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CLINICAL COLLABORATION AND OPTION AGREEMENT
This Clinical Collaboration and Option Agreement ("Agreement") is entered
into as of the 30TH day of September, 1997 between ALZA Corporation ("ALZA") and
Alkermes, Inc. ("Alkermes").
R E C I T A L S
A. ALZA and Alkermes have entered into discussions with respect to the
continued development by the parties and the commercialization of the Product
(as defined below) and have signed a Confidentiality Agreement dated February 1,
1995 (the "Confidentiality Agreement") in that regard.
B. The parties wish to conduct certain clinical studies and to provide an
option to ALZA to enter into a definitive agreement with Alkermes to complete
the development of, and to commercialize, the Product worldwide.
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the respective meanings set forth below:
1.1 "Agreement Fee" shall mean the payment by ALZA to Alkermes in
accordance with Section 2.1.
1.2 "Brain Tumor Study" shall mean the clinical study referred to in
Section 2.3(a) and Exhibit A-1 hereto.
1.3 "Collaboration Committee" shall mean the committee formed pursuant
to Section 2.1 hereof.
1.4 "Confidential Information" shall mean (i) in the case of Alkermes,
information disclosed by Alkermes to ALZA concerning the Product (or the use or
manufacture thereof), or useful to the Program, owned by or licensed to Alkermes
prior to the date hereof or developed by Alkermes after the date hereof outside
the Program and without reference to or use of any Program Information or ALZA
Confidential Information and (ii) in the case of ALZA, information disclosed by
ALZA to Alkermes that is useful to
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the Program, owned by or licensed to ALZA prior to the date hereof or developed
by ALZA after the date hereof outside the Program and without reference to or
use of any Program Information or Alkermes Confidential Information.
Confidential Information shall not include any information which is (i) already
known to the other party at the time of disclosure, as evidenced by such party's
written records made prior to the date of disclosure; (ii) publicly known prior
to or after disclosure, other than through unauthorized acts or omissions of the
other party; or (iii) disclosed in good faith to the other party by a third
party lawfully and contractually entitled to make such disclosure.
1.5 "Definitive Agreement" shall mean a definitive agreement for the
continued development and worldwide commercialization of the Product on the
terms set forth on Exhibit B hereto, to be negotiated by the parties as provided
in Section 5.
1.6 "Development Costs" shall mean the costs of the Program incurred
by the parties pursuant to this Agreement, determined, in the case of Alkermes,
in accordance with Exhibit C hereto and determined, in the case of ALZA, in
accordance with Exhibit D hereto.
1.7 "FDA" shall mean the United States Food and Drug Administration,
or its successor in regulating products such as the Product.
1.8 "Metastases Studies" shall mean the clinical studies referred to
in Section 2.3(b) and Exhibit A-2 hereto.
1.9 "Option" shall mean the option to enter into the Definitive
Agreement granted to ALZA pursuant to Section 2.1.
1.10 "Option Period" shall mean the period beginning on the date
hereof and ending as provided in Section 2.5.
1.11 "Partnership" shall mean Alkermes Clinical Partners, L. P.
1.12 "Product" shall mean Alkermes' proprietary RMP-7
(bradykinin-based receptor-mediated permeabilizer) in the form currently in
development by Alkermes, and any other formulation, dosage form or analog
thereof, and any improvements thereto, developed during the term of this
Agreement.
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1.13 "Program" shall mean the activities undertaken hereunder and in
accordance with the terms hereof for the further clinical development of the
Product and related activities, and under the Definitive Agreement for the
further clinical development and commercialization of the Product.
1.14 "Program Information" shall mean any know-how, trade secrets,
inventions (including patents covering such inventions), data technology and
information, including improvements and modifications to any thereof, developed
or acquired by either party under, in connection with or as a result of, the
Program. Program Information shall include, without limitation, processes and
analytical methodology used in development, testing, analysis and manufacture,
and medical, clinical, toxicological and other scientific data. Program
Information shall not include trademarks.
