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EXHIBIT 10.168
COLLABORATION AGREEMENT
AMONG
XXX XXXXX AND COMPANY
AND
LIGAND PHARMACEUTICALS INCORPORATED
AND
ALLERGAN LIGAND RETINOID THERAPEUTICS, INC.
DATED NOVEMBER 25, 1997
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COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT ("AGREEMENT") is entered into as of
November 25, 1997 among XXX LILLY AND COMPANY, an Indiana corporation having its
principal place of business at Lilly Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
00000 ("LILLY"),
AND
LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation having its
principal place of business at 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000 ("LIGAND"),
AND
ALLERGAN LIGAND RETINOID THERAPEUTICS, INC., a Delaware corporation
having its principal place of business at 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 ("ALRT")
RECITALS
WHEREAS, Lilly is interested in developing and commercializing
pharmaceutical products to treat and prevent medical conditions, including, but
not limited to, diabetes mellitus, insulin resistance, obesity, dyslipidemia,
and cardiovascular disorders associated with insulin resistance and obesity, and
would like to collaborate with Ligand in a research and development effort to
determine whether modulators of certain intracellular receptors or transcription
factors will be useful in treating these medical conditions; and
WHEREAS, Ligand and ALRT, its wholly owned subsidiary, own or control
certain patents and technology useful in the collaboration; and
WHEREAS, ALRT, Ligand and Lilly believe that each party can bring
significant and complementary strengths to a collaboration and wish to proceed
in accordance with the terms of the following agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter recited, the parties agree as follows:
ARTICLE 1
DEFINITIONS
When used in this Agreement, each of the following terms shall have the
meanings as set forth below:
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1.1 "AFFILIATE" shall mean any company or entity controlled by,
controlling, or under common control with a party hereto and shall include
without limitation any company fifty percent (50%) or more of whose voting stock
(or other comparable ownership interest for an entity other than a corporation)
is owned or controlled, directly or indirectly, by a party, and any company or
entity which owns or controls, directly or indirectly, fifty percent (50%) or
more of the voting stock (or other comparable ownership interest for an entity
other than a corporation) of a party or equivalent power to direct the
management or policies of such company or entity.
1.2 "ALLERGAN" shall mean Allergan, Inc., a Delaware corporation, and
its affiliates.
1.3 "ALLERGAN ROYALTY COMPOUND" shall mean an ALRT Compound with respect
to which a royalty must be paid by Ligand or ALRT under the ALRT Agreement;
provided, however, with respect to Section 7.2, Allergan Royalty Compound shall
not include Compound 324 or Compound 268.
1.4 "ALLIANCE DIRECTORS COMMITTEE" shall mean the committee described in
Section 2.3.
1.5 "ALRT AGREEMENT" shall mean that certain Amended and Restated
Technology Cross License Agreement dated as of September 24, 1997 among
Allergan, Ligand and ALRT.
1.6 "ALRT COMPOUND" shall mean a compound which is both (i) a Modulator
or a Regulator, and (ii) licensed to Ligand and ALRT pursuant to the ALRT
Agreement.
1.7 "ANALOG" shall mean a compound which is structurally closely related
to a reference compound in that
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1.8 "CALENDAR QUARTER" shall mean a quarter ending on March 31, June 30,
September 30 or December 31 of each Calendar Year.
1.9 "CALENDAR YEAR" shall mean the twelve month period ending on
December 31.
1.10 "COMBINATION PRODUCT" shall mean a Drug Product which, in addition
to utilizing a Research Compound, contains another component, which may also be
a Research Compound, as a pharmaceutically active ingredient.
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1.11 "COMMERCIALIZATION PROGRAM" shall mean all activities related to
the development and commercialization of a Drug Product that occur after Phase
III Enrollment including, without limitation, the conduct of Phase III Clinical
Trials, activities associated with the preparation, filing and prosecution of an
NDA and all activities related to commercialization of a Drug Product. The
Commercialization Program shall also include all activities relating to
manufacturing, including, without limitation, manufacturing process development
and scale-up, chemistry, manufacturing and controls, and related activities
regardless of whether they occur before or after Phase III Enrollment, and all
research and related activities in support of an NDA that occur after Phase III
Enrollment.
1.12 "COMPOUND 268" shall mean that certain compound designated as LGD
268 with the molecular structure shown in Schedule 1.12 attached hereto, and
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1.13 "COMPOUND 324" shall mean that certain compound designated as LGD
324 with the molecular structure shown in Schedule 1.13 attached hereto, and
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1.14 "CONFIDENTIAL INFORMATION" shall mean all information, inventions,
know-how and data disclosed by one party to the other party pursuant to this
Agreement, including without limitation, information relating to research and
development plans, experiments, results and plans, the existence of compounds,
therapeutic leads, candidates and products, clinical and preclinical data, trade
secrets and manufacturing, marketing, financial, regulatory, personnel and other
business information and plans, whether in oral, written, graphic or electronic
form and whether in existence as of the Effective Date or developed or acquired
in the future, except where such information (i) is public knowledge at the time
of disclosure by the disclosing party, (ii) becomes public knowledge through no
fault of the receiving party, (iii) was in the possession of the receiving party
at the time of disclosure by the disclosing party as evidenced by proper
business records or (iv) is disclosed to the receiving party by a Third Party,
to the extent such Third Party's disclosure was not in violation of any
obligation of confidentiality.
1.15 "COVER" (including variations thereof such as "Covering",
"Covered", and "Coverage") shall mean that the manufacture, use, import, offer
for sale or sale of a Research Compound, Drug Product, SERM Oncology Product,
Discontinued Drug Product or Ligand Option Compound would infringe a Valid
Claim; provided, with respect to a process or manufacturing patent, that a Valid
Claim therein effectively precludes Third Parties from manufacturing, using,
importing, offering for sale or selling Drug Products, SERM Oncology Products,
Discontinued Drug Products or Ligand Option Compounds. The determination of
whether a Research Compound, Drug Product, SERM Oncology Product, Discontinued
Drug Product or Ligand Option Compound is Covered by a particular Valid Claim
shall be made on a country by country basis. A Valid Claim shall be deemed to
provide effective preclusion hereunder where (i) there is no competing Drug
Product, SERM Oncology Product, Discontinued Drug Product or Ligand Option
Compound being marketed or (ii) if a Drug Product, SERM
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Oncology Product, Discontinued Drug Product or Ligand Option Compound is being
marketed by a competitor, it infringes the Valid Claim (including any period in
which, and provided that, the Valid Claim is being litigated).
1.16 "DATA EXCLUSIVITY PERIOD" shall mean the period, if any, during
which the FDA, or other equivalent regulatory agency in the case of countries
other than the United States, prohibits reference, for purposes of seeking
Regulatory Approval, to clinical and other data contained in the Regulatory
Approval package relating to a Drug Product, without the consent of the party
holding the NDA or equivalent Regulatory Approval.
1.17 "DESIGNATED RECEPTORS" shall mean the RXR, PPAR and HNF-4
receptors, all subtypes, splice forms and variants of each of them.
1.18 "DEVELOPMENT CANDIDATE" shall mean, during the Research Program
Term and subject to the dispute resolution provisions of Section 2.5, a Research
Compound with respect to which the Joint Program Committee has recommended and
the Steering Committee has decided, or during the one (1) year period after the
Research Program Term, Lilly has decided, based on toxicology, ADME and
preclinical pharmacology findings to proceed to Phase I Clinical Trials for
development in the Field.
1.19 "DEVELOPMENT PLAN" shall mean the plan described in Section 2.10.
1.20 "DEVELOPMENT PROGRAM" shall mean those activities with respect to a
Research Compound that occur after designation of the Research Compound as a
Development Candidate and until Phase III Enrollment.
1.21 "DISCONTINUED DRUG PRODUCT" shall have the meaning assigned thereto
in Section 2.12(b).
1.22 "DRUG DELIVERY SYSTEM" shall mean enhancements of a Drug Product
related to convenience of administration of the active ingredient such as
injectors, pens, inhalers, sustained release formulations or transdermal
patches, but not capsules, tablets, gel caps, solutions, normal pharmaceutical
excipients or the like.
1.23 "DRUG PRODUCT" shall mean (i) every pharmaceutical formulation
containing a Research Compound which has been declared a Development Candidate
during the Research Program Term plus one (1) year and which is intended for
administration to humans in the Field, (ii) any compound deemed to be a Drug
Product pursuant to Section 2.13 and (iii) both Lilly Option Compounds, but
shall not include any pharmaceutical composition to which Ligand acquires rights
under this Agreement.
1.24 "EFFECTIVE DATE" shall mean the date hereof.
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1.25 "FDA" shall mean the United States Food and Drug Administration.
1.26 "FIELD" shall mean the discovery, development and commercialization
of Drug Products for use in the treatment, palliation, prevention and/or
remission of all medical conditions including, but not limited to, diabetes
mellitus, insulin resistance, obesity, dyslipidemia, cardiovascular disorders
associated with insulin resistance and obesity, but excluding the treatment,
palliation, prevention and/or remission of cancer and dermatological disease.
1.27 "FIRST COMMERCIAL SALE" shall mean, in any particular country, the
first sale for use by the general public of a particular Drug Product after
receipt of Regulatory Approval in that country.
1.28 "GAAP" shall mean U.S. generally accepted accounting principles,
consistently applied.
1.29 "HOMOLOG" shall mean
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1.30 "IND" shall mean an Investigational New Drug Application as defined
in the United States Food, Drug, and Cosmetic Act and applicable regulations
promulgated thereunder, as they are amended or supplemented from time to time,
or an equivalent application under any successor law or regulations.
1.31 "IND ACCEPTANCE" shall mean the earliest of (i) the filing with the
FDA of an IND and the failure by the FDA, within thirty (30) days following
filing, to object to the IND or institute a clinical hold, (ii) the removal of
the objection or clinical hold referred to in (i) above, if any, or (iii) the
acceptance of an equivalent application by the equivalent agency in a Major
Foreign Market country.
1.32 "JOINT PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country together with any patents that have issued or in the future issue
therefrom, jointly owned, in whole or in part, or jointly licensed by Ligand or
any Ligand Affiliate and Lilly or any Lilly Affiliate. In the circumstance where
the addition of new matter to a solely-owned patent application results in a
continuation-in-part that is a Joint Patent, only the new matter shall be deemed
jointly owned under this Agreement.
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1.33 "JOINT PROGRAM COMMITTEE" shall mean the committee described in
Section 2.4(b) of this Agreement.
1.34 "JOINT RESEARCH COMMITTEE" shall mean the committee described in
Section 2.4(a) of this Agreement.
1.35 "JOINT TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable), tests, assays, quality control or other data, clinical and
preclinical results, technical information, and any physical, chemical or
biological material, or any replication of any part of such material, which are
jointly developed or acquired by Ligand or any Ligand Affiliate and Lilly or any
Lilly Affiliate.
1.36 "LIGAND COMPOUNDS" shall mean ***
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1.37 "LIGAND OPTION COMPOUND" shall have the meaning as set forth in
Section 4.6.
1.38 "LIGAND PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country, together with any patents that have issued or in the future
issue therefrom, owned, in whole or in part, by Ligand or any Ligand Affiliate,
or licensed by Ligand or any Ligand Affiliate (with the right to disclose and
sublicense and subject to the rights of Third Parties as of the Effective Date)
as of the Effective Date, or any such patents and/or applications that are
acquired thereafter and which Cover Research Compounds, Drug Products, New
Compounds and/or the SERM Oncology Product, but excluding any Joint Patents.
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1.39 "LIGAND TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable or patented), tests, assays, quality control or other data, clinical
and preclinical results, technical information, and any physical, chemical or
biological material, or any replication of any part of such material, which is
owned or controlled (with the right to disclose and sublicense and subject to
the rights of Third Parties as of the Effective Date) by Ligand or any Ligand
Affiliate as of the Effective Date or acquired on or before the end of the one
year period immediately following the end of the Research Program Term, to the
extent such Technology relates to the identification, development, manufacture,
use, import, offer for sale or sale of Research Compounds, Drug Products, New
Compounds and/or the SERM Oncology Product, but excluding any Joint Technology.
1.40 "LILLY COMPOUNDS" shall mean ***
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1.41 "LILLY OPTION COMPOUND" shall have the meaning as set forth in
Section 4.6.
1.42 "LILLY PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country, together with any patents that have issued or in the future
issue therefrom, owned, in whole or in part, by Lilly or any Lilly Affiliate, or
licensed by Lilly or any Lilly Affiliate (with the right to disclose and
sublicense and subject to the rights of Third Parties as of the Effective Date)
as of the Effective Date, or any such patents and/or applications that are
acquired thereafter and which Cover Research Compounds, Drug Products, the SERM
Oncology Product, Discontinued Drug Products and/or Ligand Option Compounds, but
excluding any Joint Patents.
1.43 "LILLY TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable or patented), tests, assays, quality control or other data, clinical
and preclinical results, technical information, and any physical, chemical or
biological material, or any replication of any part of such material, which is
owned or controlled (with the right to disclose and sublicense and subject to
the rights of Third Parties as of the Effective Date) by Lilly or any Lilly
Affiliate as of the Effective Date or acquired on or before the end of the one
year period immediately following the end of the Research Program Term, to the
extent such Technology relates to the identification, development, manufacture,
use, import, offer for sale or sale of Research Compounds, Drug Products, the
SERM Oncology Product, Discontinued Drug Products and/or Ligand Option
Compounds, but excluding any Joint Technology.
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1.44 "LILLY ROYALTY TERM" shall mean, with respect to a Discontinued
Drug Product or Ligand Option Compound (other than an Allergan Royalty Compound)
in each country, (a) if the manufacture, use, import, offer for sale or sale of
the Discontinued Drug Product or Ligand Option Compound in such country is
Covered by a Joint Patent, Lilly Patent or Ligand Patent, the period of time
equal to the *** of (i) *** from the date of First Commercial Sale of such
Discontinued Drug Product or Ligand Option Compound in such country or (ii) the
expiration of the last-to-expire applicable patent in such country; provided,
however, if the manufacture, use, import, offer for sale or sale of such
Discontinued Drug Product or Ligand Option Compound is Covered only by a Valid
Claim of a pending patent application in such country, the Lilly Royalty Term
shall expire, except as provided in (b) below, *** from the date of the First
Commercial Sale in such country unless (A) the pending patent application
Covering such Discontinued Drug Product or Ligand Option Compound issues prior
to the end of such *** period, in which case the Lilly Royalty Term shall not
expire at the end of such *** period, or (B) the pending patent application
Covering such Discontinued Drug Product or Ligand Option Compound issues after
the end of such *** period, in which case the Lilly Royalty Term shall expire at
the end of such *** period but shall be reinstated from the date the patent
issues, or (b) if the manufacture, use, import, offer for sale or sale of such
Discontinued Drug Product or Ligand Option Compound in such country is not so
Covered by a Joint Patent, Lilly Patent or Ligand Patent, the period of time ***
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1.45 "MAJOR FOREIGN MARKET(S)" shall mean Japan, the United Kingdom,
France, Germany, Spain, Italy, or the European Union as an entity.
1.46 "MARKETING APPROVAL" shall mean the date on which Lilly, any Lilly
Affiliate, Sublicensee or permitted assignee first receives final approval of
the labeling letter in the United States or its equivalent in a Major Foreign
Market with respect to a particular Drug Product, SERM Oncology Product or Lilly
SERM compound referred to in Section 4.4.
1.47 "MODULATOR" shall mean a compound which modulates, i.e., activates
or inhibits, a Designated Receptor in a homo- or heterodimer form, including ***
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1.48 "NDA" shall mean, with respect to a particular Drug Product, the
New Drug Application filed with the FDA pursuant to 21 U.S.C. Section 357 and 21
C.F.R. Section 314 with respect to that Drug Product, as they are amended or
supplemented from time to time, or an equivalent application under any successor
law or regulations.
