolution
proceedings or otherwise discontinues its business; or
(b) The other Party commits a material breach of the License
Agreement and within sixty (60) days after receipt of
written notice thereof fails to either cure the breach,
or with respect to any breach that has not been cured by
such time, if the breaching Party has proposed a course
of action to cure the breach and is acting in good faith
to cure same but has not cured the breach by the
sixtieth (60th) day, such period shall be extended to
such period of time as is reasonably necessary to permit
the breach to be cured.
The provisions of the following Sections shall survive the
termination or expiration of this License Agreement: 1, 11,
13, 14, 15, 16 and 17. In addition, except in the case of the
termination of this License Agreement for Somaxon's breach in
accordance with Section 11(b) above, the fully paid-up license
to Know How set forth in Section 2 shall survive the
termination or expiration of this License Agreement.
In the event of BTT's termination of this License Agreement
for Somaxon's breach under subsection (b) above and Somaxon's
determination not to continue to promote and market the
Product, Somaxon shall promptly (and in no event later than
thirty (30) days from the termination) do all acts and execute
all documents reasonably requested by BTT in order to provide
for the transfer to BTT of the Trade Marks, any product
registration and/or any preclinical or clinical data with
respect to the Product in the Field (e.g., NDA). BTT shall
bear all costs and expenses of the Parties related to the
reversion of the Trade Marks, any product registration and/or
any preclinical or clinical data.
Notwithstanding the termination, Somaxon and its Sublicensees
will be entitled to continue selling any Product produced
prior to such termination but subject to the continuing
obligation to pay royalties on such sales.
12. COMPETITION
For the period commencing at the signing of this License
Agreement through the eighth (8th) anniversary of the first
commercial sale of the Product by Somaxon in the Territory
(the "EIGHTH YEAR DATE"), or such earlier period of time as
the Parties may consent to in writing, except for the Product,
Somaxon shall not directly or indirectly, market, distribute,
sell or have sold any Competitive Product. The Parties
acknowledge that any Product or Improvement for which Somaxon
pays royalties on Net Sales hereunder shall not be deemed to
be a prohibited hereby.
Notwithstanding the foregoing, the Parties have explicitly
agreed that Somaxon may introduce a Competitive Product in the
Territory after the fifth (5th) anniversary of the first
commercial sale of the Product provided that Somaxon pays for
each year after the introduction of the Competitive Product
and until the Eighth Year Date not less than the Minimum
Royalty set forth in the table in Section 8.2 for the Year
2013, subject to the other terms of such section.
Similarly, until the Eighth Year Date, or such earlier period
of time as the Parties may consent to in writing, BTT shall
not directly or indirectly, market, distribute, sell or have
sold in the Territory any Competitive Product, unless the
license granted in this License Agreement has been converted
into a non-exclusive license in connection with an uncured
breach by Somaxon.
The non-competition restriction of this Section 12 shall not
apply, on a country-by-country and Product-by-Product basis,
in the event that for scientific or technical reasons it is
not possible using commercially reasonable efforts to develop
a Product or for scientific reasons Somaxon cannot obtain a
regulatory approval for the Product. Furthermore, upon the
termination of this License Agreement whereby the Trade Marks
and any applicable product registration reverts to BTT under
Section 11 above, this Section 12 shall terminate.
Any failure by either Party to comply with the provisions of
this Section 12 shall be a material breach of this License
Agreement and entitle the other Party to terminate this
License Agreement subject to the relevant competition
(anti-trust) regulations and the cure periods specified in
Section 11. Should such termination not be allowed with
respect to Somaxon under the applicable competition
regulations, the license granted to Somaxon in this License
Agreement shall become non-exclusive. The termination and/or
the change into non-exclusive shall be without prejudice to
any other remedy to which BTT may be entitled for such breach.
13. RECORD KEEPING AND AUDITING
Somaxon shall keep or cause to be kept in sufficient detail
accurate books and records relating to the Net Sales of the
Product and improvements thereto as well as relating to any
sublicense granted in order to enable the amount of payable
royalties to be determined and verified.