1.15 "Studies" shall mean the Brain Tumor Study and the Metastases
Studies together.
1.16 "Territory" shall mean all of the countries of the world.
2. OPTION; AGREEMENT FEE.
2.1 OPTION AND AGREEMENT FEE.
(a) Subject to the remainder of this Agreement, Alkermes hereby
grants to ALZA an exclusive, irrevocable Option, exercisable at any time during
the Option Period, to obtain exclusive rights to continue and complete the
development of the Product and to commercialize the Product in the Territory
pursuant to the Definitive Agreement.
(b) In consideration of the Option granted in paragraph (a)
above, ALZA will pay to Alkermes the Agreement Fee of $10 million. Such payment
will be made by wire transfer, within three business days after execution of
this Agreement by both parties, to an account specified in writing by Alkermes.
2.2 OPTION EXERCISE. ALZA may exercise the Option at any time during
the Option Period after execution by the parties of the letter referred to in
Section 5 concerning the Definitive Agreement, by written notice to Alkermes,
accompanied by two
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originals of the Definitive Agreement executed on behalf of ALZA. Alkermes shall
execute the Definitive Agreement within three business days after receipt from
ALZA, and shall return one signed original to ALZA. The Option shall be deemed
to have been exercised upon delivery of ALZA's written notice of exercise to
Alkermes, and the Definitive Agreement shall be deemed to be effective upon
execution and delivery by ALZA to Alkermes of the Definitive Agreement.
2.3 OPTION PERIOD ACTIVITIES.
(a) During the Option Period, Alkermes will conduct the Brain
Tumor Study, described on Exhibit A-1, pursuant to protocols approved by the
Collaboration Committee. Within 90 days after completion of the Brain Tumor
Study on all patients, Alkermes will deliver a final report signed by the Vice
President, Medical Affairs of Alkermes, with the underlying data, to ALZA.
(b) During the Option Period, Alkermes will conduct the
Metastases Studies, described on Exhibit A-2, pursuant to protocols approved by
the Collaboration Committee. Within 90 days after completion of the Metastases
Studies on all patients, Alkermes will deliver a final report signed by the Vice
President, Medical Affairs of Alkermes, with the underlying data, to ALZA.
(c) Alkermes shall pursue the Studies in a commercially
reasonable manner, with the expectation that the Studies, including the final
reports thereon, will be completed by ***.
(d) During the Option Period, Alkermes will use its commercially
reasonable efforts to commence and continue a Phase III glioma study, and will
share with ALZA any interim data that becomes available with respect to that
study and any other studies of the Product undertaken by Alkermes. The target is
to have *** patients enrolled in Phase III glioma study before ***.
(e) During the Option Period, Alkermes will not (i) develop
(except pursuant to its agreement with the Partnership as in effect on the date
hereof and except for new studies relating to the Product that are not otherwise
subject to this Agreement),
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or commercialize, directly or indirectly, alone or with any third party, any
bradykinin-based product other than the Product pursuant to the terms of this
Agreement or (ii) negotiate with any third party or grant any third party any
rights to continue the development of, or commercialize, the Product or any
other bradykinin-based product.
(f) During the Option Period, Alkermes will fulfill all of its
obligations under its arrangements with the Partnership and will not breach any
of such obligations.
2.4 PLANS FOR ADDITIONAL ACTIVITIES. During the Option Period, the
parties will work together to prepare work plans and cost estimates for the
remainder of the Program, including all clinical and regulatory activities and
all related matters necessary to complete the development of the Product through
FDA marketing clearance. The parties will also prepare a work plan and cost
estimate for development and regulatory clearance to market the Product in other
major countries of the world, and will collaborate to determine appropriate
strategies for commercializing the Product outside the United States and Canada,
subject to the provisions of Exhibit B. The work plans and cost estimates
described in this Section 2.4 shall be completed at least 30 days prior to the
target delivery date for the final reports concerning the Studies, as described
in Section 2.3.