1.49 "NDA FILING" shall mean, with respect to a particular Drug Product,
the acceptance of an NDA by the FDA or acceptance of an equivalent filing by the
equivalent agency in a Major Foreign Market country.
1.50 "NET SALES" shall mean, with respect to a Drug Product or the SERM
Oncology Product, the gross amount invoiced by Lilly, a Lilly Affiliate or Lilly
Sublicensee to unrelated third parties for the Drug Product or SERM Oncology
Product, less:
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Such amounts shall be determined from the books and records of Lilly,
Lilly's Affiliate or Lilly's Sublicensee which shall be maintained in accordance
with GAAP.
In the event the Drug Product or SERM Oncology Product is sold in a
country as part of a Combination Product, the Net Sales of the Drug Product or
SERM Oncology Product, as the case may be, for the purposes of determining
royalty payments, shall be determined by multiplying the Net Sales (as defined
above in this Section) of the Combination Product by the fraction, A/(A+B) where
A is the average sale price of the Drug Product or the SERM Oncology Product for
the reporting period when sold separately in finished form and B is the average
sale price of the other product(s) sold separately in finished form; ***
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In the event a Combination Product contains two Drug Products or a Drug
Product and a SERM Oncology Product, Net Sales of each Drug Product or the Drug
Product and the SERM Oncology Product in the Combination Product shall be
separately calculated as follows: (i) if both Drug Products or the Drug Product
and the SERM Oncology Product are sold separately in finished form, the Net
Sales for each Drug Product or the Drug Product and the SERM Oncology Product in
the Combination Product shall be separately calculated by multiplying the Net
Sales of the Combination Product by the fraction A/A+B where A is the average
sale price of the particular Drug Product or the SERM Oncology Product for which
Net Sales is being determined and B is the average sale price of the other Drug
Product or the SERM Oncology Product in the Combination Product; ***
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1.51 "NEW COMPOUND" shall mean ***
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1.52 "NOVEL PROTEIN" shall mean a protein the levels of which can be
up-regulated or down-regulated by a Designated Receptor or Regulator and, such
up-regulation or down-regulation has the potential to provide a therapeutic
benefit in the Field.
1.53 "OBESITY GENE PROMOTER" shall mean the transcriptional control
regime of the human obesity gene, described in *** .
1.54 "OPTION AGREEMENT" shall mean that certain Option and Wholesale
Purchase Agreement of even date herewith between Ligand and Lilly.
1.55 "PHASE I CLINICAL TRIALS" shall mean small scale human clinical
trials conducted in subjects to establish the initial safety profile and
pharmacokinetics of a Drug Product.
1.56 "PHASE II CLINICAL TRIALS" shall mean small scale human clinical
trials conducted in subjects to collect preliminary data regarding efficacy of a
Drug Product in the particular medical condition for which it is being studied,
as well as to obtain some indication of the dosage regimen required.
1.57 "PHASE II ENROLLMENT" shall mean the enrollment and treatment of
the first subject in Phase II Clinical Trials of a Drug Product.
1.58 "PHASE III CLINICAL TRIALS" shall mean large scale human clinical
trials conducted in subjects and intended to generate data concerning the safety
and efficacy of a Drug Product in the particular medical condition for which it
is being studied sufficient to support registration of the Drug Product with
drug regulatory authorities.
1.59 "PHASE III ENROLLMENT" shall mean the enrollment and treatment of
the first subject in Phase III Clinical Trials of a Drug Product.
1.60 "POSITION ISOMER" shall mean ***
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1.61 "PROGRAM" shall have the meaning set forth in Section 8.4(f) of
this Agreement.
1.62 "REGULATOR" ***
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1.63 "REGULATORY APPROVAL" shall mean all authorizations by the
appropriate governmental entity or entities necessary for commercial sale of a
Drug Product or SERM Oncology Product (including exports) in a jurisdiction in
which Lilly or any Lilly Affiliate elects to market the Drug Product or SERM
Oncology Product including, without limitation, approval of labeling, price,
reimbursement and manufacturing.
1.64 "RESEARCH COMPOUNDS" shall mean ***
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1.65 "RESEARCH FUNDS" shall have the meaning set forth in Section 3.1 of
this Agreement.
1.66 "RESEARCH PROGRAM" shall mean those activities with respect to a
Research Compound that occur prior to designation of the Research Compound as a
Development Candidate.
1.67 "RESEARCH PROGRAM TERM" shall mean the five (5) year period of the
collaboration measured from the Effective Date and any extensions thereof, as
provided for in Section 2.8.
1.68 "RESEARCH YEAR" shall mean a twelve-month period during the
Research Program Term. The first Research Year shall be deemed to have commenced
on the Effective Date. Subsequent Research Years shall commence on the
anniversaries of the Effective Date.
1.69 "ROYALTY TERM" shall mean, with respect to a Drug Product and the
SERM Oncology Product in each country, (a) if the manufacture, use, import,
offer for sale or sale of the Drug Product or the SERM Oncology Product in such
country is Covered by a Joint Patent, Lilly Patent or Ligand Patent, the period
of time equal to the ***
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1.70 "SCIENTIFIC PERSON YEAR" shall mean the equivalent of the
scientific work of one Ligand scientist full-time for one year which equates to
a total of *** or *** hours per year of scientific work on or directly related
to the Research Program and Development Program. Each Ligand scientist billed to
the collaboration may be an equivalent of less than or greater than one
Scientific Person Year, based on their hours worked, to meet Research Program
and Development Program requirements, but no less than *** of the Ligand
scientists billed to the Collaboration each Research Year will work on a
full-time basis on the Research Program and/or Development Program. Scientific
work on or directly related to the Research Program and Development Program to
be performed by Ligand employees can include, but is not limited to,
experimental laboratory work, recording and writing up results, reviewing
literature and references, holding scientific discussions, and attending
appropriate seminars and symposia.
1.71 "SCREENING" shall mean conducting any assay, screen or other test
using intracellular receptors or other in vitro cell systems or reagents
involved in other signal transduction pathways on a compound for the purpose of
determining whether such compound functions as a Modulator or a Regulator or
testing such compound to confirm activity with a Designated Receptor or the
Obesity Gene Promoter or for cross-reactivity with receptors or promoters other
than the Designated Receptors or the Obesity Gene Promoter.
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1.72 "SERM ONCOLOGY PRODUCT" shall mean a pharmaceutical composition
containing a Research Compound, which is a Modulator of the RXR receptor and is
developed and approved for use in the treatment, palliation, prevention and/or
remission of cancer in combination with a Selective Estrogen Receptor Modulator
("SERM") for which Lilly has received or will seek Marketing Approval in a
jurisdiction in which Lilly elects to market the SERM, including, without
limitation, approval of labeling, price, reimbursement and manufacturing.
1.73 "STAGE II COMPOUNDS" shall mean Ligand Compounds, New Compounds and
Lilly Compounds that are RXR Modulators and are first synthesized or identified
as being Modulators within *** after the Effective Date.
1.74 "STAGE III COMPOUNDS" shall mean Ligand Compounds, New Compounds
and Lilly Compounds that are RXR Modulators and are first synthesized or
identified as being a Modulator after *** after the Effective Date.
1.75 "STEERING COMMITTEE" shall mean the committee described in Section
2.2 of this Agreement.
1.76 "SUBLICENSEE" shall mean (a) a Third Party to which Lilly or any
Lilly Affiliate has licensed the right to sell a Drug Product or the SERM
Oncology Product or (b) a Third Party to which Lilly or any Lilly Affiliate has
granted the exclusive right to promote and distribute a Drug Product or the SERM
Oncology Product in the United States, Japan, the United Kingdom, France,
Germany, Spain or Italy under an arrangement substantially different from
wholesale distributor arrangements typically employed in such countries.
1.77 "TARGRETIN AGREEMENT" shall mean that certain Development and
License Agreement (Targretin) of even date herewith between Lilly and Ligand
related to the development and commercialization of Targretin.
1.78 "TECHNICAL OPERATING PLAN" shall mean the Research and Development
Technical Operating Plan referred to in Section 2.1, as revised from time to
time.
1.79 "THIRD PARTY" shall mean any entity which is not a party or
Affiliate of any party to this Agreement.
1.80 "TRADEMARKS" shall have the meaning assigned thereto in Section 9.1
of this Agreement.
1.81 "VALID CLAIM" shall mean any claim (a) issued in an unexpired
patent which has not been held unenforceable, unpatentable or invalid by a
decision of a court or other governmental agency of competent jurisdiction
following exhaustion of all possible appeal processes, and which has not been
admitted to be invalid or unenforceable through reissue,
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reexamination or disclaimer, or (b) of a pending patent application, so long as
such patent application is being diligently prosecuted.
ARTICLE 2
COLLABORATION SCOPE AND GOVERNANCE
2.1 PURPOSE AND SCOPE. The parties desire to collaborate in a research
program aimed at the identification and development of Research Compounds for
use in the Field. Subject to the terms described herein, both Ligand and Lilly
shall use their respective commercially reasonable efforts to achieve the goals
set forth in this Agreement. Promptly after the Effective Date, Ligand will
submit a draft Technical Operating Plan, covering the general subjects set forth
on Schedule 2.1. The parties will promptly after submission by Ligand finalize
the Technical Operating Plan. Specific research programs provided for in the
Technical Operating Plan in addition to those contemplated under the Targretin
Agreement are: (a) RXR Modulators, (b) PPAR Modulators, (c) HNF-4 Modulators and
(d) Regulators. The governance provisions described herein shall relate to the
conduct of the Research Program and Development Program. Lilly shall be solely
responsible for governance of the Commercialization Program. The Technical
Operating Plan is intended as a work plan summarizing the present plans
regarding key activities of the collaboration. It is subject to amendment from
time to time by the committees described below. Notwithstanding anything in the
Technical Operating Plan to the contrary, the rights of the parties with respect
to the collaboration shall be governed in all respects by the terms of this
Agreement.
2.2 STEERING COMMITTEE
(a) The Research Program and the Development Program shall be
conducted under the overall direction of the Steering Committee comprised of
four (4) members with two (2) appointed by Ligand and two (2) appointed by
Lilly. The Steering Committee established by this Agreement shall be the same
committee as the Steering Committee established by the Targretin Agreement. All
actions of the Steering Committee with respect to the activities contemplated by
this Agreement shall be governed by the terms of this Agreement. The initial
members of the Steering Committee shall be (a) for Ligand, X. Xxxxxxxx and A.
Negro-Vilar, and (b) for Lilly, X. Xxxxxx and X. Xxxx. ***
***
Either party may change its representatives on the Steering Committee at any
time by prior written notice to the other party. The party hosting the meeting
of the Steering Committee shall prepare and deliver to the other party one week
prior to the meeting the agenda for the meeting. The party hosting the meeting
of the Steering Committee shall prepare and deliver to the other party within
ten (10) days after the date of such meeting, minutes of the meeting that set
forth all decisions of the Steering Committee relating to the Research Program
and the Development Program in form and content reasonably acceptable to the
other party. Minutes shall be deemed approved unless any member of the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Steering Committee objects to the accuracy of such minutes in writing to the
other party within ten (10) business days of receipt. If a party objects to the
minutes and the objection is not resolved, the objection will be deemed a
dispute and resolved pursuant to Section 2.5.
(b) The purpose of the Steering Committee shall be to make key
strategy, policy and resource decisions regarding the Research Program and the
Development Program and to carry out its other responsibilities described in
this Agreement. The Steering Committee shall meet at least once in each Calendar
Quarter, at such times and places as are agreed to by Ligand and Lilly,
alternating between San Diego and Indianapolis, or such other locations as the
members of the Steering Committee shall agree. Meetings of the Steering
Committee may be attended by such other directors, officers and employees of
each party as such party deems necessary, and by such consultants and
non-employee agents of each party as the members of the Steering Committee may
from time to time agree, but only members of the Steering Committee shall have
the right to vote at such meetings. The Steering Committee, by unanimous
consent, shall have the authority to amend or waive compliance with the
provisions of this Agreement relating to the scheduling and conduct of the
meetings of all committees established pursuant to this Agreement. Any dispute
regarding any such amendment or waiver shall not be subject to the dispute
resolution provisions of Section 2.5.
2.3 ALLIANCE DIRECTORS COMMITTEE
(a) Promptly after the Effective Date, Lilly and Ligand each
shall appoint one of their respective employees (each an "Alliance Director") to
coordinate the execution of the Research Program and the Development Program.
The Alliance Directors shall be the primary contacts between the parties with
respect to the Research Program and the Development Program. Either party may
change its designee as the Alliance Director upon prior written notice to the
other party.
(b) Promptly after the Effective Date, Lilly and Ligand each
shall appoint an Alliance Directors Committee to assist the Alliance Directors
in the implementation and execution of the Research Program and the Development
Program. The Alliance Directors Committee shall consist of both Alliance
Directors and two (2) additional voting members, one (1) appointed by Ligand and
one (1) appointed by Lilly. Meetings of the Alliance Directors Committee may be
attended by Joint Research Committee and Joint Program Committee
representatives, as well as consultants and other agents of Ligand and Lilly as
are deemed necessary by the Alliance Directors, but only members of the Alliance
Directors Committee shall have the right to vote at such meetings. The Alliance
Directors Committee shall report to the Steering Committee which shall have the
right to review, accept, reject or modify all actions of the Alliance Directors
Committee. Either party may change its members of the Alliance Directors
Committee upon prior written notice to the other party.
(c) ***
*** The party hosting the meeting of the Alliance Directors
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Committee shall prepare and deliver to the other party one week prior to the
meeting the agenda for the meeting. The party hosting the meeting of the
Alliance Directors Committee shall prepare and deliver to the other party within
ten (10) days after the date of such meeting, minutes of the meeting that set
forth all decisions of the Alliance Directors Committee relating to the Research
Program and the Development Program in form and content reasonably acceptable to
the other party. Minutes shall be deemed approved unless any member of the
Alliance Directors Committee objects to the accuracy of such minutes in writing
to the other party within ten (10) business days of receipt. If a party objects
to the minutes and the objection is not resolved, the objection will be deemed a
dispute and resolved pursuant to Section 2.5.
(d) The Alliance Directors Committee shall be responsible for the
execution of the Research Program and the Development Program and direction of
the Joint Research Committee and Joint Program Committee. It may appoint such
other committees or working groups, with such duties and memberships, as it
deems appropriate. The Alliance Directors Committee shall have such additional
duties and responsibilities as are given to it by the Steering Committee and
shall meet with such frequency as is necessary to complete its duties and as may
otherwise be required by the Steering Committee.
2.4 JOINT RESEARCH COMMITTEE AND JOINT PROGRAM COMMITTEE
(a) Promptly after the Effective Date, Ligand and Lilly through
the Alliance Directors Committee shall appoint the Joint Research Committee. The
Joint Research Committee will be responsible for the day to day implementation
of the Research Program related to Drug Products outlined in the Technical
Operating Plan. The Joint Research Committee shall consist of eight (8) voting
members, four (4) appointed by Ligand and four (4) appointed by Lilly. Meetings
of the Joint Research Committee may be attended by such other directors,
officers and employees of each party as such party deems necessary, and by such
consultants and non-employee agents of each party as the members of the Joint
Research Committee may from time to time agree, but only members of the Joint
Research Committee shall be entitled to vote. The Joint Research Committee shall
direct the activities of the research teams managing the following research
projects: (a) RXR Modulators, (b) PPAR Modulators, (c) HNF-4 Modulators and (d)
Regulators. The Joint Research Committee shall report to the Alliance Directors
Committee which shall have the right to review, accept, reject or modify all
actions of the Joint Research Committee. Any failure of the Alliance Directors
Committee to review, accept, reject or modify actions of the Joint Research
Committee may be treated as a dispute by the written request of a party and
shall thereafter be resolved pursuant to Section 2.5. Either party may change
its members of the Joint Research Committee upon prior written notice to the
other party. All decisions of the Joint Research Committee shall be unanimous
with all members voting. The party hosting the meeting of the Joint Research
Committee shall prepare and deliver to the other party one week prior to the
meeting the agenda for the meeting. The party hosting the meeting of the Joint
Research Committee shall prepare and deliver to the other party within ten (10)
days after the date of such meeting, minutes of the meeting that set forth all
decisions of the Joint Research Committee relating to the Research Program in
form and content reasonably acceptable
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to the other party. Minutes shall be deemed approved unless any member of the
Joint Research Committee objects to the accuracy of such minutes in writing to
the other party within ten (10) business days of receipt. If a party objects to
the minutes and the objection is not resolved, the objection will be deemed a
dispute and resolved pursuant to Section 2.5.