Upon the written request of BTT an independent certified
public accountant may be retained to review such books and
records to verify the accuracy of the payments made or payable
hereunder not more than four (4) times per calendar year.
Somaxon shall provide such information and explanations, as
the accountant performing the audit shall require to verify
the accuracy of the payments made or payable hereunder and to
satisfy BTT that the terms and conditions of the License
Agreement are being complied with. If the verification
discloses an underpayment to BTT of more than five percent
(5%) of the amount due, Somaxon shall immediately and without
demand pay to BTT the difference between an amount already
paid and the correct amount shown to be due and payable as a
result of audit and promptly on demand reimburse to BTT the
fees and costs of the accountant, and the reasonable costs
incurred by BTT in respect of the audit. Any possible
overpayment shall be deducted from the royalties owed by
Somaxon to BTT.
Somaxon agrees that any complimentary physician samples of
Product distributed by it hereunder shall be labeled "not for
resale" or similarly marked as sample products consistent with
prevailing pharmaceutical industry practices.
14. LIABILITY AND INDEMNIFICATION
Subject to BTT's indemnification obligations below, Somaxon
shall have the full responsibility for pre-clinical and
clinical trials conducted by it as well as for the Products
marketed, distributed, manufactured, have manufactured or sold
by it under the license granted by BTT under this License
Agreement and shall bear any and all liability resulting
thereof.
Somaxon shall indemnify, defend and hold BTT and its
directors, officers, agents and other Affiliates (each, a "BTT
INDEMNITEE") harmless from any liabilities, damages, losses,
costs, claims or expenditures ("DAMAGES") incurred by a BTT
Indemnitee as a result of the pre-clinical or clinical trials
conducted by or on behalf of Somaxon after the Effective Date
or of the Products manufactured, have manufactured,
distributed, marketed or sold by Somaxon, including, but not
limited to, damage to or loss of property or injury to persons
caused by the pre-clinical or clinical trials of the Products;
except for Damages which arise from (i) a failure by a BTT
Indemnitee to adhere to the terms of this License Agreement;
(ii) any negligence, breach of warranty (express or implied)
or recklessness or willful misconduct on the part of a BTT
Indemnitee; (iii) a breach of any applicable federal, state or
local law by a BTT Indemnitee or (iv) those Damages for which
BTT has an obligation to indemnify Somaxon pursuant to the
indemnification set forth below, as to which Damages each
Party shall indemnify the other to the extent of its
respective liability for the Damages.
BTT shall indemnify, defend and hold Somaxon and its
directors, officers, agents and other Affiliates (each, a
"SOMAXON INDEMNITEE") harmless from any Damages incurred by a
Somaxon Indemnitee as a result of the pre-clinical or clinical
trials conducted by or on behalf of BTT before the Effective
Date or the breach of any representations, warranties
covenants or other agreements
of BTT set forth in this License Agreement; except for Damages
which arise from (i) a failure by a Somaxon Indemnitee to
adhere to the terms of this License Agreement; (ii) any
negligence, breach of warranty (express or implied) or
recklessness or willful misconduct on the part of a Somaxon
Indemnitee; (iii) a breach of any applicable federal, state or
local law by a Somaxon Indemnitee or (iv) those Damages for
which Somaxon has an obligation to indemnify BTT pursuant to
the indemnification set forth above, as to which Damages each
Party shall indemnify the other to the extent of its
respective liability for the Damages.
Somaxon shall acquire and maintain in force as long as
Products using the IPR are being sold with a reputable
insurance company a policy of general liability insurance,
including the clinical development of the Product and, at such
time as commercial sales of the Product commence, the sale of
the Product. The insurance shall be in amounts reasonable when
compared with insurance obtained by companies engaged in
similar businesses. Somaxon shall provide evidence of the
insurance to BTT on request.
Likewise, BTT shall acquire and maintain in force for the term
of this License Agreement and for a period of five (5) years
thereafter with a reputable insurance company a policy of
general liability insurance sufficient to satisfy the
indemnification obligations of BTT hereunder. The insurance
shall be in amounts reasonable when compared with insurance
obtained by companies engaged in similar businesses. BTT shall
provide evidence of the insurance to Somaxon on request.