2.5 TERMINATION OF OPTION. The Option granted in Section 2.1 shall
terminate upon the first to occur of the following: (a) termination of this
Agreement or (b) unless previously exercised, 60 days after the last to occur of
(i) the execution by the parties of the letter referred to in Section 5
concerning the Definitive Agreement; (ii) delivery by Alkermes to ALZA of the
final reports (including the supporting data) of the Studies as described in
Section 2.3; and (iii) completion by the parties of the activities described in
Section 2.4 above.
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3. CLINICAL PROGRAM.
3.1 COLLABORATION COMMITTEE.
(a) Promptly after the date hereof, the parties shall form a
Collaboration Committee, which shall consist of an equal number of
representatives of each party (expected to be three to five representatives for
each party). The Collaboration Committee shall review and approve the protocols
for the Studies and all other activities to be undertaken pursuant to the
Program, including work plans and cost estimates therefor. Each party shall
designate its own members to the Collaboration Committee, and shall notify the
other party in writing if it changes or substitutes any of its members.
(b) The Collaboration Committee shall meet at such times as it
may select, but in any case at least once in each calendar quarter during the
term of this Agreement. The meetings shall alternate between the offices of the
parties. The Collaboration Committee may meet in person, by telephone or by
video conference, and individual members may participate in any of the foregoing
ways. If a member of the Collaboration Committee is unavailable for any meeting,
such member may designate a substitute to participate in the member's place. The
costs of participation by each member in the activities of the Collaboration
Committee shall be borne by the party appointing such member.
(c) The Collaboration Committee shall have a secretary who will
keep minutes of its meetings. The secretary shall be selected on a rotating
basis each year by one of the parties.
(d) The presence at any meeting of the Collaboration Committee of
at least two members from each party shall constitute a quorum for purposes of
any action by the Collaboration Committee. Each member will have one vote, and
action shall be authorized by a majority of the votes, so long as the majority
vote includes at least one vote cast by a member selected by each party. In the
event that the Collaboration Committee cannot agree on the protocol for, or the
execution of, the Metastases Studies, ALZA will have the tie-breaking vote. If
(i) Alkermes disagrees with ALZA's resolution of
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any matter related to the Metastases Studies pursuant to such tie-breaking vote,
or (ii) if ALZA disagrees with Alkermes' resolution of a matter relating to a
new clinical study (other than the primary Phase III glioma study being planned
by Alkermes as of the date hereof) under Section 3.1 (e)(iii) pursuant to a
tie-breaking vote, or (iii) if the Collaboration Committee is unable to obtain
the vote required with respect to any other matters, then the matter may be
referred to dispute resolution by either party in accordance with Section 7.1.
(e) The Collaboration Committee will be responsible for (i)
approving the amendments, if any, to the protocols for the Studies; (ii)
reviewing ongoing clinical activities concerning the Product, (iii) approving
new clinical studies of the Product (other than the Studies); provided, however,
that in the event that the Collaboration Committee cannot agree on the protocol
for, or execution of, such new clinical studies of the Product, Alkermes will
have the tie-breaking vote; (iv) reviewing periodically, during the course of
the studies (including the Studies) and after they are completed, all
Product-related clinical data and related information; (v) reviewing and
approving work plans and cost estimates for all development and clinical
activities to be undertaken pursuant to this Agreement; (vi) reviewing the
Development Costs incurred by the parties under this Agreement; (vii) reviewing
all proposed Product-related regulatory filings prior to submission; and (viii)
coordinating all communication with regulatory agencies concerning regulatory
filings related to the Product.
3.2 RESOURCES. In connection with the Program, each party shall make
available such of its scientific, clinical, medical, regulatory and other
personnel as appropriate to perform the tasks allocated to such party under the
Program. The parties shall use commercially reasonable efforts to carry out the
Program and shall participate in periodic conferences to review its status,
including the prompt preparation, review and discussion of work plans and cost
estimates and revisions thereto, completion of the activities thereunder and the
preparation and delivery of the reports contemplated by Section 2.3.