(b) Promptly after the Effective Date, Ligand and Lilly through
the Alliance Directors Committee shall appoint the Joint Program Committee. The
Joint Program Committee will be responsible for the day to day implementation of
the Development Program, and will supervise the development teams (e.g.,
Targretin, Compound 268 and Compound 324 ) related to Drug Product as outlined
in the Technical Operating Plan. The Joint Program Committee shall consist of
six (6) voting members, two (2) appointed by Ligand and four (4) appointed by
Lilly. Decisions of the committee shall be made by majority vote with a quorum
for any meeting consisting of all six members, provided, however, that if the
Joint Program Committee is unable to act because of a lack of a quorum, either
Lilly or Ligand may call a new meeting pursuant to five (5) days written notice
at which a quorum shall consist of four (4) members. Meetings of the Joint
Program Committee may be attended by such other directors, officers, employees,
consultants and other agents of Ligand and Lilly as are deemed necessary, but
only members of the committee shall be entitled to vote. As the Alliance
Directors Committee reviews and the Steering Committee approves the development
of Research Compounds, the Joint Program Committee shall put into place such
additional teams as are necessary to proceed with the Development Plan. The
Joint Program Committee shall report to the Alliance Directors Committee which
shall have the right to review, accept, reject or modify all actions of the
Joint Program Committee. Any failure of the Alliance Directors Committee to
review, accept, reject or modify actions of the Joint Program Committee may be
treated as a dispute by the written request of a party and be resolved pursuant
to Section 2.5 Either party may change its members of the Joint Program
Committee upon prior written notice to the other party. The party hosting the
meeting of the Joint Program Committee shall prepare and deliver to the other
party one week prior to the meeting the agenda for the meeting. The party
hosting the meeting of the Joint Program Committee shall prepare and deliver to
the other party within ten (10) days after the date of such meeting, minutes of
the meeting that set forth all decisions of the Joint Program Committee relating
to the Development Program in form and content reasonably acceptable to the
other party. Minutes shall be deemed approved unless any member of the Joint
Program Committee objects to the accuracy of such minutes in writing to the
other party within ten (10) business days of receipt. If a party objects to the
minutes and the objection is not resolved, the objection will be deemed a
dispute and resolved pursuant to Section 2.5.
2.5 DISPUTE RESOLUTION. Any dispute arising from the Joint Research
Committee or the Joint Program Committee shall first be presented to the
Alliance Directors Committee for resolution. Any dispute arising from the
Alliance Directors Committee shall be presented to the Steering Committee for
resolution. Any disputes arising from the Steering Committee shall be presented
to Xxxxx Xxxxxxxx or his successor as Chief Executive Officer of Ligand on
behalf of Ligand, and August X. Xxxxxxxx or his successor as Chief Scientific
Officer of Lilly on behalf of Lilly. These executives shall confer and consider
each party's view and shall attempt in good
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faith to resolve such disagreements between themselves. If the executives cannot
promptly resolve such disagreements and if such disagreement relates to the
conduct of or decisions made as a part of the Development Program or the
Commercialization Program, for example, disagreements regarding the initiation
and termination of preclinical tests and clinical trials or the selection of
Development Candidates, the matter shall be decided by August X. Xxxxxxxx or his
successor as Chief Scientific Officer of Lilly. If the dispute relates to the
Research Program, the executives shall establish a mechanism to resolve the
disagreement promptly and efficiently, without waiving any rights which either
party may have under this Agreement, by law or otherwise. Any action requiring
Steering Committee approval shall be subject to the dispute resolution
provisions of this Section 2.5.
2.6 STAFF AVAILABILITY. Each party shall make its employees,
consultants, subcontractors and investigative sites engaged in the Research
Program and the Development Program or serving on any committee available upon
reasonable notice during normal business hours at their respective places of
employment to consult with the other party on issues arising during the Research
Program and the Development Program and in connection with any request from any
regulatory agency, including those relating to regulatory, scientific, technical
and clinical testing issues.
2.7 FACILITY VISITS. Representatives of Lilly and Ligand may, upon
reasonable notice during normal business hours, (a) visit the facilities where
the Research Program and the Development Program are being conducted and each
party will permit, or use commercially reasonable efforts if the manufacture or
testing is being performed by a Third Party to obtain permission for, such
representatives of the other party to visit facilities where a Research Compound
or Drug Product is or will be manufactured or tested, (b) consult informally,
during such visits and by telephone, with personnel for the other party
performing work on the Research Program and the Development Program, and (c)
with the other party's prior approval, which approval shall not be unreasonably
withheld, visit the sites of any experiments or tests being conducted by such
other party in connection with the Research Program and the Development Program,
but only to the extent in each case such experiments or tests relate to Research
Compounds or Drug Products. On such visits, an employee of the party conducting
the research or development shall accompany the employee(s) of the visiting
party. If requested by the other party, Ligand and Lilly shall cause appropriate
individuals working on the Research Program and the Development Program to be
available for meetings at times and places reasonably convenient to the party
responding to such request.
2.8 EXTENSION OF COLLABORATION. Lilly shall have the option to extend
the Research Program Term for up to three (3) additional years in one-year
increments by giving written notice not later than six (6) months prior to the
end of the initial Research Program Term and each one-year extension. Lilly
shall specify in such notice the level of Research Funding it will pay to Ligand
during the extended term, which shall not be more than the level applicable to
the Research Year immediately preceding such one (1) year extension nor less
than *** Scientific Person Years without Ligand's consent.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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2.9 RESEARCH FEASIBILITY. Each party shall promptly notify the other if
it should determine that any part of the Research Program and the Development
Program is not feasible or commercially justifiable, and will outline in
reasonable detail the reasons therefor and the parties shall mutually determine
in good faith whether termination of that portion of the Research Program and
Development Program is appropriate under such circumstances. In the event that
research activities to be performed by Ligand in accordance with the Technical
Operating Plan (the "Research Work") have been unreasonably delayed, Lilly and
Ligand shall review Ligand's staffing of the Research Program and Development
Program and Ligand shall assign such additional personnel or make such other
adjustments as may be reasonably required to complete the Research Work in a
timely fashion. Lilly may also undertake such Research Work, at its own expense,
if the parties cannot reach mutual agreement regarding such Research Work.
Ligand will provide reasonable assistance to Lilly to accommodate its efforts in
undertaking the Research Work.
2.10 DEVELOPMENT PLAN. The Joint Program Committee or its designee shall
prepare and oversee an overall development plan (the "Development Plan") for the
Drug Product which shall describe the proposed toxicology studies, clinical
trials, regulatory plans, and other key elements of the development work
necessary for completion of development activities through completion of Phase
II Clinical Trials. In developing such plan, the Joint Program Committee shall
take into account Lilly's requirements for the Commercialization Program. To be
effective, the Development Plan shall be reviewed by the Alliance Directors
Committee and shall be subject to review and approval by the Steering Committee
prior to its implementation, subject to the dispute resolution provisions of
Section 2.5. Progress towards the goals of the plan shall be reviewed by the
Steering Committee on a semi-annual basis. Lilly shall be responsible for the
conduct of the Development Program and Ligand shall provide consultation and
advice. The Development Plan is intended as a work plan for the development
activities of the collaboration and may be amended from time to time by the
appropriate committee. The rights of the parties with respect to the
collaboration shall be governed in all respects by the terms of this Agreement.
2.11 REGULATORY APPROVALS. The parties shall use commercially reasonable
efforts consistent with their respective responsibilities hereunder to obtain
all necessary Regulatory Approvals. Except where Regulatory Approvals are
legally required to be in Ligand's name, Lilly or its Affiliates shall have the
sole right to obtain Regulatory Approvals for Drug Products, which shall be in
Lilly's or its Affiliate's name, and Lilly shall own all submissions in
connection therewith. All formulary or marketing approvals for a Drug Product
shall also be obtained by and in the name of Lilly or its Affiliates.
Notwithstanding anything to the contrary herein, Lilly or its Affiliates shall
solely handle all matters with drug regulatory agencies concerning any Drug
Product, and shall be the sole contact with such agencies. Nothing in this
Section 2.11 shall constitute a limitation on Ligand's right to seek, obtain or
own regulatory, marketing or formulary approvals for any pharmaceutical
composition to which Ligand acquires rights in the Field under this Agreement as
well as any product outside the Field.
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2.12 TERMINATION OF DEVELOPMENT.
(a) Ligand acknowledges that the development and
commercialization of Drug Products is an inherently uncertain process, and that
there can be no assurance either that the Drug Products can be successfully
developed or that the potential commercial rewards available from the
commercialization of the Drug Products, when weighed against the costs and
uncertainties involved and compared to Lilly's other commercial opportunities,
will be sufficient to justify Lilly's continued efforts to discover, develop
and/or commercialize the Drug Products. Lilly will devote the same degree of
skill and effort to development of Drug Products as it devotes to its own
products of similar risk and potential. If Lilly in good faith determines that
further efforts under this Agreement, with respect to a particular Research
Compound or Drug Product that has begun development, would not be in the best
interests of Xxxxx, Xxxxx may cease development of such Research Compound or
Drug Product. Lilly shall promptly notify Ligand of any election to discontinue
development of a Development Candidate or Drug Product hereunder.
(b) If Lilly terminates development of a Drug Product under this
Section 2.12 (a "Discontinued Drug Product") and Lilly or its Affiliates is not
diligently researching, developing or selling another Research Compound or Drug
Product that is a Modulator of the same Designated Receptor as the Discontinued
Drug Product if the Discontinued Drug Product is a Modulator, or a Research
Compound or Drug Product that is a Regulator if the Discontinued Drug Product is
a Regulator, Lilly shall transfer back to Ligand all rights to the Discontinued
Drug Product and the related Program (including all rights to any IND or other
filing related to the Regulatory Approval and the right to reference the
relevant Drug Master File with respect to the Discontinued Drug Product) as
contemplated by Section 8.2(b), shall use commercially reasonable efforts to
promptly provide Ligand with access to all material clinical and preclinical
data at no cost to Ligand other than the direct costs of assembling, reproducing
and transmitting the data to Ligand and shall grant Ligand the licenses set
forth in Section 8.2(b). In the event that Ligand thereafter manufactures, sells
or causes to be manufactured or sold such Discontinued Drug Product, Ligand
shall pay Lilly, during the Lilly Royalty Term, a royalty on Net Sales of the
Discontinued Drug Product during each Calendar Year, calculated as provided in
Section 1.50, substituting therein "Ligand" for "Lilly" and "Discontinued Drug
Product" for "Drug Product" wherever such terms appear. The percentage of Net
Sales to be paid by Ligand shall vary in connection with the progress Lilly
shall have made toward obtaining Marketing Approval of the Drug Product as
follows:
(i) If Lilly has not filed an IND or an equivalent
application in any Major Foreign Market with respect to the Discontinued Drug
Product, Ligand shall owe *** *** on Net Sales of the Discontinued Drug Product.
(ii) If Lilly has filed an IND or an equivalent
application in any Major Foreign Market but has not enrolled and treated a
patient in Phase III Clinical Trials with respect
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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to the Discontinued Drug Product, Ligand shall *** of Net Sales of the
Discontinued Drug Product.
(iii) If Lilly has enrolled and treated a patient in Phase
III Clinical Trials but has not filed an NDA or an equivalent application in any
Major Foreign Market with respect to the Discontinued Drug Product, Ligand shall
*** of Net Sales of the Discontinued Drug Product.
(iv) If Lilly has filed a NDA or an equivalent application
in any Major Foreign Market with respect to the Discontinued Drug Product,
Ligand shall *** of Net Sales of the Discontinued Drug Product.
2.13 NOVEL PROTEIN PROGRAM. Lilly may, at its option, add one or more
research programs directed to the discovery of research targets that are a Novel
Protein for use in the Field, unless Ligand is prohibited from engaging in
research with Lilly with respect to the Novel Protein under the terms of an
existing collaboration with a Third Party. To the extent Lilly desires that
Ligand personnel provide services in connection with such program, the Steering
Committee shall determine whether it is feasible to staff such program with
existing Scientific Person Years funded by Lilly, or whether additional
Scientific Person Years funding is required. Any compound resulting from such
research program that Lilly develops shall be deemed to be a Drug Product, and
Lilly shall pay royalties and milestones to Ligand ***
***
***
***
***
***
***
***
***
***
***
***
***
***
ARTICLE 3
FUNDING PROGRAM
3.1 STAFFING AND FUNDING. Lilly shall provide research funds (the
"Research Funds") for the Research Program and Development Program and Ligand
shall during each Research Year assign to the Research Program and Development
Program sufficient personnel to provide no less than the number of Scientific
Person Years reflected in the schedule below. At least *** of the
Scientific Person Years shall be provided by scientists with a Ph.D. or M.D.
degree or
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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equivalent academic credentials. Ligand shall, from time to time, consult with
Lilly regarding assignment of Ligand personnel to the Research Program and
Development Program and shall consider in good faith any changes suggested by
Lilly. Ligand shall not, to the disadvantage of the Research Program and
Development Program, transfer personnel from the professional staff engaged in
the Research Program and Development Program to participate in another program.
The amount of Research Funds to be paid by Lilly shall be *** per Scientific
Person Year *** . Commencing January 1, 1999 and on January 1 of each year
thereafter, the amount to be paid by Lilly per Scientific Person Year will be
increased by *** over the amount applicable to the immediately preceding
Calendar Year. The following table shows the allocation of research scientists
presently contemplated by the parties. The resources shown in the table for
Targretin will support the further development of Targretin as contemplated by
the Targretin Agreement. The Steering Committee, from time to time, may
reallocate such resources as it deems appropriate.
RESEARCH YEAR 1 2 3 4 5
*** *** *** *** *** ***
*** *** *** *** *** ***
*** *** *** *** *** ***
*** *** *** *** *** ***
*** *** *** *** *** ***
Total *** *** *** *** ***
3.2 SCHEDULING PAYMENT OF RESEARCH FUNDS. Research Funds during the
Research Program Term shall be paid to Ligand by Lilly in United States Dollars
by any bank wire transfer in next day funds.***
***
***
***
***
*** Any payment for
part of a quarter shall be prorated. Any variance of expected Scientific Person
Years from actual Scientific Person Years will be adjusted with the next payment
following the end of each Research Year.
3.3 ACCOUNTING. Ligand shall maintain complete records of all monies
paid by Ligand under the Research Program and Development Program. During the
Research Program Term, Ligand shall submit to Lilly within seventy-five (75)
days following each Calendar Quarter a written statement accompanied by a
certificate signed by the chief financial officer or controller
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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of Ligand setting forth the name of each Ligand employee who worked on the
Research Program and the Development Program during that Calendar Quarter, the
functional department in which each such employee worked and the actual number
of Scientific Person Years each such employee worked during that Calendar
Quarter. Lilly shall be entitled to any tax credits due on account of research
and development expenses, to the extent permitted by law, for the Research Funds
or any other funds paid by Lilly. Lilly may, at its own expense, obtain an audit
of such report by independent certified public accountants designated by Lilly
and reasonably acceptable to Ligand. Such a request shall be made within one
year from receipt of the reports. The independent certified public accountant
shall have the right to examine all records kept pursuant to this Section and
shall report to Lilly the findings of said examination of records insofar as
necessary to verify the reports. Such findings shall be maintained in confidence
by Lilly. To the extent that the hours of scientific work Lilly has paid for
through Research Funds in any Research Year (number of Scientific Person Years
multiplied by 1,880 hours) have not been completed. Ligand shall credit Lilly at
the rate provided in Section 3.1 per uncompleted hour. If credit is owed to
Lilly, the credit may be taken against the next payment due to Ligand, or in the
event that the Research Program Term has expired, within seventy-five (75) days
of such termination by wire transfer. If credit is owed to Ligand, the credit
may be taken in the next payment due Ligand; provided, however, in no event
shall Ligand be entitled to actual cash reimbursement for excess hours completed
nor shall any credit owed to Ligand carry forward from one Research Year to the
next Research Year. Any unpaid credit after the Research Program Term shall be
paid to Lilly by wire transfer within forty-five (45) days after the final
Calendar Year report regarding the Research Program and Development Program is
due to be delivered to Lilly.