15. CONFIDENTIALITY
The Parties agree that during the term of this License
Agreement and for a period of seven (7) years after the
termination or expiration of this License Agreement, neither
Party shall use or disclose to any third party, without the
prior written consent of the other Party any Confidential
Information regarding that other Party. The non-disclosure
extends also to the research and development work performed by
the Parties under this License Agreement and the results of
such work. Nothing herein shall, however, limit (i) the
Parties' right to disclose information to their Affiliates
subject to their Affiliates' agreement to be bound the terms
of this Section 15, or (ii) either Party seeking regulatory
clearance from the FDA (or any other authorities). In
addition, from and after the expiration of all licenses
contained in this License Agreement, nothing herein shall
limit BTT from commercializing the IPR on a stand alone basis
or in co-operation with third parties after the term of this
License Agreement by using the IPR. In addition, nothing
herein shall prohibit the use or disclosure of Know How or
Improvements where this is permitted by the other terms of
this License Agreement.
It is, however, acknowledged and understood by the Parties
that
(a) the Parties may have a duty, as publicly listed
companies, to disclose the key contents of this License
Agreement and the status of the co-operation. Nothing in
this License Agreement may limit the Parties' right to
follow and act on the basis of the applicable statutory
disclosure requirements; provided, however, that if a
protective order or similar confidential treatment is
available with respect to such proposed disclosure under
applicable rules or regulations, the party proposing to
make the disclosure, shall promptly give notice to the
other Party in order to provide the other Party with the
opportunity to seek such protective order or similar
confidential treatment to limit the scope of the
disclosure; and
(b) the obligations in this Section 15 shall not apply to
information that:
(i) is known by the receiving Party, as evidenced by
its records, at the time of receipt and not
through a prior disclosure by the disclosing
Party;
(ii) is at the time of disclosure or thereafter becomes
published or otherwise part of the public domain
through no breach of this License Agreement by the
receiving Party;
(iii) is subsequently disclosed to the receiving Party
as evidenced by its records, by a third party
having the right to make such a disclosure;
(iv) is developed by the receiving Party as evidenced
by its records independently of information
received by it from the disclosing Party; and
(v) is required by law, regulation, rule, act or order
of any governmental authority or agency to be
disclosed by a Party; provided, however, that if a
protective order or similar confidential treatment
is available with respect to such proposed
disclosure under applicable rules or regulations,
the party proposing to make the disclosure, shall
promptly give notice to the other Party in order
to provide the other Party with the opportunity to
seek such protective order or similar confidential
treatment to limit the scope of the disclosure.
The content of the initial press release to be issued by the
Parties relating to this License Agreement and the transaction
contemplated hereunder is attached hereto as Appendix 15. The
form and content of any subsequent public announcement to be
made by either Party regarding this License Agreement, or the
subject matter contained herein, shall be delivered to the
other Party at least two (2) business days prior to
publication and shall be subject to the prior written consent
of the other Party (which consent may not be unreasonably
withheld or delayed), except as may be required by applicable
law (including disclosure requirements for publicly listed
companies) in which event each Party shall use commercially
reasonable efforts to give the other Party reasonable advance
notice and reasonable opportunity to review any such
disclosure.
16. FORCE MAJEURE
In the event of force majeure, i.e., in the event that further
performance of this License Agreement or any part hereof by
either Party shall be rendered impossible by or as a
consequence of any Acts of God, labour disputes, delays in
commercial carriers, strikes, boycotts, war, terrorism, riot
or as a result of any law, regulation, order, rule, direction,
priority, seizure, allocation, requisition, or any further
official action by any department, bureau, board,
administration, or other instrumentality or agency, or any
other cause beyond the reasonable control of such Party (a
"FORCE MAJEURE EVENT"), such Party shall not be considered in
default hereunder by reason of any failure to perform
occasioned thereby.
