EXHIBIT 10.1
EXECUTION COPY
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omissions.
AMENDED AND RESTATED AGREEMENT
BY AND BETWEEN
BAYER HEALTHCARE AG
AND
MILLENNIUM PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PAGES
Article I Definitions..................................................1
Section 1.1 "Additional [**] CT"................................1
Section 1.2 "Additional Bayer Focus Area".......................1
Section 1.3 "Affected Licensee".................................1
Section 1.4 "Affiliate".........................................2
Section 1.5 "Annual Sales Volume"...............................2
Section 1.6 "Bayer Configured Assay"............................2
Section 1.7 "Bayer CT Development Program"......................2
Section 1.8 "Bayer QT Development Program"......................2
Section 1.9 "Bayer Returned Target Know-How"....................2
Section 1.10 "Bayer Returned Target Patent Rights"...............3
Section 1.11 "Bayer Royalty Product".............................3
Section 1.12 "Biology-Related IP"................................3
Section 1.13 "Cell-Based Assay"..................................3
Section 1.14 "CFA" or "Collaborative Focus Area".................3
Section 1.15 "CFA QT"............................................4
Section 1.16 "Change of Control".................................4
Section 1.17 "Combination Product"...............................4
Section 1.18 "Confidential Information"..........................4
Section 1.19 "Configured Assay"..................................5
Section 1.20 "Contract Quarter"..................................5
Section 1.21 "Contract Year".....................................5
Section 1.22 "Conversion Pool"...................................5
Section 1.23 "Conversion Program"................................5
Section 1.24 "Conversion Program Term"...........................5
Section 1.25 "Conversion Target".................................5
Section 1.26 "CT Assay Configuration Deadline"...................6
Section 1.27 "CV Angiogenesis"...................................6
Section 1.28 "Designated [**] CT"................................6
Section 1.29 "Designated Scientific Issue".......................6
Section 1.30 "Development Candidate".............................6
Section 1.31 "Discovery Pool"....................................6
Section 1.32 "Discovery Program".................................6
Section 1.33 "Discovery Program Term"............................7
Section 1.34 "Disease/Therapeutic Hypothesis"....................7
Section 1.35 "Dropped Genes".....................................7
Section 1.36 "Druggable Target"..................................7
Section 1.37 "Effective Date"....................................7
Section 1.38 "Enabling Publication"..............................7
Section 1.39 "Enabled CT"........................................8
Section 1.40 "Enabled [**] CT"...................................8
Section 1.41 "Executive Officers"................................8
Section 1.42 "Failed QT".........................................8
Section 1.43 "FDA Approval"......................................8
Section 1.44 "Fee-For-Service Work"..............................8
Section 1.45 "Field".............................................8
Section 1.46 "First Commercial Sale".............................8
Section 1.47 "FTE"...............................................9
Section 1.48 "Know-How"..........................................9
Section 1.49 "Known to Bayer"....................................9
Section 1.50 "Known to Millennium"...............................9
Section 1.51 "Licensed Indication(s)"............................9
Section 1.52 "Millennium Configured Assay".......................9
Section 1.53 "Millennium Know-How"...............................9
Section 1.54 "Millennium [**]"..................................10
Section 1.55 "Millennium Patent Rights".........................10
Section 1.56 "Millennium Royalty Products"......................10
Section 1.57 "Net Sales"........................................11
Section 1.58 "New Scientific Data"..............................11
Section 1.59 "[**]".............................................12
Section 1.60 "[**] QT"..........................................12
Section 1.61 "[**] CT"..........................................12
Section 1.62 "[**] Protein".....................................12
Section 1.63 "Novel Protein"....................................12
Section 1.64 "[**]".............................................12
Section 1.65 "Party"............................................12
Section 1.66 "Patent Right".....................................12
Section 1.67 "Program Director".................................12
Section 1.68 "Program Term".....................................12
Section 1.69 "Protein"..........................................13
Section 1.70 "Public Domain"....................................13
Section 1.71 "Publication Date".................................13
Section 1.72 "Qualified Target" or "QT".........................13
Section 1.73 "Related Third Party Payments".....................13
Section 1.74 "Required Pharmacogenomic Assay"...................13
Section 1.75 "Research Plan"....................................14
Section 1.76 "[**]".............................................14
Section 1.77 "[**]".............................................14
Section 1.78 "[**] Areas".......................................14
Section 1.79 "Royalty-Bearing Product"..........................14
Section 1.80 "Scientific Failure"...............................14
Section 1.81 "Selected CT"......................................14
Section 1.82 "Selected [**] CT".................................14
Section 1.83 "Selected QT"......................................14
Section 1.84 "Small Molecule"...................................14
Section 1.85 "Small Molecule Drug"..............................14
Section 1.86 "Specific Data"....................................15
Section 1.87 "Strategic Project"................................15
Section 1.88 "Target by Class Drug Discovery Approach"..........15
Section 1.89 "Territory"........................................15
Section 1.90 "Unconfigured [**] CT".............................15
Section 1.91 "Unrecognized Protein".............................15
Section 1.92 "Urinary Incontinence".............................15
Section 1.93 "Urology"..........................................15
Section 1.94 Additional Definitions.............................15
Article II Discovery Program...........................................17
Section 2.1 Target Discovery Program Overview..................17
Section 2.2 Exclusivity........................................18
Section 2.3 Management of the Discovery Program................18
Section 2.4 Research Plan......................................20
Section 2.5 Discovery Program - General........................21
Section 2.6 Selection of Druggable Targets.....................22
Section 2.7 Identification and Selection of QTs................24
Section 2.8 Additional Activities in CFAs......................25
Section 2.9 [**] Research Activities...........................27
Section 2.10 Progression of Selected QT from First to
Third Stages.......................................27
Section 2.11 Diligence Obligation...............................28
Section 2.12 Millennium Participation in Development............28
Section 2.13 Reports............................................29
Section 2.14 Decision Making....................................29
Article III Conversion Program..........................................30
Section 3.1 Overview...........................................30
Section 3.2 Management of the Conversion Program...............30
Section 3.3 Identification and Provision of Conversion Targets.31
Section 3.4 Changes to Licensed Indications and [**] Status....32
Section 3.5 Selection of CTs by Bayer; Assay Configuration;
Unconfigured [**] CTs..............................33
Section 3.6 Enabling Publications..............................33
Section 3.7 Designated [**] CTs................................34
Section 3.8 Output Obligations.................................34
Section 3.9 Progression of Selected CT from First to
Third Stages.......................................35
Section 3.10 End of Conversion Program Term.....................36
Section 3.11 Compliance with Law................................36
Section 3.12 Patent-Related Information.........................36
Section 3.13 Biological Materials...............................37
Section 3.14 Identification of Restrictions.....................38
Section 3.15 Millennium Participation in Development............38
Section 3.16 Reporting Requirements.............................38
Section 3.17 Decision-Making....................................39
Section 3.18 Post-Conversion Program Term.......................40
Article IV Bayer and Millennium Rights and Obligations Relating to
Selected QTs, Selected CTs and CTs..........................40
Section 4.1 License Grant with Respect to Selected QTs and
Selected CTs.......................................40
Section 4.2 License Grant, Retained Rights and Option With
Respect to Returned QTs, Returned CTs and Selected
[**] CTs...........................................41
Section 4.3 [**] QTs...........................................45
Section 4.4 Non-Suit Covenants.................................46
Section 4.5 Non-Suit Covenant With Respect to Required
Pharmacogenomic Assays.............................47
Section 4.6 Retained Rights....................................47
Article V [**]; Additional Development Programs.......................48
Section 5.1 Optioned Returned Targets..........................48
Section 5.2 [**] Areas.........................................48
Section 5.3 [**] for New CFAs QTs..............................49
Section 5.4 Collaborative Technology Development Program.......49
Article VI Financial Provisions........................................49
Section 6.1 License Payment....................................49
Section 6.2 Program Payments...................................49
Section 6.3 Success Fees.......................................50
Section 6.4 Royalty Payments to Millennium.....................50
Section 6.5 Royalty Payments to Bayer..........................52
Section 6.6 Related Third Party Payments.......................52
Section 6.7 Royalties Payable Only Once........................53
Section 6.8 Sales to Affiliates and Sublicensees...............53
Section 6.9 Royalty Reports and Accounting.....................54
Section 6.10 Currency and Method of Payments; Late Payments.....54
Section 6.11 Tax Withholding....................................55
Section 6.12 Blocked Payments...................................55
Article VII Intellectual Property Ownership, Protection and
Related Matters.............................................55
Section 7.1 Ownership..........................................55
Section 7.2 Prosecution and Maintenance of Patent Rights.......55
Section 7.3 Cooperation........................................57
Section 7.4 Third Party Infringement...........................57
Section 7.5 Claimed Infringement...............................58
Article VIII Confidentiality.............................................58
Section 8.1 Confidential Information...........................58
Section 8.2 Employee and Advisor Obligations...................58
Section 8.3 Term...............................................59
Section 8.4 Publications.......................................59
Article IX Representations and Warranties..............................59
Section 9.1 Representations of Authority.......................59
Section 9.2 Consents...........................................59
Section 9.3 No Conflict........................................60
Section 9.4 Employee Obligations...............................60
Section 9.5 Know-How...........................................60
Section 9.6 Contracts..........................................60
Section 9.7 No Warranties......................................60
Section 9.8 Survival...........................................61
Article X Term and Termination........................................61
Section 10.1 Term...............................................61
Section 10.2 Survival of Licenses...............................61
Section 10.3 Termination For Material Breach....................61
Section 10.4 Termination Upon Change of Control.................62
Section 10.5 Effect of Termination..............................62
Section 10.6 Survival...........................................62
Article XI Dispute Resolution..........................................62
Section 11.1 General............................................63
Section 11.2 Independent Experts................................63
Section 11.3 Failure of Executive Officers to Resolve Dispute...63
Section 11.4 Alternative Dispute Resolution.....................63
Section 11.5 No Limitation......................................64
Article XII Miscellaneous Provisions....................................64
Section 12.1 Product Liability Indemnification..................64
Section 12.2 Section 365(n) of the Bankruptcy Code..............65
Section 12.3 Governing Law......................................65
Section 12.4 Assignment.........................................65
Section 12.5 Amendments.........................................66
Section 12.6 Notices............................................66
Section 12.7 Exports............................................67
Section 12.8 Force Majeure......................................67
Section 12.9 Public Announcements...............................67
Section 12.10 Independent Contractors............................68
Section 12.11 No Strict Construction.............................68
Section 12.12 Headings...........................................68
Section 12.13 No Implied Waivers; Rights Cumulative..............68
Section 12.14 Severability.......................................68
Section 12.15 Execution in Counterparts..........................68
Section 12.16 Provisions Relating to Specific QTs................68
AMENDED AND RESTATED AGREEMENT
This amended and restated agreement (the "Agreement"), dated the 10th
of October, 2003 (the "Restatement Execution Date"), is by and between Bayer
HealthCare AG, a corporation organized and existing under the laws of Germany
and having its principal office at D 00000 Xxxxxxxxxx, Xxxxxxx ("Bayer") and
Millennium Pharmaceuticals, Inc., a corporation organized and existing under the
laws of the State of Delaware and having its principal office at 00 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 ("Millennium").
INTRODUCTION
1. Millennium is engaged in the business of conducting research in the
field of human genomics, an objective of which is to discover potential
biological targets and assays for use in drug discovery.
2. Bayer is in the business of discovering, developing and marketing
pharmaceuticals.
3. Xxxxx XX and Millennium entered into an agreement dated as of September
22, 1998, as amended by Amendment No. 2 dated as of December 1, 1999, Amendment
No. 3 dated as of September 18, 2000, Amendment No. 4 dated as of December 1,
2000, Amendment No. 5 dated as of September 7, 2001 and Amendment No. 6 dated as
of March 22, 2002 (as amended through Amendment No. 6, the "Original
Agreement").
4. On October 1, 2003, Bayer became the successor in interest in and to all
of the healthcare business of Xxxxx XX.
5. Bayer and Millennium are interested in continuing to collaborate in the
discovery and development of targets and assays to identify and develop small
molecule drugs for the treatment of certain human diseases and conditions.
NOW, THEREFORE, intending to amend and restate the Original Agreement in
its entirety, Millennium and Bayer agree as follows:
ARTICLE I
DEFINITIONS
When used in this Agreement, each of the following terms shall have the
meanings set forth in this Article I:
Section 1.1 "ADDITIONAL [**] CT" means a CT which has been designated
as such pursuant to Section 3.8.
Section 1.2 "ADDITIONAL BAYER FOCUS AREA" means any of the following
diseases and/or conditions: [**].
Section 1.3 "AFFECTED LICENSEE" means any person or entity other than
a Party or an Affiliate that has been granted a license or sublicense, following
the Restatement Execution Date, to use Know-How or Patent Rights covering a QT
or CT that are owned or otherwise controlled by a Party for the purpose of
discovering Small Molecule drugs that interact with such QT or CT.
Section 1.4 "AFFILIATE" means any corporation, company, partnership,
joint venture and/or firm which controls, is controlled by, or is under common
control with a Party. For purposes of this Section 1.4, "control" shall mean (a)
in the case of corporate entities, direct or indirect ownership of at least
forty percent (40%) of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least forty percent (40%) of the equity interest with
the power to direct the management and policies of such non-corporate entities.
Section 1.5 "ANNUAL SALES VOLUME" means total worldwide Net Sales of
a Royalty-Bearing Product during a calendar year.
Section 1.6 "BAYER CONFIGURED ASSAY" means a Configured Assay (a) for
which Bayer is designated as the developing Party in accordance with the
provisions of Section 2.8(a) or (b) otherwise developed by Bayer.
Section 1.7 "BAYER CT DEVELOPMENT PROGRAM" means the development
activities undertaken by Bayer with respect to First, Second and Third Stage
CTs, as more fully set forth in Section 3.9.
Section 1.8 "BAYER QT DEVELOPMENT PROGRAM" means the development
activities undertaken by Bayer with respect to First, Second and Third Stage
QTs, as more fully set forth in Section 2.10.
Section 1.9 "BAYER RETURNED TARGET KNOW-HOW" means Know-How owned or
otherwise controlled by Bayer (as of the date Millennium exercises the option
under Section 4.2(d) with respect to the applicable Bayer Returned Target
Know-How), in which Bayer has a licensable or sublicensable interest and which
Bayer has developed or acquired as a result of (a) the Discovery Program and/or
the Bayer QT Development Program, relating to (i) a Returned QT, the use of such
Returned QT to discover and develop Small Molecule Drugs, the treatment of
diseases and/or conditions with Small Molecule Drugs that interact with such
Returned QT, and the Bayer Configured Assay relating to such Returned QT, and/or
(ii) the lead structure under development by Bayer and related data (as more
specifically set forth in Section 4.2(d)) relating to or derived from such
Returned QT or (b) the Conversion Program and/or the Bayer CT Development
Program, relating to (i) a Returned CT, the use of such Returned CT to discover
and develop Small Molecule Drugs, the treatment of diseases and/or conditions
with Small Molecule Drugs that interact with such Returned CT, and the Bayer
Configured Assay relating to such Returned CT, and/or (ii) the lead structure
under development by Bayer and related data (as more specifically set forth in
Section 4.2(d)) relating to or derived from such Returned CT. Notwithstanding
the preceding provisions of this Section, Bayer Returned Target Know-How does
not include any Know-How outside the applicable Licensed Indication(s) for a
Returned QT or Returned CT.
Section 1.10 "BAYER RETURNED TARGET PATENT RIGHTS" means a Patent
Right owned or otherwise controlled by Bayer (singly or jointly with
Millennium), and in which Bayer has a licensable or sub-licensable interest,
covering an invention that is part of the Bayer Returned Target Know-How.
Section 1.11 "BAYER ROYALTY PRODUCT" means a Small Molecule Drug
discovered or developed by Bayer, its Affiliates or sublicensees, PROVIDED THAT
for purposes of this definition, Millennium, its Affiliates or permitted
sublicensees shall not be considered to be a sublicensee of Bayer.
Section 1.12 "BIOLOGY-RELATED IP" means, with respect to a QT or CT,
(a) Know-How or Patent Rights owned or otherwise controlled by a Party, and in
which such Party has a licensable or sublicensable interest, and (b) patents or
patent applications (including all converted provisionals, divisions,
continuations, continuations-in-part, reissues, reexaminations, extensions,
supplementary protection certificates and foreign counterparts thereof) owned or
otherwise controlled by an Affiliate or an Affected Licensee that cover
inventions made by such Affiliate or Affected Licensee through the material use
of Know-How or Patent Rights covering a QT or CT that are owned or otherwise
controlled by a Party, in the case of each of (a) and (b) above, relating to (i)
the development of a Configured Assay that embodies or is based on such QT or CT
and the use of such Configured Assay in the discovery or development of a
therapeutic or prophylactic agent for the Licensed Indication(s) for such QT or
CT, the active ingredient of which is a Small Molecule or (ii) any [**] in the
Licensed Indication(s) for such QT or CT, PROVIDED, HOWEVER, that
Biology-Related IP shall not include any Know-How embodied in or Patent Rights,
patents or patent applications (including all converted provisionals, divisions,
continuations, continuations-in-part, reissues, reexaminations, extensions,
supplementary protection certificates and foreign counterparts thereof) that
cover, (A) any therapeutic or prophylactic use of a Small Molecule or (B) (1)
with respect to a CT that is not a Selected CT, any invention made after the
termination of the Conversion Program Term, (2) with respect to a Selected [**]
CT that is not an IP on Sequence Target, any invention made after the fifth
(5th) anniversary of the selection of such CT as a Selected CT, (3) with respect
to a Selected [**] CT that is an IP on Sequence Target, any invention made after
the seventh (7th) anniversary of the selection of such target as a Selected CT,
(4) with respect to a Returned QT or Returned CT, any invention made after the
fifth (5th) anniversary of the designation of such QT or CT as a Returned QT or
Returned CT and (5) with respect to a Selected CT that is not a [**] CT or a
Returned CT, any invention made after the First Commercial Sale of a Small
Molecule Drug directed to such CT. To the extent that Biology-Related IP owned
or controlled by a Party is transferred in whole or in part to an Affiliate,
Affected Licensee or other third party, the Know-How and/or Patent Rights
constituting such Biology-Related IP shall continue to be Biology-Related IP for
purposes of this agreement, and, to the extent such transfer is to a third
party, such third party shall be deemed to be an Affected Licensee.
Section 1.13 "CELL-BASED ASSAY" means a Bayer Configured Assay that
uses a Selected QT or Selected CT incorporated in a cell or presented on the
surface of a cell (as distinct from a biochemical assay in which the Selected QT
or Selected CT is assayed in a cell-free context).
Section 1.14 "CFA" or "COLLABORATIVE FOCUS AREA" means one or more of
the following human diseases and/or conditions during the periods indicated:
(a) [**] diseases and/or conditions, including but not limited to [**] (but
not including diseases and/or conditions excluded under subsections (b) and (c)
below) at all times from and after the Effective Date;
(b) [**], including, but not limited to, [**] at all times from and after
the Effective Date;
(c) [**] diseases and/or conditions, including, but not limited to, [**]
from and after June 9, 1999, [**] at all times from and after the Effective
Date, and [**] from and after September 7, 2001, [**];[**](including all [**] at
all times from and after the Effective Date;[**] from and after June 30, 2000,
notwithstanding subsection (c) above;
(d) [**] from and after September 7, 2001;
(e) (i) [**] during the period commencing on the Effective Date and ending
October 31, 2000 and (ii) [**] and, solely to the extent set forth in Section
12.16(b), [**] from and after October 31, 2000;
(f) [**] during the period commencing on the Effective Date and, subject to
Section 12.16(a), ending June 30, 2000; and
(g) [**] during the period commencing on the Effective Date and, subject to
Section 12.16(a), ending June 30, 2000.
Section 1.15......"CFA QT" means a QT that has a Disease/Therapeutic
Hypothesis in a CFA (as determined by the Program Directors pursuant to Section
2.7(b)), [**].
Section 1.16 "CHANGE OF CONTROL" means (i) a merger or consolidation
of a Party which results in the voting securities of such Party outstanding
immediately prior thereto ceasing to represent at least [**] of the combined
voting power of the surviving entity immediately after such merger or
consolidation; (ii) the sale of all or substantially all of the assets of a
Party; or (iii) any "person", as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
together with any of such person's "affiliates" or "associates", as such terms
are used in the Exchange Act, becoming the beneficial owner of [**] or more of
the combined voting power of the outstanding securities of a Party (other than
such Party, any trustee or other fiduciary holding securities under an employee
benefit plan of such Party or any corporation owned directly or indirectly by
the stockholders of such Party in substantially the same proportion as their
ownership of stock of such Party).
Section 1.17 "COMBINATION PRODUCT" means any pharmaceutical product
which comprises the Royalty-Bearing Product and other active compounds and/or
active ingredients.
Section 1.18 "CONFIDENTIAL INFORMATION" means all materials, know-how
or other information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other information is disclosed by the disclosing Party to the other
Party. Notwithstanding the foregoing to the contrary, materials, know-how or
other information which is orally, electronically or visually disclosed by a
Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information of a Party (a) if the
disclosing Party, within thirty (30) days after such disclosure, delivers to the
other Party a written document or documents describing the materials, know-how
or other information and referencing the place and date of such oral, visual,
electronic or written disclosure and the names of the persons to whom such
disclosure was made, or (b) such information is of the type that is customarily
considered to be confidential information by persons engaged in activities that
are substantially similar to the activities being engaged in by the Parties
pursuant to this Agreement.
Section 1.19 "CONFIGURED ASSAY" means an assay embodying or based upon
a Selected QT or a CT that has been appropriately adapted into a cell-free,
membrane, or whole-cell microtiter-based format that will reliably and robustly
detect, (e.g., via radioactivity, fluorescence, mass spectroscopic fragments,
absorbance, etc.) and identify specific Small Molecules, derived from screening
libraries of Small Molecules, that can selectively interact with such Selected
QT or CT (or a target in a biochemical pathway in which such Selected QT or CT
participates), as further defined in the Research Plan (which shall specify
Bayer's high throughput screening criteria and require that the assay satisfy
such criteria).
Section 1.20 "CONTRACT QUARTER" means the period beginning on the
first day of the First Contract Year and ending on January 31, 1999, and each
succeeding quarter thereafter during the Discovery Program Term or the
Conversion Program Term.
Section 1.21 "CONTRACT YEAR" means the period beginning on the
Effective Date and ending on October 31, 1999 (the "First Contract Year"), and
each succeeding twelve (12) month period thereafter during the Discovery Program
Term and the Conversion Program Term (referred to as the "Second Contract Year",
"Third Contract Year", etc.).
Section 1.22 "CONVERSION POOL" means the pool of CTs made available by
Millennium for selection by Bayer for Bayer's use in the Conversion Program and
the Bayer CT Development Program in accordance with this Agreement.
Section 1.23 "CONVERSION PROGRAM" means the activities to be
undertaken by each of the Parties with respect to CTs during the Conversion
Program Term, as specifically set forth in Article III; PROVIDED THAT any
activities undertaken by either Party with respect to (a) a [**] CT following
its designation as such, (b) a Returned CT following its designation as such, or
(c) the Bayer CT Development Program, shall not be considered to be part of the
Conversion Program.
Section 1.24 "CONVERSION PROGRAM TERM" means the period beginning on
November 1, 2003 and ending on the earlier of (a) October 31, 2010 and (b) the
date a total of [**] have been developed under this Agreement.
Section 1.25 "CONVERSION TARGET" or "CT" means a target for Small
Molecule Drug discovery falling within one of the following categories:
(a) Any target identified as "IP on Sequence" on EXHIBIT E as of the
Restatement Execution Date ("IP on Sequence Targets");
(b) Any target identified as a [**] Protein on EXHIBIT E ("[**] Protein
CTs"), which includes [**] Proteins meeting one of the following criteria: (i)
[**] Proteins that are Failed QTs having a fail date on or before the
Restatement Execution Date, (ii) [**] Proteins approved by the Program Directors
pursuant to Section 3.3 [**], (iii) [**] Proteins approved by the Program
Directors pursuant to Section 3.3 [**] or (iv) [**] Proteins approved by the
Program Directors pursuant to Section 3.3 [**];
(c) Any [**] Protein which is designated [**] from time to time [**].
For purposes of clarity, any QT that constitutes a CT under this Section 1.25
shall no longer be deemed a QT for any purpose hereunder.
Section 1.26 "CT ASSAY CONFIGURATION DEADLINE" means, with respect to
a CT, the later of (a) [**] the date Bayer selects a CT from the Conversion
Pool, and (b) [**] Bayer's receipt of the CT Materials.
Section 1.27 "CV ANGIOGENESIS" means any cardiovascular diseases [**].
Section 1.28 "DESIGNATED [**] CT" means a CT which has been designated
as such pursuant to Section 3.7.
Section 1.29 "DESIGNATED SCIENTIFIC ISSUE" means one or more of the
following issues: (a) whether a target has met the criteria to qualify as a QT,
including, but not limited to, [**]; (b) in which categories a Selected QT is
included for purposes of the quotas set forth in EXHIBIT A (i.e., [**]); (c)
whether a QT has a Disease/Therapeutic Hypothesis, including, but not limited
to, (i) whether the Disease/Therapeutic Hypothesis is [**] and (ii) whether gene
expression data from diseased tissue should be obtained; (d) whether a
Configured Assay conforms to the applicable Assay Specifications; (e) whether a
publication is an Enabling Publication; and (f) whether the failure to configure
an assay after publication of an Enabling Publication is as a result of a
Scientific Failure.
Section 1.30 "DEVELOPMENT CANDIDATE" means a "development candidate"
designated by Bayer as such in accordance with Bayer's internal decision making
processes and guidelines in effect from time to time. A copy of Bayer's current
guidelines has been provided by Bayer to Millennium.
Section 1.31 "DISCOVERY POOL" means the pool of QTs available for
selection by Bayer as determined by the Program Directors, during the Discovery
Program in accordance with the provisions of Section 2.7.