3.4 RESEARCH PROGRAM AND DEVELOPMENT PROGRAM COSTS. Ligand shall pay all
expenses incurred by it pursuant to the Research Program and shall not be
entitled to any payment therefor except the Research Funds and the milestones
and royalties provided herein. If Lilly requests any modification to the
Technical Operating Plan as it relates to the Research Program or additional
activities which Ligand anticipates will cause it to incur expenses in excess of
the Research Funds, Ligand shall so advise Lilly, and Ligand shall not be
obligated to provide such services unless the services are approved by the
appropriate committee or the Lilly Alliance Director agrees in writing to pay
such expenses. ***
***
***
***
***
***
***
***
***
*** Lilly shall be responsible for its own costs in providing
consultation, advice and research efforts to support the Research Program and
the Development Program. Services of Third Parties, such as academic
collaborators and contract laboratories utilized in the Research Program and the
Development Program must be approved by the Steering Committee and any
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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payment by Ligand for such services will be reimbursed at cost. Ligand will pay
the costs of providing advice and consultation. Lilly shall be responsible for
all costs of the Commercialization Program, except that Ligand shall provide
reasonable advice or other assistance at its expense.
3.5 RESEARCH PROGRAM AND DEVELOPMENT PROGRAM DURING DEVELOPMENT. In the
event that Lilly is pursuing the development of a Research Compound, Ligand and
Lilly shall regularly confer, with the objective of reaching agreement, on what
further research under the Research Program and the Development Program is most
appropriate in light of Lilly's development efforts with respect to such
Research Compound. The parties acknowledge that a principal focus of the
Research Program and Development Program under these circumstances shall be to
coordinate research activities with Lilly's development activities so as to
commercialize a Drug Product as expeditiously as reasonably practicable. From
time to time, Lilly may request that, to the extent practicable, Ligand shift
personnel allocated under Section 3.1 above from one project to another project
or support research activities directed to the advancement of development of
Drug Products.
3.6 REDUCTION IN FUNDING. The parties may agree, from time to time, to
end or reduce funding on a Program by Program basis, if they believe that such
research efforts are not as productive as they had intended. The Steering
Committee may also determine that resources used in one Program should be
allocated to another Program. Lilly, in its sole discretion and by providing not
less than six (6) months prior written notice to Ligand, may reduce its payment
of Research Funds in the *** Research Year by up to *** Scientific Person Years
from the level funded in the *** Year and, in the *** Research Year by up to ***
*** Scientific Person Years from the level funded in the *** Research Year.
ARTICLE 4
ADDITIONAL ASPECTS OF RESEARCH PROGRAM AND
DEVELOPMENT PROGRAM
4.1 SCREENING LILLY COMPOUNDS. During the Research Program Term, Lilly
shall have the right to submit to Ligand for Screening such Lilly Compounds as
it deems appropriate. Lilly may also use any Ligand Technology licensed to Lilly
under this Agreement at Lilly facilities for Screening compounds in the Field.
The scheduling of Screening and other research activity shall be determined by
the Steering Committee or the Alliance Directors Committee. Ligand will not
subject any Lilly Compound to any binding or other assay or test which has not
been specifically approved by the Steering Committee or other appropriate
committee. No royalty or other fee shall be paid or payable by Lilly for the
Screening of Lilly Compounds unless the Lilly Compound becomes a Drug Product
for which milestones or royalties are owing. If a Lilly Compound reaches the
status equivalent to a Development Candidate within one (1) year after the end
of the Research Program Term, royalty and other payments will be paid as set
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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forth in this Agreement. If a Lilly Compound does not reach the status
equivalent to a Development Candidate within one (1) year after the end of the
Research Program Term, Lilly shall have the right to develop and commercialize
such compound or product without the obligation to make royalty and other
payments set forth in this Agreement.
4.2 TREATMENT OF LILLY COMPOUNDS. Ligand will not chemically or
physically analyze or have analyzed any Lilly Compound to determine its
structure and shall not permit any Third Party to observe or have access to any
Lilly Compound without the express written consent of Lilly. Lilly will provide
to Ligand all information related to, including information regarding the
structure of, all Lilly Compounds which upon Screening show the ability to
activate or inhibit a Designated Receptor or up-regulate or down-regulate the
expression of a coding gene under control of the Obesity Gene Promoter that is
material to Ligand's activities hereunder, except to the extent Lilly is legally
prohibited as of the Effective Date from disclosing such information. All
information, results or data generated in connection with any Screening of a
Lilly Compound submitted by Lilly shall be deemed Lilly Technology. All
information provided to Ligand in connection with such Screening shall be
treated in the manner proscribed in Article 12. Lilly will provide Ligand with
handling instructions and all safety information relating to any Lilly Compound
submitted by Lilly and access to such other information as is useful to
facilitate Ligand's Screening activities.
4.3 SCREENING OF LIGAND COMPOUNDS AND NEW COMPOUNDS. Ligand shall submit
all Ligand Compounds and New Compounds, and Lilly shall submit all New
Compounds, for Screening. The compounds to be screened, the schedule for such
screening and the tests used shall be determined by the Joint Research Committee
or other appropriate committee established under this Agreement. All
information, results or data generated in connection with any such Screening
conducted by Ligand shall be deemed Ligand Technology. All information, results
or data generated in connection with any Screening conducted by Lilly shall be
deemed Lilly Technology. The Research Committee shall have the option, from time
to time, to submit to Ligand and Lilly a list of compounds by name and structure
and each party shall promptly notify the Research Committee if, to its
knowledge, a royalty obligation would be owing if any compound identified on the
list were commercialized.
4.4 SERM ONCOLOGY PRODUCT.
(A) LILLY RIGHT. During the Research Program Term and for one (1)
year thereafter, Lilly shall have the right to select *** Research Compounds
that are Allergan Royalty Compounds or New Compounds that are RXR Modulators for
use in a SERM Oncology Product, subject to Ligand's selection rights under
Section 4.5. In the event a SERM Oncology Product *** selected does not receive
Regulatory Approval or if Lilly, in its sole discretion, terminates development
of such SERM Oncology Product, Lilly shall have the right to select ***
additional Research Compounds that are Allergan Royalty Compounds and/or New
Compounds that are RXR Modulators for use in a SERM Oncology Product. ***
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*** The Research Compound
used in the SERM Oncology Product may be developed for any indication in the
Field but shall not be developed or marketed for any indication outside the
Field other than as the SERM Oncology Product. Milestones and royalties for the
Research Compound used in the SERM Oncology Product shall be as provided in
Sections 7.2 and 6.1 for the applicable RXR Modulator. In addition, if such
Research Compound is also developed for use other than in combination with a
SERM, Ligand shall also be entitled to any milestones and royalties payable
pursuant to Section 7.2 and 6.1 with respect to such other use of the Research
Compound; provided, however, that in no event shall more than one royalty be
paid with respect to the same Net Sales. Lilly shall be solely responsible for
all research and development activities relating to the development of a SERM
Oncology Product and costs related thereto, and shall not provide Research Funds
to Ligand with respect to such SERM Oncology Product. Ligand shall use
commercially reasonable efforts to provide to Lilly, at no cost to Lilly other
than the direct costs of assembling, reproducing and transmitting the data,
information already in Ligand's possession, and shall provide such reasonable
assistance to Lilly as Lilly agrees to pay for at a reasonable rate to be
agreed, to facilitate Lilly's research efforts with respect to the SERM Oncology
Product.
(b) CO-PROMOTION OPTION. Ligand shall have the option to
co-promote the SERM Oncology Product to physicians in the United States who are
board certified or eligible in the medical specialties of oncology and/or
hematology. Lilly shall notify Ligand within ninety (90) days prior to any
anticipated NDA Filing with respect to a SERM Oncology Product and provide
Ligand with a reasonably detailed summary of the relevant scientific and
commercial information related to the SERM Oncology Product. Within sixty (60)
days of delivery of such notice, Ligand shall notify Lilly whether it will
exercise its co-promotion option. If Ligand elects to exercise its option, Lilly
and Ligand shall negotiate in good faith reasonable terms and conditions under
which Ligand will co-promote the SERM Oncology Product,***
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(c) CO-DEVELOPMENT FUNDING OPTION. Ligand shall have the option
to co-fund the worldwide development of the SERM Oncology Product. Lilly shall
fund the development of such product until Phase II Enrollment. No later than
ninety (90) days prior to initiation of Phase II Clinical Trials for the SERM
Oncology Product, Lilly shall provide Ligand with a reasonably detailed summary
of all preclinical and clinical data along with an estimate of all remaining
costs required to obtain Regulatory Approval for the SERM Oncology Product and a
budget for such costs. Ligand shall then have ninety (90) days following receipt
of the information described above in which to advise Lilly, in writing, that it
intends to exercise its co-funding option. If Ligand exercises its option,
Ligand shall then be responsible for *** *** of all further costs incurred by
Lilly in obtaining Regulatory Approval for use in the treatment, palliation,
prevention and/or remission of cancer based on funding levels of ***
per full time equivalent (inflated in the manner provided for funding of
Ligand Scientific Person Years in Section 3.1) and Lilly's reasonable additional
expenses in every market where marketing is contemplated. Lilly shall provide to
Ligand semi-annually each year in the months of March and September an update of
the budget of all remaining costs required to obtain Regulatory Approval for the
SERM Oncology Product and shall allow Ligand to, at its own expense, obtain an
audit by independent certified accountants designated by Ligand and reasonably
acceptable to Lilly of expenses incurred. If, in obtaining Regulatory Approval
with respect to the SERM Oncology Product, Lilly combines the clinical trials
relating to use in cancer with clinical trials relating to use for other
indications, the parties shall agree on the portion of such expenses which
relate to use in cancer. Lilly shall xxxx Ligand for its portion of expenses in
arrears within thirty (30) days of the end of each Calendar Quarter. Ligand
shall pay Lilly in U.S. Dollars by any bank wire transfer within thirty (30)
days of receiving Lilly's invoice. If Ligand does not exercise its co-funding
option within the ninety (90) day period: (i) Ligand shall be deemed to have
waived its rights to co-develop the SERM Oncology Product, (ii) Lilly shall
remain responsible for funding and obtaining Regulatory Approval for such SERM
Oncology Product, and (iii) Lilly shall pay Ligand royalties and milestones as
set forth in Section 4.4(a). If Ligand co-funds the development of the SERM
Oncology Product, as contemplated by this Section 4.4(c), Lilly shall pay
Ligand, in addition to any royalty described in Section 4.4(a), *** of that
portion of such royalty applicable to sales of the SERM Oncology Product for use
in the treatment, palliation, palliation, prevention and/or remission of cancer
("Oncology Portion"). If the SERM Oncology Product receives Regulatory Approval
for uses in addition to the treatment, palliation, prevention and/or remission
of cancer, the Oncology Portion will be determined by the mutual agreement of
the parties. If the parties cannot agree on the determination of the Oncology
Portion, the parties shall agree upon an appropriate survey mechanism to be
utilized to determine the Oncology Portion. The survey will be conducted as
follows: A statistical expected accuracy of *** will be considered sufficient
for each registered indication (all non-registered indications will be
considered as one group and the *** accuracy threshold shall be applied to the
group as a whole). The survey will be done in a manner that minimizes cost while
providing the desired level of accuracy. This may mean that the survey is
conducted differently in each country. Eligible methods of surveying end use
include the following plus any others agreed upon by the parties: (i) use of an
independent third party to do random surveys of customers; (ii) use of coupons
or incentives for customers
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to track use in their institution; (iii) inclusion of coupons or incentives in
the vial or case packaging for customers to track use in their institutions;
(iv) use of telephone surveys of customers; and (v) logical deduction from the
customer list (e.g., product purchased by oncologists or hematologists will be
assumed to have been purchased for use in the treatment, palliation, prevention
or remission of cancer). The first survey will be conducted promptly after the
end of the first full Calendar Quarter in which sales of the SERM Oncology
Product are made and triennially thereafter, and the cost of these surveys will
be shared equally by the parties. Either party may conduct surveys more
frequently at its own expense (using a methodology approved by the other party,
whose approval shall not be unreasonably withheld), but no more frequently than
one time per calendar year. Regardless of the time that has elapsed since the
last survey, the time period to be examined will be the most recently completed
three (3) month period for which marketing information is available at the time
the survey is commenced. If, at the time of the survey, marketing information is
not available for a three (3) month period, the survey will be delayed until
such information is available; provided, however, that if the information is not
available within ninety (90) days after the end of any Calendar Quarter, the
survey for the most recent three (3) month period will be used. The Oncology
Portion determined by the agreement of the parties or by the survey will be
binding on the parties. The amount of the additional royalty due under this
Section 4.4(c) shall be calculated by multiplying any royalty described in
Section 4.4(a) by the Oncology Portion most recently set by agreement of the
parties or the survey, as the case may be.
4.5 LIGAND RIGHTS TO SELECT COMPOUNDS OUTSIDE THE FIELD. Promptly
following the Effective Date, Ligand shall disclose to Lilly all information
with respect to the Allergan Royalty Compounds that Lilly may reasonably
request. Within the first ninety (90) days following the Effective Date, Ligand
shall have the right to select *** Allergan Royalty Compounds (other than
Compound 268 and Compound 324) for use outside the Field, in which case such
Allergan Royalty Compounds shall not be available for development by Lilly or
its Affiliates in the Field. The Steering Committee shall approve the selection
of Allergan Royalty Compounds by Ligand, such approval not to be unreasonably
withheld. Any dispute arising at the Steering Committee with respect to the
selection of such compounds shall be subject to resolution under Section 2.5 in
the manner provided for Research Program disputes. The compounds so selected
shall not be available to Lilly or its Affiliates and will not be subject to
royalty and milestone payments to Lilly. All Allergan Royalty Compounds other
than the *** selected by Ligand shall be available to Lilly and its Affiliates
exclusively and may not be developed by Ligand or its Affiliates for any purpose
during the Research Program Term plus one (1) year, subject to Ligand's and its
Affiliates' rights under Section 2.12(b), 4.6(b), 8.1(b), 8.2(b) and 8.5(f) and
subject to any license granted to Lilly under Section 8.1 with respect to
Allergan Royalty Compounds that become Drug Products or the SERM Oncology
Product.