In the event that failure or delay arises out of or results
from any such Force Majeure Event, both Parties shall
co-operate in an effort to agree upon the establishment of
such alternative arrangements not subject to such failure or
delay as will confer upon them benefits comparable in
character and substantially equivalent in amount to those
intended to be conferred by this License Agreement, or terms
and conditions not materially more burdensome to either Party
than those herein provided.
However, in the event any individual Force Majeure Event
results in a failure or delay of a Party to perform its
obligations hereunder for a period in excess of ten (10)
months, the other Party may terminate this License Agreement
by giving written notice to the other party.
17. NOTICES
All notices to be given by each Party to the other shall be
made in writing by (a) an internationally recognized courier
service guaranteeing next-day or two-day delivery, charges
prepaid; (b) facsimile (with original promptly sent in the
manner set forth in clause (a)); or (c) email (with original
promptly sent in the manner set forth in clause (a)), and
addressed respectively to the Parties.
Notices to BTT shall be sent to:
Name: BioTie Therapies Corp.
Attn: Vice President Kai Lahdesmaki
Address: Xxxxxxxxxxx 0, XXX-00000 Xxxxx, Xxxxxxx
Fax: + 000 0 000 0000
Email: xxx.xxxxxxxxxx@xxxxxx.xxx
With a copy to:
Xxxxxx Xxxxxxxx Attorneys at Law Ltd., Attn: Xx. Xxxxx
Xxxxxxxx, Esq., X.X. Xxx 0, XXX-00000 Xxxxx, Xxxxxxx, Fax +358
2 2130 630, Email: xxxxx.xxxxxxxx@xxxxxxxxxxxxxxx.xx
Notices to Somaxon shall be sent to:
Name: Somaxon Pharmaceuticals, Inc.
Attn: Xxxxxxx Xxxxx, President and CEO
Address: 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000 XXX
Fax: + 0 (000) 000-0000
Email: xxxxxx@xxxxxxx.xxx
With a copy to:
Xxxxxx & Xxxxxxx LLP, Attn: Xxxxx X. Xxxxx, Esq., 00000 Xxxx
Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000, Fax +1 (858)
523-5450; Email: xxxxx.xxxxx@xx.xxx.
Each Party may by written notice to the other Party change the
address to which any such communication shall be sent, and,
after notice of such change has been received, any
communication shall be sent to such Party at such changed
address.
18. ASSIGNMENT
Neither Party is allowed to assign any rights, benefits or
obligations under this License Agreement to any third parties
without the other Party's prior written consent thereto;
provided, however, that a Party may assign its rights and
obligations to (i) any Affiliate or (ii) the successor in
interest to its business or a purchaser of all or
substantially all of its assets relating to the Product;
provided further that such assignee assumes in writing the
obligations and duties of the Party under this License
Agreement, including, but not limited to, the minimum Budget
and Target Sales Calls and the Minimum Royalty. In the event
of any failure of any assignee to comply with the minimum
Budget and Target Sales Calls, BTT shall have the right to
elect to convert the license granted under Section 2 of this
License Agreement to non-exclusive by providing the notice
specified in Section 8 above. For the avoidance of doubt it is
agreed and understood that this License Agreement shall remain
valid and binding towards any and all legal successors of the
Parties.
19. RELATIONSHIP OF PARTIES
Nothing in this License Agreement is intended or shall be
deemed to constitute a partnership, agency, employer -
employee or joint venture relationship between the Parties. No
Party shall incur any debts or make any commitments for the
other, except to the extent, if at all, specifically provided
herein.
20. NO WAIVER
Failure by any Party at any time or times to require
performance of any provisions of this License Agreement shall
in no manner affect its right to enforce the same, and the
waiver by any Party of any breach of any provision of this
License Agreement shall not be construed to be a waiver by
such Party of any succeeding breach of such provision or
waiver by such Party of any breach of any other provision
hereof.
21. COMPLIANCE WITH LAWS
Each Party shall comply with all laws, rules, regulations and
policies applicable to the conduct of its duties and
obligations under this License Agreement.