Section 1.32 "DISCOVERY PROGRAM" means collectively (a) the discovery
and development program to be undertaken by Millennium in collaboration with
Bayer during the Discovery Program Term to identify Druggable Targets and QTs
(the "Target Discovery Program"), and (b) the Assay Configuration Activities and
Screen to Clinic Validation Activities to be undertaken by Bayer and Millennium
pursuant to Section 2.8 (the "Post-Target Discovery Program"), in each case in
accordance with the Research Plan, PROVIDED THAT any activities undertaken by
either Party with respect to a Returned QT following its designation as such
shall not be considered to be part of the Discovery Program. For clarity, the
Discovery Program does not include activities undertaken by either Party with
respect to CTs.
Section 1.33 "DISCOVERY PROGRAM TERM" means the period commencing on
the Effective Date and ending on the last day of [**].
Section 1.34 "DISEASE/THERAPEUTIC HYPOTHESIS" means a scientifically
reasonable association of a Druggable Target with a disease/therapeutic area
where such association is based upon scientific evidence derived from gene
expression data of appropriate tissue distribution and, subject to
scientifically reasonable efforts (as mutually agreed upon by the Program
Directors), disease tissue, as further described in the Research Plan. Without
limiting the generality of the foregoing, the gene expression data upon which a
Disease/Therapeutic Hypothesis is based shall include [**].
Section 1.35 "DROPPED GENES" means each gene for which activities in
the Discovery Program have been terminated prior to such gene reaching QT
status, based on a determination [**] in the Discovery Program, it being
understood that a gene that is temporarily on hold shall not be a Dropped Gene.
Section 1.36 "DRUGGABLE TARGET" means (a) a nucleic acid sequence
and/or the Protein it encodes, where there is reasonable evidence (based upon
bioinformatics analysis) to suggest that the Protein is of a class that (i) is
reasonably believed to be capable, given commercially reasonable efforts over a
[**] period, of being developed into a Configured Assay, and (ii) is reasonably
believed to be capable, given commercially reasonable efforts, of being
modulated by Small Molecules identified through high throughput screening, and
(b) any other class of nucleic acid sequences and/or the associated encoded
Proteins that is determined to be a Druggable Target by mutual agreement of the
Program Directors. Druggable Targets under subsection (a) consist of the
following classes: [**] (each, a "Druggable Target Class").
Section 1.37 "EFFECTIVE DATE" means October 31, 1998.
Section 1.38 "ENABLING PUBLICATION" means a Scientific Publication
that, alone or together with information in up to two other Scientific
Publications, each with an earlier Publication Date, discloses a protein which,
(a) for those CTs on EXHIBIT E that list "assay" in the column titled "Type
of Enabling Publication," (i) has [**]% or more identity across its entire
sequence to the protein sequence of a CT, (ii) is shown to be recombinantly
expressed (and for enzymes, such recombinant expression must be scalable, e.g.,
the E. COLI and baculovirus expression systems are scalable), and (iii) shows
functional activity consistent with its Druggable Target Class and is amenable
to high throughput screening; or
(b) for those CTs on EXHIBIT E that list "disease hypothesis" in the column
titled "Type of Enabling Publication," (i) has [**]% identity across its entire
sequence to the human protein sequence of a CT or is a rodent orthologue of a
CT, and (ii) has a Disease/Therapeutic Hypothesis in the Licensed Indication(s)
supported by data from two independent experimental approaches other than
expression profiling. Examples of such supporting data include: direct
demonstration of a protein's involvement in a disease state; functional
association of a protein with a recognized, disease-relevant pathway; substrate
identification consistent with disease hypothesis; in vivo functional knock-out
data and IN VITRO functional knock-down data; or
(c) for those CTs on EXHIBIT E that list "druggability" in the column
titled "Type of Enabling Publication," (i) has [**]% or more identity across its
entire sequence to the protein sequence of a CT, (ii) is the target of a small
molecule lead which is an inhibitor or activator of such protein and (iii) such
small molecule lead must either (x) be Xxxxxxxx Rule-of-Five compliant , show
evidence of IN VITRO structure-activity relationship and show IN VITRO activity
of 1 micro-molar or lower or (y) show evidence of activity in an animal model of
disease after oral or intravenous administration.
As used herein, "Scientific Publication" means an English-language,
international, peer-reviewed scientific publication of general circulation which
has an independent scientific advisory board.
Section 1.39 "ENABLED CT" means any CT to which an Enabling
Publication relates.
Section 1.40 "ENABLED [**] CT" means a CT which has been designated as
such pursuant to Section 3.6.
Section 1.41 "EXECUTIVE OFFICERS" means the Head of Worldwide
Pharmaceutical Research of Bayer (or an executive of Bayer designated by Bayer)
and the Chief Executive Officer of Millennium (or an officer of Millennium
designated by Millennium).
Section 1.42 "FAILED QT" means a Selected QT which, despite reasonable
commercial efforts, is not able to be developed into a Configured Assay within
nine (9) months (or twelve (12) months if a Party requests the other Party to
assist it in identifying natural or surrogate ligands or substrates, as provided
in Section 2.8(a)(i)) (or, in either case, such shorter or longer period as the
Program Directors may determine by mutual agreement) from the date the Selected
QT is selected from the Discovery Pool.
Section 1.43 "FDA APPROVAL" means in the United States approval from
the U.S. Food and Drug Administration and in other countries approval from a
comparable regulatory authority.
Section 1.44 "FEE-FOR-SERVICE WORK" means contract services under
which a Party procures such services from a third party and for which (a) no
license to or other interest in intellectual property is granted or conferred by
such Party and (b) such Party retains ownership of all intellectual property and
work product conceived or developed pursuant to such contract, which by way of
example excludes drug development collaborations.
Section 1.45 "FIELD" means therapeutic and/or prophylactic treatment
of all human diseases and conditions.
Section 1.46 "FIRST COMMERCIAL SALE" means, for each Royalty-Bearing
Product, the first commercial sale in a country as part of a nationwide
introduction by a Party, its Affiliates or its sublicensees. Sales for test
marketing, clinical trial purposes or compassionate or similar use shall not be
considered to constitute a First Commercial Sale.
Section 1.47 "FTE" means a full time equivalent person year
(consisting of a total of one thousand eight hundred eighty (1,880) hours per
year) of scientific or technical work on or directly related to Screen to Clinic
Validation Activities as part of the Post-Target Discovery Program.
Section 1.48 "KNOW-HOW" means any information, data and materials,
including, without limitation, biological materials, such as cell lines, RNA,
DNA, DNA fragments, organisms, Proteins, polypeptides, plasmids and vectors,
that are owned or otherwise controlled by a Party and that are proprietary and
not in the public domain at the time of their receipt, but shall not include (a)
full-length clones for [**] Proteins in a standard cloning vector for QTs or CTs
(including without limitation CT Materials relating to [**] Proteins), (b)
plasmids or vectors for [**] Proteins or (c) the sequence of [**] Proteins, to
the extent that (a) through (c) above would not otherwise be included in the
definition of Millennium Patent Rights.
Section 1.49 "KNOWN TO BAYER" means that specific utility and/or
claims (supported by Specific Data) are, at the filing of a patent application
claiming such utility, already the subject of a patent application filed by
Bayer.
Section 1.50 "KNOWN TO MILLENNIUM" means knowledge that [**] claims
were the subject of a patent application filed by a third party known to
Millennium (or any person acting on Millennium's behalf) to have an invention
date superior to Millennium's invention date, where Millennium is entitled to
use such information in relation to patent filing decisions.
Section 1.51 "LICENSED INDICATION(S)" means, with respect to a QT or
CT, the disease indication or indications specified in the "Licensed
Indication(s)" column on EXHIBIT D or EXHIBIT E, respectively, as such exhibits
may be amended by the Parties from time to time (a) upon the entry of a QT into
the Discovery Program or a CT into the Conversion Program, such amendment to be
evidenced by signature of the Program Director of each Party or (b) by operation
of Section 3.4.
Section 1.52 "MILLENNIUM CONFIGURED ASSAY" means a Configured Assay
(a) for which Millennium is designated as the developing Party in accordance
with the provisions of Section 2.8(a) or (b) otherwise developed by Millennium.
Section 1.53 "MILLENNIUM KNOW-HOW" means Know-How owned or otherwise
controlled by Millennium, which was proprietary and not in the public domain at
the time of its receipt by Bayer and in which Millennium has a licensable or
sublicensable interest, relating to (a) a Selected QT or Selected CT, (b) the
use of a Selected QT or Selected CT to discover and develop Small Molecule
Drugs, (c) the treatment of diseases and/or conditions with Small Molecule Drugs
that interact with a Selected QT or Selected CT, (d) Millennium Configured
Assays relating to a Selected QT or Selected CT, (e) Screen to Clinic Validation
Activities relating to a Selected QT, and (f) any other Know-How relating to a
Selected QT or Selected CT, in each case which Millennium has introduced into
the Discovery Program, or has developed or acquired in the course of the
Discovery Program. Notwithstanding the preceding provisions of this Section,
Millennium Know-How does not include any Know-How (i) in the case of a CT,
discovered or developed after the date that the CT is entered into the
Conversion Pool and (ii) in the case of a Selected QT or a Selected CT, outside
the applicable Licensed Indication(s) for such Selected QT or Selected CT.
Section 1.54 "MILLENNIUM [**] FAILURE" means, with respect to a [**],
(a) a failure by Millennium (or any person acting on Millennium's behalf)
to identify one or more written disclosures indicating that the claims giving
rise to [**] were in the Public Domain or Known to Millennium, where such
information was readily available to Millennium at the time it filed the patent
application(s) covering such [**]; or
(b) where (i) Millennium (or any person acting on Millennium's behalf)
identifies one or more written disclosures indicating that the claims giving
rise to [**] may be in the Public Domain or Known to Millennium, where such
information was readily available to Millennium at the time it filed the patent
application(s) covering such [**], and (ii) at the time Millennium files the
patent application(s) covering such [**], Millennium misjudges the impact the
information disclosed in the written disclosure(s) may have on the patentability
of Millennium's claims for [**], and (iii) the Millennium-filed patent
application covering the claims for such [**] does not issue with respect to
such claims for failure to meet the patentability criteria of the relevant
patent office and such failure resulted from the existence of the information
identified by Millennium and Millennium's misjudgment of the impact such
information may have on the patentability of Millennium's [**] claims, PROVIDED,
HOWEVER, that if the patent application covering the claims for such [**] also
does not issue with respect to such claims for the independent reason of the
existence of other prior art that it was not possible using commercially
reasonable efforts for Millennium to identify or discover prior to the filing of
such patent application, then such misjudgment by Millennium shall not
constitute a Millennium [**]; or
(c) the failure (without Bayer's written consent) by Millennium (or any
person acting on Millennium's behalf) to pay required filing, issue,
maintenance, annuity or renewal fees on any patent applications/patents covering
such [**] as prescribed by Section 7.2.
The determination of whether a Millennium [**] exists shall be made on a
Licensed Indication-by-Licensed Indication basis.
For the purpose of determining whether or not the [**] are in the Public Domain
or are Known to Millennium, neither (A) a disclosure of the [**] [**], nor (B) a
disclosure of [**], will satisfy the foregoing tests for determining [**].
Section 1.55 "MILLENNIUM PATENT RIGHTS" means a Patent Right owned or
otherwise controlled by Millennium (singly or jointly with Bayer), and in which
Millennium has a licensable or sublicensable interest, covering an invention
that is part of the Millennium Know-How.
Section 1.56 "MILLENNIUM ROYALTY PRODUCTS" means all Small Molecule
Drugs that have as their active therapeutic substance (a) a lead structure
provided by Bayer to Millennium pursuant to Millennium's exercise of the option
set forth in Section 4.2(d)(i)(A)(2) or (3), or (b) any modified version of such
lead structure derived therefrom.
Section 1.57 "NET SALES" means with respect to a Royalty-Bearing
Product, the gross amount invoiced by a Party, its Affiliates and/or its
sublicensees on sales or other dispositions of the Royalty-Bearing Product to
unrelated third parties, less the following items:
(a) Trade, cash and quantity discounts actually allowed and taken directly
with respect to such sales;
(b) Tariffs, duties, excises, sales taxes or other taxes imposed upon and
paid directly with respect to the production, sale, delivery or use of the
Royalty-Bearing Product (excluding national, state or local taxes based on
income);
(c) Amounts repaid or credited by reason of rejections, defects, recalls or
returns or because of chargebacks, refunds, rebates or retroactive price
reductions; and
(d) An allowance for distribution expenses (such as freight, transportation
and insurance expenses) and any other customary deductions in the amount of five
percent (5%) of the gross amount invoiced.
Such amounts shall be determined from the books and records of the
applicable Party, its Affiliates and/or its sublicensees, maintained in
accordance with generally accepted accounting principles, consistently applied.
In the event the Royalty-Bearing Product is sold as part of a Combination
Product, the Net Sales from the Combination Product, for the purposes of
determining royalty payments, shall be determined by multiplying the Net Sales
of the Combination Product, during the applicable royalty reporting period, by
the fraction, A/A+B, where A is the average sale price of the Royalty-Bearing
Product when sold separately in finished form and B is the average sale price of
the other product(s) included in the Combination Product when sold separately in
finished form, in each case during the applicable royalty reporting period or,
if sales of both the Royalty-Bearing Product and the other product(s) did not
occur in such period, then in the most recent royalty reporting period in which
sales of both occurred. In the event that such average sale price cannot be
determined for both the Royalty-Bearing Product and all other products(s)
included in the Combination Product, Net Sales for the purposes of determining
royalty payments shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction of C/C+D where C is the fair market value of
the Royalty-Bearing Product and D is the fair market value of all other
pharmaceutical product(s) included in the Combination Product. In such event,
the selling Party shall in good faith make a determination of the respective
fair market values of the Royalty-Bearing Product and all other pharmaceutical
products included in the Combination Product, and shall notify the other Party
of such determination and provide the other Party with data to support such
determination. The other Party shall have the right to review such determination
and supporting data, and to notify the selling Party if it disagrees with such
determination. If the other Party does not agree with such determination and if
the Parties are unable to agree in good faith as to such respective fair market
values, then such matter shall be referred to the Executive Officers.
Section 1.58 "NEW SCIENTIFIC DATA" means, with respect to a Dropped
Gene, information generated internally by Bayer or available in the Public
Domain, that (i) was not available prior to the date upon which such gene became
a Dropped Gene, (ii) is specific to such Dropped Gene, and (iii) [**] as it
relates to a [**] in a [**].
Section 1.59 "[**]" means any human disease or condition that [**].
Section 1.60 "[**] QT" means a QT that has a Disease/Therapeutic
Hypothesis [**] (as determined by the Program Directors pursuant to Section
2.7(b) and that [**].
Section 1.61 "[**] CT" means an Additional [**], a Designated [**] CT,
an Enabled [**] CT or an Unconfigured [**] CT.
Section 1.62 "NOVEL ANNOTATION PROTEIN" means a target for Small
Molecule drug discovery (i) which is not a [**], (ii) for which [**] is in the
[**], (iii) which has [**], and (iv) for which Millennium shall have filed a
patent application covering and claiming such [**], it being understood that the
Program Directors shall have the discretion set forth in Section 2.7(a)(iv).
Section 1.63 "NOVEL PROTEIN" means the nucleic acid sequence of the
full length coding sequence supplied by Millennium (and, hence, the Protein it
encodes) where such sequence [**]. The full length coding sequence provided by
Millennium [**] of such sequence provided by Millennium [**] of the sequence
provided by Millennium is [**] provided by Millennium that [**].
Section 1.64 "NOVEL UTILITY" means, with respect to a potential QT or
CT, [**] claims [**] which, as of the date of the filing of a patent application
claiming [**], (a) are not in the Public Domain, and (b) are not Known to Bayer.
For the purpose of determining whether or not the [**] claims are in the Public
Domain or are Known to Bayer, neither (i) a disclosure of the [**], nor (ii) a
disclosure of a [**], will satisfy the foregoing tests for determining [**].
Section 1.65 "PARTY" means Bayer or Millennium; "Parties" means Bayer
and Millennium. As used in this Agreement, references to "third parties" do not
include a Party or its Affiliates.
Section 1.66 "PATENT RIGHT" means a patent or patent application and
all converted provisionals, divisions, continuations, continuations-in-part,
reissues, reexaminations, extensions, supplementary protection certificates and
foreign counterparts thereof that are owned or otherwise controlled by a Party.
Section 1.67 "PROGRAM DIRECTOR" means a research executive appointed
by each Party to serve as such Party's principal coordinator and liaison for the
Discovery Program and/or the Conversion Program. The Program Director appointed
by Bayer is referred to as the "Bayer Program Director," and the Program
Director appointed by Millennium is referred to as the "Millennium Program
Director."
Section 1.68 "PROGRAM TERM" means the period commencing on the
Effective Date and ending October 31, 2003.
Section 1.69 "PROTEIN" means a compound composed of a variety of amino
acids joined by amide linkages, including allelic variants thereof and
post-translationally modified variants thereof (e.g., glycoslylated Proteins),
PROVIDED THAT a Protein shall not include any peptide that is comprised [**].
Section 1.70 "PUBLIC DOMAIN" means, with respect to a nucleic acid
sequence, that such sequence, and with respect to an annotation of a nucleic
acid sequence, that such annotation, has been made available to the general
public in any manner, including without limitation (a) in a published scientific
paper, (b) in an issued patent or a published patent application, or (c) in an
electronically published database (e.g. GenBank, DBEST, etc.).
Section 1.71 "PUBLICATION DATE" means (a) the last day of the month in
which a Scientific Publication is first circulated in print-format (as opposed
to electronically) to the regular subscribers of the Scientific Publication or
(b) in the case of a Scientific Publication which is circulated only
electronically, the last day of the month in which a Scientific Publication is
first circulated electronically to its regular subscribers.
Section 1.72 "QUALIFIED TARGET" or "QT" means a target for Small
Molecule drug discovery identified or developed in the course of the Target
Discovery Program that has all of the following characteristics: (a) is a
Druggable Target that is [**] (except in the case of Druggable Targets for [**],
in which case the gene may be [**] in nature); (b) has a [**]; (c) is (i) a
[**], (ii) [**], (iii) [**], or (iv) a Druggable Target that is otherwise [**]
as a Qualified Target; and (d) the use of such target in the manner contemplated
in the Research Plan would not, at the time of its identification or annotation
in the Target Discovery Program, [**], unless such target is otherwise approved
by the Bayer Program Director.
Section 1.73 "RELATED THIRD PARTY PAYMENTS" means payments to a third
party to license patents covering such third party's technology if, in the
absence of such license, the licensed use by Bayer of the specific technology
licensed by Millennium under Section 4.1 (or, with respect to Returned QTs or
Returned CTs, the licensed use by Millennium of the specific technology licensed
by Bayer under Section 4.2(d) of this Agreement) would or is likely to, in the
reasonable judgment of the Party seeking such license from such third party,
infringe such patents.
Section 1.74 "REQUIRED PHARMACOGENOMIC ASSAY" means a diagnostic tool
(including without limitation an assay) embodied in a diagnostic product used to
ascertain the predisposition of an individual to respond favorably or
unfavorably to the administration of a Small Molecule Drug where (a) the United
States Food and Drug Administration (or a comparable regulatory authority in
another country) requires that an individual be tested with the diagnostic
product prior to the administration of the associated Small Molecule Drug, as a
condition of registering and approving for commercial sale such Small Molecule
Drug, or (b) it is determined, in the reasonable judgment of the Party that has
the right to commercialize or have commercialized a Small Molecule Drug (based
on written information that is made available to the other Party), that the
diagnostic product must be marketed and sold with such Small Molecule Drug in
order for such Small Molecule Drug to achieve significant market penetration in
a country in the Territory.
Section 1.75 "RESEARCH PLAN" means the research plan attached as
EXHIBIT B to this Agreement, as such plan may be updated or amended pursuant to
Section 2.4.
Section 1.76 "[**]" means [**].[**]"RESTRICTED TARGET" means, subject
to Section 3.4, a QT or CT with respect to which Millennium is prevented from
granting to Bayer the exclusive or non-exclusive right (as set forth in Section
4.1 or Section 4.2, as applicable) under Millennium Know-How or Millennium
Patent Rights to exploit Small Molecule Drugs identified using such target in
the applicable Licensed Indication(s), including without limitation targets with
entries in the "[**] (Indications)" column of EXHIBIT D or EXHIBIT E. A target
is NOT a [**] if (a) genetic sequences or data from which Millennium identifies
or annotates that particular target are derived from sources not exclusively
owned by or licensed to Millennium (such as genetic sequences or data in the
Public Domain or derived from the MBio-Lilly Collaboration); and (b) Millennium
is not prevented (by contract or otherwise) from granting exclusive or
non-exclusive rights (as set forth in Section 4.1 or Section 4.2, as applicable)
under Millennium Know-How or Millennium Patent Rights to exploit Small Molecule
Drugs identified using the target in the applicable Licensed Indication(s).
Section 1.77 "[**] AREAS" means any of the following human diseases or
conditions: [**].
Section 1.78 "ROYALTY-BEARING PRODUCT" means a Bayer Royalty Product
and/or a Millennium Royalty Product, as applicable, together with any related
Required Pharmacogenomic Assay.
Section 1.79 "SCIENTIFIC FAILURE" means, with respect to an Enabled
CT, the inability of Bayer to configure an assay meeting Bayer's then-current
assay specifications as used generally by Bayer at such time, where such failure
is the result of an inaccuracy in any Enabling Publication.
Section 1.80 "SELECTED CT" means a CT selected by Bayer from the
Conversion Pool in accordance with the provisions of Section 3.5.
Section 1.81 "SELECTED [**] CT" means a [**] CT that is a Selected CT.
Section 1.82 "SELECTED QT" means a QT selected by Bayer from the
Discovery Pool in accordance with the provisions of Section 2.7(d).
Section 1.83 "SMALL MOLECULE" means a compound that is non-peptidic
or, if peptidic, is comprised of no more than ten (10) amino acids, including,
without limitation, a compound that is a natural product or is developed using
medicinal chemistry or combinatorial chemistry technologies.
Section 1.84 "SMALL MOLECULE DRUG" means any therapeutic agent, the
active ingredient in which is a Small Molecule, that [**] in a Small Molecule
[**]. The term "Small Molecule Drug" shall not include any pharmaceutical
product in which the active ingredient is [**].
Section 1.85 "SPECIFIC DATA" means data that reasonably support the
claim of [**]. Without limiting the generality of the foregoing, one or more of
the following types of data are Specific Data if such data reasonably support a
claim of [**]: (1) transcriptional profiling, differential or
cell-/organ-specific expression data from clinically [**]; (2) [**] data; (3)
[**] data; (4[**] data; (5) [**] data; (6) [**] data; (7) [**]data; (8) [**]
data; (9) [**] data; (10) [**] data; (11) [**]data, (12) [**]data; (13) [**]
data; (14) [**] data; (15) [**] data; (16) [**]; (17) [**] data; (18) [**] data;
(19) [**] data; (20) [**] data; (21) [**] data; and (22)[**] data and [**] data.
[**] as Specific Data.
Section 1.86 "STRATEGIC PROJECT" means a "strategic project"
designated by Bayer as such in accordance with Bayer's internal decision-making
processes and guidelines in effect from time to time. A copy of Bayer's current
guidelines has been provided by Bayer to Millennium.
Section 1.87 "TARGET BY CLASS DRUG DISCOVERY APPROACH" means a program
for the discovery of targets for Small Molecules that has both of the following
elements: (i) the bioinformatics analysis of proprietary and publicly available
nucleic acid or amino acid sequences to identify Druggable Targets and/or
support a Disease/Therapeutic Hypothesis for the Druggable Targets, and (ii) the
use of high-throughput gene expression analysis to identify or support a
Disease/Therapeutic Hypothesis for the Druggable Targets.
Section 1.88 "TERRITORY" means all countries of the world.
Section 1.89 "UNCONFIGURED [**] CT" means a CT which has been
designated as such pursuant to Section 3.5.
Section 1.90 "UNRECOGNIZED PROTEIN" means the nucleic acid sequence of
the full length coding sequence supplied by Millennium (and, hence, the Protein
it encodes) where (a) [**] of the sequence provided by Millennium [**], but
nevertheless (b) [**] sequence by Millennium [**] of the gene as a [**] and such
[**]. Such may occur where the [**] or where the Program Directors agree that
the [**] "[**]" means [**] caused by [**].