4.6 OPTION COMPOUNDS
(a) LILLY OPTION COMPOUNDS. Ligand shall on a quarterly basis
share information with Lilly with respect to the status of its internal research
or other programs related
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to development of RXR Modulators outside the Field (to the extent any agreements
to which Ligand is a party as of the Effective Date do not prohibit Ligand from
disclosing the information to Lilly ). At the time the third of *** compounds
from Ligand's internal research efforts on RXR Modulators outside the Field or
other programs related to RXR Modulators outside the field has reached a stage
after the Effective Date that is equivalent to Development Candidate, Ligand
shall so notify Lilly and Lilly shall have up to ninety (90) days from receipt
of such notice to select for use in the Field up to *** compounds (other than
Ligand Option Compounds or Allergan Royalty Compounds selected by Ligand under
Section 4.5) synthesized in the course of such internal research or other
programs. The compounds so selected by Lilly shall be deemed Research Compounds
and shall be referred to as a "Lilly Option Compounds." Lilly shall have the
sole right to develop Lilly Option Compounds for use in the Field. Neither
Ligand nor any Ligand Affiliate shall have any right to develop any Lilly Option
Compound for any use, whether in or outside the Field. If a Lilly Option
Compound is further developed and commercialized, milestone payments and royalty
payments on such Lilly Option Compound shall be paid by Lilly with respect to
the development and commercialization of such compound in a manner equivalent to
those set forth in Sections 6.1 and 7.2 with respect to Drug Products containing
HNF-4 Modulators, regardless of the date upon which the milestones are achieved
and whether or not the Lilly Option Compounds are declared a Development
Candidate during the Research Program Term plus one (1) year. If at the end of
the Research Program Term plus one year Lilly has not selected *** compounds, it
shall be permitted to make its selection at that time, regardless of whether
Ligand has brought forward *** compounds to a stage equivalent to Development
Candidate.
(b) LIGAND OPTION COMPOUNDS. At the time the *** Research
Compounds has reached the status of Development Candidate, Ligand shall have up
to ninety (90) days to select up to *** other compounds (other than Lilly Option
Compounds and any Allergan Royalty Compounds chosen for the SERM Oncology
Product) from Allergan Royalty Compounds and/or New Compounds that are RXR
Modulators for use outside the Field. The compounds so selected by Ligand shall
be deemed "Ligand Option Compounds." Ligand shall have the sole right to develop
Ligand Option Compounds for use outside the Field. Neither Lilly nor any of its
Affiliates shall have any right to develop any Ligand Option Compound for any
use, whether in or outside the Field. If a Ligand Option Compound is further
developed and commercialized, milestone payments and royalty payments on such
Ligand Option Compound shall be paid by Ligand with respect to the development
and commercialization of such compound in a manner equivalent to those set forth
in Sections 6.1 and 7.2 with respect to Drug Products containing HNF-4
Modulators, regardless of the date upon which the milestones are achieved,
provided no milestone or royalty payments shall be due under this Section if the
Ligand Option Compound is an Allergan Royalty Compound. If at the end of the
Research Program Term plus one year Ligand has not selected *** compounds, it
shall be permitted to make its selections at that time, regardless of whether
Lilly has brought forward any Development Candidates. Other than the right to
select Ligand Option Compounds as provided in this Section 4.6(b) and the right
to New Compounds that are Discontinued Drug Products as provided in this
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Agreement, Ligand shall have no right under this Agreement to research, develop,
make, use, import, offer for sale or sell any New Compound.
ARTICLE 5
COMMERCIALIZATION
5.1 COMMERCIALIZATION. All decisions regarding the Commercialization
Program for each Drug Product, including pricing and terms of sale and
assignment of Ligand personnel allocated under Section 3.1 above with respect to
the Drug Product, shall be determined by Lilly, in its sole discretion;
provided, however, that Ligand's participation in the Commercialization Program
shall be approved by the Steering Committee, subject to the dispute resolution
provisions of Section 2.5, and in no event shall such Ligand participation be
disruptive of Ligand programs not funded by Lilly.
5.2 MARKETING PARTNERS FOR DRUG PRODUCT. Lilly shall have the right to
appoint one or more Third Party marketing partners to promote, co-promote,
distribute, market or co-market any Drug Product in any country of the world
where such an arrangement would be beneficial for pricing approvals or overall
market share. In the event Lilly elects to appoint a marketing partner, Lilly
shall have the right to supply the Drug Product to such partner at such prices
as Lilly shall determine. With the consent of Ligand, which consent will not be
unreasonably withheld, Lilly may, in connection with the appointment of a
marketing partner, assign to such partner some or all of Lilly's obligations
under the Development Program with respect to one or more countries, provided
that such assignment shall not release Lilly from any obligations it may have
under this Agreement.
5.3 COMMERCIAL DILIGENCE. Lilly shall use commercially reasonable
efforts to obtain Regulatory Approval for and to market, sell and distribute
Drug Products in all countries of the world.
ARTICLE 6
ROYALTIES
6.1 ROYALTIES.
(a) Subject to the terms and conditions of this Agreement (including,
but not limited to, Section 6.1(b) below) and during the Royalty Term, in
partial consideration for the licenses and services provided hereunder, Lilly
shall pay Ligand the following royalties based on
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worldwide Net Sales of each Drug Product incorporating one of the following
Research Compounds during a Calendar Year:
ROYALTY TIER I II III IV
Allergan Royalty Compound *** *** *** ***
Stage II Compounds *** *** *** ***
Stage III Compounds *** *** *** ***
HNF-4 Modulator *** *** *** ***
PPAR Modulator *** *** *** ***
Regulator *** *** *** ***
I: Percentage of Net Sales paid for that portion of Net Sales of
each Drug Product in the Calendar Year that are less than *** .
II: Percentage of Net Sales paid for that portion of Net Sales of
each Drug Product in the Calendar Year that equal or exceed ***
but are less than *** .
III: Percentage of Net Sales paid for that portion of Net Sales of
each Drug Product in the Calendar Year that equal or exceed ***
but are less than *** .
IV: Percentage of Net Sales paid for that portion of Net Sales of
each Drug Product in the Calendar Year that equal or exceed ***.
Commencing January 1, 1999 and on January 1 of each year
thereafter the threshold and ceilings for the different royalty tiers will be
increased by *** over the levels in effect during the immediately preceding
Calendar Year. Royalties shall be calculated on a Drug Product by Drug Product
basis, and sales of various Drug Products shall not be aggregated for purposes
of determining the applicable royalty rate. For this purpose, all formulations
of a Research Compound shall be regarded as one Drug Product.
(b) In the event Ligand does not exercise the "Ligand Option" or gives
the "Rejection Notice" as provided in Section 1 of the Option Agreement and has
not previously exercised the "Targretin Royalty Option" under Section 5.1(b) of
the Targretin Agreement, Ligand shall have the option to increase the royalties
payable on either Compound 268 or Compound 324 (but not both) (the "268/324
Royalty Option") by *** *** over the royalty rates
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provided in Section 6.1(a) above (i.e., the royalty rate would increase from ***
To exercise the 268/324 Royalty Option, Ligand must deliver written notice to
Lilly within thirty (30) days after the first to occur of (i) the date Ligand
receives (A) the payment of the Phase III Enrollment milestone for Compound 268
pursuant to Section 7.2 of this Agreement or (B) written notice from Lilly
acknowledging that the Phase III Enrollment milestone for Compound 268 has been
satisfied, (ii) the date Ligand receives (A) the payment of the Phase III
Enrollment milestone for Compound 324 pursuant to Section 7.2 of this Agreement
or (B) written notice from Lilly acknowledging that the Phase III Enrollment
milestone for Compound 324 has been satisfied or (iii) the date Ligand receives
(A) the payment of the first Phase III Enrollment milestone for Targretin (as
defined in the Targretin Agreement) pursuant to Section 5.4 of the Targretin
Agreement or (B) written notice from Lilly acknowledging that the first Phase
III Enrollment milestone for Targretin has been satisfied. If Ligand does not
deliver written notice within the required thirty (30) days, the 268/324 Royalty
Option shall be deemed to have expired.
6.2 PAYMENTS REGARDING CERTAIN COMPOUNDS. Ligand shall pay Allergan any
royalty or other amount payable with respect to any Allergan Royalty Compound.
6.3 ROYALTY PAYMENTS. Royalty payments under this Agreement shall be
made to the receiving party within seventy-five (75) days following the end of
each Calendar Quarter for which royalties are due.
6.4 PAYMENTS FOR LICENSED PPAR MODULATORS. In the event that Lilly
exercises its option to license a PPAR Modulator from a Third Party pursuant to
Section 8.5(c) of this Agreement and such compound is used in a Combination
Product with a Research Compound or Targretin, Net Sales of the Combination
Product shall be calculated as set forth in Section 1.50 of this Agreement or
Section 1.37 of the Targretin Agreement, as the case may be, ***
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ARTICLE 7
INITIAL AND MILESTONE PAYMENTS
7.1 INITIAL PAYMENT. Within three (3) business days of the submission by
Ligand of the draft Technical Operating Plan to the Steering Committee, Lilly
shall pay Ligand twelve million five hundred thousand dollars ($12,500,000).
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7.2 MILESTONES. Upon achievement of any milestone event listed below
with respect to a Drug Product, Lilly shall pay Ligand on or before the *** day
following achievement of the milestone as provided below:
DEVELOPMENT IND Phase II Phase III NDA Marketing
CANDIDATE Acceptance Enrollment Enrollment Filing Approval
Allergan Royalty
Compound *** *** *** *** *** ***
Compound 268/
Compound 324 *** *** *** *** *** ***
Stage II Compound *** *** *** *** *** ***
Stage III Compound *** *** *** *** *** ***
HNF-4 Modulator *** *** *** *** *** ***
PPAR Modulator *** *** *** *** *** ***
Regulator *** *** *** *** *** ***
Amounts shown on the above table are in millions of U.S. dollars. The milestone
payments set forth above will be paid only for the first indication of a Drug
Product to achieve the required status and no milestone payment shall be made
more than once with respect to the same Drug Product. For purposes of paying
milestones, all formulations of a Research Compound shall be regarded as the
same Drug Product.
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In the event that Phase II Clinical Trials and Phase III Clinical Trials are
combined or other doubts exist regarding the achievement of such milestones, the
Steering Committee or its designee shall determine the point in the trials at
which the Phase II Enrollment and Phase III Enrollment milestones have been
achieved. Notwithstanding the provisions of Section 2.5 of this Agreement, in
the event that the Steering Committee (i) is unable to agree or (ii) is no
longer in existence and no designee has been named, the determination shall be
made by the mutual agreement of the parties.
ARTICLE 8
LICENSES
8.1 LICENSES TO LILLY.
(a) Subject to the other provisions of this Agreement (including,
without limitation, Section 8.1(b)) and except as provided below, Ligand and its
Affiliates hereby grant to Lilly and its Affiliates an exclusive, worldwide
license, with the right to sublicense, the
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exclusivity being even as to Ligand and its Affiliates, under the Joint Patents,
Joint Technology, Ligand Patents and Ligand Technology:
(i) to make, have made, use, have used, import, offer
for sale, sell and have sold, the SERM Oncology
Product as provided in Section 4.4;
(ii) to make, have made, use, have used, import, offer
for sale, sell and have sold, Drug Products;
(iii) to make, have made, use, have used, import, offer
for sale, sell and have sold, New Compounds for
which Lilly has disclosed in writing to Ligand the
chemical and physical structure not later than
*** days after Lilly's receipt of a written
request for such disclosure made by Ligand at any
time after the end of the Research Program Term ***
; and
(iv) to co-exclusively with Ligand and its Affiliates,
with the right to sublicense, conceive, discover,
evaluate, identify, characterize, research and
develop the SERM Oncology Product, Research
Compounds in the Field and Drug Products during the
Research Program Term *** ; provided that Ligand
shall exercise its rights hereunder solely in
connection with the performance of its obligations
under this Agreement and shall not sublicense its
rights hereunder; and
(v) to exclusively research and develop in the Field
after the Research Program Term plus one (1) year
Research Compounds which are declared to be
Development Candidates during the Research Program
Term *** .
Lilly shall exercise the licenses granted pursuant to this
Section 8.1(a) only in accordance with the terms of this Agreement.
(b) All rights to Ligand Compounds which are not New Compounds,
other than those declared to be Development Candidates during the Research
Program Term plus one (1) year and those, if any, that are selected as Lilly
Option Compounds pursuant to Section 4.6(a), shall revert to Ligand following
the Research Program Term *** . In addition, the licenses granted to Lilly and
its Affiliates in Section 8.1(a) do not extend and are subject to Allergan's
rights to Unsynthesized Compounds and Allergan Selected Compounds (each as
defined in the ALRT Agreement) to which Allergan has exclusive rights under the
ALRT Agreement.
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After the Research Program Term *** , Ligand shall have the right
to conduct research using Research Compounds which are declared to be
Development Candidates during the Research Program Term *** .
8.2 LICENSES TO LIGAND.
(a) Subject to the other provisions of this Agreement, Lilly
hereby grants to Ligand an exclusive, worldwide license, with the right to
sublicense, the exclusivity being even as to Lilly and its Affiliates, under the
Joint Patents, Joint Technology, Lilly Patents and Lilly Technology to make,
have made, use, have used, import, offer for sale, sell and have sold drug
products containing Ligand Option Compounds for use outside the Field.
(b) In the event Lilly discontinues development of a Discontinued
Drug Product pursuant to Section 2.12 of this Agreement and Lilly or its
Affiliates is not diligently researching, developing or selling another Research
Compound or Drug Product that is a Modulator of the same Designated Receptor as
the Discontinued Drug Product if the Discontinued Drug Product is a Modulator,
or another Research Compound or Drug Product that is a Regulator if the
Discontinued Drug Product is a Regulator, the licenses granted to Lilly and its
Affiliates under Section 8.1 with respect to such Discontinued Drug Product and
the related Program (and any Research Compound contained in such Drug Product or
Program) shall terminate and Lilly and its Affiliates shall grant to Ligand an
exclusive, worldwide license, with the exclusivity being even as to Lilly and
its Affiliates, with the right to sublicense, under the Joint Patents, Joint
Technology, Lilly Patents and Lilly Technology to develop, make, have made, use,
import, offer for sale, sell and have sold the Discontinued Drug Product (and
any Research Compound contained in such Discontinued Drug Product); provided,
however, that Lilly shall retain the exclusive license to any New Compounds
other than the Discontinued Drug Products and the Ligand Option Compounds, that
may have been synthesized or identified as part of the Program. If Lilly elects
to discontinue development of a Discontinued Drug Product, such license shall be
granted upon receipt by Ligand of Lilly's written election to discontinue
development and shall be subject to the royalty provisions of Section 2.12.
Notwithstanding the above, neither Lilly nor its Affiliates grant any license
under this Section 8.2(b) under the Lilly Patents or the Lilly Technology
applicable to making a Drug Product that was not used to make the Drug Product
in the development or commercialization of the Drug Product by Lilly or its
Affiliates.
8.3 DEVELOPMENT OUTSIDE FIELD. Neither Ligand nor its Affiliates shall
develop any Research Compound or Drug Product, including a SERM Oncology
Product, for use or sale outside the Field for so long as Lilly or any Lilly
Affiliate or Sublicensee is developing, manufacturing, or selling such Research
Compound or Drug Product, including the SERM Oncology Product.
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8.4 ROYALTIES ON NEW COMPOUNDS.
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(f) Subject to Section 3.6, Lilly shall have the right, pursuant
to Section 2.12 of this Agreement or otherwise, to terminate all Research Funds
for any of the RXR Program, the PPAR Program, the HNF-4 Program and/or the OB
Gene Program (each, a "Program"). In the event that Lilly terminates all
Research Funds for a Program without Ligand's agreement, (i) all rights to the
Program shall revert to Ligand, subject to obligations imposed herein, (ii) all
licenses from Ligand and its Affiliates to Lilly and its Affiliates affecting
the Program shall terminate, except that Lilly shall retain all licenses under
Section 8.1(a)(ii), 8.1(a)(iv) and 8.1(a)(v) with respect to Research Compounds
that were declared to be Development Candidates in the Program prior to
termination of all Research Funds for the Program, and (iii) the exclusivity
covenants of both Ligand and Lilly contained in this Section 8.5 with respect to
the Program shall terminate. If all Research Funds for a Program are terminated
by the mutual agreement of Lilly and Ligand, Lilly's rights to the Program and
its licenses affecting the Program shall not terminate and the exclusivity
covenants of both Ligand and Lilly contained in this Section 8.5 with respect to
the Program shall not terminate. If Ligand requests from Lilly a report on the
status of a Program, Lilly will promptly report to Ligand whether it has
discontinued the development and/or commercialization of all Research Compounds
and Drug Products in the Program. Notwithstanding the foregoing, Lilly shall
retain the exclusive license under Section 8.1(a)(iii) to any New Compounds,
other than any New Compound contained in a Discontinued Drug Product and any
Ligand Option Compounds that are New Compounds.