22. SEVERABILITY OF CLAUSES
In case of one (1) or more of the provisions contained in this
License Agreement shall, for any reason, be held invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this License Agreement, but this License
Agreement shall be construed by limiting such invalid, illegal
or unenforceable provision or, so that the invalid, illegal or
unenforceable provision is substituted by a valid, legal and
enforceable provision which as nearly as possible gives effect
to the Parties' intention expressed in this License Agreement.
23. AMENDMENTS
No amendment, modification or supplement of any provisions of
this License Agreement shall be valid or effective unless made
in writing and signed by a duly authorized representative of
each Party. By an instrument in writing, any Party may waive
compliance by the other Party with any term or provision of
this License Agreement that such other Party was or is
obligated to comply with or perform.
24. ENTIRE AGREEMENT
This License Agreement constitutes the entire agreement
between the Parties regarding the subject matter hereof and
supersedes all written or oral prior agreements or
understandings.
The Appendices to this License Agreement are an integral part
hereof.
25. GOVERNING LAW
This License Agreement is acknowledged to have been made and
shall be construed, governed, interpreted and applied in
accordance with the laws of England without giving effect to
its choice of law provisions.
26. DISPUTE RESOLUTION
In the event of any controversy, claim or dispute arising out
of or relating to any provisions of this License Agreement,
the Parties shall try to settle those conflicts amicably
between themselves within thirty (30) days as of either
Party's written request for amicable settlement negotiations.
Should the Parties fail to settle, the matter in dispute shall
be finally and exclusively settled by binding arbitration in
accordance with Rules of the International Chamber of
Commerce. The arbitration shall be held in the English
language in London, England. In any such arbitration, Somaxon
shall select one (1) arbitrator and BTT shall select one (1)
arbitrator, who, in each case, shall be an experienced lawyer
or judge (or retired lawyer or judge) and fluent in English.
The arbitrators selected by the Parties shall select a third
arbitrator to act as Chairman. Judgment upon the award may be
entered in any Court having jurisdiction.
27. SPECIFIC PERFORMANCE
The Parties agree that if any of the provisions of this
License Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage
would occur, no adequate remedy at law would exist and damages
would be difficult to determine, and that the Parties shall be
entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity. Notwithstanding
Section 26 above, either Party may apply to any court having
jurisdiction over such dispute or controversy to seek interim
injunctive relief hereunder until the arbitration award is
rendered or the controversy is otherwise resolved. EACH OF THE
PARTIES HERETO
HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE ENGLISH
COURTS FOR SUCH PURPOSE.
28. EXPENSES
Each Party shall bear its own direct and indirect expenses
incurred in connection with the negotiation and preparation of
this License Agreement and, except as specifically set forth
herein, the performance of the obligations contemplated hereby
and thereby. If any action at law or in equity is necessary to
enforce or interpret the terms of this License Agreement, the
prevailing Party shall be entitled to reasonable attorneys'
fees, costs and necessary disbursements in addition to any
other relief to which such Party may be entitled.
29. APPENDICES AND HEADINGS
Each Appendix to which reference is made in this License
Agreement and which is attached hereto shall be incorporated
in this License Agreement by such reference.
The headings and sub-headings of this License Agreement are
for convenience only and do not in any way limit or affect the
meaning or interpretation of the provisions of this License
Agreement.
30. COUNTERPARTS OF THIS LICENSE AGREEMENT
This License Agreement has been executed in two (2) identical
counterparts, one (1) for BTT and one (1) for Somaxon.
IN WITNESS WHEREOF, the Parties hereto have duly executed this
License Agreement in Helsinki, Finland as of the day and year
first above written.
BioTie Therapies Corp. Somaxon Pharmaceuticals, Inc.
/s/ Xxxx Xxxxxxxx /s/ Xxxxxxx Xxxxx
--------------------- -----------------------
Name: Xxxx Xxxxxxxx Name: Xxxxxxx Xxxxx
Title: President and Chief Title: President and Chief
Executive Officer Executive Officer