Section 1.91 "[**]" means [**]. [**]ADDITIONAL DEFINITIONS. Each of
the following definitions is set forth in the Section of this Agreement
indicated below:
DEFINITIONS SECTION
----------- -------
1974 Convention Section 12.3
AAA Section 11.4(a)
Agreement Preamble
Assay Configuration Activities Section 2.8(a)(i)
Assay Configuration Credit Section 3.8(a)
Assay Configuration Date Section 2.8(a)(iv)
Assay Specifications Section 2.8(a)(iii)
Bayer Preamble
Bayer Indemnified Parties Section 12.1(b)
Bayer [**] Royalty Products Section 6.4
Bayer [**] Activities Section 6.6(b)
Bayer Program Director Section 1.67
Biological Materials Section 2.5(c)
[**] Section 1.93
Breaching Party Section 10.3
CT First Stage Period Section 3.9(a)
CT Materials Section 3.13(a)
CT Second Stage Period Section 3.9(b)
CT Third Stage Period Section 3.9(c)
Database Section 2.5(b)
Designated Inventions Section 7.3
[**] Section 2.3(d)(i)
Druggable Target Class Section 1.36
EP Section 3.8(a)
Exchange Act Section 1.16
First Contract Year Section 1.21
First Stage CT Section 3.9(a)
First Stage Period Section 2.10(a)
First Stage QT Section 2.10(a)
[**] Section 1.14(g)
Incyte Agreement Section 6.6(b)
IP on Sequence Targets Section 1.25(a)
Joint Steering Committee Section 2.3(c)
[**] Section 2.3(d)(i)
[**] Section 2.3(d)(ii)
[**] Section 2.3(d)(i)
[**] Section 2.5(b)
Millennium Preamble
Millennium Indemnified Parties Section 12.1(a)
Millennium Program Director Section 1.67
[**] Section 4.3(a)
New CFA QT Opportunity Section 5.3
New CFA QT Opportunity Negotiation Period Section 5.3
New CFA QT Opportunity Response Period Section 5.3
New CFA QTs Section 12.16(a)
Non-Breaching Party Section 10.3
[**] Section 4.3(a)
[**] Protein CTs Section 1.25(b)
[**] Section 2.3(d)(i)
Optioned Returned Target Section 5.1
Original Agreement Preamble
Original Partner Section 5.2
Post-Restatement Failed-QT CTs Section 1.25(c)
Post-Target Discovery Program Section 1.32
Program Payments Section 6.2
Project Team Section 2.3
Recovered Bayer Net Sales Section 7.4(a)
Recovered Millennium Net Sales Section 7.4(a)
Reduced Royalty Section 6.4
Relevant Patent Information Section 3.12(b)
Restatement Execution Date Preamble
Returned CT Section 3.9(a)
Returned QT Section 2.10(a)
Royalty Recipient Section 6.9(a)
Royalty-Paying Party Section 6.9(a)
Scientific Publication Section 1.38
Screen to Clinic Validation Activities Section 2.8(b)
Second Contract Year Section 1.21
Second Stage CT Section 3.9(a)
Second Stage Information Section 4.2(d)(i)(A)
Second Stage Period Section 2.10(b)
Second Stage QT Section 2.10(a)
Section 5.1 Opportunity Section 5.1
Section 5.1 Opportunity Negotiation Period Section 5.1
Section 5.1 Opportunity Response Period Section 5.1
Section 5.2 Opportunity Section 5.2
Section 5.2 Opportunity Negotiation Period Section 5.2
Section 5.2 Opportunity Response Period Section 5.2
Selection Project Team Section 2.3(b)
Target Discovery Program Section 1.32
Third Contract Year Section 1.21
Third Stage CT Section 3.9(b)
Third Stage Information Section 4.2(d)(i)(A)
Third Stage Period Section 2.10(c)
Third Stage QT Section 2.10(b)
Unselected CT Section 3.10
[**] Section 4.3(a)
Visiting Scientists Section 2.3(g)
Waived QT Section 2.7(e)
ARTICLE II
DISCOVERY PROGRAM
Section 2.1 TARGET DISCOVERY PROGRAM OVERVIEW. The primary objective
of the Target Discovery Program is to identify and qualify a minimum of 225 QTs
during the Discovery Program Term. The principal focus of the Target Discovery
Program shall be the identification and qualification of CFA QTs, based upon a
Target by Class Drug Discovery Approach. In addition to the foregoing, the
Discovery Program may include work directed at [**] or work utilizing approaches
for the discovery of targets for Small Molecules other than a Target by Class
Drug Discovery Approach, but only if mutually agreed upon by the Parties and
reflected in the Research Plan. Millennium shall use commercially reasonable
efforts to generate and enter into the Discovery Pool a minimum of 225 QTs over
the course of the Discovery Program Term.
Section 2.2 EXCLUSIVITY.
(a) MILLENNIUM OBLIGATION. During the Discovery Program Term and subject to
the exclusions set forth in Section 2.2(b), [**] with a Disease/Therapeutic
Hypothesis in one or more CFAs. Notwithstanding the foregoing, the Parties
anticipate that, to further the goals of the Target Discovery Program,
Millennium [**] with academic, research or other non-commercial institutions
with the goal of identifying additional CFA QTs or qualifying CFA QTs identified
in the Target Discovery Program; in such cases, Millennium shall [**]) to the
discoveries relevant to this Agreement made pursuant to such agreements [**].
If, in such cases, Millennium is [**].
(b) EXCLUSIONS. The provisions of subsection (a) are not intended to apply
to the following:
(i) the identification, discovery and/or development of Small
Molecule drugs [**] that have been [**] by third parties (other than third
parties making such [**] in collaboration with Millennium or any of its
Affiliates) as having a Disease/Therapeutic Hypothesis relevant to a CFA,
PROVIDED THAT the foregoing shall not apply to any target that is a Selected QT;
(ii) any activity directed to the identification of targets for Small
Molecule drug discovery for CFAs if (A) Millennium's involvement in the activity
results from Millennium's acquisition of or by a third party (by merger or
otherwise) which, prior to such acquisition or merger, was already engaged in
such activity; and (B) [**], such activity, if such activity is of the same type
as that being undertaken by the Parties in the course of the Target Discovery
Program or [**];
(iii) the identification, discovery, development and/or practice of
[**];
(iv) the identification, discovery and/or development of any
therapeutic product that is not a Small Molecule drug, including any
pharmaceutical product in which the active therapeutic substance is [**]; and
(v) the development of health care or patient management information
systems and the provision of health care or patient management information
services.
Section 2.3 MANAGEMENT OF THE DISCOVERY PROGRAM.
(a) PROGRAM DIRECTORS. Bayer and Millennium have each appointed a Program
Director and shall continue to have an appointed Program Director for the
benefit of the Discovery Program and the Bayer QT Development Program until
December 31, 2007, or such longer mutually agreed time period. Each Party shall
have the right, after consultation with the other Party, to designate a
different Program Director. During the Discovery Program Term, the Bayer Program
Director shall be resident at Millennium for at least three (3) months of each
Contract Year in order to facilitate close and direct collaboration between the
Parties. The Program Directors shall jointly oversee the conduct of the
Discovery Program and shall be responsible for recommending to the Parties any
changes to the Research Plan.
(b) PROJECT TEAMS. The Program Directors shall appoint one or more
appropriate project teams ("Project Teams"), in each case consisting of
representatives from Bayer and Millennium, to facilitate the conduct of elements
of the Discovery Program and the collaboration of the Parties in the following
areas: (i) the design of searches of the Database (as defined in Section 2.5)
and the identification, based upon a review of such searches, of potential
Druggable Targets (the "Selection Project Team"); (ii) review of transcript
profiling data; (iii) the identification of targets for each disease within the
CFA and the use of such targets to develop Small Molecule Drugs in such CFA; and
(iv) such other areas as may be agreed upon by the Program Directors.
(c) JOINT STEERING COMMITTEE. During the Discovery Program Term, the
Parties established a joint steering committee (the "Joint Steering Committee"),
comprised of (i) three (3) senior executives of Bayer and three (3) senior
executives of Millennium, and (ii) the Program Directors. During the remainder
of the Discovery Program Term, the Parties shall continue the Joint Steering
Committee. The Joint Steering Committee shall meet quarterly, or if mutually
agreed by the Parties at least semi-annually during the Discovery Program and
the Bayer QT Development Program to (i) review the efforts of the Parties in the
conduct of the Discovery Program and the Bayer QT Development Program and (ii)
attempt to resolve any disputes relating to this Agreement that may arise
between the Parties. The location of such meetings of the Joint Steering
Committee shall alternate between Massachusetts and Germany, or as otherwise
agreed by the Parties. The Joint Steering Committee may also meet by means of a
telephone conference call. Each Party may change any one or more of its
representatives to the Joint Steering Committee at any time upon notice to the
other Party. Each Party shall use reasonable efforts to cause its
representatives to attend the meetings of the Joint Steering Committee. If a
representative of a Party is unable to attend a meeting, such Party may
designate an alternate to attend such meeting in place of the absent
representative. In addition, each Party may, at its discretion, invite
non-voting employees, and, with the consent of the other Party, consultants or
scientific advisors, to attend the meetings of the Joint Steering Committee.
Decisions of the Joint Steering Committee shall be made by majority vote of all
of the members of the Joint Steering Committee. In general, matters to be agreed
upon or approved by the Parties shall be referred to the Joint Steering
Committee. Either Party may convene a special meeting of the Joint Steering
Committee for the purpose of resolving disputes.
(d) DISCOVERY PROGRAM LIMITATIONS. Notwithstanding any provisions of this
Agreement, including without limitation Section 2.2 hereof, the Parties
acknowledge that:
(i) Millennium is currently a party to an agreement with [**] in
certain areas of [**] which contains restrictions relating to Millennium's
undertaking of genomic research activities designed primarily to yield
biological molecules likely to be useful as targets or as pharmaceutical
products in [**] based upon (A) mechanisms [**], (B) [**] mechanisms, and (C)
[**] mechanisms ((A), (B) and (C), collectively, the "[**]"). Millennium
represents and warrants that the Research Plan did not, as of the Effective
Date and does not, as of the Restatement Execution Date, encompass [**] in
any manner that would be in violation of or inconsistent with Millennium's
obligations under the [**] Agreement. The [**] Agreement was amended on [**],
to permit Millennium to [**] on a non-exclusive basis (i.e., [**]) to
undertake genomic research activities, pursuant to this Agreement, to yield
biological molecules likely to be useful as targets for Small Molecules for
the treatment of [**]. Millennium hereby gives written notice [**] that,
effective March 31, 2002, (x) the exclusivity restrictions set forth in the
[**] Agreement relating to [**] expired, and (y) the [**] Agreement no longer
restricts Millennium from [**] on a non-exclusive basis (i.e. from [**]) to
undertake genomic research activities, pursuant to this Agreement, to yield
biological molecules likely to be useful as targets for Small Molecules [**]
and (z) such activities are included [**].
(ii) Millennium is currently a party to an agreement with [**] in
certain areas of [**] which contains restrictions relating to Millennium's
undertaking of genomic research activities designed primarily to yield
biological molecules likely to be useful as targets or as pharmaceutical
products in [**]. The [**] Agreement was amended on [**], to permit Millennium
to collaborate [**] on a non-exclusive basis (i.e., [**]) to undertake genomic
research activities, pursuant to this Agreement, to yield biological molecules
likely to be useful as targets for Small Molecules [**] (as defined above in
this clause (ii)).
(e) NO NEW RESTRICTIONS. Millennium agrees that, from and after the
Effective Date, it shall not enter into any agreements, or transfer Know-How or
any other assets to any of its Affiliates, that would, in either case, restrict
or limit its or Bayer's rights or ability to conduct the Discovery Program, as
contemplated in the Research Plan as of the Effective Date and as amended from
time to time (such as an agreement not to engage in the types of target
discovery activities contemplated by the Research Plan).
(f) OPTIMIZATION OF ACTIVITIES. Each of the Parties will empower its
Program Director to act as a general manager for such Party in the Discovery
Program. As such, the Program Directors will have the authority to define
approaches and activities that will optimize achievement of the goals of the
Discovery Program and the authority to shift resources within the Discovery
Program in order to make it more likely to achieve a goal of 225 Configured
Assays (it being understood that it is not the intent to alter the legal
standard imposed on the Millennium in Article II of this Agreement).
(g) BAYER VISITING SCIENTISTS. During the Discovery Program Term Millennium
agreed to host several scientists employed by Bayer and/or by Bayer Corporation,
a wholly owned subsidiary of Bayer ("Visiting Scientists") at Millennium
facilities in Cambridge, Massachusetts, and Millennium provided the Visiting
Scientists with use of certain Millennium facilities and other valuable
resources of Millennium. Millennium and Bayer hereby agree that, effective as of
the end of the Discovery Program Term, Millennium will no longer host the
Visiting Scientists, and that as of such date the Visiting Scientists will no
longer have access to Millennium facilities and other resources of Millennium.
By letter agreement dated August 13, 1999, Millennium, Bayer and Bayer
Corporation agreed to certain protections regarding access by Visiting
Scientists to Millennium confidential information during the Discovery Program
Term that is outside the scope of the Discovery Program. The Parties agree that
any Millennium confidential information that such Visiting Scientists may
receive or be exposed to prior to the end of the Discovery Program Term that is
outside the scope of the Discovery Program shall be deemed to be "Non-Discovery
Program Confidential Information" as that term is defined in such agreement
(subject to terms, conditions and applicable exclusions set forth therein).
Section 2.4 RESEARCH PLAN.
(a) GENERAL; MODIFICATIONS. The Parties shall undertake the Discovery
Program in accordance with the Research Plan. During the Discovery Program Term,
the Program Directors will review the Research Plan on at least an annual basis
and submit any proposed modifications or updates to the Parties for their
approval; any such modifications or updates shall not become effective until
approved by both Parties. The Parties agree to review and consider any such
proposed modifications or updates on an expeditious basis.
(b) CHANGE IN BAYER RESEARCH OBJECTIVES. The Parties recognize that the
Discovery Program is designed to result in the creation of a portfolio of QTs
distributed among all of the CFAs and Druggable Target Classes. The Parties have
established non-binding objectives for QT discovery with respect to each of the
CFAs, as set forth on EXHIBIT A to this Agreement. In addition, the Parties have
established certain quotas for entry of QTs into the Discovery Pool, also as set
forth on EXHIBIT A to this Agreement. In the event that Bayer's research
objectives change during the Discovery Program Term (such as Bayer's decision to
discontinue efforts in a particular CFA or increase efforts in a particular CFA)
or other relevant changes occur in the scientific and competitive environment,
the Research Plan shall be modified to reflect such changes, and appropriate
corresponding adjustments shall be made to the objectives and quotas set forth
on EXHIBIT A to this Agreement.
Section 2.5 DISCOVERY PROGRAM - GENERAL.
(a) GENERAL. Each Party agrees to use commercially reasonable efforts to
(i) undertake the responsibilities assigned to such Party in the Research Plan,
including, but not limited to, the dedication of resources appropriate to such
efforts, and (ii) make available to the other Party those resources set forth in
the Research Plan. In addition, each Party agrees to use commercially reasonable
efforts to carry out all work done in the course of the Discovery Program and
the Bayer QT Development Program in material compliance with all applicable
federal, state or local laws, regulations and guidelines governing the conduct
of such work, including, without limitation, all applicable export and import
control laws.
(b) MILLENNIUM. Without limiting the generality of Section 2.5(a), the
Discovery Program is designed as a multi-disciplinary effort on the part of
Millennium, and shall include, but not be limited to, the following internal
Millennium activities (as further outlined in the Research Plan): tissue
acquisition, DNA extraction, library construction, DNA sequencing
bioinformatics, database mining, expression profiling, IN SITU hybridization,
Assay Configuration Activities and Screen to Clinic Validation Activities. In
particular, the sources for potential Druggable Targets will be derived from DNA
sequences from Millennium and its Affiliates (such as DNA sequences derived from
[**] and public databases (collectively, the "Database")). During the Discovery
Program Term, Millennium shall maintain and make available adequate technical
resources and personnel to perform its obligations under the Discovery Program
in accordance with the Research Plan, including the software necessary to
perform such obligations.
(c) BIOLOGICAL MATERIALS. For the purposes of facilitating the conduct of
the Discovery Program, each Party shall provide to the other Party animal or
human tissues, cells, blood samples and other materials ("Biological Materials")
specified from time to time in the Research Plan. Each Party agrees to provide
all such Biological Materials to the other Party in accordance with the Research
Plan. The Parties agree that: (i) all Biological Materials provided by one Party
to the other shall be used solely for research purposes in material compliance
with all applicable federal, state or local laws, regulations and guidelines;
(ii) all such Biological Materials are provided without any warranties, express
or implied; (iii) the Party providing such Biological Materials shall obtain (or
cause its third party collaborators to obtain or certify that they have
obtained) all appropriate and required consents from the source of such
Biological Materials; and (iv) Biological Materials provided by one Party to the
other shall not be made available by the other Party to any third party except
pursuant to the Discovery Program or upon the prior written consent of the Party
providing such Biological Materials.
(d) DISCLOSURE OF MILLENNIUM KNOW-HOW. During the Discovery Program Term,
Millennium (consistent with its applicable confidential disclosure obligations,
if any) shall promptly disclose to Bayer (i) all Millennium Know-How specified
in the Research Plan, and (ii) all Millennium Know-How not specified in the
Research Plan which Millennium reasonably believes to be pertinent to the
Discovery Program. Without limiting the generality of the foregoing, promptly
following the Effective Date, the Program Directors shall review Millennium
Know-How in existence as of the Effective Date relevant to the Target Discovery
Program to identify any potential Druggable Targets with a Disease/Therapeutic
Hypothesis in a CFA (not previously disclosed in the preparation of the Research
Plan), with the intention of placing all such Druggable Targets in the Target
Discovery Program. After the Discovery Program Term, Millennium shall not
disclose to Bayer any know-how owned or otherwise controlled by Millennium,
including without limitation any Millennium Know-How; PROVIDED HOWEVER, that
Millennium may disclose Millennium Know-How in written form after the Discovery
Program that Millennium disclosed to Bayer in presentation form during the
Discovery Program.
Section 2.6 SELECTION OF DRUGGABLE TARGETS.
(a) IDENTIFICATION OF DRUGGABLE TARGETS. The Selection Project Team will
design searches of the Database in order to identify Druggable Targets,
participate in the searches of the Database, have access to all output from the
searches of the Database for the sole purpose of reviewing and selecting
Druggable Targets, review the output and select Druggable Targets for expression
profiling and other processes designed to identify QTs with potential utility in
a CFA, all as further described in the Research Plan. The Selection Project Team
shall have full access to the Database and to Millennium personnel for the
purposes provided above to enable the Selection Project Team to identify those
Druggable Targets most likely to have the highest potential utility in the CFAs.
Bayer's access to the Database shall be limited to Bayer's members of the
Selection Project Team for the purposes solely of the Discovery Program and the
Bayer QT Development Program.
(b) PRIORITIZATION. The Parties shall undertake further research efforts
relating to Druggable Targets (such as [**]) as provided in the Research Plan.
The Program Directors shall determine by mutual agreement which Druggable
Targets shall be subject to such further efforts. In each Contract Year during
the Discovery Program Term, Bayer shall have the right [**] identified during
such Contract Year (as measured at the end of such Contract Year), PROVIDED THAT
the number of Druggable Targets [**]. At the time the Selection Project Team
reviews and selects Druggable Targets for further work (under Section 2.6(a),
above), [**] in the Target Discovery Program. In the event that, due to resource
constraints, Millennium is unable to work on all Druggable Targets at any given
time, the Program Directors shall prioritize all such Druggable Targets; [**].
(c) IDENTIFICATION OF RESTRICTIONS. Millennium shall identify, at the
earliest possible stage of the process of reviewing potential Druggable Targets
for status as QTs, the proprietary status of any gene sequence encoding the
Druggable Target under consideration as a QT (e.g., whether it is derived from
the [**], etc.) as well as any potential restrictions that would limit or
otherwise affect Bayer's right to exploit in all human diseases and conditions
Small Molecule drugs identified or developed using the Druggable Target.
(d) PATENT REVIEW. Each Contract Quarter during the Discovery Program Term,
Millennium shall use reasonable efforts to monitor patent issuances and patent
applications of third parties relevant to any QT and shall advise Bayer of the
results of such efforts. In addition, when a QT enters the Discovery Pool,
Millennium shall provide Bayer with a written report relating to the following:
Millennium Patent Rights, agreements between a third party and Millennium or any
Millennium Affiliate, and any patents or patent applications of third parties
known to Millennium, in each case to the extent that such information is
material either to the ability of Bayer to develop Small Molecule Drugs based
upon such QT or to Bayer's decision to utilize such QT to develop Small Molecule
Drugs.
(e) DROPPED GENES. On a regular basis during the course of the Discovery
Program, the Program Directors shall review the Discovery Program activities in
order to identify any Dropped Genes, PROVIDED THAT the [**] in the Discovery
Program (it being understood that a gene that is temporarily on hold shall not
be a Dropped Gene). Notwithstanding the provisions of Section 2.2 of this
Agreement, Millennium shall have the right to conduct internal research and
development activities within the CFAs (as well as collaborate thereon with
academic, research or other non-commercial institutions) with respect to Dropped
Genes during the Discovery Program Term. Subject to the limitation on the number
of QTs which Bayer is permitted to select from the Discovery Pool, Bayer shall
have the right, at any time during the Discovery Program Term, to designate
Dropped Genes for inclusion in the Discovery Program if Bayer can present New
Scientific Data relating to such Dropped Gene. If, pursuant to the preceding
sentence, Bayer designates a Dropped Gene for inclusion in the Discovery
Program, Millennium will, within fifteen (15) days after such designation,
disclose to Bayer in writing the stage of Millennium's development of such
Dropped Gene. In the event that Millennium has not, prior to the date of such
designation, developed a Configured Assay with respect to such Dropped Gene and
initiated high throughput screening for such Dropped Gene, Bayer shall have the
right to include the Dropped Gene in the Discovery Program on the same basis as
if such gene had not constituted a Dropped Gene. In the event that Millennium
has, prior to the date of such designation, developed a Configured Assay with
respect to such Dropped Gene and initiated high throughput screening, Bayer
shall, within fifteen (15) days after Millennium's disclosure relating to the
development status of such Dropped Gene, either select the Dropped Gene as a
Selected QT or elect to maintain its status as a Dropped Gene at all times
thereafter. If Bayer selects the Dropped Gene as a Selected QT, (x) Bayer shall
pay Millennium a success fee for the Configured Assay with respect to such
Selected QT, and (y) the non-exclusive license set forth in Section 4.2 of this
Agreement and the Millennium covenant not to xxx set forth in Section 4.4 of
this Agreement shall apply as though such Selected QT were a Returned QT and
shall be limited to Millennium Know-How (and corresponding Millennium Patent
Rights) generated by Millennium prior to the development of the applicable
Configured Assay and to the Configured Assay. In the case that Millennium uses
commercially reasonable efforts over a period of at least nine months but fails
to develop a Configured Assay for a Dropped Gene, the same general principles
shall apply to any alternative drug discovery activities undertaken by
Millennium and the rights of Bayer with respect to such Dropped Gene. For
example, if, in any such case, Millennium identifies a lead structure through
rational drug design without the aid of a Configured Assay, Millennium shall be
deemed to have developed a Configured Assay and initiated a high-throughput
screen.
Section 2.7 IDENTIFICATION AND SELECTION OF QTS.
(a) GENERAL LIMITATIONS. The following general limitations shall be
applicable with respect to the entry of QTs into the Discovery Pool:
(i) CFA QTS. Unless otherwise agreed by Bayer, in each Contract Year
during the Discovery Program Term at least [**] of the QTs entered into the
Discovery Pool shall be CFA QTs.
(ii) [**]. In each Contract Year during the Discovery Program Term,
Millennium may, in its discretion, propose that up to [**] of the QTs entered
into the Discovery Pool be [**] QTs, PROVIDED THAT such QTs must have a
Disease/Therapeutic Hypothesis [**] or in another disease area approved by the
Bayer Program Director.
(iii) [**]. No QT may be entered into the Discovery Pool if it is a
[**] unless agreed upon by Bayer.
(iv) NOVEL ANNOTATION PROTEINS. Unless otherwise agreed by the Program
Directors, Millennium shall have filed a patent application covering and
claiming the [**] of a [**] at or prior to the designation of such [**] as a QT.
(b) QT DESIGNATIONS. The Program Directors shall, on an ongoing basis
during the Discovery Program Term, review the Druggable Targets identified in
the Target Discovery Program and determine and designate by mutual agreement (i)
the Disease/Therapeutic Hypothesis or Hypotheses associated with each such QT
and (ii) whether, according to the criteria set forth in the definition of
"Qualified Target" and in the Research Plan, a target constitutes a QT, except
that, in the case of [**], the Millennium Program Director (or others acting on
his behalf) will have sole responsibility for determining whether the criteria
set forth in Section 1.62(iii) have been met with respect to designating a
target as a QT, PROVIDED THAT the foregoing shall not apply to the determination
of whether a Millennium [**].
(c) DISCOVERY POOL; QTS IN DISCOVERY POOL. The Discovery Pool shall include
(A) all CFA QTs as soon as determined to meet the criteria for status as QTs in
accordance with Section 2.7(b) and (B) subject to the limitations set forth in
Section 2.7(a) above, [**] that (1) are determined by the Program Directors to
meet the criteria for status as QTs, and (2) have a Disease/Therapeutic
Hypothesis [**] or in another disease area approved by the Bayer Program
Director. The Discovery Pool shall not include CTs.
(d) BAYER SELECTIONS FROM DISCOVERY POOL. Bayer shall review the QTs in the
Discovery Pool on a continuing basis during the Discovery Program Term and shall
have the right to select a maximum of 225 QTs (or such lower aggregate number of
QTs as shall have been entered into the Discovery Pool during the Discovery
Program Term) from the Discovery Pool at any time during the Discovery Program
Term, PROVIDED THAT with respect to a QT that enters the Discovery Pool within
[**] prior to the expiration of the Discovery Program Term, Bayer shall have the
right to select such QT for a period of [**] after such QT enters the Discovery
Pool. The Bayer Program Director shall notify the Millennium Program Director of
each selection of a QT within [**] after such selection.
(e) RIGHTS TO WAIVED QTS. Millennium shall retain all rights to use all
Waived QTs for all purposes. As used in this Agreement, a "Waived QT" means (a)
any Failed QT that is not a CT, and (b) any QT in the Discovery Pool that (i) is
not selected by Bayer in accordance with Section 2.7(d), and (ii) is not a CT.
(f) FAILED QTS AFTER THE RESTATEMENT EXECUTION DATE. Any QT which becomes a
Failed QT after the Restatement Execution Date shall be automatically entered
into the Conversion Pool as a CT as of the date the QT is designated as a Failed
QT. From and after the date any such Failed QT is entered into the Conversion
Pool it will be identified as a CT and not as a QT or Failed QT.
Section 2.8 ADDITIONAL ACTIVITIES IN CFAS. As part of the Discovery
Program, Millennium shall undertake further development activities with respect
to CFA QTs selected by Bayer. These activities principally fall into two
categories: Assay Configuration Activities and Screen to Clinic Validation
Activities.
(a) ASSAY CONFIGURATION.
(i) DESIGNATION OF DEVELOPER. Bayer and Millennium shall determine
by mutual agreement, on a Selected QT-by-Selected QT basis, which Party has the
optimal expertise/resources to convert a CFA QT into a Configured Assay (as
delineated in the Research Plan, "Assay Configuration Activities") and shall by
mutual agreement designate such Party as the developer of the Configured Assay
for each such Selected QT. In making such designations, the objective of the
Program Directors shall be to allocate development responsibility equitably
between the Parties, taking into consideration the degree of anticipated
difficulty in developing a Configured Assay for a particular QT. In addition,
the Program Directors shall allocate such development responsibility in a manner
reasonably necessary at any given time to enable Millennium to satisfy its
overall commitment to configure the number of Configured Assays specified in
subsection (ii) below. However, if the Parties are unable to agree on such
designation, the matter shall be resolved by the Bayer Program Director.