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3.3 CLINICAL SUPPLIES. In connection with the Program, Alkermes will
provide, at no charge, such reasonable quantities of the Product as are
necessary to carry out the activities under the Program. Alkermes will also
provide ALZA with a Material Safety Data Sheet for the Product, all relevant
information available and known to Alkermes concerning the safety, handling,
use, disposal and environmental effects of the Product or as may be necessary to
continue the Program.
3.4 PAYMENT OF DEVELOPMENT COSTS. Alkermes shall pay all of the
Development Costs of the Studies incurred pursuant to work plans and cost
estimates approved by the Collaboration Committee. With respect to any
Development Costs incurred by ALZA, ALZA shall invoice Alkermes on or before the
fifteenth day of each month for the preceding month's Development Costs incurred
by ALZA. All payments shall be made within 30 days after the date of the
invoice. Notwithstanding the foregoing, Alkermes shall not be obligated to pay
or bear Development Costs in excess of those provided for in work plans and cost
estimates approved by the Collaboration Committee, and neither party shall be
obligated to perform any work which would result in Development Costs exceeding
such approved cost estimates. If the total Development Costs of the Studies as
approved by the Collaboration Committee exceed $***, then such excess over $***
will be shared equally by the parties, on a monthly basis. If the total
Development Costs of the Studies as approved by the Collaboration Committee are
less than $***, then 50% of the difference between $*** and such total
Development Costs will be credited against the lump sum payment due to Alkermes
from ALZA upon execution of the Definitive Agreement (if such a payment is to be
made) or the first payments due to Alkermes as reimbursement of Development
Costs under the Definitive Agreement (if ALZA elects to fund Development Costs
on an ongoing basis).
3.5 REGULATORY ACTIVITIES. Each party shall have the right to
participate in any substantive meetings to be held with regulatory authorities
with respect to the Product during the term of this Agreement, and each party
shall promptly provide the other party with copies of all correspondence from or
to regulatory authorities concerning the Product.
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3.6 ADVERSE EVENTS. Each party shall promptly inform the other party
of any information that it obtains or develops regarding the efficacy or safety
of the Product and shall promptly report to the other party any information or
notice of adverse or unexpected reactions or side effects related to the
utilization or medical administration of the Product. Each party shall allow the
other party to comply, and shall assist the other party in complying with the
adverse reaction reporting requirements of the Food, Drug and Cosmetic Act, 21
USC 321 et seq., and regulations thereunder with respect to the Product by
notifying the other party in writing of any "adverse drug experience" that is
considered "serious" or "unexpected", regardless of source, in a manner so that
the other party shall receive such notice within three working days of the
notifying party's first having "obtained or otherwise received" such "adverse
drug experience...from any source" as those terms are defined in 21 CFR 314.80.
Each party shall provide the other party with copies of Adverse Drug Experience
Reports held with the FDA as to the Product.
4. CONFIDENTIALITY; OWNERSHIP.
4.1 CONFIDENTIALITY. Except as specifically authorized or permitted
by this Agreement, each party shall, for the term of this Agreement and for ten
years after its expiration or termination for any reason, keep confidential and
not disclose to others, and use only as permitted hereunder, all of the other
party's Confidential Information and all Program Information. Notwithstanding
the foregoing, such information may be (i) disclosed to government agencies and
others where such information may be required to be included in patent
applications or regulatory filings relating to the Product; (ii) provided to
third parties under appropriate confidentiality agreements for consulting,
manufacturing, development, external testing and marketing trials with respect
to the Product and other activities under the Program; (iii) published if and to
the extent such publication has been approved in writing by each of the parties
(unless the laws and regulations applicable to the third party submitting such
publication prohibit such prior review); or (iv) disclosed to the extent
required by applicable laws or regulations or as ordered by a court or other
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regulatory body having competent jurisdiction. In each of the foregoing cases,
the parties will use their commercially reasonable efforts to limit the
disclosure and maintain confidentiality to the extent possible.