ARTICLE 9
TRADEMARKS
9.1 SELECTION; LICENSE; EXPENSES. Lilly may select one or more
trademarks, as it deems appropriate, but not one which could be reasonably
expected to be likely to cause confusion, mistake or to deceive with respect to
Targretin, for the marketing of Drug Products. Such trademarks shall be owned
solely by Lilly (collectively, the "Trademarks"); provided, however, that if
required by law in any country, Ligand shall own the Trademarks in that country
and shall grant an exclusive license to Lilly. Expenses for registration of the
Trademarks shall be borne solely by Lilly.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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ARTICLE 10
INFORMATION AND REPORTS
10.1 INFORMATION DISCLOSURE. Lilly and Ligand will disclose and make
available to each other promptly (and in any event as soon as it is generally
available within their respective organizations) the results of the work
conducted in connection with the Research Program and Development Program,
including without limitation all structural, preclinical, clinical, regulatory,
and other information known by Lilly or its Affiliates or Ligand or its
Affiliates concerning Research Compounds and Drug Products. Lilly shall own and
maintain its database of clinical trial data and adverse drug event information
accumulated from all clinical trials of the Drug Products for which it was
responsible. In the event that Lilly terminates this Agreement or Ligand
acquires rights to a Discontinued Drug Product, Lilly will permit Ligand, at no
cost to Ligand other than the direct costs of assembling, reproducing and
transmitting the data, to make copies of all material information described in
the immediately preceding sentence and use such information in connection with
Regulatory Approvals; provided, however, that if Ligand subsequently sublicenses
the right to develop and market the Discontinued Drug Product to any Third
Party, Ligand shall reimburse Lilly for its direct costs incurred in obtaining
such information, including, without limitation, the direct costs of clinical
trials. Ligand shall own and maintain its database of clinical trial data and
adverse drug event information accumulated from all clinical trials of drug
products containing Research Compounds outside the Field. Lilly and Ligand each
shall have the right, during normal business hours and upon reasonable notice,
to inspect and copy all records of the other party to the extent reasonably
required for the performance of its obligations under this Agreement (with the
party owning the records determining what is reasonably required). Each party
shall treat the records and the information of the other party contained therein
as Confidential Information and shall not use or disclose such records or
information except to the extent permitted by this Agreement as well as to
provide to the sponsor of the IND, NDA, or other regulatory submission, for
initial and/or periodic submission to governmental agencies, significant
information on any Drug Product from preclinical laboratory, animal toxicology
and pharmacology studies, as well as serious or unexpected adverse experience
reports from clinical trials and commercial experiences with such Drug Product.
10.2 COMPLAINTS. Each party shall maintain a record of all complaints it
receives with respect to Drug Products. Except as otherwise provided in Section
10.3, each party shall notify the responsible party in reasonable detail of any
complaint received by it and within three (3) days after the event, and in any
event in sufficient time to allow the responsible party to comply with any and
all regulatory requirements imposed upon it in any country in which the Drug
Product is being marketed.
10.3 ADVERSE EVENT REPORTING. The party who has responsibility for and
sponsorship of the regulatory submission will also have responsibility for
submitting information and filing reports to various governmental agencies, to
the extent they are lawfully required, on Drug
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Products. Information must be submitted at the time of initial filing for
investigational use in humans and at the time of NDA filing in the U.S., or the
foreign equivalent of any such filing. In addition, supplemental information
must be provided on Drug Products at periodic intervals and adverse drug
experiences must be reported at more frequent intervals depending on the
severity of the experience. Consequently, Lilly and Ligand agree to provide each
other with all information necessary or desirable to comply with the laws and
regulations of governmental regulatory authorities in the applicable country and
to develop and follow appropriate adverse experience reporting procedures and:
(a) provide to the sponsor of the IND, NDA, or other regulatory
submission, for initial and/or periodic submission to governmental agencies,
significant information on any Drug Product from preclinical laboratory, animal
toxicology and pharmacology studies, as well as serious or unexpected adverse
experience reports from clinical trials and commercial experiences with such
Drug Product.
(b) report to one another in such a manner and time so as to
enable each party to comply with all governmental laws and regulations in
countries for which Regulatory Approval is or will be sought.
10.4 USE OF INFORMATION. Information contained in reports made pursuant
to this Article 10 or otherwise communicated between the parties will be subject
to the confidentiality provisions of Article 12 below. Lilly may use any
information obtained by it (either by its own efforts or by disclosure from
Ligand) pursuant to this Agreement for the purposes of obtaining Regulatory
Approval for Drug Products throughout the world. Each party shall have the right
to use the Confidential Information disclosed by the other party without charge,
but only to the extent necessary to enable each party to carry out their
respective roles defined in this Agreement.
10.5 PUBLICATIONS. During the Research Program Term, Ligand and Lilly
each acknowledge the other party's interest in publishing certain information
gathered during the collaboration to obtain recognition within the scientific
community and to advance the state of scientific knowledge. Each party also
recognizes the mutual interest in obtaining valid patent protection and
protecting business interests. The Steering Committee, or its designee, will
establish procedures for review of publications that will address the process,
timing and criteria for decision while taking into account both Ligand's and
Lilly's policies for publication review and approval. The Steering Committee, or
its designee (the "Publication Subcommittee"), shall consider each such proposed
publication that arises during the Research Program Term by reviewing an advance
draft of all written publications and an abstract of all oral presentations,
which shall be submitted not later than 45 days prior to the first submission
for publication in the case of written publications and 45 days prior to
submission of the abstract to the organizers of the forum at which the oral
presentation is to be made. If, within 30 days of receipt of the advance copy of
a party's proposed written publication or abstract of a proposed oral
presentation, the Steering Committee or its Publication Subcommittee informs
such party that its
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proposed publication or presentation could be expected to have a material
adverse effect on any Ligand Patents, Ligand Technology, Lilly Patents, Lilly
Technology, Joint Patents or Joint Technology developed or acquired during the
Research Program Term, then such party shall delay such proposed publication or
presentation for a period of up to 90 days or, if longer, a commercially
reasonable period of time, to enable modifications to the publication or
presentation for patent, trade secret, or commercial reasons or to allow for
patent(s) preparation and filing of the information involved, if such
information pertains to a patentable invention. If any material changes are made
to the advance copy prior to publication or presentation, the final version
shall be submitted for review by the Steering Committee or the Publication
Subcommittee, which shall then have a period of 10 business days to review the
final version.
If, within 30 days of receipt of an advance copy or within 10 business
days of receipt of the final version of a party's proposed publication or
presentation, the Steering Committee or the Publication Subcommittee has failed
to act with respect to such party's proposed publication or presentation, then
such proposed publication or presentation shall be regarded as approved by the
Steering Committee and may be published or presented. The disclosure of
information that has been previously approved or is not Confidential Information
shall not require the review and approval of the Steering Committee under this
Section 10.5.
10.6 REGULATORY REPORTING. The parties acknowledge that either or both
parties will be required to submit information and file reports with various
governmental agencies in addition to those contemplated by the preceding
sections. Without limiting the generality of Sections 2.10 and 2.11 above, the
Joint Program Committee or its designee, with the approval of the Steering
Committee, shall establish procedures to be followed by the parties which will
facilitate the coordination of the parties in complying with their respective
regulatory obligations, and the parties agree to cooperate with each other as
necessary to allow each party to comply with its regulatory obligations. Lilly
shall coordinate all contacts with regulatory agencies with respect to Drug
Products and the SERM Oncology Product keeping Ligand appropriately advised of
such contacts. Each party shall consult with the other party before responding
to any inquiries from regulatory agencies regarding Research Compounds or Drug
Products, provided however, each party may make such communication as required
by law.
10.7 SALES REPORTS.
(a) During the term of this Agreement and after First Commercial
Sale of a Drug Product or the SERM Oncology Product in any country, Lilly shall
furnish or cause to be furnished to Ligand on a quarterly basis a written report
or reports covering each Calendar Quarter (each such Calendar Quarter being
sometimes referred to herein as a "reporting period") showing (i) the Net Sales
of each Drug Product and the SERM Oncology Product in each country during the
Royalty Term by Lilly, its Affiliates, Sublicensees and assigns, and (ii) the
royalties which shall have accrued under Article 6 in respect of such sales and
the basis for calculating those royalties. With respect to sales of Drug
Products and the SERM Oncology Product
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invoiced in United States Dollars ("Dollars"), the Net Sales amounts and the
amounts due to Ligand hereunder shall be expressed in Dollars.
With respect to sales of Drug Products and the SERM Oncology
Product invoiced in a currency other than Dollars, the Net Sales shall be
calculated using Lilly's then current standard exchange rate methodology for the
translation of foreign currency sales into Dollars. Each quarterly report shall
be accompanied by a list of the exchange rates used in calculating Net Sales
covered by such quarterly report. Lilly will at Ligand's reasonable request but
not more frequently than once a Calendar Quarter inform Ligand as to the
specific exchange rate translation methodology, if any, used for a particular
country or countries. In the event that any exchange rate translation
methodology changes, Lilly will inform Ligand of the change in the quarterly
report next due.
Each quarterly report shall be due on the seventy-fifth (75th)
day following the close of each reporting period. Lilly shall keep accurate
records in sufficient detail to enable the amounts due hereunder to be
determined and to be verified by the independent public accountants described
hereunder. Lilly shall furnish annually to Ligand appropriate evidence of
payment of any tax or other amount required by applicable laws or regulations to
be deducted from any royalty payment, including any tax or withholding levied by
a foreign taxing authority in respect of the payment or accrual of any royalty.
(b) All payments shall be made in Dollars at the time of
quarterly reporting. If at any time legal restrictions prevent the prompt
remittance of any payments with respect to any country where Drug Products or
the SERM Oncology Product are sold, Lilly or its sublicensees or marketing
partners shall have the right and option to make such payments by depositing the
amount thereof in local currency to Ligand's account in a bank or depository in
such country.
Upon the written request of Ligand, at Ligand's expense and not
more than once in or in respect of any Calendar Year,
***
***
***
***
Upon the expiration of thirty-six (36) months following the end of any Calendar
Year, the calculation of amounts payable with respect to such fiscal year shall
be binding and conclusive upon Ligand, and Lilly and its sublicensees and
marketing partners shall be released from any liability or accountability with
respect to payments for such year. The report prepared by such independent
public accountant, a copy of which shall be sent or otherwise provided to Lilly
by such independent public accountant at the same time it is sent or otherwise
provided to Ligand, shall contain the conclusions of such independent public
accountant regarding the audit and will specify that the amounts paid to Ligand
pursuant thereto were correct or, if incorrect, the amount of any underpayment
or overpayment. If such independent public accountant's report shows any
underpayment, Lilly shall remit or shall cause its sublicensees or marketing
partners to remit to Ligand within thirty (30) days after Lilly's receipt of
such report, (i) the amount of
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45
such underpayment and (ii) if such underpayment exceeds ten percent (10%) of the
total amount owed for the Calendar Year then being audited, the reasonable and
necessary fees and expenses of such independent public accountant performing the
audit, subject to reasonable substantiation thereof. Any overpayments shall be
fully creditable against amounts payable in subsequent payment periods. Ligand
agrees that all information delivered or subject to review under this Section
10.7 or under any sublicensee or marketing agreement is Confidential Information
and that Ligand shall retain all such information in confidence.
10.8 STATUS REPORTS. At any time after the committees referred to in
Article 2 cease to exist, Lilly shall, upon request, and not more frequently
than semi-annually , provide to Ligand a written report summarizing the
activities of Lilly with respect to the Drug Products and the SERM Oncology
Product, and in the event that Ligand obtains rights to any Discontinued Drug
Product, Ligand shall, upon request, and not more frequently than semi-annually,
provide to Lilly a written report summarizing the activities of Ligand with
respect to the Discontinued Drug Products, the contents of each such report to
be as set forth on Schedule 10.8.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1 PATENTABLE INVENTIONS AND TECHNOLOGY.
(a) OWNERSHIP. Ligand will disclose to Lilly all Ligand
Technology and Joint Technology and Lilly will disclose to Ligand all Lilly
Technology and Joint Technology to the extent developed or acquired during the
Research Program and the Development Program promptly after the disclosing party
recognizes the significance thereof unless the same shall have been developed as
part of a collaboration with a Third Party, the terms of which prohibit
disclosure to the other party. All Ligand Patents and Ligand Technology shall be
owned by Ligand, all Lilly Patents and Lilly Technology shall be owned by Lilly
and all Joint Patents and Joint Technology shall be owned jointly by Ligand and
Lilly, inventorship to be determined in accordance with U.S. laws of
inventorship, where applicable.
(b) PATENT PROSECUTION. Ligand shall be responsible for
preparing, filing, prosecuting, maintaining and taking such other actions as are
reasonably necessary or appropriate with respect to the Ligand Patents and any
patentable inventions encompassed by Ligand Technology. Lilly shall be
responsible for preparing, filing, prosecuting, maintaining and taking such
other actions as are reasonably necessary or appropriate with respect to the
Joint Patents, Lilly Patents and any patentable inventions encompassed by Lilly
Technology or Joint Technology. Each party will consult the other party with
respect to its choice of external patent counsel and will keep that party
continuously informed of all material developments relating to the preparation,
filing, prosecution and maintenance of patents and patent applications covered
by this Agreement. Each party shall endeavor in good faith to coordinate its
efforts with those
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of the other party to minimize or avoid interference with the prosecution of the
other party's patent applications. To the extent practicable, each party shall
provide the Steering Committee with a copy of any patent application which first
discloses any specific Lilly Technology, Ligand Technology or Joint Technology,
prior to filing the first of such applications in any jurisdiction, for review
and comment by the Steering Committee or its designees.
(c) COSTS. Subject to the provisions of subsection (d) below, the
party initially responsible for all costs incurred in the preparation, filing,
prosecution and maintenance of a patent pursuant to Section 11.1(b) shall bear
all costs incurred in the preparation, filing, prosecution and maintenance of
such patents; provided, however, that Ligand shall pay one-half (1/2) of all
reasonable external expenses incurred by Lilly while prosecuting and maintaining
Joint Patents. External expenses will include patent office fees and taxes in
connection with the filing, prosecution and maintenance of any patent or patent
application and the fees of any outside patent attorneys or agents in connection
with the ex parte preparation, filing, prosecution and maintenance thereof. The
allocation of such expenses will occur on an annual basis at the end of each
Calendar Year, at which time Lilly will provide Ligand with an itemized list of
external expenses denominated in Dollars incurred during the previous annual
period in prosecuting and maintaining Joint Patents and Ligand will reimburse
Lilly's expenses within sixty (60) days of the date of receipt of this itemized
list.
(d) DISCONTINUANCE OF PATENT PROSECUTION. The party initially
responsible for preparation, filing, prosecution and maintenance (including the
costs or reimbursement of costs related thereto) of a particular Ligand Patent,
Lilly Patent or Joint Patent (the "Initial Responsible Party") shall give thirty
(30) days advance notice (the "Discontinuance Election") to the other party of
any decision to cease preparation, filing, prosecution and maintenance of that
patent (a "Discontinued Patent") provided, however, that abandonment of a patent
application in favor of a continuation or continuation-in-part thereof shall not
constitute discontinuance of the parent application. In such case, the other
party may elect at its sole discretion to continue preparation, filing and
prosecution or maintenance of the Discontinued Patent at its sole expense. The
party so continuing shall own any such patent or patent application and patents
maturing therefrom; and the Initial Responsible Party shall execute such
documents and perform such acts as may be reasonably necessary for the other
party to file or to continue prosecution or maintenance, including assigning
ownership of such patents and applications to such electing party.