Configured Assays for Selected QTs may also be configured jointly by Bayer and
Millennium, in which event the terms and conditions of Millennium's use of such
Configured Assays in relation to Returned QTs under Section 4.2 shall be
determined by mutual agreement on a case-by-case basis at the time work on the
Configured Assay is commenced. If a Party is developing a Configured Assay for a
Selected QT and requests the other Party to assist it in [**] in connection with
developing such assay, such other Party shall provide such assistance. The
provision of such assistance shall not make a Configured Assay a jointly
Configured Assay. If a Party requests such assistance, such Party shall have
[**] to develop the Configured Assay for the Selected QT before such Selected QT
becomes a Failed QT. The Party responsible for developing a Configured Assay for
a Selected QT shall use commercially reasonable efforts to do so as soon as
practicable. If a Party responsible for developing a Configured Assay for a
Selected QT is unable to do so, it shall report to the other Party on its
efforts and the reasons for such inability.
(ii) MILLENNIUM COMMITMENT. Millennium shall make available sufficient
assay configuration resources to configure [**] Configured Assays for Selected
QTs over the Discovery Program Term, PROVIDED THAT in the event that Millennium
is unable to configure an assay for any of the Selected QTs for which it is the
designated developer, Millennium shall make available assay configuration
resources to configure an additional Configured Assay (not to exceed an
additional [**] such Configured Assays). Millennium's obligation to make
available such assay configuration resources shall terminate as of the earlier
of (A) [**], or (B) [**] after the date upon which Bayer selects the last
Selected QT from the Discovery Pool for which Millennium is designated during
the Discovery Program Term as the developer of the related Configured Assay.
Millennium shall provide to Bayer the standard operating procedures, tools and
reagents necessary to use each Millennium Configured Assay, with limits and
quantities relating to such reagents to be set forth in the Research Plan.
(iii) ASSAY SPECIFICATIONS. The Research Plan shall include
specifications for Configured Assays generally, and the Program Directors shall
by mutual agreement establish additional specifications for each assay
(collectively, "Assay Specifications"). Each Party shall use commercially
reasonable efforts to develop Configured Assays in conformance with the
applicable Assay Specifications.
(iv) ASSAY CONFIGURATION DATE. The Program Directors shall determine
by mutual agreement whether a Configured Assay for a Selected QT has been
developed in accordance with the Assay Specifications. With respect to a Bayer
Configured Assay for a Selected QT, the date of such determination by the
Program Directors (or, in the event that the Program Directors fail to reach
agreement, the date of determination pursuant to Section 2.14) shall be the
"Assay Configuration Date" for such Bayer Configured Assay. With respect to a
Millennium Configured Assay for a Selected QT, the later of (A) the date such
assay is delivered to a destination designated by Bayer (or failing any such
designation, to Bayer's facility in Wuppertal), or (B) the date of the
determination by the Program Directors (or, in the event that the Program
Directors fail to reach agreement, the date of determination pursuant to Section
2.14 that the Configured Assay has been developed in conformance with the Assay
Specifications, shall be the "Assay Configuration Date" for such Millennium
Configured Assay. Bayer shall have the right to test each such Millennium
Configured Assay to confirm that it has been developed in conformance with the
Assay Specifications. If, within [**] after a Millennium Configured Assay has
been delivered to a Bayer location as specified above, Bayer does not provide
written notice to Millennium that such Millennium Configured Assay failed to
conform to the Assay Specifications based on such tests, the Assay Configuration
Date shall remain the date specified above. However, if Bayer determines that
the Millennium Configured Assay does not conform to the Assay Specifications
based upon such tests and so notifies Millennium within such [**] period, the
Parties shall work together for a period of [**] to modify the Millennium
Configured Assay to enable it to conform to the Assay Specifications; in such
event, the date that the Parties agree that the Millennium Configured Assay
meets such Assay Specifications shall be the "Assay Configuration Date" for such
Millennium Configured Assay. If the Parties are unable to modify the Millennium
Configured Assay within such [**] period (or such longer period as may be
mutually agreed) to enable it to meet the Assay Specifications, the Selected QT
related to such Millennium Configured Assay shall become a Failed QT.
(b) SCREEN TO CLINIC VALIDATION. On a selective basis to be determined by
Bayer and as further described in the Research Plan, Millennium shall provide
additional resources (approximately [**] in the First Contract Year, and an
average of approximately [**] in each of the Second through Fifth Contract
Years) necessary to engage in (i) additional validation of CFA QTs selected by
Bayer for which lead compounds have been discovered and/or (ii) additional
validation or optimization of the lead compounds targeted to CFA QTs
(collectively, "Screen to Clinic Validation Activities"), PROVIDED THAT no such
Screen to Clinic Validation Activities shall be undertaken under the Discovery
Program with respect to First Stage QTs (as defined in Section 2.10 below)
unless otherwise mutually agreed. Examples of Screen to Clinic Validation
Activities include, without limitation, high throughput gain or loss of function
studies in cell-based systems, profiling of compounds targeted to CFA QTs and
the development of animal models (e.g., through transgenic, knockout and gene
delivery methods) to further validate the CFA QTs and/or lead compounds targeted
to them.
Section 2.9 [**] RESEARCH ACTIVITIES. Unless otherwise agreed by the
Parties on a case-by-case basis, Millennium shall [**].
Section 2.10 PROGRESSION OF SELECTED QT FROM FIRST TO THIRD STAGES.
For the purpose of determining which Selected QTs shall become Returned QTs,
each Selected QT shall pass through a series of development stages or become a
Returned QT, as set forth in this Section 2.10.
(a) FIRST STAGE. After a Selected QT has been developed into a Configured
Assay, such Selected QT shall become a first stage QT ("First Stage QT") for a
maximum of [**] from the Assay Configuration Date for such QT (the "First Stage
Period"). During the First Stage Period with respect to each First Stage QT,
Bayer shall [**] after the expiration of the First Stage Period for each First
Stage QT, either (x) Bayer shall designate such First Stage QT as a second stage
QT (a "Second Stage QT") or (y) Bayer will relinquish its exclusive rights under
Section 4.1(a) with respect to such QT (a "Returned QT"). Bayer may not
designate more than [**] First Stage QTs and First Stage CTs, in the aggregate,
to become Second Stage QTs.
(b) SECOND STAGE. A Second Stage QT shall remain a Second Stage QT for a
maximum of [**] from the time of its designation as a Second Stage QT (the
"Second Stage Period"). During the Second Stage Period with respect to each
Second Stage QT, Bayer shall [**] after the expiration of the Second Stage
Period for each Second Stage QT, either (x) Bayer shall designate such Second
Stage QT as a third stage QT (a "Third Stage QT"), or (y) such Second Stage QT
shall be designated by Bayer as a Returned QT. Bayer may not designate more than
[**] Second Stage QTs and Second Stage CTs, in the aggregate, to become Third
Stage QTs.
(c) THIRD STAGE. A Third Stage QT shall remain a Third Stage QT for a
maximum of [**] from the time of its designation as a Third Stage QT (the "Third
Stage Period"). During the Third Stage Period, with respect to each Strategic
Project associated with a Third Stage QT, Bayer shall [**] after the expiration
of the Third Stage Period for each Third Stage QT, either (x) the Development
Candidate associated with such Third Stage QT shall be taken into further
development and be retained by Bayer, or (y) such Third Stage QT shall be
designated by Bayer as a Returned QT. Bayer may not designate more than [**]
Third Stage QTs and Third Stage CTs, in the aggregate, to become Development
Candidates.
(d) FAILED QTS AND NON-SCREENED QTS. With respect to each Failed QT which
Bayer has elected to retain as a Selected QT (excluding Failed QTs which are
designated as CTs and entered into the Conversion Pool) and each Selected QT
which Bayer intends to develop without using a Configured Assay (such as through
rational drug design), the Parties shall discuss in good faith and implement
timing and return standards substantially similar to the provisions of
subsections (a) through (c).
(e) EARLY DETERMINATIONS. In the case of First, Second and Third Stage QTs,
the time periods set forth in Section 2.10(a), (b), and (c) are intended as
maximum time periods. Consequently, Bayer shall notify Millennium of any
decision it makes with respect to discontinuing permanently the activities
required to be undertaken for any First, Second or Third Stage QT within [**] of
such decision, in which instance such QT shall immediately be designated as a
Returned QT.
(f) ACTIVITIES NOT PART OF DISCOVERY PROGRAM. Any activities undertaken, by
either Party with respect to a Returned QT following its designation as such
shall not be considered to be part of the Discovery Program or the Bayer QT
Development Program.
(g) FORCE MAJEURE. The time periods set forth in Section 2.10(a), (b), and
(c) shall be extended in the event of (and for the duration of) delays relating
to the activities set forth in such Sections as a result of any cause or causes
beyond the control of Bayer, including, but not limited to, the events described
in Section 12.8.
Section 2.11 DILIGENCE OBLIGATION. Bayer shall use reasonable
commercial efforts to undertake the activities relating to each First, Second
and Third Stage QT that is not a Returned QT, as provided in Section 2.10,
PROVIDED THAT Bayer may discontinue or suspend such activities from time to time
with respect to a particular Selected QT if Bayer determines that it is
commercially reasonable to do so (any such discontinuation or suspension,
however, to have no effect on the time periods set forth in Section 2.10(a),
(b), and (c)).
Section 2.12 MILLENNIUM PARTICIPATION IN DEVELOPMENT. Millennium shall
participate with Bayer in the research and development of Small Molecule Drugs
under development by Bayer in the Discovery Program (other than Small Molecule
Drugs based upon Returned QTs) as follows: (a) for Small Molecule Drugs that
have not yet reached Development Candidate status, the Parties shall establish
an appropriate forum to provide Millennium with the opportunity to be informed
of and comment on the research and development activities relating to all such
Small Molecule Drugs on at least a quarterly basis; and (b) for Small Molecule
Drugs that have reached Development Candidate status, Bayer shall provide
Millennium with the opportunity to be informed of and comment on the
development, clinical and regulatory activities related to all such Small
Molecule Drugs, PROVIDED THAT Bayer shall have the right to make all
determinations relating to research, development, clinical and regulatory issues
relating to Small Molecule Drugs.
Section 2.13 REPORTS.
(a) MONTHLY SPREADSHEETS. In order to assist the Parties in administering
the Discovery Program and the Bayer QT Development Program, and in the selection
and return of QTs, the Program Directors shall provide jointly prepared
spreadsheets to the Parties within five (5) business days after the end of each
calendar month covering the following matters for such month:
(i) the following matters relating to the conduct of the Discovery
Program: (A) the QTs entered into the Discovery Pool; (B) the success fees
invoiced or paid; (C) statistical information concerning Assay Configuration
Activities relating to Selected QTs; (D) statistical information concerning
Screen to Clinic Validation Activities; and (E) the QTs that have been
designated by Millennium [**];
(ii) the following matters relating to the Bayer QT Development
Program: (A) each First Stage QT that has reached the end of the First Stage
Period, and whether such First Stage QT has become a Second Stage QT or a
Returned QT; (B) each Second Stage QT that has reached the end of the Second
Stage Period, and whether such Second Stage QT has become a Third Stage QT or a
Returned QT; (C) each Third Stage QT that has reached the end of the Third Stage
Period and whether such Third Stage QT has become a Development Candidate or a
Returned QT; and (D) the number of First, Second and Third Stage QTs that have
become Returned QTs cumulatively since the Effective Date; and
(iii) such other matters mutually deemed relevant by the Program
Directors or the Parties.
(b) SEMI-ANNUAL REPORTS. The Program Directors shall jointly prepare and
deliver summary reports to the Parties within thirty (30) days after the end of
each April and October during the Discovery Program Term and the period during
which the Bayer QT Development Program is being conducted summarizing the
information included in the monthly spreadsheets for such calendar half-year and
providing a narrative report on the status of the activities being conducted in
the Discovery Program and the Bayer QT Development Program.
(c) SPREADSHEET AND REPORT FORMATS. The Program Directors shall establish
by mutual agreement standard formats for the monthly spreadsheet and the
semi-annual report. Such formats shall be incorporated in the Research Plan.
Section 2.14 DECISION MAKING. The goal of all decision making shall be
to achieve consensus. The Program Directors and Project Teams shall decide
matters appropriate to their scope of responsibilities on a consensus basis. If
a matter cannot be resolved by a Project Team on a consensus basis, it shall be
referred to the Program Directors for resolution. In the event that the Program
Directors are unable to reach agreement on any matter within fifteen (15) days
after the matter is referred to them, the issue shall be referred for resolution
to the Joint Steering Committee and, if the Joint Steering Committee is unable
to reach agreement on such matter within thirty (30) days after the matter is
referred to it, to the Executive Officers, PROVIDED THAT the following matters
shall not be referred to the Joint Steering Committee or to the Executive
Officers or to arbitration under Article XI: (a) whether, under Section 2.1, the
Target Discovery Program should include work [**] or using target discovery
approaches other than a Target by Class Drug Discovery Approach; (b) approval of
any changes or modifications to the Research Plan pursuant to Section 2.4; (c)
whether a QT is a Failed QT; (d) the extension or shortening of the time for the
configuration of an assay under Section 2.8 or Section 3.5; and (e) the matters
referred to in Section 2.9. If the Executive Officers are unable to resolve a
matter referred to them under this Section 2.14, and the issue relates to a
Designated Scientific Issue, the Parties shall resolve that matter through the
use of an expedited mediation process, in which the Parties first try to agree
on a mutually acceptable scientist to serve as the mediator (failing mutual
agreement on a single scientist, each Party appoints a scientist not affiliated
with such Party and the two so selected pick a third unaffiliated scientist).
The mediator(s) shall review the disputed matter on an expedited basis (not to
exceed 45 days), considering the relevant data, standards established by this
Agreement and the Research Plan and relevant precedents. The decision of the
mediator(s) shall be binding on the Parties. If the Executive Officers are
unable to resolve a matter referred to them under this Section within thirty
(30) days after the matter is referred to them and the issue is not a Designated
Scientific Issue, the provisions of Article X shall apply.
ARTICLE III
CONVERSION PROGRAM.
Section 3.1 OVERVIEW. The primary objective of the Conversion Program
is to provide Bayer with access to a pool of Conversion Targets from which Bayer
may choose Selected CTs for use by Bayer in conducting Assay Configuration
Activities and the development by Bayer of Bayer Royalty Products. Millennium
acknowledges that, during the course of [**] in the Discovery Program, the Bayer
QT Development Program, the Conversion Program or the Bayer CT Development
Program, Bayer may [**] that is a QT or a CT. Millennium agrees that Bayer may
[**] and for which use Bayer would require a license grant from Millennium.
Section 3.2 MANAGEMENT OF THE CONVERSION PROGRAM.
(a) PROGRAM DIRECTORS. Bayer and Millennium have each appointed a Program
Director for the benefit of the Discovery Program and the Bayer QT Development
Program, and each Party shall continue to have an appointed Program Director
during the Conversion Program Term and the term of the Bayer CT Development
Program for the benefit of the Conversion Program and the Bayer CT Development
Program. Each Party shall have the right, after consultation with the other
Party, to designate a different Program Director.
(b) JOINT STEERING COMMITTEE. During the Discovery Program Term, the
Parties established a Joint Steering Committee, comprised of (i) three (3)
senior executives of Bayer and three (3) senior executives of Millennium, and
(ii) the Program Directors. The Joint Steering Committee shall remain in place
during the Conversion Program Term and the term of the Bayer CT Development
Program and shall meet quarterly, or if mutually agreed by the Parties, at least
semi-annually to (i) review the efforts of the Parties in the conduct of the
Conversion Program and the Bayer CT Development Program, and (ii) attempt to
resolve any disputes relating to this Agreement that may arise between the
Parties. The location of such meetings of the Joint Steering Committee shall
alternate between Massachusetts and Germany, or as otherwise agreed by the
Parties. The Joint Steering Committee may also meet by means of a telephone
conference call. Each Party may change any one or more of its representatives to
the Joint Steering Committee at any time upon notice to the other Party. Each
Party shall use reasonable efforts to cause its representatives to attend the
meetings of the Joint Steering Committee. If a representative of a Party is
unable to attend a meeting, such Party may designate an alternate to attend such
meeting in place of the absent representative. In addition, each Party may, at
its discretion, invite non-voting employees, and, with the consent of the other
Party, consultants or scientific advisors, to attend the meetings of the Joint
Steering Committee. Decisions of the Joint Steering Committee shall be made by
majority vote of all of the members of the Joint Steering Committee. In general,
matters to be agreed upon or approved by the Parties shall be referred to the
Joint Steering Committee. Either Party may convene a special meeting of the
Joint Steering Committee for the purpose of resolving disputes.
Section 3.3 IDENTIFICATION AND PROVISION OF CONVERSION TARGETS.
(a) MILLENNIUM OBLIGATION. Millennium shall use commercially reasonable
efforts (i) until October 31, 2003, to undertake the process set forth in
subsection (d) below with the objective of identifying at least [**] CTs for
inclusion in the Conversion Pool, and (ii) until November 30, 2003, to finalize
data packages and to update exhibits hereto relating to those CTs identified for
inclusion in the Conversion Pool. In the event that the Parties agree on [**]
CTs for inclusion in the Conversion Pool prior to October 31, 2003, Millennium
shall continue to use commercially reasonable efforts to identify additional CTs
for inclusion in the Conversion Pool until October 31, 2003. Except as set forth
in this Section 3.3, Millennium will have no obligation to identify targets for
inclusion in the Conversion Pool.
(b) INITIAL CT DESIGNATIONS. As of the commencement of the Conversion
Program Term, Millennium shall enter the IP on Sequence Targets and [**] Protein
CTs into the Conversion Pool as CTs. From and after the Restatement Execution
Date, EXHIBIT E will automatically be deemed to include any CT identified as a
[**] Protein CT by mutual agreement of the Program Directors during the period
commencing on the Restatement Execution Date and ending as of the beginning of
the Conversion Program Term.
(c) POST-RESTATEMENT FAILED-QT CTS. Each Post-Restatement Failed-QT CT will
automatically enter the Conversion Pool as a CT as of the date it becomes a
Failed QT, PROVIDED HOWEVER, that if such date would be before the beginning of
the Conversion Program Term, then such CT shall be entered into the Conversion
Pool as of the beginning of the Conversion Program Term. From and after the
Restatement Execution Date, EXHIBIT E will automatically be deemed to include
any such QT that becomes a Post-Restatement Failed-QT CT as of the date
specified in the preceding sentence.
(d) PROCESS FOR INCLUSION OF CTS. The Program Directors shall work together
during the period from the Restatement Execution Date through the end of the
Discovery Program Term to identify and include in the Conversion Pool [**]
Protein CTs to meet the objectives set forth in Section 3.3(a). The Bayer
Program Director, in consultation with the Millennium Program Director, shall
have the right to identify CTs proposed by Millennium for inclusion in the
Conversion Pool until October 31, 2003. For purposes of clarity, Millennium will
not be required to undertake any additional experimental activities in the
conduct of the CT designation process set forth in this Section 3.3(d),
including, without limitation, any activity relating to the identification or
characterization of any target, other than producing, with the agreement of the
Program Directors, gene expression-related data as described in Section 1.34.
Section 3.4 CHANGES TO LICENSED INDICATIONS AND RESTRICTED TARGET
STATUS.
(a) Until three (3) business days after the Restatement Execution Date, the
Bayer Program Director may give the Millennium Program Director notice by e-mail
reducing the scope to a subset of the Licensed Indication(s) for the CTs listed
on EXHIBIT E as of the Restatement Execution Date, and EXHIBIT E will be deemed
automatically amended as a result of such notice. The Millennium Program
Director shall promptly send an e-mail to the Bayer Program Director
acknowledging receipt of the Bayer Program Director's e-mail. If a CT was a [**]
but, as a result of such notice from Bayer to Millennium, none of the
indication(s) listed in the "Restrictions" column for a particular CT on EXHIBIT
E are included in the Licensed Indication(s) for such CT, then, notwithstanding
anything to the contrary in this Agreement, such CT shall no longer be deemed a
[**].
(b) For a period of three (3) weeks after the identification of a CT as a
[**] Protein CT, where such CT is identified as a [**] Protein CT following the
Restatement Execution Date, the Bayer Program Director may give the Millennium
Program Director notice by e-mail reducing the scope to a subset of the Licensed
Indication(s) for such [**] Protein CT as set forth on EXHIBIT E, and EXHIBIT E
will be deemed automatically amended as a result of such notice. The Millennium
Program Director shall promptly send an e-mail to the Bayer Program Director
acknowledging receipt of the Bayer Program Director's e-mail. If the
corresponding [**] Protein on EXHIBIT E was a [**] but, as a result of such
notice from Bayer to Millennium, none of the indication(s) listed in the
"Restrictions" column for the corresponding [**] Protein as set forth in EXHIBIT
E are included in the Licensed Indication(s) for such [**] Protein CT on EXHIBIT
E, then, notwithstanding anything to the contrary in this Agreement, such [**]
Protein CT shall no longer be deemed a [**].
(c) For a period of thirty (30) days after a Post-Restatement Failed-QT CT
enters the Conversion Pool after the Restatement Execution Date, the Bayer
Program Director may give the Millennium Program Director notice by e-mail of
the Licensed Indication(s) for such Post-Restatement Failed-QT CT (such Licensed
Indication(s) to be within the CFA of the corresponding Failed QT (as set forth
in EXHIBIT D)) and EXHIBIT D and EXHIBIT E will be deemed automatically amended
as a result of such notice (including without limitation by deleting the
corresponding Failed QT from EXHIBIT D and including the Post-Restatement
Failed-QT CT on EXHIBIT E). The Millennium Program Director shall promptly send
an e-mail to the Bayer Program Director acknowledging receipt of the Bayer
Program Director's e-mail. If the corresponding Failed QT on EXHIBIT D was a
[**], but, as a result of such notice from Bayer to Millennium, none of the
indication(s) listed in the "Restrictions" column for the corresponding Failed
QT as set forth in EXHIBIT D are included in the Licensed Indication(s) for such
Post-Restatement Failed-QT CT on EXHIBIT E, then, notwithstanding anything to
the contrary in this Agreement, such Post-Restatement Failed-QT CT shall no
longer be deemed a [**].
(d) After the last Post-Restatement Failed-QT CT has entered into the
Conversion Pool, Bayer shall provide Millennium with a signed copy of EXHIBIT D
and EXHIBIT E which shall be acknowledged by Millennium by countersignature. The
Millennium Program Director shall promptly provide a copy of such exhibits to
the Bayer Program Director.
(e) With respect to each of QT [**], Millennium shall use commercially
reasonable efforts to complete, on or before October 31, 2003, an analysis as to
whether such QT is a [**] Protein with respect to CV Angiogenesis, and
Millennium will provide to Bayer written notice confirming the results of such
analysis. In the event that Millennium determines, based on such results, that
any such QT is not a [**] Protein with respect to CV Angiogenesis, EXHIBIT D or
EXHIBIT E, as applicable, will be deemed automatically amended, effective upon
delivery of such results to Bayer, so that the reference to "CV Angiogenesis" in
the "Licensed Indication(s)" column of such exhibit with respect to such QT is
deleted.
Section 3.5 SELECTION OF CTS BY BAYER; ASSAY CONFIGURATION;
UNCONFIGURED [**] CTS.
(a) BAYER SELECTIONS FROM CONVERSION POOL. Bayer will have the right to
select CTs from the Conversion Pool at any time during the Conversion Program
Term. Upon Bayer's selection of a CT from the Conversion Pool, the CT will be
designated as a Selected CT. The Bayer Program Director shall notify the
Millennium Program Director of each selection of a CT within ten (10) days after
such selection.
(b) MILLENNIUM NOTICE CONCERNING SELECTED CTS. Millennium shall, within
thirty (30) days after receipt of notice from Bayer concerning its selection of
a CT, provide written notice to Bayer if it believes that such Selected CT
constitutes an Enabled [**] CT, with such notice specifying the publication that
Millennium believes constitutes an Enabling Publication. If Bayer disagrees that
a publication is an Enabling Publication, then such dispute shall be resolved in
accordance with the terms of this Agreement. If Millennium does not provide such
notice within the prescribed period, then, notwithstanding anything to the
contrary in this Agreement, in no event shall such Selected CT be designated an
Enabled [**] CT.
(c) UNCONFIGURED [**] CTS. If Bayer fails to successfully develop a
Configured Assay with respect to any Selected CT on or before the applicable CT
Assay Configuration Deadline, then the Selected CT will be designated as an
Unconfigured [**] CT, subject to the provisions of Section 3.6(c) below.
(d) LIMIT ON MILLENNIUM OPTION. Millennium's option and license rights to
Bayer Returned Target Know-How and Bayer Returned Target Patent Rights under
Section 4.2(d) shall not apply to Unconfigured [**] CTs.
Section 3.6 ENABLING PUBLICATIONS.
(a) BAYER SELECTION OF ENABLED CTS. During the Conversion Program Term, if
an Enabling Publication is published and a Configured Assay has not already been
developed with respect to the related CT, Bayer shall either (i) select such
Enabled CT pursuant to Section 3.5(a) within [**] days after the Publication
Date of the Enabling Publication or (ii) such Enabled CT will be designated as
an Enabled [**] CT.
(b) MILLENNIUM NOTIFICATION. The Millennium Program Director shall provide
written notice to the Bayer Program Director during the Conversion Program Term
promptly after he/she becomes aware of an Enabling Publication relating to any
CT that is not a [**] CT, and such notice shall specify the Enabling
Publication. For the purpose of clarity, neither Millennium nor the Millennium
Program Director shall have any obligation to undertake a search for Enabling
Publications.
(c) SCIENTIFIC FAILURE. If Bayer fails to develop a Configured Assay for an
Enabled CT on or before the applicable CT Assay Configuration Deadline and such
failure is as a result of a Scientific Failure, then such Enabled CT shall not
be designated as an Enabled [**] CT but shall return to the Conversion Pool and
shall no longer be deemed a Selected CT.
(d) LIMIT ON MILLENNIUM OPTION. Millennium's option and license rights to
Bayer Returned Target Know-How and Bayer Returned Target Patent Rights under
Section 4.2(d) shall not apply to Enabled [**] CTs.