4.2 OWNERSHIP. Program Information shall be owned jointly by the
parties. Subject to Section 6.3, during the term of the Agreement Program
Information may not be used outside the Program by either party without the
prior written consent of the other party.
5. DEFINITIVE AGREEMENT. Within two months after the date hereof, the
parties shall commence good faith negotiations of the Definitive Agreement,
which shall include the terms set forth on Exhibit B hereto. The intent of the
parties is to complete such negotiation, with the execution form of the
Definitive Agreement agreed upon, no later than ***. Upon completion of the
negotiation and preparation of the Definitive Agreement, the parties will
execute a letter, to be attached to the completed draft, agreeing that the
attached draft is the execution form of the Definitive Agreement.
6. TERM AND TERMINATION.
6.1 TERM. This Agreement shall remain in effect until the first to
occur of (a) the exercise or expiration of the Option or (b) the termination of
this Agreement in accordance with Section 6.2.
6.2 TERMINATION.
(a) ALZA may terminate this Agreement upon not less than 30 days'
written notice to Alkermes, if Alkermes fails to pay any amounts due to ALZA
under this Agreement within 30 days after the date of invoice, or if Alkermes is
not proceeding to execute the activities allocated to it under the work plans
approved by the Collaboration Committee in a commercially reasonable manner.
(b) Alkermes may terminate this Agreement upon not less than 30
days' written notice to ALZA, if ALZA is not proceeding to execute the
activities allocated
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to it under the work plans as approved by the Collaboration Committee in a
commercially reasonable manner.
(c) ALZA may terminate this Agreement at any time upon not less
than 30 days' written notice to Alkermes.
(d) Either party may terminate this Agreement upon at least 30
days' prior written notice in the event of a material breach of this Agreement
by the other party, which breach continues uncorrected for 30 days after written
notice of the breach by the nonbreaching party to the breaching party.
(e) This Agreement will automatically terminate upon expiration
of the Option unexercised.
6.3 CONSEQUENCES OF EARLY TERMINATION.
(a) In the event of the termination of this Agreement by ALZA
pursuant to Section 6.2(c), or the termination of this Agreement by Alkermes
pursuant to Section 6.2(b) or (d) hereof, or if the Option expires unexercised,
ALZA hereby grants Alkermes an irrevocable, royalty-free, worldwide, exclusive
license, with the right to sublicense, in and to all of ALZA's interest in all
Program Information (other than market research, market data, marketing and
sales information, promotional materials and related material generated by or on
behalf of ALZA, as to which no license is granted). Effective as of any such
termination, the information covered by such license will no longer be subject
to the provisions of Section 4.1 hereof. At the request of Alkermes following
termination of this Agreement for any of the reasons described above, ALZA shall
execute any documents reasonably requested by Alkermes to evidence or confirm
the foregoing license.
(b) If this Agreement is terminated pursuant to Section 6.2(a),
or by ALZA pursuant to Section 6.2(d), Alkermes shall refund to ALZA the
difference, if any,
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between (a) $*** and (b) total Development Costs duly incurred under this
Agreement from the date hereof through the date of such termination.
6.4 RETURN OF PRODUCT. Upon termination of this Agreement for any
reason, ALZA will return to Alkermes all unused Product held by ALZA (if any),
or dispose of it, at Alkermes' expense, as elected by Alkermes. Within 30 days
after termination of the Agreement, Alkermes shall notify ALZA in writing of its
election.
7. DISPUTE RESOLUTION; GOVERNING LAW.
7.1 DISPUTES RESOLUTIONS.
(a) Any dispute, controversy or claim arising out of or relating
to this Agreement, or the breach, termination, or invalidity of this Agreement,
shall be submitted in the first instance to the Chief Executive Officer of ALZA
and the Chief Executive Officer of Alkermes.