Discontinuance may be on a country-by-country basis or for a patent application
or patent series in total. In the event that Lilly exercises its Discontinuance
Election with respect to a Discontinued Patent in a particular country, Lilly's
license under Section 8.1 with respect to that Discontinued Patent shall
terminate with respect to such country.
11.2 INFRINGEMENT CLAIMS BY THIRD PARTIES.
(a) In the case of any claim of infringement of a patent owned by
a Third Party based upon the making, having made, using, having used, importing,
offering for sale, selling or having sold Compound 268 or Compound 324 in a Drug
Product, and the patent Covers
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Compound 268 or Compound 324 per se, or the use of Compound 268 or Compound 324
per se in the treatment of diabetes mellitus, obesity, insulin resistance,
dyslipidemia, and cardiovascular disorders associated with diabetes mellitus or
insulin resistance, (i) Lilly shall have the right to obtain a license from the
Third Party and credit *** of any royalty payable to the Third Party against the
royalty payable to Ligand, but in no event will Ligand's royalty each year be
reduced by more than *** , or (ii) if Lilly and/or Ligand is sued for
infringement by such Third Party, Lilly shall control and defend or settle the
action at its expense and shall pay any damages or other monetary awards
resulting therefrom, and Lilly shall be entitled to credit *** of such monetary
award against the royalties payable to Ligand, but in no event will Ligand's
royalty each year be reduced by more than *** .
(b) In the case of any claim of infringement of a patent owned by
a Third Party based upon the making, having made, using, having used, importing,
offering for sale, selling or having sold any Research Compound in a Drug
Product other than Compound 268 or Compound 324, and the patent Covers the
Research Compound per se, or the use of the Research Compound per se in the
treatment of diabetes mellitus, obesity, insulin resistance, dyslipidemia, and
cardiovascular disorders associated with diabetes mellitus or insulin
resistance, (i) Lilly shall have the right to obtain a license from the Third
Party and credit *** of any royalty payable to the Third Party against the
royalty payable to Ligand, but in no event will Ligand's royalty each year be
reduced by more than *** , or (ii) if Lilly and/or Ligand is sued for
infringement by such Third Party, Lilly shall control and defend or settle the
action at its expense and shall pay any damages or other monetary awards
resulting therefrom, and Lilly shall be entitled to credit *** of such monetary
award against the royalties payable to Ligand, but in no event will Ligand's
royalty each year be reduced by more than *** *** .
(c) If a claim of infringement is made against Lilly and/or
Ligand by a Third Party and that claim is based upon a claim of infringement for
use of an assay system or biological material used in an assay system (for
example, the co-transfection assay or a gene or protein used therein) which is
Ligand Technology and the claim of infringement is not based on a patent claim
which covers a compound or its method of use or any other separately patented
technology, then (i) Lilly shall have the right to obtain a license from the
Third Party and credit *** of any royalty payable to the Third Party against the
royalty payable to Ligand arising from the infringing use, but in no event will
Ligand's royalty each year be reduced by more than *** , or (ii) if Lilly and/or
Ligand is sued for infringement by such Third Party, Ligand shall control and
defend or settle the action and Ligand and Lilly shall share equally all
expenses of the action and any damages or other monetary award resulting
therefrom. Lilly shall have the right to approve any settlement of any such
action, which approval will not be unreasonably withheld.
(d) If a claim of infringement is made against Lilly by a Third
Party based upon a claim of patent infringement not arising under (a), (b) or
(c) above, Lilly shall have the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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obligation to control and defend or settle the claim at its sole expense
(including the payment of any damages, attorneys' fees or other monetary
awards).
11.3 INFRINGEMENT CLAIMS AGAINST THIRD PARTIES.
(a) Ligand and Lilly each agree to take commercially reasonable
actions to protect their respective Patents and Technology from infringement and
from unauthorized possession or use.
(b) If any Ligand Patent, Ligand Technology, Lilly Patent, Lilly
Technology, Joint Patent or Joint Technology is infringed or misappropriated, as
the case may be, by a Third Party, the party to this Agreement first having
knowledge of such infringement or misappropriation, or knowledge of a reasonable
probability of such infringement or misappropriation, shall promptly notify the
other in writing. The notice shall set forth the facts of such infringement or
misappropriation in reasonable detail. Subject to the rights of Third Parties,
the owner of the Patent or Technology shall have the primary right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to infringement or misappropriation of such Patent or Technology by a
Third Party seeking to develop or market a Modulator or Regulator using its own
counsel and the other party shall have the right to be represented in such
action by its own counsel. The Steering Committee shall determine, or, if the
Steering Committee is no longer in existence, the parties shall mutually
determine, which party shall have the primary responsibility to institute,
prosecute, and control any action or proceeding with respect to infringement or
misappropriation of Joint Patents or Joint Technology and the other party shall
have the right to be represented by its counsel. The costs and expenses of all
suits brought by the party having the primary right or responsibility to
institute, prosecute, and control such action or prosecution (including the
costs and expenses of the other party and its separate counsel, if any, should
the other party elect to participate in such action or proceeding) shall be paid
*** by Lilly and *** by Ligand and all damages or other monetary awards
recovered therein remaining after the pro rata reimbursement of such costs and
expenses shall be split (i) *** to Lilly and (ii) *** to Ligand. If the party
having the primary right or responsibility to institute, prosecute, and control
such action or prosecution fails to do so within a period of one hundred twenty
(120) days after receiving notice of the infringement, the other party, subject
to the prior rights of any Third Party, shall have the right to bring and
control any such action by counsel of its own choice, and the other shall not
have the right to participate in such action or proceeding, except that such
party may be joined as a party plaintiff and, in case of joining, such party
agrees to give the other party reasonable assistance and authority to file and
to prosecute such suit. All costs and expenses of any suit brought by the party
not having the primary right or responsibility to institute, prosecute and
control such action or prosecution (including the costs and expenses incurred by
the other party in providing reasonable assistance to the party initiating the
action or proceeding) shall be paid, and all damages or other monetary awards
recovered therein shall be retained, by the party initiating the action or
proceeding. No settlement or consent judgment or other voluntary final
disposition of
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Confidential Treatment and filed separately with the Commission.
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a suit under this Section 11.3 may be entered into without the joint consent of
Ligand and Lilly (which consent shall not be unreasonably withheld).
11.4 NOTICE OF CERTIFICATION. Ligand and Lilly each shall immediately
give notice to the other of any certification filed under the U.S. "Drug Price
Competition and Patent Term Restoration Act of 1984" claiming that a Joint
Patent, a Ligand Patent or a Lilly Patent is invalid or that any infringement
will not arise from the manufacture, use, import, offer for sale, or sale of any
product by a Third Party. If Ligand decides not to bring infringement
proceedings against the entity making such a certification with respect to a
Ligand Patent, Ligand shall give notice to Lilly of its decision not to bring
suit within twenty-one (21) days after receipt of notice of such certification.
Lilly may then, but is not required to, bring suit against the party that filed
the certification. If Lilly decides not to bring infringement proceedings
against the entity making such a certification with respect to a Joint Patent,
or a Lilly Patent, Lilly shall give notice to Ligand of its decision not to
bring suit within twenty-one (21) days after receipt of notice of such
certification. Ligand may then, but is not required to, bring suit against the
party that filed the certification. Any suit by Lilly or Ligand shall either be
in the name of Lilly or in the name of Ligand, or jointly by Lilly and Ligand,
as may be required by law. For this purpose, the party not bringing suit shall
execute such legal papers necessary for the prosecution of such suit as may be
reasonably requested by the party bringing suit.
11.5 PATENT TERM EXTENSIONS. The parties shall cooperate with each other
in gaining patent term extensions wherever applicable to patents Covering Drug
Products and products to which Ligand acquires rights under this Agreement or
that also cover products for which Ligand has rights to market outside the
Field. The party first eligible to seek extension of such patent shall have the
right to do so; provided, that if in any country the first party has an option
to extend the patent term for only one of several products, the first party will
consult with the other party before making the election. If more than one patent
is eligible for extension, the Steering Committee shall agree upon a strategy
that will maximize patent protection for Drug Products and for products to which
Ligand acquires rights under this Agreement and products which Ligand has rights
to market outside the Field. All filings for such extensions and certificates
shall be made by the party to whom the patent is assigned, provided, however,
that in the event that the party to whom the patent is assigned elects not to
file for an extension or supplementary protection certificate, such party shall
(i) inform the other party of its intention not to file and (ii) grant the other
party the right to file for such extension or certificate.
ARTICLE 12
CONFIDENTIALITY AND NONDISCLOSURE
12.1 CONFIDENTIALITY. Unless otherwise set forth in this Agreement, for
a period from the Effective Date until five (5) years following the later of:
(a) the termination of this Agreement or (b) if Lilly or one or more of its
Affiliates is marketing a Drug Product, the date on which
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Lilly and its Affiliates cease to market any Drug Product, each party and its
respective Affiliates shall maintain in confidence all Confidential Information,
and shall not, except as contemplated by this Agreement, disclose Confidential
Information or use Confidential Information for its benefit or the benefit of
others, without the consent of the disclosing party (the "Disclosing Party").
Documents made available to the receiving party (the "Receiving Party") shall
remain the property of the Disclosing Party and shall be returned upon written
request of the Disclosing Party, except that one copy of all such information
may be retained for legal archival purposes by the Receiving Party.
12.2 AUTHORIZED DISCLOSURE. Each party may disclose Confidential
Information for the purpose of making various regulatory filings and complying
with applicable governmental regulations, and to sublicensees (potential and
actual), marketing partners (potential and actual), consultants and others
having a need to know for the purposes of development, manufacture or marketing
of Drug Products pursuant to this Agreement, provided that such sublicensees,
marketing partners, consultants and others shall also agree to appropriate and
comparable confidentiality and non-use provisions. In addition, each party shall
be entitled to disclose Confidential Information to the extent required by
applicable law, orders of courts, regulatory authorities or similar bodies
having jurisdiction over the party ("Legal Process"). The Receiving Party shall
promptly notify the Disclosing Party of any request or demand by Legal Process
for disclosure of Confidential Information. With respect to any disclosure of
Confidential Information, including the text of this Agreement, for the purpose
of complying with applicable government regulations, the disclosing party shall
give the other party an opportunity to review and comment upon the extent of any
such disclosure of Confidential Information prior to disclosure.
12.3 NONDISCLOSURE OF AGREEMENT. Neither party shall disclose any
information about this Agreement without the prior written consent of the other.
Consent shall not be required, however, for (a) disclosures to tax or other
governmental authorities or to potential or actual sublicensees, or marketing
partners to the extent required or contemplated by this Agreement, provided,
that in connection with such disclosure, each party agrees to use its
commercially reasonable efforts to secure confidential treatment of such
information, (b) disclosures of information for which consent has previously
been obtained or (c) information which had previously been publicly disclosed.
Each party shall have the further right to disclose the terms of this Agreement
as required by applicable law, including the rules and regulations promulgated
by the Securities and Exchange Commission, and to disclose such information to
shareholders or potential investors as is customary for publicly-held companies.
Any copy of this Agreement to be filed with the Securities and Exchange
Commission shall be redacted to the satisfaction of both parties; provided, in
the event that the Securities and Exchange Commission objects to the redaction
of any portion of the Agreement after the initial submission, the filing party
shall inform the other party of the objections and shall in good faith respond
to the objections in an effort to limit the disclosure required by the
Securities and Exchange Agreement, but in any event the filing party shall be
free to include any portions of the Agreement it deems necessary to respond to
the objections in any future filings. Without limiting the generality of the
foregoing
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and except in the circumstance where a party's outside counsel advises the party
that immediate disclosure is required, in the event that a Receiving Party,
intends to disclose Confidential Information as permitted under this Article 12,
such a party will provide to the Disclosing Party a copy of the information to
be disclosed and an opportunity to comment thereon prior to such disclosure,
and, to the extent practicable, consult with the Disclosing Party on the
necessity for the disclosure and the text of the proposed release within a
reasonable time in advance of the proposed disclosure. Without limiting the
generality of this Section 12.3, Ligand may allow Allergan to review a copy of
this Agreement, for the sole purpose of complying with Ligand's obligation to
Allergan under the ALRT Agreement. Any copy of this Agreement disclosed under
this Article 12 shall be redacted to the satisfaction of both parties.
12.4 SURVIVAL. The confidentiality obligations of this Article 12 shall
survive the termination or expiration of the Agreement.
12.5 PRESS RELEASES. Press releases or other public communication by
either party relating to the collaboration contemplated by this Agreement shall
be approved in advance by the other party, except for those communications
required by law, disclosures of information for which consent has previously
been obtained or information which has been previously disclosed, or as
otherwise set forth in this Agreement.
ARTICLE 13
TERM AND TERMINATION OF AGREEMENT
13.1 TERM. This Agreement shall become effective on the Effective Date
and shall continue in effect, unless terminated earlier as described hereunder
or by mutual written agreement of the parties, until the later of either: (1)
the expiration of the last to expire Lilly Patent, Ligand Patent or Joint Patent
Covering a Drug Product or a Discontinued Drug Product, New Compound, Ligand
Option Compound; (2) in the event that Lilly or any Lilly Affiliate is
developing or marketing a Research Compound or Drug Product in accordance with
the terms of this Agreement but there is no issued Lilly Patent, Ligand Patent
or Joint Patent Covering a Drug Product, then *** from the date of the most
recent First Commercial Sale with respect to a Drug Product, if any, or (3) the
expiration of the last applicable Data Exclusivity Period with respect to a Drug
Product.
13.2 TERMINATION FOR MATERIAL BREACH. Either party shall have the right
to terminate this Agreement after ninety (90) days written notice to the other
in the event the other is in material breach of this Agreement, unless the other
party cures the breach before the expiration of such period of time. Such notice
shall set forth in reasonable detail the specifics of the breach. In the event
of termination under this Section 13.2 by Lilly, all licenses granted under this
Agreement to Lilly and its Affiliates shall not be affected and shall continue
in full force and effect, and Lilly and its Affiliates shall have the right to
exercise all such licenses (subject to all
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payment and other surviving obligations as set forth in Section 13.4). All
licenses granted under this Agreement to Ligand and its Affiliates shall
automatically terminate upon such termination by Lilly. In the event of
termination under this Section 13.2 by Ligand, all licenses granted under this
Agreement to Ligand and its Affiliates shall not be affected and shall continue
in full force and effect, and Ligand and its Affiliates shall have the right to
exercise all such licenses (subject to all payment and other surviving
obligations as set forth in Section 13.4). All licenses granted under this
Agreement to Lilly and its Affiliates shall automatically terminate upon such
termination by Ligand. Notwithstanding the foregoing, Lilly shall be permitted
to distribute and sell all supplies of Drug Products in its inventory at the
time of termination until such supplies are exhausted.
13.3 TERMINATION UPON INSOLVENCY. This Agreement may be terminated by
either party upon notice to the other should the other party:
(a) consent to the appointment of a receiver or a general
assignment for the benefit of creditors, or
(b) file or consent to the filing of a petition under any
bankruptcy or insolvency law or have any such petition filed against it which
has not been stayed within 60 days of such filing.