Section 3.7 DESIGNATED [**] CTS. Subject to Section 3.1, at the end
of each full Contract Year of the Conversion Program Term commencing at the end
of the [**], Millennium shall have the right to designate [**] CTs as Designated
[**] CTs, PROVIDED THAT any such CT is not a Selected CT. Notwithstanding the
foregoing, if the CT that Millennium desires to designate as a Designated [**]
CT is an [**] CT but is not an [**] CT, Millennium must first provide Bayer with
notice that it desires to designate the [**] CT as a [**] CT. If Bayer fails to
select the [**] CT from the Conversion Pool within [**] of Millennium's notice,
then such CT shall be designated as a [**] CT in accordance with this Section
3.7. If Bayer selects the [**] CT from the Conversion Pool within such [**]
period, then Bayer must develop a Configured Assay with respect thereto in
accordance with Section 3.6. If Bayer fails to develop a Configured Assay with
respect thereto in accordance with Section 3.6, then such [**] CT shall be
designated as an [**] CT pursuant to Section 3.5(c). Millennium shall provide
Bayer from time to time with one or more notices stating which targets it
intends to designate as [**] CTs pursuant to this Section 3.7 within [**] after
the end of a Contract Year or Millennium shall lose the right to so designate.
If Millennium fails to designate [**] CTs as [**] CTs for any one Contract Year
pursuant to this Section 3.7, Millennium will not have the right to
carry-forward unused designations to subsequent Contract Years during the
Conversion Program Term. Millennium's option and license rights to Bayer
Returned Target Know-How and Bayer Returned Target Patent Rights under Section
4.2(d) shall not apply [**].
Section 3.8 OUTPUT OBLIGATIONS.
(a) MINIMUM ASSAY CONFIGURATION REQUIREMENTS. Bayer will be obligated to
develop a minimum number of Configured Assays during each full Contract Year of
the Conversion Program Term commencing with the [**] equal to (i) [**]
multiplied by EP (ii) minus the Assay Configuration Credits, where "EP" is the
number of Enabling Publications with a Publication Date in the immediately
preceding Contract Year; PROVIDED, HOWEVER, that notwithstanding the foregoing
Bayer, in no event may the calculation of ([**] multiplied by EP) exceed [**]
for any Contract Year, regardless of how may Enabling Publications had a
Publication Date in the immediately preceding Contract Year. If, based on the
formula noted above, Bayer is able to develop more Configured Assays than is
required in a particular Contract Year, then Bayer may carry forward a credit
(the "Assay Configuration Credit") equal to the number of Configured Assays in
excess of the number required for the Contract Year and apply it to Bayer's
assay configuration requirement in any following Contract Year. For example, if,
during the [**] there are [**] Enabling Publications, and Bayer has one Assay
Configuration Credit available, then, for the [**], Bayer will be required to
develop [**] Configured Assays.
(b) ADDITIONAL [**] CTS. If, in any full Contract Year of the Conversion
Program Term commencing with the [**], Bayer fails to develop the minimum number
of Configured Assays required by Section 3.8(a) for the Contract Year, then at
the end of such Contract Year, Millennium shall have the right to designate a
number of CTs that are not Selected CTs as Additional [**] CTs equal to (i) (A)
the minimum number of Configured Assays required by Section 3.8(a) for the
Contract Year minus (B) the number of Configured Assays actually developed by
Bayer in such Contract Year, multiplied by (ii) one (1) for the [**], two (2)
for the [**] or [**] and three (3) for the [**]. For example, if, in accordance
with the calculation set forth in Section 3.8(a), Bayer is required to develop
[**] Configured Assays during the [**], but Bayer develops [**], then Millennium
shall have the right to designate [**] CTs. Millennium shall provide Bayer from
time to time with one or more notices stating which CTs that are not Selected
CTs that it intends to designate as [**] CTs pursuant to this Section 3.8 within
[**] after the end of the applicable Contract Year. For clarity, any
designations pursuant to this Section 3.8 will be in addition to Millennium's
right to designate [**] CTs pursuant to Section 3.7. Millennium's option and
license rights to Bayer Returned Target Know-How and Bayer Returned Target
Patent Rights under Section 4.2(d) shall not apply [**].
Section 3.9 PROGRESSION OF SELECTED CT FROM FIRST TO THIRD STAGES.
For the purpose of determining which Selected CTs shall become Returned CTs,
each Selected CT that is not a Selected [**] CT shall pass through a series of
development stages or become a Returned CT, as set forth in this Section 3.9(b).
For the avoidance of doubt, these development stages do not apply [**].
(a) FIRST STAGE. After a Selected CT has been developed into a Configured
Assay by or on behalf of Bayer, such Selected CT shall become a first stage CT
("First Stage CT") for a maximum of [**] from the date that a Configured Assay
was developed for such CT (the "CT First Stage Period"). During the CT First
Stage Period with respect to each First Stage CT, Bayer shall [**]. [**] after
the expiration of the CT First Stage Period for each First Stage CT, either (x)
Bayer shall designate the First Stage CT as a second stage CT ("Second Stage
CT") or (y) Bayer will relinquish its exclusive rights under Section 4.1(a) with
respect to the CT (a "Returned CT"). Bayer may not designate more than [**]
First Stage QTs and First Stage CTs, in the aggregate, to become Second Stage
QTs and Second Stage CTs.
(b) SECOND STAGE. A Second Stage CT shall remain a Second Stage CT for a
maximum of [**] from the date of its designation as a Second Stage CT (the "CT
Second Stage Period"). During the CT Second Stage Period with respect to each
Second Stage CT, Bayer or an Affiliate or sublicensee shall [**]. [**] after the
expiration of the Second Stage Period for each Second Stage CT, either (x) Bayer
shall designate the Second Stage CT as a third stage CT ("Third Stage CT") or
(y) the Second Stage CT shall be designated by Bayer as a Returned CT. Bayer may
not designate more than [**] Second Stage QTs and Second Stage CTs, in the
aggregate, to become Third Stage QTs and Third Stage CTs.
(c) THIRD STAGE. A Third Stage CT shall remain a Third Stage CT for a
maximum of [**] from the date of its designation as a Third Stage CT (the "CT
Third Stage Period"). During the CT Third Stage Period, with respect to each
Strategic Project associated with a Third Stage CT, Bayer or an Affiliate or
sublicensee shall [**]. [**] after the expiration of the CT Third Stage Period
for each Third Stage CT, either (x) the Development Candidate associated with
the Third Stage CT shall be taken into further development and be retained by
Bayer, or (y) the Third Stage CT shall be designated by Bayer as a Returned CT.
Bayer may not designate more than [**] Third Stage QTs and Third Stage CTs, in
the aggregate, to become Development Candidates.
(d) EARLY DETERMINATIONS. In the case of First, Second and Third Stage CTs,
the time periods set forth in Section 3.9(a), Section 3.9(b) and Section 3.9(c)
are intended as maximum time periods. Consequently, Bayer shall notify
Millennium of any decision it makes with respect to discontinuing permanently
the activities required to be undertaken for any First, Second or Third Stage CT
within [**] of such decision, in which instance such CT shall immediately be
designated as a Returned CT.
(e) SURVIVAL. The timelines set forth in subsections (a) through (c) shall
survive the Conversion Program Term.
(f) ACTIVITIES NOT PART OF CONVERSION PROGRAM. Any activities undertaken,
by either Party with respect to a Returned CT following its designation as such
shall not be considered to be part of the Conversion Program or the Bayer CT
Development Program.
(g) FORCE MAJEURE. The time periods set forth in Section 3.9(a), Section
3.9(b) and Section 3.9(c) shall be extended in the event of (and for the
duration of) delays relating to the activities set forth in such subsections as
a result of any cause or causes beyond the control of Bayer, including, but not
limited to, the events described in Section 12.8.
Section 3.10 END OF CONVERSION PROGRAM TERM. Following the end of the
Conversion Program Term, Bayer will have no rights to (a) CTs that it does not
select prior to the end of the Conversion Program Term ("Unselected CTs"), or
(b) Unconfigured [**] CTs, and any rights granted to Bayer in this Agreement
with respect to such CTs shall terminate as of the end of the Conversion Program
Term.
Section 3.11 COMPLIANCE WITH LAW. Each Party agrees to use
commercially reasonable efforts to carry out all work done in the course of the
Conversion Program in material compliance with all applicable federal, state or
local laws, regulations and guidelines governing the conduct of such work,
including, without limitation, all applicable export and import control laws.
Section 3.12 PATENT-RELATED INFORMATION.
(a) INITIAL DATA. Within [**] days after the Restatement Execution Date,
and with respect only to CTs in the Conversion Pool as of the Restatement
Execution Date, Millennium will provide Bayer with a written report relating to
the following: Millennium Patent Rights, agreements between a third party and
Millennium or any Millennium Affiliate, and any patents or patent applications
of third parties known to Millennium, in each case to the extent that such
information is material either to the ability of Bayer to develop Small Molecule
Drugs based upon such CT or to Bayer's decision to utilize such CT to develop
Small Molecule Drugs.
(b) SUBSEQUENT PATENT INFORMATION. After the Restatement Execution Date,
Millennium shall on a quarterly basis provide Relevant Patent Information to
Bayer during the Conversion Program Term, PROVIDED THAT Millennium shall have no
obligation under this Section 3.12(b) to conduct any search or analysis or to
monitor third party patents issuing following the Restatement Execution Date. As
used herein, "Relevant Patent Information" means information (i) made available
to Millennium in the course of filing and/or prosecuting Millennium Patent
Rights relating to CTs that enter the Conversion Pool after the Restatement
Execution Date, including, but not limited to, information contained in
correspondence received from patent offices and (ii) updates of the prosecution
status with respect to Millennium Patent Rights.
Section 3.13 BIOLOGICAL MATERIALS.
(a) MILLENNIUM OBLIGATIONS. For the purposes of facilitating the conduct of
the Conversion Program and the Bayer CT Development Program, Millennium agrees
to provide Bayer on or before December 31, 2003 with the following [**];
PROVIDED THAT, if Bayer specifically requests that Millennium provide the [**],
Millennium will provide Bayer with [**] shall constitute the [**] for such CT:
(i) [**] of Failed QT that are designated as CTs for which Millennium
was the Party designated to develop the Configured Assay;
(ii) up to an [**] relating to CTs designated by the Bayer Program
Director on or before June 1, 2003, PROVIDED THAT, (A) [**], and (B) [**]; and
(iii) such additional [**] as Millennium may identify through a search
of its existing DNA libraries.
For clarity, Millennium will not be obligated to provide CT Materials for any CT
which is a Failed QT under the Discovery Program and where Bayer was the Party
designated to develop the Configured Assay for such target.
(b) TECHNICAL INQUIRIES. From and after [**], Millennium shall have no
further obligation to provide CT Materials to Bayer, PROVIDED THAT the
Millennium Program Director shall use commercially reasonable efforts to respond
to any technical inquiries from the Bayer Program Director regarding CT
Materials previously provided by Millennium to Bayer.
(c) BAYER RESPONSIBILITY. From and after [**], Bayer shall be responsible
[**] relating to, CTs. If Bayer elects to utilize a third party vendor to
provide such [**], Bayer shall first discuss with Millennium the possibility of
utilizing Millennium to provide such [**] before Bayer utilizes a third party
vendor to provide such [**]. In the event that Bayer utilizes a third party
vendor to provide [**] for each Selected CT (whether such CT is a Selected CT at
the time Bayer obtains the CT Materials from such vendor or subsequently becomes
a Selected CT), Bayer may deduct reasonable amounts charged by such vendor for
such [**] pursuant to Section 6.3. [**] for a Selected CT from a third party
vendor, Bayer shall provide Millennium with a statement of the amounts charged
by such vendor [**].
(d) USE OF CT MATERIALS. The Parties agree that: (i) all CT Materials
provided by Millennium to Bayer shall be used solely for research purposes in
material compliance with all applicable federal, state or local laws,
regulations and guidelines; (ii) all such CT Materials are provided without any
warranties, express or implied; (iii) Millennium shall obtain (or cause its
third party collaborators to obtain or certify that they have obtained) all
appropriate and required consents from the source of such CT Materials; and (iv)
CT Materials provided by Millennium to Bayer shall not be made available by
Bayer to any third party except upon the prior written consent of Millennium,
which consent shall not be required with respect to any CT Materials made
available by Bayer in connection with (A) a sublicense to the corresponding CT
granted by Bayer in accordance with Section 4.1(b) or Section 4.2(b) or (B)
Fee-For-Service Work.
Section 3.14 IDENTIFICATION OF RESTRICTIONS. Millennium shall identify
to Bayer at the earliest possible stage of the process of reviewing potential
Conversion Targets the proprietary status of any gene sequence encoding a
Conversion Target under consideration (e.g., whether it is derived from [**],
etc.) as well as any potential restrictions that would limit or otherwise affect
Bayer's rights set forth in Article IV to [**], including without limitation any
royalty obligations or co-promotion or co-marketing rights relating to such
Conversion Target and whether Millennium has in-licensed any rights from a Third
Party relating to such Conversion Target.
Section 3.15 MILLENNIUM PARTICIPATION IN DEVELOPMENT. Millennium shall
participate with Bayer in the research and development of Small Molecule Drugs
under development by Bayer in the Conversion Program as follows: (a) for Small
Molecule Drugs that have not yet reached Development Candidate status, Bayer
will provide Millennium at quarterly JSC meetings with the opportunity to be
informed of and comment on the research and development activities relating to
all such Small Molecule Drugs; and (b) for Small Molecule Drugs that have
reached Development Candidate status, Bayer shall provide Millennium with the
opportunity to be informed of the development, clinical and regulatory
activities related to all such Small Molecule Drugs at the reasonable request of
Millennium. Bayer shall have the right to make all determinations relating to
research, development, clinical and regulatory issues relating to Small Molecule
Drugs.
Section 3.16 REPORTING REQUIREMENTS.
(a) GENERAL. In order to administer the Conversion Program and the Bayer CT
Development Program, including the selection and return of CTs, the Bayer
Program Director shall notify the Millennium Program Director in writing about:
(i) the following matters relating to the conduct of the Conversion
Program: (A) the date a CT is selected by Bayer from the Conversion Pool as a
Selected CT; (B) the date a CT becomes an Unconfigured [**] CT; (C) the date of
development of a Configured Assay for a CT; and (D) the failure by Bayer to
develop a Configured Assay for an Enabled CT as a result of a Scientific
Failure, and an explanation as to the nature of such failure;
(ii) the following matters relating to the Bayer CT Development
Program: (x) each First Stage CT that has reached the end of the CT First Stage
Period, and whether such First Stage QT has become a Second Stage CT or a
Returned CT; (y) each Second Stage CT that has reached the end of the CT Second
Stage Period, and whether such Second Stage CT has become a Third Stage CT or a
Returned CT; (z) each Third Stage CT that has reached the end of the CT Third
Stage Period and whether such Third Stage CT has become a Development Candidate
or a Returned CT; and
(iii) such other matters mutually deemed relevant by the Program
Directors or the Parties.
Notification by the Bayer Program Director under subsections (i) and (ii) shall
be via e-mail or any other form of written notification and shall occur within
[**] after the foregoing events.
(b) SEMI-ANNUAL REPORTS. The Bayer Program Director shall prepare and
deliver a summary spreadsheet to the Millennium Program Director within [**]
days after the end of each April and October during the Conversion Program Term
and the period during which the Bayer CT Development Program is being conducted
summarizing:
(i) the following matters relating to the conduct of the Conversion
Program: (A) the CTs selected by Bayer from the Conversion Pool; (B) statistical
information concerning Assay Configuration Activities relating to Selected CTs;
and (C) the CTs that have been designated as [**] CTs.
(ii) the following matters relating to the Bayer CT Development
Program: (A) the number of First, Second and Third Stage CTs, and (B) the number
of First, Second and Third Stage CTs that have become Returned CTs cumulatively
since the Effective Date.
The Program Directors shall establish by mutual agreement standard formats for
the semiannual spreadsheet.
Section 3.17 DECISION-MAKING. The goal of all decision making during
the Conversion Program shall be to achieve consensus. The Program Directors
shall decide matters on a consensus basis. In the event that, during the
Conversion Program, the Program Directors are unable to reach agreement on any
matter within [**] after the matter is referred to them, the issue shall be
referred for resolution to the Executive Officers. If the Executive Officers are
unable to resolve a matter referred to them under this Section 3.17, and the
issue relates to a Designated Scientific Issue, the Parties shall resolve that
matter through the use of an expedited mediation process, in which the Parties
first try to agree on a mutually acceptable scientist to serve as the mediator
(failing mutual agreement on a single scientist, each Party appoints a scientist
not affiliated with such Party and the two so selected pick a third unaffiliated
scientist). The mediator(s) shall review the disputed matter on an expedited
basis (not to exceed [**]), considering the relevant data, standards established
by this Agreement and the Research Plan and relevant precedents. The decision of
the mediator(s) shall be binding on the Parties. If the Executive Officers are
unable to resolve a matter referred to them under this Section within [**] after
the matter is referred to them and the issue is not a Designated Scientific
Issue, the provisions of Article XI shall apply.
Section 3.18 POST-CONVERSION PROGRAM TERM. After the Conversion
Program Term, until such time as no Bayer Royalty Product or Millennium Royalty
Product which have been developed are no longer being sold, each Party shall
submit to the other Party semi-annual reports on the development and marketing
of Bayer Royalty Products or Millennium Royalty Products, as the case may be.
The Parties shall meet annually to review such development and marketing
efforts.
ARTICLE IV
BAYER AND MILLENNIUM RIGHTS AND OBLIGATIONS
RELATING TO SELECTED QTS, SELECTED CTS AND CTS
Section 4.1 LICENSE GRANT WITH RESPECT TO SELECTED QTS AND SELECTED
CTS.
(a) LICENSE.
(i) GRANT WITH RESPECT TO SELECTED QTS. Subject to the terms and
conditions of this Agreement, Millennium hereby grants to Bayer and its
Affiliates an exclusive license in the Territory, under Millennium's rights to
Millennium Know-How and Millennium Patent Rights, (A) to research, develop, make
and use Selected QTs [**] and the Configured Assays (including without
limitation Millennium Configured Assays) that embody or are based on such
Selected QTs, to the extent necessary to discover or develop Bayer Royalty
Products for the applicable Licensed Indication(s) through the use of such
Selected QTs, and (B) to make, have made, import, use, have used, offer for
sale, sell and have sold for the applicable Licensed Indication(s) Bayer Royalty
Products that are discovered or developed through the use of such Selected QTs,
subject, in the case of both subsections (A) and (B), to any applicable field
restrictions or exclusivity limitations in the case of any Selected QTs that
are [**].
(ii) GRANT WITH RESPECT TO SELECTED CTS. Subject to the terms and
conditions of this Agreement, Millennium hereby grants to Bayer and its
Affiliates an exclusive license in the Territory, under Millennium's rights to
Millennium Know-How and Millennium Patent Rights, (A) to research, develop, make
and use Selected CTs [**] and the Configured Assays (including without
limitation Millennium Configured Assays) that embody or are based on such
Selected CTs, to the extent necessary to discover or develop Bayer Royalty
Products for the applicable Licensed Indication(s) through the use of such
Selected CTs, and (B) to make, have made, import, use, have used, offer for
sale, sell and have sold for the applicable Licensed Indication(s) Bayer Royalty
Products that are discovered or developed through the use of such Selected CTs,
subject, in the case of both subsections (A) and (B), to any applicable field
restrictions or exclusivity limitations in the case of any such Selected CTs
that are [**].
(b) SUBLICENSE RIGHTS. Bayer shall have the right to enter into sublicenses
relating to the licenses granted in Section 4.1(a) with respect to Development
Candidates on which Bayer has filed an IND or its equivalent. In addition, Bayer
shall be permitted to engage one or more third parties for Fee-For-Service Work
in connection with its license grants. Each such sublicense shall be consistent
with the provisions of this Agreement, and shall incorporate the following
provisions of this Agreement for the benefit of Millennium: Section 4.4, Section
6.9, Article VIII and Section 12.1(a). In addition, any sublicense by Bayer of
its license rights under Section 4.1(a)(i)(A) or Section 4.1(a)(ii)(A), shall
contain contractual terms that provide that Millennium will have the same rights
with respect to access to Bayer Returned Target Know-How and Bayer Returned
Target Patent Rights (including access to compounds) as if Bayer had conducted
this work itself. Bayer shall provide Millennium with a copy of each such
sublicense agreement promptly after execution thereof (which copy may be
redacted to reflect confidential business or scientific terms).
(c) SPECIAL TERMS RELATING TO QTS [**]. On or before the date that [**] is
designated as a QT, Bayer shall have the option (exercisable by providing
written notice to Millennium on or prior to such designation date) to extend the
scope of such licenses to the Field. In the event that (i) Bayer does not
exercise the option set forth in the first sentence of this Section 4.1(c), and
(ii) during the Discovery Program Term, Millennium discovers a [**] within a CFA
indication that is not a Licensed Indication(s) for a QT that is also a [**]
and, PROVIDED THAT Millennium shall have filed a patent application covering and
claiming such [**], EXHIBIT D shall be automatically updated to include in the
Licensed Indication(s) for such QT such [**] and the licenses and options set
forth in this Article IV will be expanded to apply to the disease area which is
the subject of such [**]. In the event that (A) Bayer does not exercise the
option set forth in the first sentence of this Section 4.1(c), and (B) during
the Discovery Program Term, Millennium discovers [**] for a QT that is [**] and
the Parties may, by mutual agreement, expand the licenses and options set forth
in this Article IV to include the disease area which is the subject of such
[**].
Section 4.2 License Grant, Retained Rights and Option With Respect to
Returned QTs, Returned CTs and [**]. With respect to each Returned QT, Returned
CT and [**] CT, the rights of Bayer and Millennium to such target shall be as
follows:
(a) LICENSE.
(i) GRANT WITH RESPECT TO RETURNED QTS. Subject to the terms and
conditions of this Agreement, Millennium hereby grants to Bayer and its
Affiliates a non-exclusive license in the Territory, under Millennium's rights
to Millennium Know-How and Millennium Patent Rights, (A) to research, develop,
make and use Returned QTs and Configured Assays (including without limitation
Millennium Configured Assays) that embody or are based on such Returned QTs, to
the extent necessary to discover or develop Bayer Royalty Products for the
applicable Licensed Indication(s) through the use of such Returned QTs, and (B)
to make, have made, import, use, have used, offer for sale, sell and have sold
for the applicable Licensed Indication(s) Bayer Royalty Products that are
discovered or developed through the use of such Returned QTs, subject, in the
case of both subsections (A) and (B), to any applicable field restrictions in
the case of any Returned QTs that are [**].
(ii) GRANT WITH RESPECT TO RETURNED CTS AND [**] CTS. Subject to the
terms and conditions of this Agreement, Millennium hereby grants to Bayer and
its Affiliates a non-exclusive license in the Territory, under Millennium's
rights to Millennium Know-How and Millennium Patent Rights, (A) to research,
develop, make and use the Returned CTs and [**] CTs and Configured Assays
(including without limitation Millennium Configured Assays) that embody or are
based on such Returned CTs and [**] CTs, to the extent necessary to discover or
develop Bayer Royalty Products for the applicable Licensed Indication(s) through
the use of such Returned CTs or [**] CTs, and (B) make, have made, import, use,
have used, offer for sale, sell and have sold for the applicable Licensed
Indication(s) Bayer Royalty Products that are discovered or developed through
the use of Returned CTs and [**] CTs, subject, in the case of both subsections
(A) and (B), to any applicable field restrictions in the case of any Returned
CTs or [**] CTs that are [**].
(b) SUBLICENSE RIGHTS. Bayer shall have the right to enter into sublicenses
relating to the licenses granted in Section 4.2(a) with respect to Development
Candidates on which Bayer has filed an IND or its equivalent. In addition, Bayer
shall be permitted to engage one or more third parties for Fee-For-Service Work
in connection with its license grant. Each such sublicense shall be consistent
with the provisions of this Agreement, and shall incorporate the following
provisions of this Agreement for the benefit of Millennium: Section 4.4, Section
6.9, Article VIII and Section 12.1(a). In addition, any sublicense by Bayer of
its license rights under Section 4.2(a)(i)(A) or (ii)(A) pertaining to Returned
QTs or Returned CTs for which Millennium may still exercise its rights pursuant
to Section 4.2(d)(ii) shall contain contractual terms that provide that
Millennium will have the same rights with respect to access to Bayer Returned
Target Know-How and Bayer Returned Target Patent Rights (including access to
compounds) as if Bayer had conducted this work itself. Bayer shall provide
Millennium with a copy of each such sublicense agreement promptly after
execution thereof (which copy may be redacted to reflect confidential business
or scientific terms).
(c) MILLENNIUM RETAINED RIGHTS. Millennium shall retain all rights in all
fields (including the Field) to (i) each Returned QT, Returned CT and [**] CT
(and, if applicable, the Millennium Configured Assay that embodies or is based
on such Returned QT, Returned CT or [**] CT), subject to Bayer's non-exclusive
rights set forth in subsections (a) and (b) and Bayer's rights set forth in
Section 4.4, and (ii) each Waived QT.
(d) OPTIONAL MILLENNIUM RIGHTS.
(i) MILLENNIUM OPTION. At Millennium's option (exercisable as
provided below), Bayer shall grant to Millennium and its Affiliates a
non-exclusive license in the Territory, under Bayer's rights in Bayer Returned
Target Know-How and Bayer Returned Target Patent Rights to the extent necessary,
(A) to research, develop, make and use any or all of the
following (as determined by Millennium), in connection with the use of a
Returned QT or Returned CT to discover or develop Small Molecule Drugs for the
applicable Licensed Indication(s) for such Returned QT or Returned CT: (1) the
Bayer Configured Assay that embodies or is based on such Returned QT or Returned
CT, together with the standard operating procedures and reagents necessary to
use such Bayer Configured Assay for such purpose, subject to the limitations set
forth below; (2) if a Second Stage QT is designated as a Returned QT or a Second
Stage CT is designated as a Returned CT, the most promising lead structure (in
Bayer's reasonable judgment) under development by Bayer, and the optimization
history of such lead structure and the data pertinent to critical optimization
decisions that relate to such lead structure (the "Second Stage Information"),
including without limitation, information on the major structural templates that
were evaluated by Bayer and relevant SAR data; and (3) if a Third Stage QT is
designated as a Returned QT or a Third Stage CT is designated as a Returned CT,
the most promising lead structure (in Bayer's reasonable judgment) under
development by Bayer, and the optimization history of such lead structure and
the data pertinent to critical optimization decisions that relate to such lead
structure (the "Third Stage Information"), including without limitation, related
SAR data, related pharmacological data (including toxicology and ADME
information) and information related to chemical synthesis, PROVIDED, HOWEVER,
that, in the case of a Second Stage QT, Third Stage QT, Second Stage CT or Third
Stage CT, Bayer shall not be obligated to grant any such license with respect to
the most promising lead structure if such lead structure is under development by
Bayer as a Development Candidate or later stage drug candidate outside of the
Bayer QT Development Program or the Bayer CT Development Program, in which event
Bayer shall be obligated to grant such a license with respect to the next most
promising lead structure that is not a Development Candidate or later stage drug
candidate outside of the Bayer QT Development Program and the Bayer CT
Development Program, and
(B) to make, have made, import, use, have used, offer for sale,
sell and have sold Small Molecule Drugs for the applicable Licensed
Indication(s) that are discovered or developed by Millennium through the use of
Returned QTs or Returned CTs pursuant to Section 4.2(d)(i)(A).
Notwithstanding the foregoing, Millennium's option with respect to Bayer
Configured Assays under subsection (A)(1) above shall apply to all such assays
that are not Cell-Based Assays and to [**] all Cell-Based Assays (such
percentage to be measured on an annual basis at the end of each calendar year).
If Millennium exercises the foregoing option with respect to subsection (A)(1)
above, Bayer shall transfer to Millennium the applicable cell line, standard
operating procedures for such assay, information relating to the reagents and
quantities of the applicable reagents with limits and quantities as set forth in
the Research Plan, PROVIDED THAT Bayer shall not be obligated to provide
proprietary equipment and related Know-How (e.g., robotics and detection
systems) relating to an assay. If Millennium exercises the foregoing option with
respect to subsections (A)(2) or (A)(3) above, Bayer shall also transfer to
Millennium as soon as practicable at least [**] of such most promising (or such
next most promising, if applicable) lead structure, quantities of the applicable
reagents with limits and quantities consistent with the stage of development of
such lead structure, as well as all of the Second Stage Information or Third
Stage Information, as the case may be. For the avoidance of doubt, Millennium's
option and license rights to Bayer Returned Target Know-How and Bayer Returned
Target Patent Rights under this Section 4.2(d) shall not apply [**].
(ii) EXERCISE OF OPTION. With respect to each Returned QT and Returned
CT, Millennium may exercise the option set forth in subsection (i) by providing
written notice to Bayer within [**] days after a Selected QT becomes a Returned
QT or a Selected CT becomes a Returned CT, as the case may be. Such notice shall
indicate the specific Bayer Returned Target Know-How and Bayer Returned Target
Patent Rights (e.g., Bayer Configured Assay, lead structure, Second Stage
Information and Third Stage Information) for which the option is being
exercised; PROVIDED, HOWEVER that (A) in the event that Millennium elects to
exercise such option with respect to Bayer Returned Target Know-How and/or Bayer
Returned Target Patent Rights set forth in Section 4.2(d)(i)(A)(1) for a
Returned QT or Returned CT, and such Returned QT or Returned CT is a Second
Stage QT or Second Stage CT, as applicable, then Millennium shall also exercise
its option with respect to all of the Second Stage Information set forth in
Section 4.2(d)(i)(A)(2) for such Returned QT or Returned CT, as applicable
(including without limitation the Bayer lead structure and pertinent data), and
(B) in the event that Millennium elects to exercise such option with respect to
Bayer Returned Target Know-How and/or Bayer Returned Target Patent Rights set
forth in Section 4.2(d)(i)(A)(1) for a Returned QT or Returned CT, and such
Returned QT or Returned CT is a Third Stage QT or Third Stage CT, as applicable,
then Millennium shall also exercise its option with respect to all of the Third
Stage Information set forth in Section 4.2(d)(i)(A)(3) for such Returned QT or
Returned CT, as applicable (including without limitation the Bayer lead
structure and pertinent data). The license shall be granted effective as of the
date of the Millennium notice of exercise.
(iii) SUBLICENSE RIGHTS. Millennium shall have the right to enter into
sublicenses under the licenses granted to Millennium under Section 4.2(d)(i)(A);
PROVIDED, HOWEVER that Millennium will not have the right to sublicense Bayer
Returned Target Know-How and Bayer Returned Target Patent Rights described in
Section 4.2(d)(i)(A)(2) and Section 4.2(d)(i)(A)(3) unless the sublicense occurs
after Millennium has filed an IND or its equivalent with respect to, or has
first tested in human, a lead structure provided by Bayer pursuant to
Millennium's exercise of the option set forth in Section 4.2(d)(i)(A)(2) or
Section 4.2(d)(i)(A)(3), or any modified version of such lead structure derived
therefrom (in which case Millennium shall have the right to enter into
sublicenses and to grant the right to its permitted sublicensees to enter into
further sublicenses). In addition, Millennium shall be permitted to engage one
or more third parties for Fee-For-Service Work in connection with its license
grant. Millennium shall have the right to enter into sublicenses relating to the
license granted in Section 4.2(d)(i)(B). Any sublicense under Section 4.2(d)(i)
shall be consistent with the provisions of this Agreement, and shall incorporate
the following provisions of this Agreement for the benefit of Bayer: Section
4.4, Section 6.9, Article VIII and Section 12.1(b). Millennium shall provide
Bayer with a copy of each such sublicense agreement promptly after execution
thereof (which copy may be redacted to reflect confidential business or
scientific terms).
(iv) ADDITIONAL PROVISIONS. In the event that (i) Millennium exercises
the option set forth in Section 4.2(d)(i)(A) or (B), with respect to a Returned
QT or Returned CT, (ii) Millennium has obtained (as a result of exercise of the
option) access to Bayer lead structures and pertinent data, as described in
Section 4.2(d)(i)(A)(2) and Section 4.2(d)(i)(A)(3), and (iii) Millennium
intends to sublicense such lead structures, or any modified version of such lead
structure derived therefrom, and pertinent data to a commercial third party in
connection with Millennium's grant to such third party of marketing rights to
Small Molecule Drugs discovered through the use of the applicable Optioned
Returned Target, then the right of first negotiation provisions of Section 5.1
below shall apply with respect to such Returned QT or Returned CT. In the event
that Millennium exercises the option set forth in Section 4.2(d)(i)(A)(2) or
(3), Millennium shall pay royalties to Bayer on Millennium Royalty Products, if
any, at the royalty rates described in Section 6.5 of this Agreement.
(v) SPECIAL PROVISIONS RELATING TO OPTION RIGHTS.
(A) In the event that a Millennium [**] occurs with respect to a
Selected QT that is a [**] and Bayer subsequently elects to designate such
Selected QT as a Returned QT because of such Millennium [**], the option held
by Millennium under this subsection (d) shall not apply to such Returned QT.
(B) In the event that a Millennium [**] occurs with respect to a
Selected CT that is a [**] and Bayer subsequently elects to designate such
Selected CT as a Returned CT because of such Millennium [**], the option held by
Millennium under this subsection (d) shall not apply to such Returned CT.
Section 4.3 [**] QTS.
(a) GENERAL. As used in this Agreement, (i) a "[**] QT" means a QT that has
a Disease/Therapeutic Hypothesis [**] and that is designated by Millennium as a
"[**] QT" within [**] after such QT is entered into the Discovery Pool and (ii)
a "Millennium-Designated [**]" means one (1) [**] that is associated (on the
basis of a Disease/Therapeutic Hypothesis) with a QT, as designated by
Millennium at the time such QT is designated a [**] by Millennium. Millennium
may designate up to [**] in each of the [**] and may designate the same or a
different Millennium Designated [**] QT. Within [**] after any such designation
by Millennium, Bayer shall have the right to veto such designation by providing
written notice of such veto to Millennium (a "Vetoed [**] QT").
(b) RIGHTS RELATING TO [**] QTS NOT VETOED BY BAYER. In the event that
Bayer, under Section 2.7(d), selects a [**] QT that is not a Vetoed [**] QT,
such Selected QT shall be deemed to be a Returned QT effective as of the
expiration of the [**] veto period specified in subsection (a), and the
non-exclusive license grant, the retained rights and the option set forth in
Section 4.2 shall apply with respect to such Returned QT. The option set forth
in Section 4.2 with respect to a [**] QT that is not a Vetoed [**] QT shall
apply only during the [**] period following the expiration of the First Stage
Period for such [**] QT and to the Bayer Returned Target Know-How and Bayer
Returned Target Patent Rights set forth in Section 4.2(d)(i)(A)(1).
(c) RIGHTS RELATING TO VETOED [**] QTS. In the event that Bayer selects a
Vetoed [**] QT under Section 2.7(d), such Selected QT shall not be considered to
be a [**] QT for purposes of the exclusive license grant set forth in Section
4.1(a) and, accordingly, shall be subject to such exclusive license grant and to
the provisions of Section 2.10, PROVIDED, HOWEVER, that if such Selected QT is
subsequently designated by Bayer as a Returned QT pursuant to Section 2.10, then
the non-exclusive license grant, the retained rights and the option set forth in
Section 4.2 shall apply with respect to such Returned QT.
(d) ROYALTY RATE RELATING TO VETOED [**] QTS. Notwithstanding the
provisions of Section 6.4 (except as provided below), the royalty rate payable
on the Net Sales in a country of a Bayer Royalty Product that (i) is discovered
or developed through the use of a Vetoed [**] QT and (ii) is registered and
approved for commercial sale in such country by the appropriate regulatory
authority for use in the treatment of a Millennium-Designated [**] (irrespective
of whether it is so registered and approved for use in the treatment [**] that
is not a Millennium-Designated [**]) but is not so registered and approved for
use in the treatment [**] shall be [**] percent ([**]%) of such Net Sales,
PROVIDED, HOWEVER, that in the event that such Bayer Royalty Product is
subsequently registered and approved for commercial sale in such country by the
appropriate regulatory authority for use in the treatment of any CFA, then (A)
Millennium shall provide Bayer (in the form of a credit against future royalties
due Millennium on the Net Sales in such country of such Bayer Royalty Product)
with an amount equal to the difference between the amount of the royalties on
the Net Sales in such country of such Bayer Royalty Product that Bayer actually
paid to Millennium pursuant to this Section 4.3(d) and the amount of the
royalties on the Net Sales in such country of such Bayer Royalty Product that
Bayer would have paid to Millennium pursuant to the provisions of Section 6.4,
and (B) the royalty rate payable on all subsequent Net Sales in such country of
such Bayer Royalty Product shall be determined in accordance with the provisions
of Section 6.4.
Section 4.4 [**] COVENANTS.
(a) CTS IN THE CONVERSION POOL. Each Party covenants [**], the other Party
(or its Affiliates, licensees or sublicensees), under such Party's, its
Affiliate's or its Affected Licensee's, as the case may be, rights to
Biology-Related IP, for making and using a CT in the Conversion Pool to the
extent necessary to discover or develop a Configured Assay that embodies or is
based on such CT, where such Configured Assay is for use in the discovery or
development of any therapeutic or prophylactic agent, the active ingredient of
which is [**], for the Licensed Indication(s) for such CT. For purposes of
clarity, Bayer shall not have any rights under any Know-How or Patent Rights
owned or otherwise controlled by Millennium to use any CT in the Conversion Pool
to discover or develop any therapeutic or prophylactic agent, the active
ingredient of which is [**]. Further, Bayer shall have no right to perform high
throughput screening of a CT for the discovery or development of any therapeutic
or prophylactic agent, the active ingredient of which is [**], for the Licensed
Indication(s) for such CT [**]. Further, the term "[**]" as used in this
subsection shall not include any pharmaceutical product in which the active
ingredient is [**].
(b) SELECTED CTS. Millennium covenants [**], Bayer (or its Affiliates,
licensees or sublicensees), under Millennium's, its Affiliate's or its Affected
Licensee's, as the case may be, rights to Biology-Related IP, for making and
using a Selected CT that is not a Returned CT to the extent necessary to
discover, develop or use a Configured Assay that embodies or is based on such
Selected CT in order to discover or develop [**] for the Licensed Indication(s)
for such Selected CT and to make, have made, import, use, have used, offer for
sale, sell and have sold such [**] in the applicable Licensed Indication(s).
Notwithstanding the foregoing, Bayer shall not have any rights under any
Know-How or Patent Rights owned or otherwise controlled by Millennium to use for
any purpose any CT [**].
(c) [**] CTS. Bayer covenants [**], Millennium (or its Affiliates,
licensees or sublicensees), under Bayer's, its Affiliate's or its Affected
Licensee's, as the case may be, rights to Biology-Related IP, for making and
using a [**] CT to the extent necessary to discover, develop or use a Configured
Assay that embodies or is based on such [**] CT in order to discover or develop
any therapeutic or prophylactic agent, the active ingredient of which is a [**],
for the Licensed Indication(s) for such [**] CT and to make, have made, import,
use, have used, offer for sale, sell and have sold such therapeutic or
prophylactic agent in the applicable Licensed Indication(s). For purposes of
clarity, the term "[**]" as used in this subsection shall not include any
pharmaceutical product in which the active ingredient is [**].
(d) UNSELECTED CTS. Bayer covenants [**], Millennium (or its Affiliates,
licensees or sublicensees), under Bayer's, its Affiliate's or its Affected
Licensee's, as the case may be, rights to Biology-Related IP, for making and
using an Unselected CT to the extent necessary to discover, develop or use a
Configured Assay that embodies or is based on such Unselected CT in order to
discover or develop any therapeutic or prophylactic agent, the active ingredient
of which is a [**], for such Unselected CT and to make, have made, import, use,
have used, offer for sale, sell and have sold such therapeutic or prophylactic
agent. For purposes of clarity, the term "[**]" as used in this subsection shall
not include any pharmaceutical product in which the active ingredient is [**].
(e) RETURNED QTS AND RETURNED CTS. Each Party covenants [**], the other
Party (or its Affiliates, licensees or sublicensees), for using a Returned QT or
a Returned CT to discover or develop [**] in the Licensed Indication(s) for such
Returned QT or Returned CT, as applicable, or to make, have made, import, use,
have used, offer for sale, sell and have sold for the applicable Licensed
Indication(s) such [**], under any of such Party's, its Affiliate's or its
Affected Licensee's, as the case may be, rights to (i) Biology-Related IP and
(ii) Know-How that is embodied in, or Patent Rights that cover, inventions
relating to such Returned QT or Returned CT, as applicable, where such
inventions were made prior to the designation of such QT or CT as a Returned QT
or Returned CT, as applicable.
Section 4.5 NON-SUIT COVENANT WITH RESPECT TO REQUIRED
PHARMACOGENOMIC ASSAYS.
(a) MILLENNIUM COVENANT. Millennium covenants not to xxx Xxxxx (or its
Affiliates or sublicensees), under (i) Millennium's rights in Millennium
Know-How or Millennium Patent Rights, or (ii) other rights (owned or otherwise
controlled by Millennium) to Know-How that is embodied in, or Patent Rights that
cover, any inventions made through the use of Millennium Know-How, for the
making, developing, importing, exporting, using, offering for sale or selling of
a Required Pharmacogenomic Assay associated with a Bayer Royalty Product.
(b) BAYER COVENANT. Bayer covenants not to xxx Millennium (or its
Affiliates or sublicensees), under (i) Bayer's rights in Bayer Returned Target
Know-How or Bayer Returned Target Patent Rights, or (ii) other rights (owned or
otherwise controlled by Bayer) to Know-How that is embodied in, or Patent Rights
that cover, any inventions made through the use of Bayer Returned Target
Know-How, for the making, developing, importing, exporting, using, offering for
sale or selling of a Required Pharmacogenomic Assay associated with a Small
Molecule Drug.
Section 4.6 RETAINED RIGHTS.
(a) BAYER RETAINED RIGHTS. Any of Bayer's rights to Bayer Returned Target
Know-How and Bayer Returned Target Patent Rights not specifically licensed to
Millennium under this Agreement, including without limitation, Bayer's rights to
compounds discovered by Bayer through the use of Selected QTs, Selected CTs
and/or to Configured Assays, shall be retained by Bayer, subject, in the case of
Required Pharmacogenomic Assays, to the provisions of Section 4.5(b).
(b) MILLENNIUM RETAINED RIGHTS. Any of Millennium's rights to Millennium
Know-How and Millennium Patent Rights not specifically licensed to Bayer under
this Agreement shall be retained by Millennium, including without limitation,
Millennium's exclusive right to use QTs and CTs for the development of
therapeutic and prophylactic products [**] and diagnostic, information and other
products and services, subject, in the case of Required Pharmacogenomic Assays,
to the provisions of Section 4.5(a).
ARTICLE V
[**]; ADDITIONAL DEVELOPMENT PROGRAMS
Section 5.1 OPTIONED RETURNED TARGETS. If Millennium intends to [**]
receive marketing rights to Small Molecule Drugs discovered through the use of
one or more Returned QTs or Returned CTs with respect to which Millennium has
exercised the option set forth in Section 4.2(d)(i)(A)(1), (2) and/or (3) (an
"Optioned Returned Target"), (ii) Millennium has obtained (as a result of
exercise of the option) access to Bayer lead structures, or any modified version
of such lead structure derived therefrom, and pertinent data, as described in
Section 4.2(d)(i)(A)(2) and Section 4.2(d)(i)(A)(3), and (iii) Millennium
intends to sublicense such lead structures and pertinent data to a commercial
third party in connection with Millennium's grant to such third party of
marketing rights to Small Molecule Drugs discovered through the use of the
applicable Optioned Returned Target, whether as part of a standalone program
relating to such Optioned Returned Target or as part of a broader relationship
encompassing such Optioned Returned Target and other projects (a "Section 5.1
Opportunity"), then Millennium shall [**] as to whether it has [**]. [**] shall
include information reasonably necessary [**]. If, during the [**], the Parties
shall [**] on such terms as may be mutually agreeable. If (a) [**] or (b) [**]
but the Parties are unable to reach mutual agreement with respect to [**],
Millennium shall be free, during the [**] period commencing as of the end of the
[**] or the end of the [**], to enter into a transaction relating to such [**].
Millennium and Bayer recognize that [**], numerous factors may be taken into
account and given appropriate weight, including without limitation, [**] in the
relevant markets. If Millennium [**] subsequent commercial transactions [**].
Notwithstanding the foregoing, if, within such [**], Millennium obtains material
new data relating to such Optioned Returned Target, [**] Millennium shall [**]
set forth in this Section 5.1 shall [**].
Section 5.2 [**] AREAS. If, prior to the end of the Fifth Contract
Year, (a) a collaboration arrangement with respect to a [**] Area between
Millennium and one of its commercial collaborative partners as of the Effective
Date (an "Original Partner") (as detailed in Exhibit B) terminates or expires
and (b) Millennium wishes to begin negotiations with another commercial third
party(ies) (i.e., other than the Original Partner or its Affiliates) with
respect to a relationship to undertake a broad-based program with the goal of
identifying and qualifying targets for use in Small Molecule drug discovery in
such [**] Area, whether as part of a standalone [**] Area program or as part of
a broader relationship encompassing the [**] Area and other diseases and
conditions (a "Section 5.2 Opportunity"), Millennium shall [**] as to whether it
has [**]. [**] shall include information reasonably necessary [**] with respect
to such [**]. If, during the [**], Bayer indicates that it [**], the Parties
shall [**] on such terms as may be mutually agreeable. If (i) [**] in discussing
such [**] or (b) [**] but the Parties are unable to reach mutual agreement with
respect to such [**], Millennium shall be free, during the [**] commencing as of
the end of the [**], to enter into a collaborative research and development
arrangement relating to such [**]. Millennium and Bayer recognize that in [**],
numerous factors may be taken into account and given appropriate weight,
including without limitation, [**] in the relevant markets. If Millennium [**]
subsequent commercial collaborations [**].
Section 5.3 [**] QTS. If, prior to the end of the Discovery Program
Term, Millennium intends to begin negotiations with a commercial third
party(ies) pursuant to which such third party(ies) will receive marketing rights
to [**] discovered through the use of [**], whether as part of a stand alone
program [**] or as part of a broader relationship encompassing [**] and other
projects (a "[**]"), Millennium shall [**] shall include information reasonably
necessary [**]. If, during the [**], the Parties [**] on such terms as may be
mutually agreeable. If (a) [**] in discussing such [**], or (b) [**], but the
Parties are unable to reach mutual agreement with respect to such [**],
Millennium shall be free, during the [**] commencing as of the end of the [**],
to enter into a transaction relating to such [**]. The Parties recognize that in
[**], numerous factors may be taken into account and given appropriate weight,
including without limitation, [**] in the relevant markets. If Millennium [**]
subsequent commercial transactions [**].
Section 5.4 COLLABORATIVE TECHNOLOGY DEVELOPMENT PROGRAM. In order to
facilitate the opportunity to identify and collaborate on technology development
opportunities of mutual benefit and interest to the Parties, appropriate leaders
of the Parties' respective technology development activities for drug discovery
and development may meet annually to discuss their plans for technology
development activities to be conducted in the coming year. Based on these
discussions, the Parties may identify technology development projects which,
through collaboration, maximize the value of complementary skills, expertise
and/or resources, and/or exchanges of technology of mutual benefit to the
Parties. In such instance, the Parties shall endeavor to define a mutually
acceptable collaborative technology development project or technology exchange.
In general, each Party shall be responsible for its own costs associated with
any collaborative technology development project and both Parties shall share
the right to use any resulting collaboratively developed technologies for its
own purposes. This general framework may be altered on a case-by-case basis if,
with respect to a given project, the resources to be employed by and/or
expertise of one Party on the project significantly exceeds those of the other
Party.
ARTICLE VI
FINANCIAL PROVISIONS
Section 6.1 LICENSE PAYMENT.
(a) INITIAL LICENSE PAYMENT. On the Effective Date, and in partial
consideration of the grant by Millennium to Bayer of the licenses set forth in
Article IV, Bayer made an initial license payment to Millennium of [**] Dollars
($[**]).
(b) ADDITIONAL LICENSE PAYMENT. Following the entry of the [**], and in
partial consideration of the grant by Millennium to Bayer of the licenses set
forth in Article IV, Bayer made an additional license payment to Millennium of
[**] Dollars ($[**]).
Section 6.2 PROGRAM PAYMENTS. During the Discovery Program Term, and
in consideration of Millennium's continuing performance of the research services
under the Research Plan, Bayer made program payments of [**] Dollars ($[**]).
Section 6.3 SUCCESS FEES. Bayer paid to Millennium $[**] in success
fees for QTs entered into the Discovery Program through April 30, 2001. During
the Discovery Program Term and the Conversion Program Term, Bayer shall pay
Millennium a success fee of [**] Dollars ($[**]) for each Configured Assay
developed on or after May 1, 2001 from a Selected QT or a Selected CT. Bayer
will in no event from May 1, 2001 through the remainder of the term of this
Agreement be obligated to pay success fees in excess of [**] U.S. dollars
($[**]). Such payments shall be deemed to be earned on the last business day of
the month during which a Configured Assay is developed, and the success fee
shall be payable within [**] days after such payment is deemed to be earned.
Section 6.4 ROYALTY PAYMENTS TO MILLENNIUM. Bayer shall pay to
Millennium royalties on Net Sales of Bayer Royalty Products in the applicable
Licensed Indication(s) as set forth in EXHIBIT D or EXHIBIT E, as appropriate,
for the Selected QTs or Selected CTs used to discover or develop such Bayer
Royalty Products, at the following rates (except as provided below in this
Section 6.4):
ANNUAL SALES VOLUME BASE ROYALTY REDUCED ROYALTY
------------------- ------------ ---------------
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
The Base Royalty rate set forth above shall be applicable to Net Sales of all
Bayer Royalty Products in the applicable Licensed Indication(s) except (a) Bayer
Royalty Products discovered or developed through the use of [**], (b) Bayer
Royalty Products discovered or developed through the use of [**] and (c) Bayer
Royalty Products discovered or developed through the use of [**] and registered
and approved for commercial sale in a country by the appropriate regulatory
authority for use in the treatment of a [**]. The royalty rate set forth in the
table above under the caption "Reduced Royalty" (the "Reduced Royalty") shall be
applicable to Net Sales of Bayer Royalty Products in subsections (a) and (b) in
the preceding sentence. The royalty rate of [**] percent ([**]%) (and royalty
adjustment, if necessary) set forth in Section 4.3(d) shall be applicable to Net
Sales of Bayer Royalty Products in subsection (c) above. The obligation to make
royalty payments pursuant to this Section 6.4 shall commence on the date of the
First Commercial Sale of a Bayer Royalty Product for any applicable Licensed
Indication(s) in a given country and shall continue with respect to Net Sales of
such Bayer Royalty Product sold in such country, regardless of the Licensed
Indication, for a period of [**] ([**]) years, PROVIDED, HOWEVER, that such
obligation to make royalty payments shall continue [**] of the date of such
First Commercial Sale with respect to a Bayer Royalty Product that contains an
active ingredient, the use or sale of which is covered by a Patent Right in such
country that precludes the use or sale of such active ingredient by others in
such country. In order to enable the Parties to track sales of Bayer Royalty
Products in the Licensed Indication(s), the Parties shall, within [**] days
after the designation by Bayer of the first Development Candidate based upon a
Selected QT or a Selected CT agree upon a mechanism for tracking sales of Bayer
Royalty Products generally. If the Parties are unable to reach agreement upon
such a mechanism within such [**] day period, the Parties will refer the issue
to a mutually acceptable third party for resolution (and, failing agreement upon
the selection of such a third party, to arbitration pursuant to Section 11.4 of
this Agreement). For purposes of determining the Annual Sales Volume category in
which a given increment of Net Sales falls, all Net Sales of such Bayer Royalty
Product for all applicable Licensed Indication(s) in all countries during the
given Contract Year shall be aggregated. The royalty rates set forth above shall
apply [**] for all Bayer Royalty Products on a product-by-product basis
according to the Annual Sales Volume categories [**] during any given Contract
Year. For purposes of this Section 6.4, [**] in which the same active ingredient
is present shall be the same Bayer Royalty Product [**]. For the purposes of
clarity, (A) the royalties payable with respect to Bayer Royalty Products will
be payable solely on Net Sales of such Bayer Royalty Products in the applicable
Licensed Indication(s) as set forth in EXHIBIT D or EXHIBIT E, as appropriate,
for the Selected QTs or Selected CTs used to discover or develop such Bayer
Royalty Products and (B) no royalties shall be payable with respect to Net Sales
of Bayer Royalty Products outside the Licensed Indication(s) as set forth in
EXHIBIT D or EXHIBIT E, as appropriate, for the Selected QTs or Selected CTs
used to discover or develop such Bayer Royalty Products.