13.4 ACCRUED RIGHTS, SURVIVING OBLIGATIONS, RESIDUAL RIGHTS. Upon the
expiration or early termination of this Agreement, except as provided herein to
the contrary, all rights and obligations of the parties shall cease, except as
follows:
(a) obligations to pay royalties and other sums accruing
hereunder up to the date of termination;
(b) the right to complete the manufacture and sale of Drug
Products, Discontinued Drug Products and Ligand Option Compounds, which qualify
as "work in process" under GAAP or which are in stock at the date of
termination, and the obligation to pay royalties on Net Sales of such Drug
Products, the SERM Oncology Product, Discontinued Drug Products and Ligand
Option Compounds;
(c) the obligations to pay milestones and royalties with respect
to Drug Products, the SERM Oncology Product, Discontinued Drug Products and
Ligand Option Compounds;
(d) all provisions regarding confidentiality shall continue in
full force and effect;
(e) obligations for record-keeping and accounting reports for so
long as Drug Products, the SERM Oncology Product, Discontinued Drug Products and
Ligand Option
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Compounds are sold, plus three (3) years. At such time after termination of this
Agreement when sales or other dispositions of Drug Products, the SERM Oncology
Product, Discontinued Drug Products and Ligand Option Compounds have ceased,
Lilly or Ligand, as the case may be, shall render a final report along with any
royalty payment due;
(f) the parties rights to inspect books and records as described
in Article 10;
(g) the obligations of defense and indemnity as described in
Article 14;
(h) any cause of action or claim of a party accrued or to accrue
because of any breach or default by the other party hereunder (subject to
applicable statutes of limitations); and
(i) in the event of expiration of this Agreement under Section
13.1, Lilly shall have a fully paid-up, perpetual license to the rights granted
pursuant to Section 8.1 solely with respect to the unpatented Ligand Technology,
and Ligand shall have a fully paid-up, perpetual license to the rights granted
pursuant to Section 8.2 solely with respect to the unpatented Lilly Technology;
and
(j) all other terms, provisions, representations, rights and
obligations contained in this Agreement that by their sense and content are
intended to survive.
ARTICLE 14
INDEMNITY
14.1 CLAIMS. Each party hereby agrees to indemnify, defend and hold
harmless the other party and its Affiliates, and their respective officers,
directors, agents and employees from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or losses, including reasonable
attorneys' fees and other costs of defense other than claims for patent
infringement (which shall be resolved pursuant to Article 11) ("Claims"), (a)
resulting directly or indirectly from the manufacture, use, handling, storage,
sale or other disposition of Research Compounds, New Compounds, Drug Products,
the SERM Oncology Product, Discontinued Drug Products or Ligand Option Compounds
by the indemnifying party, its Affiliates, agents or Sublicensees (other than a
party hereunder), but only to the extent such Claims do not result from the
negligence or intentional misconduct of the party seeking indemnification, or
(b) resulting directly from a breach of any representation or warranty of the
indemnifying party contained in Article 15 of this Agreement.
14.2 DEFENSE. Any entity entitled to indemnification under this Article
14 shall give prompt written notice to the indemnifying party of any Claims with
respect to which it seeks indemnification, and the indemnifying party shall have
the option to assume the defense of such Claims with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed
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by the indemnifying party with counsel so selected, the indemnifying party will
not be obligated to pay the fees and expenses of any separate counsel retained
by the indemnified party with respect to such Claims. Except with the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld, the indemnifying party may not enter into any settlement
of such litigation unless such settlement includes an unqualified release of the
indemnified party.
14.3 INSURANCE. Ligand and Lilly shall each have and maintain such type
and amounts of liability insurance covering the manufacture, supply, use, and
sale of Research Compounds and Drug Products as is normal and customary in the
pharmaceutical industry generally for parties similarly situated, and will upon
request provide the other party with a copy of its policies of insurance in that
regard, along with any amendments and revisions thereto.
ARTICLE 15
REPRESENTATIONS AND WARRANTIES
15.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party hereby represents
and warrants to the other party as of the Effective Date as follows:
(a) CORPORATE EXISTENCE AND POWER. Such party (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state in which it is incorporated, and (ii) has full corporate power and
authority and the legal right to own and operate its property and assets and to
carry on its business as it is now being conducted and is contemplated in this
Agreement.
(b) AUTHORIZATION. Such party (i) has the corporate power and
authority and the legal right to enter into the Agreement and perform its
obligations hereunder, and (ii) has taken all necessary corporate action on its
part required to authorize the execution and delivery of the Agreement and the
performance of its obligations hereunder. The Agreement has been duly executed
and delivered on behalf of such party, and constitutes a legal, valid, binding
obligation of such party and is enforceable against it in accordance with its
terms subject to the effects of bankruptcy, insolvency or other laws of general
application affecting the enforcement of creditor rights and judicial principles
affecting the availability of specific performance and general principles of
equity whether enforceability is considered a proceeding at law or equity.
(c) ABSENCE OF LITIGATION. Such party is not aware of any pending
or threatened litigation (and has not received any communication) which alleges
that such party's activities related to this Agreement have violated, or that by
conducting the activities as contemplated herein such party would violate, any
of the intellectual property rights of any other person.
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(d) CONSENTS. All necessary consents, approvals and
authorizations of all governmental authorities and other persons or entities
required to be obtained by such party in connection with the Agreement have been
obtained.
(e) NO CONFLICT. The execution and delivery of the Agreement and
the performance of such party's obligations hereunder (i) do not conflict with
or violate any requirement of applicable law or regulation or any provision of
articles of incorporation or bylaws of such party in any material way, and (ii)
do not conflict with, violate or breach or constitute a default or require any
consent under, any contractual obligation or court or administrative order by
which such party is bound.
(f) PATENTS. Except as such party has otherwise advised the other
party in writing, such party represents and warrants to the other that, to the
best of its knowledge, it has sufficient legal and/or beneficial title and
ownership under its intellectual property rights necessary for it to fulfill its
obligations under this Agreement and that it is not aware of any communication
alleging that it has violated or by conducting its business as contemplated by
this Agreement would violate any of the intellectual property rights of any
other person. As used herein, "intellectual property rights" means all patent
rights, copyrights, trademarks, trade secret rights, chemical and biological
material rights and know-how rights necessary or useful to make, use, import,
offer for sale or sell Research Compounds and/or Drug Products.
(g) PRIOR DATA. Ligand represents and warrants to Lilly that it
has made (or will make) available to Lilly (to the extent the same exists and is
material to assessing the commercial, medical, clinical or regulatory potential
of Research Compounds) all toxicology studies, clinical data, manufacturing
process data and other information in its possession regarding Research
Compounds that is material and would be reportable to the FDA under 21 C.F.R.
200 et. seq., and that to the best of its knowledge, such data and information
is accurate and complete and is what it purports to be. Lilly represents and
warrants to Ligand that it will make available to Ligand (to the extent the same
exists and is material to assessing the commercial, medical, clinical or
regulatory potential of Discontinued Drug Products) all toxicology studies,
clinical data, manufacturing process data and other information in its
possession regarding Discontinued Drug Products that is material and would be
reportable to the FDA under 21 C.F.R. 200 et. seq., and that to the best of its
knowledge, such data and information will be accurate and complete and what it
purports to be.
(h) NO DEBARMENT. Such party will comply at all times with the
provisions of the Generic Drug Enforcement Act of 1992 and will upon request
certify in writing to the other that none of it, its employees, or any person
providing services to such party in connection with the collaboration
contemplated by this Agreement have been debarred under the provisions of such
Act.
15.2 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. Ligand and
ALRT hereby represent, warrant and covenant to Lilly as follows:
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(c) Ligand hereby agrees to use its commercially reasonable
efforts to comply with the terms and conditions of those certain license
agreements set forth in Schedule 15.2. In addition, Ligand hereby agrees to
timely pay all royalty and milestone payments required to be paid under those
certain license agreements set forth in Schedule 15.2 during the Research
Program Term and thereafter only as necessary to xxxxx Xxxxx the licenses
granted pursuant to Section 8.1(a). Ligand has provided to Lilly complete and
correct copies of such license agreements prior to the Effective Date. Each such
license agreement is in full force and effect and, to Ligand's knowledge, no
event has occurred which with notice or the passage of time would constitute a
breach or event of default under, or permit termination of, such license
agreement. To Ligand's knowledge, there is no material unauthorized use,
infringement or misappropriation of the Ligand Patents Covering Compound 268 or
Compound 324. There are no administrative, judicial or other proceedings
pending, or to the knowledge of Ligand, threatened, in which a person or
government body is or would be contesting directly the ownership of, or any
rights of Ligand or any licensee under, any Ligand Patent or Ligand Technology.
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ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 GOVERNING LAW. The Agreement shall be governed by the laws of the
State of Indiana, without regard to Indiana choice of law provisions.
16.2 DISPUTE RESOLUTION PROCESS. In the event of any dispute relating to
this Agreement or the collaborative effort contemplated hereby, the parties
shall, prior to instituting any lawsuit, arbitration or other dispute resolution
process on account of such dispute, follow the procedures for dispute resolution
set forth in Section 2.5 of this Agreement if such dispute relates to the
conduct of or decisions made as part of the Research Program or the Development
Program. In the event of any dispute relating to or arising from this Agreement
which a party does not believe is covered by Section 2.5 and prior to
instituting any litigation with respect thereto, the dispute shall be presented
to Xxxxx Xxxxxxxx or his successor as Chief Executive Officer of Ligand on
behalf of Ligand, and August X. Xxxxxxxx or his successor as chief scientific
officer of Lilly on behalf of Lilly; provided, however, that this provision
shall not prevent either party from seeking a preliminary injunction or other
equitable relief in the event such party believes it will suffer irreparable
harm. These executives shall confer and consider each party's view and shall
attempt in good faith to resolve the dispute between themselves or, if they are
unable to so resolve the dispute, to establish a mechanism to resolve the
dispute promptly and efficiently. In the event said executives are unable to
resolve such dispute or agree upon a mechanism to resolve such dispute within
thirty (30) days, either party shall be entitled to institute litigation and
seek such remedies as may be available.
16.3 NOTICES. All notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed given, upon receipt, if mailed
by registered or certified mail (return receipt requested), postage prepaid, or
sent by overnight delivery (receipt verified) to the address below, or given
personally or transmitted by facsimile to the number indicated below (with
confirmation).
To Lilly:
Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
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To Ligand:
Ligand Pharmaceuticals Incorporated
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
Any party may, by written notice to the others, designate a new address or fax
number to which notices to the party giving the notice shall thereafter be
mailed or faxed.
16.4 FORCE MAJEURE. If either party's performance hereunder is affected
by any extraordinary, unexpected and unavoidable event such as acts of God,
floods, fires, riots, war, accidents, labor disturbances, breakdown of plant or
equipment, lack or failure of transportation facilities, unavailability of
equipment, sources of supply or labor, raw materials, power or supplies,
infectious diseases of animals, or by the reason of any law, order,
proclamation, regulation, ordinance, demand or requirement of the relevant
government or any sub-division, authority or representative thereof, or by
reason of any other cause whatsoever (provided that in all such cases the party
claiming relief on account of such event can demonstrate that such event was
extraordinary, unexpected and unavoidable by the exercise of reasonable care)
("Force Majeure") it shall as soon as reasonably practicable notify the other
party of the nature and extent thereof and take all reasonable steps to overcome
the Force Majeure and to minimize the loss occasioned to that other party.
Neither party shall be deemed to lose any rights under, be in breach of this
Agreement or otherwise be liable to the other party by reason of any delay in
performance or nonperformance of any of its obligations hereunder, except with
respect to payment obligations, to the extent that such delay and nonperformance
is due to any Force Majeure of which it has notified the other party and the
time for performance of that obligation shall be extended accordingly.
16.5 WITHHOLDING TAXES. If either party is required by the United States
government or other authorities to withhold any tax on the amounts payable by
that party to the other party under this Agreement, that party shall be allowed
to do so, and shall in such case remit payments to the other party net of such
withheld amount, provided that the withholding party furnishes the other party
with reasonable evidence of such withholding payment in electronic or written
form as soon as practicable after such withholding in order that the other party
may use the withholding tax paid as a tax credit.
16.6 ENTIRE AGREEMENT. This Agreement, its exhibits and schedules, the
Confidentiality Agreements between Ligand and Lilly dated September 30, 1996,
January 23, 1997 and May 8, 1997, the Targretin Agreement, the Option Agreement
and the Stock Purchase Agreement between Ligand and Lilly of even date herewith
set forth the entire agreement and understanding of the parties relating to the
subject matter contained herein and merges all prior discussions and agreements
between them. No party shall be bound by any representation other than as
expressly
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stated in this Agreement, or by a written amendment to this Agreement signed by
authorized representatives of both parties.
16.7 NON-WAIVER. The failure of a party in any one or more instances to
insist upon strict performance of any of the terms and conditions of this
Agreement shall not be construed as a waiver or relinquishment, to any extent,
of the right to assert or rely upon any such terms or conditions on any future
occasion.
16.8 DISCLAIMER OF AGENCY. This Agreement shall not constitute any party
the legal representative or agent of another, nor shall any party have the right
or authority to assume, create, or incur any Third Party liability or obligation
of any kind, express or implied, against or in the name of or on behalf of
another except as expressly set forth in this Agreement.
16.9 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to be effectuated.
16.10 ASSIGNMENT. Lilly may discharge any obligations and exercise any
right hereunder through an Affiliate although Lilly shall remain ultimately
responsible for the proper discharge of all obligations hereunder
notwithstanding any assignment or delegation to any such Affiliate. References
to Lilly shall include any Affiliate of Lilly to whom such an assignment or
delegation has been made in accordance with this Agreement. Except as provided
in this Section 16.10 or otherwise expressly provided in this Agreement, neither
Lilly nor Ligand shall delegate duties of performance or assign, in whole or in
part, rights or obligations under this Agreement without the prior written
consent of the other party, not to be unreasonably withheld, and any attempted
delegation or assignment without such written consent shall be of no force or
effect. Notwithstanding the foregoing, Ligand or Lilly may assign the Agreement
and its rights and obligations hereunder in connection with the transfer or sale
of all or substantially all of its business, or in the event of its merger or
consolidation or change in control or similar transaction. This Agreement shall
be binding upon the permitted successors and assigns of the parties.
16.11 HEADINGS. The headings contained in this Agreement have been added
for convenience only and shall not be construed as limiting or defining the
content of said sections or paragraphs.
16.12 LIMITATION OF LIABILITY. No party shall be liable to another for
indirect, incidental, consequential or special damages, including but not
limited to lost profits, arising from or relating to any breach of this
Agreement, regardless of any notice of the possibility of such damages. Nothing
in this Section is intended to limit or restrict the indemnification rights or
obligations of any party.
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16.13 INTERPRETATION. This Agreement has been jointly prepared by the
parties and their respective legal counsel and ambiguities shall not be strictly
construed against either party.
16.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
16.15 COMPLIANCE WITH LAWS. Each party shall, and shall cause its
respective Affiliates to, comply in all material respects with all federal,
state, local and foreign laws, statutes, rules and regulations applicable to the
parties and their respective activities under this Agreement.
16.16 FURTHER ACTIONS. Each party agrees to execute, acknowledge, and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
XXX XXXXX AND COMPANY
By: /s/ August X. Xxxxxxxx
-----------------------------------------
August X. Xxxxxxxx
Executive Vice President
LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
ALLERGAN LIGAND RETINOID THERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
President
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SCHEDULE 1.12
COMPOUND 268
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SCHEDULE 1.13
COMPOUND 324
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Schedule 1.47
Intracellular Receptors
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SCHEDULE 2.1
TECHNICAL OPERATING PLAN
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SCHEDULE 10.8
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Schedule 15.2
5. The Settlement Agreement, License and Mutual General Release between
La Jolla Cancer Research Foundation, SelectRA Pharmaceutical Inc., Allergan
Ligand, and Allergan Ligand Retinoid Therapeutics, Inc., effective August 23,
1995.
6. The Amended and Restated Technology Cross License Agreement among
Allergan, Inc., Ligand Pharmaceuticals Inc. and Allergan Ligand Retinoid
Therapeutics, Inc., effective September 24, 1997.
7. The license agreement between Salk Institute for Biological Studies
and Ligand Pharmaceuticals Inc., effective October 20, 1988, and as amended on
September 15, 1989, December 1, 1989 and October 20, 1990.
8. The agreements between Insitut Pasteur de Lille and Ligand
Pharmaceuticals Inc., effective March 1, 1995 and December 1, 1995.
9. The agreement between Rockefeller and Ligand Pharmaceuticals Inc.,
effective November 14, 1991.
10. The agreement between Baylor College of Medicine and Ligand
Pharmaceuticals Inc., effective March 9, 1992 and September 1, 1992.