Notwithstanding the Base Royalty rates set forth above, with respect to Bayer
Royalty Products derived from [**], whether based on Selected QTs or Selected
CTs (but [**] so long as such QT is not a Returned QT, which, for purposes of
clarity, shall be subject to the Base Royalty rates set forth above) ("Bayer NAP
Royalty Products"), the Base Royalty shall be adjusted as follows (while the
Reduced Royalty rates shall remain the same as for Bayer Royalty Products that
are not Bayer NAP Royalty Products):
ANNUAL SALES VOLUME OF BAYER NAP ROYALTY PRODUCTS BASE ROYALTY
------------------------------------------------- ------------
[**] [**]
[**] [**]
[**] [**]
In the event that a Millennium [**] of the type described in Section 1.54(a) or
(c) occurs which results in there being no patent protection on the [**], Bayer
shall have the right to sell Bayer [**] Royalty Products [**] for the Licensed
Indication to which such Millennium [**] relates without the payment to
Millennium of the royalties set forth above. In the event that a Millennium [**]
of the type described in Section 1.54(b) occurs which results in there being no
patent protection on the [**], then the royalty rate payable by Bayer on Bayer
[**] Royalty Products derived from such [**] for the Licensed Indication to
which such Millennium [**] relates will be reduced to [**] percent ([**]%). For
the purposes of clarity, (A) the royalties payable with respect to Bayer [**]
Royalty Products will be payable solely on Net Sales of such Bayer [**] Royalty
Products in the Licensed Indication(s) as set forth in EXHIBIT D or EXHIBIT E,
as appropriate, for the Selected QTs or Selected CTs used to discover or develop
such Bayer [**] Royalty Products and (B) no royalties shall be payable with
respect to Net Sales of Bayer [**] Royalty Products outside the Licensed
Indication(s) as set forth in EXHIBIT D or EXHIBIT E, as appropriate, for the
Selected QTs or Selected CTs used to discover or develop such Bayer [**] Royalty
Products.
Section 6.5 ROYALTY PAYMENTS TO BAYER. Millennium shall pay to Bayer
royalties on Net Sales of Millennium Royalty Products in the applicable Licensed
Indication(s) as set forth in EXHIBIT D or EXHIBIT E, as appropriate, for the
Returned QTs or Returned CTs used to discover or develop such Millennium Royalty
Products, at the following rates:
ANNUAL SALES VOLUME ROYALTY RATE
------------------- ------------
[**] [**]
[**] [**]
[**] [**]
The royalty rates set forth above shall be applicable to Net Sales of all
Millennium Royalty Products in the applicable Licensed Indication(s). The
obligation to make royalty payments pursuant to this Section 6.5 shall commence
on the date of the First Commercial Sale of a Millennium Royalty Product for any
applicable Licensed Indication(s) in a given country and shall continue with
respect to Net Sales of such Millennium Royalty Product sold in such country,
regardless of the Licensed Indication, for a period of [**] years PROVIDED,
HOWEVER, that such obligation to make royalty payments shall continue [**] of
the date of such First Commercial Sale with respect to a Millennium Royalty
Product that contains an active ingredient, the use or sale of which is covered
by a Patent Right in such country that precludes the use or sale of such active
ingredient by others in such country. In order to enable the Parties to track
sales of Millennium Royalty Products in the Licensed Indication(s), the Parties
shall, within ninety (90) days after the designation by Millennium, its
Affiliates or sublicensees of the first development candidate based upon a
Returned QT or a Returned CT agree upon a mechanism for tracking sales of
Millennium Royalty Products generally. If the Parties are unable to reach
agreement upon such a mechanism within such [**] day period, the Parties will
refer the issue to a mutually acceptable third party for resolution (and,
failing agreement upon the selection of such a third party, to arbitration
pursuant to Section 11.4 of this Agreement). For purposes of determining the
Annual Sales Volume category in which a given increment of Net Sales falls, all
Net Sales of such Millennium Royalty Product for all applicable Licensed
Indication(s) in all countries during the given Contract Year shall be
aggregated. The royalty rates shall apply to increments of Net Sales for all
Millennium Royalty Products on a product-by-product basis according to the
Annual Sales Volume categories in which such increments fall during any given
Contract Year. For purpose of this Section 6.5, line extensions, new
formulations and Combination Products in which the same active ingredient is
present shall be the same Millennium Royalty Product as the original Millennium
Royalty Product.
Section 6.6 RELATED THIRD PARTY PAYMENTS
(a) Each Party shall be entitled to deduct, from the quarterly royalty
payments made by it in respect of Net Sales of a given Royalty-Bearing Product
in a given country in accordance with Section 6.9, [**] percent ([**]%) of
Related Third Party Payments paid by such Party in respect of such
Royalty-Bearing Product; PROVIDED THAT in no event shall a deduction under this
Section 6.6 reduce any quarterly royalty payment made by a Party in respect of
Net Sales of a given Royalty-Bearing Product in a given country by more than
[**] percent ([**]%). Any deduction hereunder, or portion thereof, that is
rendered not usable pursuant to the final clause of the immediately preceding
sentence may be carried forward for use in a future period.
(b) Notwithstanding subsection (a), [**], Millennium shall pay the annual
fee due [**] as set forth in Section 3.2 of the Non-Exclusive Patent License
Agreement for Rights [**]. From and after the [**] anniversary of the
Restatement Execution Date, Millennium shall pay all annual fees, milestone
payments and royalties arising under the [**] Agreement, which such payments
shall not be Related Third Party Payments under this Agreement, with respect to
Bayer's development of [**] for Small Molecule Drug discovery and Bayer's
development and commercialization of Small Molecule Drugs that interact with
such QT ("Bayer [**] Activities") and shall not terminate the [**] Agreement,
PROVIDED, that (i) prior to the [**] anniversary of the Restatement Execution
Date, Bayer undertakes [**], (ii) within [**] after the time Bayer undertakes
the activities set forth in subsection (i), Bayer undertakes [**], (iii) within
[**] after the time that Bayer undertakes the activities set forth in subsection
(ii), Bayer undertakes [**], (iv) within [**] after the time that Bayer
undertakes the activities set forth in subsection (iii), Bayer undertakes a
[**], and (v) thereafter, Bayer continues in its efforts to develop and
commercialize such Development Candidate or other Small Molecule Drugs that
[**]. In the event that Bayer fails to undertake the activities described in the
foregoing subsections (i) through (v) within the timeframes defined therein,
Millennium shall have no further obligation to make any payments under the [**]
Agreement for the benefit of Bayer, and Millennium shall have the right, at its
option and upon [**] days prior written notice to Bayer (or sooner, if any
payment is due under the [**] Agreement within such [**] day period), to
terminate the [**] Agreement without further obligation to Bayer; PROVIDED,
HOWEVER, that if, prior to the expiration of such [**] day (or shorter) period,
Bayer informs Millennium in writing that Bayer wishes Millennium not to
terminate the [**] Agreement, then Millennium shall not terminate the [**]
Agreement and shall continue to pay all annual fees, milestone payments and
royalties arising thereunder with respect to [**]; PROVIDED, FURTHER, that
Millennium shall refrain from terminating the [**] Agreement and shall continue
to pay such amounts thereunder only for so long as Bayer reimburses Millennium
in full for all of such payments made by Millennium accruing at any time after
the date of that Millennium's notice of termination would have otherwise become
effective. Bayer shall reimburse Millennium for such payments made by Millennium
within [**] days after Millennium's invoice to Bayer itemizing such payments,
and any such amounts paid by Bayer to Millennium for reimbursement of such
payments shall be deemed Related Third Party Payments for purposes of Section
6.6(a).
Section 6.7 ROYALTIES PAYABLE ONLY ONCE. The obligation to pay
royalties is imposed only once with respect to the same unit of a
Royalty-Bearing Product. Except as specifically provided in this Agreement, it
is understood and agreed that there shall be no deductions from the royalties
payable under this Agreement.
Section 6.8 SALES TO AFFILIATES AND SUBLICENSEES. Sales of
Royalty-Bearing Products between a Party and its Affiliates or permitted
sublicensees, or among such Affiliates and permitted sublicensees, shall not be
subject to royalties under Section 6.4 and Section 6.5, but in such cases the
royalties shall be calculated on the Net Sales by such Affiliates or
sublicensees to an independent third party.
Section 6.9 ROYALTY REPORTS AND ACCOUNTING.
(a) ROYALTY REPORTS; ROYALTY PAYMENTS. Each Party obligated to pay
royalties to the other Party under Section 6.4 and Section 6.5 above (a
"Royalty-Paying Party") shall deliver to the other Party (the "Royalty
Recipient"), within sixty (60) days after the end of each calendar quarter,
reasonably detailed written accountings of Net Sales of Royalty-Bearing Products
that are subject to royalty payments due to the Royalty Recipient for such
calendar quarter. Such quarterly reports shall indicate gross sales on a
country-by-country and product-by-product basis and the calculation of royalties
from such gross sales. When the Royalty-Paying Party delivers such accountings
to the Royalty Recipient, the Royalty-Paying Party shall also deliver all
royalty payments due under Section 6.4 or Section 6.5 to the Royalty Recipient
for the calendar quarter. With respect to sales of products invoiced in U.S.
Dollars, the sales and royalties payable shall be expressed in U.S. Dollars.
With respect to sales of products invoiced in a currency other than U.S.
Dollars, the sales and royalties payable shall be expressed in their U.S. Dollar
equivalent, calculated using the applicable conversion rates for buying United
States dollars published by The Wall Street Journal on the last business day of
the calendar quarter to which the royalty report relates.
(b) AUDITS BY ROYALTY RECIPIENT. Each Royalty-Paying Party shall keep, and
shall require its Affiliates and sublicensees to keep, complete and accurate
records of the latest three (3) years of sales to which royalties attach. For
the sole purpose of verifying royalties payable to the Royalty Recipient, the
Royalty Recipient shall have the right annually at the Royalty Recipient's
expense to retain an independent certified public accountant selected by the
Royalty Recipient and reasonably acceptable to the Royalty-Paying Party, to
review such records in the location(s) where such records are maintained by the
Royalty-Paying Party, its Affiliates or its sublicensees upon reasonable notice
and during regular business hours and under obligations of strict confidence.
However, with respect to an audit of the records of a sublicensee of Bayer or
its Affiliates, such audit shall be conducted by either Bayer or such
independent accountant, at Bayer's election, PROVIDED THAT if Bayer elects to
conduct such audit, Bayer shall pay all expenses thereof. Results of such review
shall be made available to both the Royalty Recipient and the Royalty-Paying
Party. If the review reflects an underpayment of royalties to the Royalty
Recipient, such underpayment shall be promptly remitted to the Royalty
Recipient, together with interest calculated in the manner provided in Section
6.10 below. If the underpayment is equal to or greater than five percent (5%) of
the royalty amount that was otherwise due, the Royalty Recipient shall be
entitled to have the Royalty-Paying Party pay all of the costs of such review.
Section 6.10 CURRENCY AND METHOD OF PAYMENTS; LATE PAYMENTS. All
payments under this Agreement shall be made in United States dollars by transfer
to such bank account as Millennium or Bayer (as applicable) may designate from
time to time within no more than ten (10) days of invoice or when such payment
is due in accordance with the provisions of this Agreement. Any royalty payments
due hereunder with respect to sales outside of the United States shall be
payable in their U.S. Dollar equivalents, calculated using the applicable
conversion rates for buying United States dollars as published by The Wall
Street Journal for the last business day of the calendar quarter for which the
royalties are payable. Millennium or Bayer, as the case may be, shall pay
interest to the other Party on the aggregate amount of any payments that are not
paid on or before the date such payments are due under this Agreement at a rate
per annum equal to the lesser of the London Interbank Offering Rate of interest
plus one percent (1%), as reported by Citibank, N.A. for the applicable period,
or the highest rate permitted by applicable law, calculated on the number of
days such payment is delinquent.
Section 6.11 TAX WITHHOLDING. The Parties shall use all reasonable and
legal efforts to reduce tax withholding on payments made to Millennium and Bayer
hereunder. Notwithstanding such efforts, if the paying Party concludes that tax
withholdings under the laws of any country are required with respect to payments
to the other Party, the paying Party shall withhold the required amount and pay
it to the appropriate governmental authority. In such a case, the paying Party
will promptly provide the other Party with original receipts or other evidence
reasonably desirable and sufficient to allow the other Party to document such
tax withholdings adequately for purposes of claiming foreign tax credits and
similar benefits.
Section 6.12 BLOCKED PAYMENTS. In the event that, by reason of
applicable laws or regulations in any country, it becomes impossible or illegal
for a Party or its Affiliates or sublicensees, to transfer, or have transferred
on its behalf, royalties or other payments to the other Party, such royalties or
other payments shall be deposited in local currency in the relevant country to
the credit of the other Party in a recognized banking institution designated by
the other Party or, if none is designated by the other Party within a period of
thirty (30) days, in a recognized banking institution selected by the paying
Party or its Affiliates or sublicensees, as the case may be, and identified in a
notice in writing given to the other Party.
ARTICLE VII
INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS
Section 7.1 OWNERSHIP. Bayer shall own all Know-How and inventions
made solely by its employees in the course of the Discovery Program, the Bayer
QT Development Program, the Conversion Program and/or the Bayer CT Development
Program, and Millennium shall own all Know-How and inventions made solely by its
employees in the course of the Discovery Program and/or the Conversion Program.
All inventions made jointly by employees of Bayer and employees of Millennium in
the course of the Discovery Program or the Conversion Program shall be owned
jointly on the basis of an undivided one-half interest by Bayer and Millennium,
PROVIDED THAT either Party may only sell, license or otherwise transfer such
jointly-owned invention without the consent of the other Party in a manner that
is consistent with the licenses granted pursuant to this Agreement and is
otherwise consistent with this Agreement. The determination of inventorship
shall be made in accordance with relevant patent laws; in the event of a dispute
regarding inventorship or the ownership of Know-How, if the Parties are unable
to resolve the inventorship dispute, mutually acceptable outside patent counsel
not regularly employed by either Party shall resolve such dispute.
Section 7.2 PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.
(a) GENERAL. Except as otherwise provided in Section 7.2(b) and Section
7.2(c), the responsibility for preparing, filing and prosecuting patent
applications and for maintaining patents (and for managing any interference
proceedings relating to the foregoing) covering inventions made in the course of
the Discovery Program or the Conversion Program, the Bayer QT Development
Program or the Bayer CT Development Program shall be the responsibility of the
Party that makes said invention, PROVIDED, HOWEVER, that, with respect to
inventions made jointly by the Parties, such responsibility shall be shared by
the Parties as determined by agreement of the Parties on a case-by-case basis.
All patent expenses incurred by a Party in the performance of its obligations
under this Section 7.2(a) shall be borne by such Party. If either Party elects
not to participate financially in the further prosecution or maintenance of any
Patent Right that covers a joint invention, such Party shall notify the other
Party of such election at least thirty (30) days prior to the last available
date for action to preserve such Patent Right. If such other Party elects to
continue prosecution or maintenance, such Patent Right shall become the
exclusive property of such other Party and appropriate assignment documents
shall be executed.
(b) QTS, CTS AND CONFIGURED ASSAYS. The responsibility for preparing,
filing and prosecuting patent applications and for maintaining patents (and for
managing any interference proceedings relating to the foregoing) covering
inventions made in the course of the Discovery Program or the Conversion Program
that pertain to QTs, CTs and Configured Assays shall be as follows: (i) for QTs,
CTs and Millennium Configured Assays - Millennium; (ii) for Bayer Configured
Assays - Bayer; and (iii) for Configured Assays that are configured jointly by
the Parties - determined by agreement of the Parties on a case-by-case basis.
All patent expenses incurred by Millennium in the performance of its obligations
under this Section 7.2(b) shall be borne by Millennium. Notwithstanding the
foregoing, for each QT, CT and/or Millennium Configured Assay, Millennium will
be obligated to continue to prosecute patent applications and maintain patents
applications (and for managing any interference proceedings relating to the
foregoing) covering such QT, CT and/or Millennium Configured Assay, only in (A)
the United States, (B) Europe (and, with respect to national filings in Europe
if a European Patent is granted, only in the United Kingdom, Germany, France,
Italy and Spain), and (C) Japan if (1) with respect to a QT or CT, Bayer intends
to conduct high throughput screening in Japan using such QT or CT, or (2) with
respect to a QT, Bayer has developed a Configured Assay that embodies or is
based on such QT. If Bayer wishes to continue prosecution or maintenance of
patents or patent applications (as the case may be) covering a QT, CT and/or
Millennium Configured Assay, outside of the United States, Europe or, as limited
above, Japan, Millennium shall, at the election of Bayer, either (x) prosecute
or maintain such patents or patent applications at Bayer's expense, or (y)
permit Bayer to prosecute or maintain such patent or patent applications, at
Bayer's expense, and in such case, provide reasonable cooperation to enable
Bayer to do so.
(c) PRODUCTS. The responsibility for preparing, filing and prosecuting
patent applications and for maintaining patents (and for managing any
interference proceedings relating to the foregoing) (i) covering inventions
pertaining to Bayer Royalty Products shall be the responsibility of Bayer and
(ii) covering inventions pertaining to Millennium Royalty Products shall be the
responsibility of Millennium. All patent expenses incurred by a Party in the
performance of its obligations under this Section 7.2(c) shall be borne by such
Party.
(d) [**] PATENTS. Except as otherwise provided in Section 7.2(b) and
Section 7.2(c), Millennium shall have responsibility for deciding to file,
preparing, filing and prosecuting patents applications relating to [**]. From
and after the date that a Novel [**] is designated as a QT, or from and after
the date Millennium discovers a [**] within an additional CFA during the
Discovery Program Term for a QT which is a [**], (i) Millennium and Bayer shall
mutually agree upon the data to be included in such patent applications in
support of such [**], and (ii) Millennium will advise Bayer of any material
issues which arise during the prosecution of such patent applications in support
of such [**], and the Parties shall analyze the impact of such material issues.
Patents and patent applications relating to [**] shall be filed and maintained
in the countries specified in Section 7.2(b). Bayer shall have the right to
continue prosecution or maintenance of any such patents or patent applications
as specified in Section 7.2(b).
Section 7.3 COOPERATION. Each Party hereby agrees to (a) make its
employees, agents and consultants available to the other Party (or to the other
Party's authorized attorneys, agents or representatives), to the extent
reasonably necessary to enable the appropriate Party to prepare, file and
prosecute patent applications and maintain resulting patents that cover QTs,
CTs, Configured Assays, Bayer Royalty Products and Millennium Royalty Products
(the "Designated Inventions"), and (b) cooperate, if necessary and appropriate,
with the other Party in gaining patent term extensions wherever applicable to
Patent Rights that cover Designated Inventions, and (c) cooperate, if necessary
and appropriate, with the other Party in the protection of Patent Rights that
cover Designated Inventions.
Section 7.4 THIRD PARTY INFRINGEMENT.
(a) LEGAL PROCEEDINGS. Bayer shall have the sole right and responsibility
to institute legal proceedings against any third party believed to be infringing
the intellectual property rights pertaining to Bayer Configured Assays,
Configured Assays configured jointly by the Parties and Bayer Royalty Products.
All costs relating to such legal proceedings shall be borne by Bayer. Any
recoveries in excess of Bayer's costs shall be deemed to be Net Sales (the
"Recovered Bayer Net Sales") and, as such, shall contribute to the Annual Sales
Volume for applicable Bayer Royalty Products, on a product-by-product basis,
PROVIDED, HOWEVER, that the royalty payment to be made to Millennium with
respect to any such Recovered Bayer Net Sales shall be based on a royalty rate
of [**] percent ([**]%). Millennium shall have the sole right and responsibility
to institute legal proceedings against any third party believed to be infringing
the intellectual property rights related to (i) QTs, (ii) CTs, (iii) Millennium
Configured Assays and (iv) Millennium Royalty Products. All such costs relating
to such legal proceedings shall be borne by Millennium. Any recoveries in excess
of Millennium's costs shall be deemed to be Net Sales (the "Recovered Millennium
Net Sales") and, as such, shall contribute to the Annual Sales Volume for
applicable Millennium Royalty Products, on a product-by-product basis, PROVIDED,
HOWEVER, that the royalty payment to be made to Bayer with respect to any such
Recovered Millennium Net Sales shall be based on a royalty rate of [**] percent
([**]%).
(b) COOPERATION; SETTLEMENTS. In the event that either Bayer or Millennium
takes action pursuant to subsection (a) above, the other Party shall cooperate
with the Party so acting to the extent reasonably possible, including the
joining of suit if necessary or desirable. Bayer shall not settle or compromise
any claim or proceeding relating to Millennium Know-How or Millennium Patent
Rights without the prior written consent of Millennium, such consent, not to be
unreasonably withheld. Millennium shall not settle or compromise any claim or
proceeding relating to Bayer Know-How or a Bayer Patent Right without the prior
written consent of Bayer, such consent not to be unreasonably withheld.
Section 7.5 CLAIMED INFRINGEMENT. In the event that a Party becomes
aware of any claim that the practice by Bayer of Millennium Know-How that has
been licensed to Bayer pursuant to Section 4.1 or Section 4.2, or that the
practice by Millennium of Bayer Returned Target Know-How that has been licensed
to Millennium pursuant to Section 4.2, infringes the intellectual property
rights of any third party, such Party shall promptly notify the other Party. In
any such instance, the Parties shall cooperate and shall mutually agree upon an
appropriate course of action.
ARTICLE VIII
CONFIDENTIALITY
Section 8.1 CONFIDENTIAL INFORMATION. All Confidential Information
disclosed by a Party to the other Party during the term of this Agreement shall
not be used by the receiving Party except in connection with the activities
contemplated by this Agreement (including without limitation in connection with
permitted sublicensing, subcontracting or Fee-For-Service Work), shall be
maintained in confidence by the receiving Party (except to the extent reasonably
necessary for regulatory approval of products developed by Bayer or Millennium
or any of their respective Affiliates or for the filing, prosecution and
maintenance of Patent Rights), and shall not otherwise be disclosed by the
receiving Party to any other person, firm, or agency, governmental or private,
without the prior written consent of the disclosing Party, except to the extent
that the Confidential Information (as determined by competent documentation):
(a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to the receiving
Party is lawfully disclosed to the receiving Party by sources other than the
disclosing Party rightfully in possession of the Confidential Information; or
(c) either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public (including information
known to the public through the sale of products in the ordinary course of
business) through no fault or omission on the part of the receiving Party or its
sublicensees; or
(d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, PROVIDED THAT the receiving Party provides prior
written notice of such disclosure to the disclosing Party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
Section 8.2 EMPLOYEE AND ADVISOR OBLIGATIONS. Bayer and Millennium
each agree that they shall provide Confidential Information received from the
other Party only to their respective employees, consultants, sublicensees,
subcontractors (including without limitation sublicensees and subcontractors
performing Fee-For-Service Work) and advisors and to the employees, consultants,
sublicensees, subcontractors and advisors of such Party's Affiliates, who have a
need to know and have an obligation to treat such information and materials as
confidential. Each employee of Bayer, Millennium or their respective Affiliates
who participates in the Discovery Program, the Conversion Program, the Bayer QT
Development Program or the Bayer CT Development Program shall be required to
acknowledge in writing that the provisions of this Article VIII shall be binding
upon such employee.
Section 8.3 TERM. All obligations of confidentiality imposed under
this Article VIII shall expire five (5) years following termination or
expiration of this Agreement.
Section 8.4 PUBLICATIONS. The Parties acknowledge that scientific
lead time is a key element of the value of the Discovery Program, the Conversion
Program and the Bayer QT Development Program and further agree that scientific
publications must be strictly monitored to prevent any adverse effect of the
premature publication of results of the Discovery Program, the Conversion
Program and the Bayer QT Development Program. The Parties shall establish a
procedure for publication review and approval and each Party shall first submit
to the other Party an early draft of all such publications, whether they are to
be presented orally or in written form, at least sixty (60) days prior to
submission for publication, PROVIDED THAT the Parties shall have no obligation
to submit drafts of publications relating to [**] CTs, Returned QTs or Returned
CTs. Each Party shall review each such proposed publication in order to avoid
the unauthorized disclosure of a Party's Confidential Information and to
preserve the patentability of inventions arising from the Discovery Program, the
Conversion Program and the Bayer QT Development Program. If, as soon as
reasonably possible but no longer than sixty (60) days following receipt of an
advance copy of a Party's proposed publication, the other Party informs such
Party that its proposed publication contains Confidential Information of the
other Party, then such Party shall delete such Confidential Information from its
proposed publication. If, as soon as reasonably possible but no longer than
sixty (60) days following receipt of an advance copy of a Party's proposed
publication, the other Party informs such Party that its proposed publication
could be expected to have a material adverse effect on any Patent Rights or
Know-How of such other Party, then such Party shall delay such proposed
publication sufficiently long to permit the timely preparation and first filing
of patent application(s) on the information involved. Without limiting the
generality of the foregoing, Millennium shall not permit a publication that
includes information relating to a Bayer Development Candidate without the prior
approval of Bayer.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
Section 9.1 REPRESENTATIONS OF AUTHORITY. Bayer and Millennium each
represents and warrants to the other that as of the Restatement Execution Date
it has full right, power and authority to enter into this Agreement and to
perform its respective obligations under this Agreement. Millennium represents
and warrants to Bayer that it has the right to grant to Bayer the licenses and
sublicenses granted pursuant to this Agreement, and that it has, as of the
Restatement Execution Date, access to and the right to use the technology
necessary to perform its obligations hereunder.
Section 9.2 CONSENTS. Bayer and Millennium each represents and
warrants that all necessary consents, approvals and authorizations of all
government authorities and other persons required to be obtained by such Party
in connection with execution, delivery and performance of this Agreement have
been obtained.
Section 9.3 NO CONFLICT. Bayer and Millennium each represents and
warrants that notwithstanding anything to the contrary in this Agreement, the
execution and delivery of this Agreement, the performance of such Party's
obligations hereunder and the conduct of the Discovery Program and/or the
Conversion Program (a) do not conflict with or violate any requirement of
applicable laws or regulations and (b) do not and will not conflict with,
violate or breach or constitute a default or require any consent under, any
contractual obligations of such Party, except such consents as shall have been
obtained prior to the Effective Date in the case of the Discovery Program and
prior to the Restatement Execution Date in the case of the Conversion Program.
Section 9.4 EMPLOYEE OBLIGATIONS. Bayer and Millennium each
represents and warrants that all of its employees, officers, and consultants
have executed agreements or have existing obligations under law requiring, in
the case of employees and officers, assignment to such Party of all inventions
made during the course of and as the result of their association with such Party
and obligating the individual to maintain as confidential such Party's
Confidential Information as well as confidential information of a third party
which such Party may receive, to the extent required to support such Party's
obligations under this Agreement.
Section 9.5 KNOW-HOW. To the knowledge of Millennium, except as
disclosed in writing by Millennium to Bayer, as of the Effective Date, the
conduct by Millennium of the Target Discovery Program in accordance with the
Research Plan does not and will not infringe or conflict with the rights of any
third party in respect of Know-How or issued patents or published patent
applications owned by such third party, except where such infringement or
conflict would not materially affect the ability of Millennium to conduct the
Target Discovery Program in accordance with the Research Plan. To the knowledge
of Millennium, as of the Effective Date, none of the Know-How or Patent Rights
owned, controlled or used by Millennium that is expected to be utilized by
Millennium in the Target Discovery Program in accordance with the Research Plan
is being infringed by any third party, except where such infringement would not
materially affect the ability of Millennium to conduct the Target Discovery
Program in accordance with the Research Plan. As of the Effective Date, there is
no claim or demand of any person pertaining to, or any proceeding which is
pending or, to the knowledge of Millennium, threatened, that challenges the
rights of Millennium in respect of Know-How or Patent Rights owned, controlled
or used by Millennium, except where such claim, notice, demand or proceeding
would not materially adversely affect the ability of Millennium to conduct the
Target Discovery Program in accordance with the Research Plan.
Section 9.6 CONTRACTS. Millennium is not a party to any contract
that, if terminated, would materially adversely affect Millennium's ability to
conduct the Target Discovery Program in accordance with the Research Plan.
Section 9.7 NO WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN OR IN THE INVESTMENT AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND
EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY
THAT PRODUCTS WILL BE SUCCESSFULLY DEVELOPED HEREUNDER, AND IF DEVELOPED, WILL
HAVE COMMERCIAL UTILITY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 9.8 SURVIVAL. The representations and warranties set forth in
this Agreement shall survive the Restatement Execution Date.
ARTICLE X
TERM AND TERMINATION
Section 10.1 TERM. This Agreement shall become effective as of the
Restatement Execution Date, may be terminated as set forth in this Article X,
and otherwise remains in effect until the expiration of all of the obligations
to pay royalties set forth in Article VI.
Section 10.2 SURVIVAL OF LICENSES.
(a) LICENSES TO BAYER. Upon the expiration of Bayer's obligations to pay
royalties to Millennium under Section 6.4 with respect to each Bayer Royalty
Product in any country, the licenses under Millennium Know-How and Millennium
Patent Rights set forth in Section 4.1(a) and Section 4.2(a) shall be deemed to
be perpetual and fully paid up with respect to such Bayer Royalty Product in
such country.
(b) LICENSES TO MILLENNIUM. Upon the expiration of Millennium's obligations
to pay royalties to Bayer under Section 6.5 with respect to each Millennium
Royalty Product in any country, the licenses under Bayer Returned Target
Know-How and Bayer Returned Target Patent Rights set forth in Section 4.2(d)
shall be deemed to be perpetual and fully paid-up with respect to such
Millennium Royalty Product in such country.
Section 10.3 TERMINATION FOR MATERIAL BREACH. Upon any material breach
of this Agreement by either Party (in such capacity, the "Breaching Party"), the
other Party (in such capacity, the "Non-Breaching Party") may terminate this
Agreement by providing sixty (60) days' written notice to the Breaching Party,
specifying the material breach. The termination shall become effective at the
end of the sixty (60) day period unless (a) the Breaching Party cures such
breach during such sixty (60) day period, or (b) if such breach is not
susceptible to cure within sixty (60) days of the receipt of written notice of
the breach, the Breaching Party is diligently pursuing a cure (unless such
breach, by its nature, is incurable, in which case the Agreement may be
terminated immediately). The Parties shall use reasonable efforts to work
together to cure any breach. In the event of a dispute concerning whether a
material breach has occurred, such dispute shall be resolved in accordance with
the provisions of Article XI, and the 60-day cure period specified above shall
be suspended during the period commencing upon the submission of such dispute
for resolution under Section 11.1 to the Executive Officers and continuing until
the resolution of such dispute under Section 11.1 or Section 11.4, as
applicable. Without limiting the generality of the foregoing, material failure
by Millennium to maintain and make available adequate technical resources and
personnel to perform its obligations under the Discovery Program in accordance
with the Research Plan shall be considered to be a material breach of this
Agreement. Notwithstanding the foregoing, a breach of the provisions of Article
VIII or Article IX shall not be deemed to be a material breach under this
Section 10.3 unless such breach has a material adverse effect on the Discovery
Program, the Conversion Program, the Bayer QT Development Program, the Bayer CT
Development Program or the business or financial condition of the Non-Breaching
Party, PROVIDED THAT [**] shall be deemed to have a material adverse effect on
the Discovery Program, the Conversion Program, the Bayer QT Development Program
and the Bayer CT Development Program.
Section 10.4 TERMINATION UPON CHANGE OF CONTROL. If a Change of
Control with respect to either Party occurs during the Discovery Program Term,
the other Party may, at its sole discretion, elect to terminate this Agreement
by giving the Party which experienced such Change of Control written notice
within ninety (90) days after such Change of Control, such termination to be
effective sixty (60) days after provision of written notice of termination.
Section 10.5 EFFECT OF TERMINATION.
(a) GENERAL. In the event that this Agreement is terminated by either
Party, (i) the licenses set forth in Section 4.1(a) and (b), Section 4.2(a) and
(b) and Section 4.2(d) shall, except as provided in subsection (b) below,
survive such termination, subject to continued compliance with obligations
related to such licenses, such as the royalty and reporting provisions of
Article VI; (ii) the performance of work under the Discovery Program and/or the
Conversion Program shall cease as of the effective date of such termination;
(iii) all financial obligations under Section 6.3 accrued or owed as of the
effective date of such termination shall remain effective and shall be paid
promptly; and (iv) the right to select QTs from the Discovery Pool or to select
CTs from the Conversion Pool shall terminate as of the effective date of such
termination.
(b) TERMINATION UNDER SECTION 10.3. Subject to the provisions of Section
10.2, if this Agreement is terminated under Section 10.3 and Millennium is the
Breaching Party, the licenses granted by Bayer to Millennium under Section
4.2(d) shall terminate as of the effective date of such termination, and all
sublicenses granted by Millennium pursuant to Section 4.2(d)(iii) shall also
terminate as of such date. Subject to the provisions of Section 10.2, if this
Agreement is terminated under Section 10.3 and Bayer is the Breaching Party, the
licenses granted by Millennium to Bayer under Section 4.1(a) and Section 4.2(a)
shall terminate as of the effective date of such termination, and all
sublicenses granted by Bayer pursuant to Section 4.1(b) and Section 4.2(b) shall
also terminate as of such date.
Section 10.6 SURVIVAL. Upon expiration or termination of this
Agreement for any reason, nothing in this Agreement shall be construed to
release either Party from any obligations that matured prior to the effective
date of expiration or termination; and the following provisions shall expressly
survive any such expiration or termination: Article I, Section 2.10, Section
2.11, Section 4.1 (except as provided in Section 10.5), Section 4.2(d) (except
as provided in Section 10.5), Section 6.4, Section 6.5, Section 6.6, Section
6.9, Section 6.10, Article VII, Article VIII, Article X, Article XI and Article
XII.
ARTICLE XI
DISPUTE RESOLUTION
Section 11.1 GENERAL. Any controversy, claim or dispute arising out of
or relating to this Agreement shall be settled, if possible, through good faith
negotiations between the Parties. If, however, the Parties are unable to settle
such dispute after good faith negotiations, the matter shall be referred to the
Executive Officers to be resolved by negotiation in good faith as soon as is
practicable but in no event later than thirty (30) days after referral. Such
resolution, if any, of a referred issue shall be final and binding on the
Parties.
Section 11.2 INDEPENDENT EXPERTS. Each Executive Officer shall have
the right to engage the services of any number of independent experts in the
field in question (each individual so engaged by each Executive Officer to be
reasonably acceptable to the other Executive Officer in terms of independence
and expertise and to be engaged under obligations of confidentiality) to assist
the Executive Officers in making a joint determination in the best interests of
the collaboration, and each Executive Officer shall be obligated to consider in
good faith the analyses and opinions of any such independent experts engaged by
either of them in making a determination.
Section 11.3 FAILURE OF EXECUTIVE OFFICERS TO RESOLVE DISPUTE. If the
Executive Officers are unable to settle the dispute after good faith negotiation
in the manner set forth above, then the dispute shall be resolved in accordance
with Section 11.4, which resolution shall be final and binding upon the Parties,
PROVIDED THAT Designated Scientific Issues shall be resolved in accordance with
Section 2.14.
Section 11.4 ALTERNATIVE DISPUTE RESOLUTION. If the dispute has not
been resolved by the Executive Officers within thirty (30) days of referral in
accordance with Section 11.1, or if the Executive Officers fail to meet within
such thirty (30) days, a Party may seek resolution of the dispute by initiating
arbitration in accordance with the following provisions.
(a) All disputes arising out of this Agreement and referred to arbitration
pursuant to this Section 11.4 shall be finally resolved by arbitration conducted
in the English language in London, England in accordance with the Arbitration
Rules of the United Nations Commission on International Trade Law (UNCITRAL).
Each Party shall appoint an arbitrator and the two arbitrators so appointed
shall jointly appoint a third arbitrator; PROVIDED, HOWEVER, that if they cannot
agree (or if any one Party refuses to appoint an arbitrator), then this third
arbitrator shall be appointed by the American Arbitration Association ("AAA").
If a Party fails to appoint an arbitrator within thirty (30) days after a
dispute is referred to arbitration, the AAA shall appoint an arbitrator for such
Party. The AAA shall be the administrator of the arbitration proceedings.
(b) The arbitrators shall rule on each disputed issue within ninety (90)
days after the third arbitrator has accepted the appointment to serve as an
arbitrator, PROVIDED THAT if the arbitrators are unable to render a decision
within such 90-day period, they shall render such decision as soon thereafter as
is practicable. The arbitrators shall issue a written decision in order to
explain the basis of the ruling. The arbitrators shall not have the authority to
award punitive damages.
(c) The arbitrators shall be paid reasonable fees plus expenses. These fees
and expenses, along with the reasonable legal fees and expenses of the
prevailing Party (including all expert witness fees and expenses), the fees and
expenses of a court reporter, and any expenses for a hearing room, shall be paid
as follows:
(i) If the arbitrators rule in favor of one Party on all disputed
issues in the arbitration, the losing Party shall pay 100% of such fees and
expenses.
(ii) If the arbitrators rule in favor of one Party on some issues and
the other Party on other issues, the arbitrators shall issue with the ruling a
written determination as to how such fees and expenses shall be allocated
between the Parties. The arbitrators shall allocate fees and expenses in a way
that bears a reasonable relationship to the outcome of the arbitration, with the
Party prevailing on more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees and expenses.
(d) Any decision or award of the arbitrators shall be final, conclusive,
and binding on the Parties to the dispute, and judgment may be entered on any
award in any court of competent jurisdiction. To the extent lawful, the Parties
exclude any right of application or appeal to the English or other courts in
connection with any question of law arising in the arbitration or in connection
with any award or decision made by the arbitrators, except as is necessary to
recognize or enforce such award or decision.
Section 11.5 NO LIMITATION. Notwithstanding the foregoing, nothing in
this Article XI shall be construed as limiting in any way the right of a Party
to seek injunctive or other equitable relief from a court of competent
jurisdiction with respect to any actual or threatened breach of this Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 PRODUCT LIABILITY INDEMNIFICATION.
(a) BAYER. Bayer agrees to defend Millennium and its Affiliates at its cost
and expense, and will indemnify and hold Millennium and its Affiliates and their
respective directors, officers, employees and agents (the "Millennium
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses arising out of any claim relating to (i) any breach by Bayer of any
of its representations, warranties or obligations pursuant to this Agreement or
(ii) personal injury from the development, manufacture, use, sale or other
disposition of any product or service offered by Bayer and/or its licensees or
collaborators. In the event of any such claim against the Millennium Indemnified
Parties by any third party, Millennium shall promptly notify Bayer in writing of
the claim and Bayer shall manage and control, at its sole expense, the defense
of the claim and its settlement. The Millennium Indemnified Parties shall
cooperate with Bayer and may, at their option and expense, be represented in any
such action or proceeding. Bayer shall not be liable for any litigation costs or
expenses incurred by the Millennium Indemnified Parties without Bayer's prior
written authorization. In addition, Bayer shall not be responsible for the
indemnification of any Millennium Indemnified Party arising from any negligent
or intentional acts by such party, or as the result of any settlement or
compromise by the Millennium Indemnified Parties without Bayer's prior written
consent.
(b) MILLENNIUM. Millennium agrees to defend Bayer and its Affiliates at its
cost, and will indemnify and hold Bayer and its Affiliates and its respective
directors, officers, employees and agents (the "Bayer Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses arising
out of any claim relating to (i) any breach by Millennium of any of its
representations, warranties or obligations pursuant to this Agreement or (ii)
personal injury from the development, manufacture, use, sale or other
disposition of any product or service offered by Millennium or its licensees or
collaborators. In the event of any claim against the Bayer Indemnified Parties
by any third party, Bayer shall promptly notify Millennium in writing of the
claim and Millennium shall manage and control, at its sole expense, the defense
of the claim and its settlement. The Bayer Indemnified Parties shall cooperate
with Millennium and may, at their option and expense, be represented in any such
action or proceeding. Millennium shall not be liable for any litigation costs or
expenses incurred by the Bayer Indemnified Parties without Millennium's prior
written authorization. In addition, Millennium shall not be responsible for the
indemnification of any Bayer Indemnified Party arising from any negligent or
intentional acts by such party, or as the result of any settlement or compromise
by the Bayer Indemnified Parties without Millennium's prior written consent.
Section 12.2 SECTION 365(n) OF THE BANKRUPTCY CODE. All rights and
licenses granted under or pursuant to any section of this Agreement are, and
shall otherwise be, deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) of the Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the Bankruptcy Code.
Upon the bankruptcy of any Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property, and such, if not already in its or their possession,
shall be promptly delivered to the non-bankrupt Party, unless the bankrupt Party
elects to continue, and continues, to perform all of its obligations under this
Agreement.
Section 12.3 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the Parties hereto determined (including in any arbitration
proceeding under Article XI) according to the substantive laws of the
Commonwealth of Massachusetts notwithstanding the provisions governing conflict
of laws under such Commonwealth of Massachusetts law to the contrary and without
giving effect to the United Nations Convention on Contracts for the
International Sale of Goods, the 1974 Convention on the Limitation Period in the
International Sale of Goods (the "1974 Convention") and the Protocol amending
the 1974 Convention, done at Vienna April 11, 1980, except matters of
intellectual property law which shall be determined in accordance with the
national intellectual property laws relevant to the intellectual property in
question.
Section 12.4 ASSIGNMENT. Neither Millennium nor Bayer may assign this
Agreement in whole or in part without the consent of the other, except if such
assignment occurs in connection with the sale or transfer of all or
substantially all of the business and assets of Millennium, on the one hand, or
Bayer, on the other, to which the subject matter of this Agreement pertains.
Notwithstanding the foregoing, any Party may assign its rights (but not its
obligations) pursuant to this Agreement in whole or in part to an Affiliate of
such Party.
Section 12.5 AMENDMENTS. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof, and
supersedes all previous arrangements, including the Original Agreement, with
respect to the subject matter hereof, whether written or oral; PROVIDED,
HOWEVER, that the letter agreement dated August 13, 1999 by and among
Millennium, Bayer and Bayer Corporation and the letter agreement dated June 11,
2003 by and between Millennium and Bayer shall remain in full force and effect
in accordance with their respective terms and conditions; and, PROVIDED FURTHER,
that the letter agreement dated June 11, 2003 by and between Millennium and
Bayer is hereby amended by deleting each of the three references to "Section
2.6(c)" in the third paragraph of such agreement and by substituting "Section
2.5(c)" in the place of each such reference. Any amendment or modification to
this Agreement shall be made in writing signed by both Parties.
Section 12.6 NOTICES.
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Attention: Legal Department
Facsimile No.: (000) 000-0000
Notices to Bayer shall be addressed to:
Bayer Healthcare XX
X 00000
Xxxxxxxxxx, Xxxxxxx
Attention: General Counsel
Facsimile No.: 011 49 214 30 82986
with a copy to:
Bayer Corporation
000 Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxxxxx 00000-0000
Attention: Legal Department
Facsimile No.: (000) 000-0000
Any Party may change its address by giving notice to the other Party in the
manner herein provided. Any notice required or provided for by the terms of this
Agreement shall be in writing and shall be (a) sent by registered or certified
mail, return receipt requested, postage prepaid, (b) sent via a reputable
overnight courier service, or (c) sent by facsimile transmission, in each case
properly addressed in accordance with the paragraph above. The effective date of
notice shall be the actual date of receipt by the Party receiving the same.
Section 12.7 EXPORTS. The Parties acknowledge that the export of
technical data, materials or products is subject to the exporting Party
receiving any necessary export licenses and that the Parties cannot be
responsible for any delays attributable to export controls that are beyond the
reasonable control of either Party. Bayer and Millennium agree not to export or
reexport, directly or indirectly, any information, technical data, the direct
product of such data, samples or equipment received or generated under this
Agreement in violation of any governmental regulations that may be applicable.
Bayer and Millennium agree to obtain similar covenants from their Affiliates,
sublicensees and contractors with respect to the subject matter of this Section
12.7.
Section 12.8 FORCE MAJEURE. No failure or omission by the Parties
hereto in the performance of any obligation of this Agreement shall be deemed a
breach of this Agreement or create any liability if the same shall arise from
any cause or causes beyond the control of the Parties, including, but not
limited to, the following: acts of God; acts or omissions of any government; any
rules, regulations or orders issued by any governmental authority or by any
officer, department, agency or instrumentality thereof; fire; storm; flood;
earthquake; accident; war; rebellion; insurrection; riot; and invasion and
PROVIDED THAT such failure or omission resulting from one of the above causes is
cured as soon as is practicable after the occurrence of one or more of the
above-mentioned causes.
Section 12.9 PUBLIC ANNOUNCEMENTS. Any announcements or similar
publicity with respect to the execution of this Agreement shall be agreed upon
among the Parties in advance of such announcement. Each Party understands that
this Agreement is likely to be of significant interest to investors, analysts
and others, and that either Party therefore may make such public announcements
with respect thereto. The Parties agree that any such announcement will not
contain confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will make reasonable efforts to minimize such disclosure and obtain confidential
treatment for any such information which is disclosed to a governmental agency
or group. Each Party agrees to provide to the other Party with a copy of any
public announcement as soon as reasonably practicable under the circumstances
prior to its scheduled release. Except under extraordinary circumstances, each
Party shall provide the other with an advance copy of any press release at least
five (5) business days prior to the scheduled disclosure. Each Party shall have
the right to expeditiously review and recommend changes to any announcement
regarding this Agreement or the subject matter of this Agreement, PROVIDED THAT
such right of review and recommendation shall only apply for the first time that
specific information is to be disclosed, and shall not apply to the subsequent
disclosure of substantially similar information that has previously been
disclosed. Except as otherwise required by law, the Party whose press release
has been reviewed shall remove any information the reviewing Party reasonably
deems to be inappropriate for disclosure.
Section 12.10 INDEPENDENT CONTRACTORS. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either Millennium or Bayer to act as agent for the other. The
Program Directors and members of Project Teams shall remain employees of Bayer
or Millennium, as the case may be.
Section 12.11 NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against any Party.
Section 12.12 HEADINGS. The captions or headings of the sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 12.13 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the
part of Millennium or Bayer to exercise, and no delay in exercising, any right,
power, remedy or privilege under this Agreement, or provided by statute or at
law or in equity or otherwise, shall impair, prejudice or constitute a waiver of
any such right, power, remedy or privilege or be construed as a waiver of any
breach of this Agreement or as an acquiescence therein, nor shall any single or
partial exercise of any such right, power, remedy or privilege preclude any
other or further exercise thereof or the exercise of any other right, power,
remedy or privilege.
Section 12.14 SEVERABILITY. If any provision hereof should be held
invalid, illegal or unenforceable in any respect in any jurisdiction, then, to
the fullest extent permitted by law, (a) all other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in order to carry out the intentions of the Parties as nearly as may
be possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Millennium and Bayer
hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
Section 12.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in counterparts, each of which counterparts, when so executed and delivered,
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
Section 12.16 PROVISIONS RELATING TO SPECIFIC QTS.
(a) [**].
(i) QTS WITH NEW CFAS. The Parties acknowledge that each of [**],
[**] became QTs on the basis of a Disease/Therapeutic Hypothesis in the [**] and
that the Disease/Therapeutic Hypothesis for such QTs has been changed to a
CFA [**] (the "New CFA QTs"). With respect to the New CFA QTs, the Parties
agree that Bayer will have the exclusive right to pursue such QTs in all
disease areas other than the former CFAs [**] and the non-exclusive right
to pursue such QTs in the former CFAs [**]. Accordingly, with respect to
the New CFA QTs, the license granted to Bayer under Section 4.1 shall be
limited to disease areas [**] and the license granted to Bayer and the
retained rights of Millennium set forth in Section 4.2 shall apply to the
former CFAs [**]. Further, in the event that a New CFA QT becomes a
Returned QT, the option granted to Millennium under Section 4.2(d) shall
apply. Unless and until a New CFA QT becomes a Returned QT, the right of
first negotiation set forth in Section 5.3 shall apply to such New CFA QT.
(ii) RETURNED OR FAILED QTS. The Parties acknowledge that [**] and
that [**]. The Parties also acknowledge that [**].
(b) [**].
(i) [**] QTS. The Parties acknowledge that [**] will remain QTs for
the [**].
(ii) RETURNED OR FAILED QTS. The Parties acknowledge that [**], and
that [**]. The Parties also acknowledge that [**].
(c) [**]. The Parties agree that (A) [**] converted from a Returned QT to a
Third Stage QT for [**] with the understanding that the Third Stage Period was
deemed to have commenced on [**] and (B) Bayer declared a Development Candidate
directed to [**] and that the Third Stage Period was extended by Millennium
through [**].
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
BAYER HEALTHCARE AG
By: /s/ Dr. Jan-Xxxxxx Xxxxxxxx
-----------------------------------------
Title: EVP, Pharma Research
--------------------------------------
By: /s/ Xxxxxxxx Xxxxxxxxxx
-----------------------------------------
Title: Chief Patent Counsel
--------------------------------------
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ XXXXXXX X. XXXX
-----------------------------------------
Title: EVP
--------------------------------------
EXHIBIT A
QT QUOTAS
The Parties have established the following objectives and quotas relating
to QTs. [**] and relevant to the entry of QTs into the Discovery Pool.
(a) CFA OBJECTIVES AND QUOTAS. For calendar year 2003 (through October 31,
2003), the quotas for the numbers of QTs entered into the Discovery
Pool shall be as follows (it being understood that the quotas may be
increased with the consent of Bayer):
---------------------------------------- -------------------------------
CFA Calendar Year 2003
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
[**] [**]
---------------------------------------- -------------------------------
(b) ANTICIPATED CONFIGURED ASSAYS. For calendar year 2003, the Parties
anticipate that the following number of Configured Assays will be
developed from QTs:
--------------------------------------- ----------------------------
Calendar Year 2003
--------------------------------------- ----------------------------
Configured Assays expected to be [**]
developed from QTs
--------------------------------------- ----------------------------
EXHIBIT B
Research Plan
[To be provided.]
EXHIBIT C
ORIGINAL PARTNERS IN [**] AREAS
[**] AREA ORIGINAL PARTNER
--------- ----------------
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
EXHIBIT D
XXXXX XX
By:
----------------------------------
Date:
--------------------------------
Title: BAYER PROGRAM DIRECTOR
MILLENNIUM PHARMACEUTICALS, INC.
By:
----------------------------------
Date:
--------------------------------
Title: MILLENNIUM PROGRAM DIRECTOR
LICENSED INDICATION(S):
------------------------------------------------------------------------------
QT MINE CFA NOMIN- QT CURRENT RESTRICTED LICENSED INDICATION(S)
NUMBER ATION TYPE STAGE TARGET (SEE DEFINITIONS ON
DATE LAST PAGE)
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Definitions for Licensed Indication(s):
"Field" means [**]
"Cardiovascular diseases" means cardiovascular diseases [**]"CV Angiogenesis"
means any cardiovascular diseases [**]
"Hematological diseases"" means hematological diseases [**]"Oncology" means
oncology, [**]"Pain" means pain [**]"Thrombosis" means thrombosis [**]"Urology"
means [**]
"Urinary incontinence" means urinary incontinence, [**]
"Virology" means viral diseases [**]
EXHIBIT E
XXXXX XX
By:
----------------------------------
Date:
--------------------------------
Title: BAYER PROGRAM DIRECTOR
MILLENNIUM PHARMACEUTICALS, INC.
By:
----------------------------------
Date:
--------------------------------
Title: MILLENNIUM PROGRAM DIRECTOR
LICENSED INDICATION(S):
-------------------------------------------------------------------------------
CT or QT Type Mine CT IP Type of Licensed Restricted
Number Analysis Enabling Indication(s) Target
Date Publication (see definitions
on last page(
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Definitions for Licensed Indication(s):
"All CFAs" means [**] (including, but not limited to, [**], including but not
limited to anemia, [**], including, but not limited to, [**]
"Cardiovascular diseases" means cardiovascular diseases [**]
"CV Angiogenesis" means any cardiovascular diseases [**]
"Hematological diseases" means hematological diseases [**]
"Oncology" means oncology, [**]
"Pain" means pain [**]
"Thrombosis" means thrombosis [**]"Urology" means ([**]
"Urinary incontinence" means urinary incontinence, [**]
"Virology" means viral diseases [**]