(b) If any matter or dispute under this Agreement cannot be
resolved by the individuals designated in Section 7.1 (a) within 30 days after
its submission to them, either party shall be entitled to bring suit thereon,
subject to Section 7.2. All such suits shall be brought in the Federal District
Court for the Southern District of New York located in New York City.
7.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
8. MISCELLANEOUS.
8.1 AMENDMENT. This Agreement shall not be amended or modified except
in a writing signed by each of the parties hereto.
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8.2 NOTICES. Any notice required or permitted under this Agreement
shall be in writing and addressed as follows:
if to ALZA: ALZA Corporation
950 Page Xxxx Xxxx
X.X Xxx 00000
Xxxx Xxxx, XX 00000-0000
Attention: Senior Vice President and
General Counsel
if to Alkermes: Alkermes, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
All notices given in accordance with this Section 8.2 shall be deemed to be
effective five days after the date of mailing, if mailed by registered or
certified mail, postage prepaid and return receipt requested or, upon delivery,
if delivered by hand, or upon receipt, if faxed. Faxed notices shall be followed
by originals. Any party may change its address at which notice is to be received
by written notice provided pursuant to this Section 8.2.
8.3 RECORDS. Each party shall maintain true and complete books and
records in accordance with generally accepted accounting principles, in
sufficient detail to verify Development Costs and such records shall be
maintained for at least two years after the submission of each report or invoice
required to be provided under this Agreement. Each party shall have the right,
through its independent auditors, during normal business hours and following
reasonable prior notice to the other party, to examine the books and records of
the other party for the purpose of verifying Development Costs incurred
hereunder. If any such examination shows any underpayment, overcharge or
miscalculation, a correcting payment or refund shall be made within 30 days
after receipt of the written statement described above. The fees and expenses of
the accountants performing such examination shall be borne by the party
requesting the audit. Examinations may be made not more than once in each
calendar year and for two years after the expiration or termination of this
Agreement, and any particular records may be
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audited only once, and only within two calendar years after the end of the
calendar year in which they were created.
8.4 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, it shall be
modified, if possible, to the minimum extent necessary to make it valid and
enforceable, if such modification is not possible, it shall be stricken and the
remaining provisions shall remain in full force and effect. If any of the terms
or provisions of this Agreement is in conflict with any applicable statute or
rule of law in any jurisdiction, then such term or provision shall be deemed
inoperative in such jurisdiction to the extent of such conflict and the parties
will renegotiate the affected terms and conditions of this Agreement to resolve
any inequities.
8.5 ASSIGNMENT AND BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto. Without the prior written consent of the other party, neither party may
assign any of its rights, or delegate any of its obligations, under this
Agreement, except to any Affiliate (for this purpose, an "Affiliate" of a party
is a corporation or other entity that controls, is controlled by, or is under
common control with, such party) or to any corporation with which it may merge
or consolidate, or to which it may transfer all or substantially all of its
assets to which this Agreement relates. Such consent will not be unreasonably
withheld if the proposed assignee has capabilities at least comparable to those
of the assigning party to carry out its obligations hereunder.
8.6 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, sets forth the entire agreement and understanding between the parties as
to the subject matter hereof, and supersedes all agreements and understandings
between the parties as to the subject matter, whether oral or in writing.
8.7 NONDISCLOSURE. Neither party shall have the right to disclose to
third parties the existence of this Agreement or any of the terms and conditions
hereof without the express prior written consent of the other party, except as
may be required by applicable law, including United States securities laws,
rules and regulations. The parties
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anticipate issuing a joint press release upon execution of this Agreement. The
parties will work together to agree upon the content and timing of such release.
8.8 SURVIVAL OF PROVISIONS. The provisions of Sections 3.4, 3.6 (with
respect to adverse events occurring during the term of this Agreement), 6.3,
6.4, 8.2, 8.3, 8.4, 8.5 (first sentence only), 8.6 and this Section 8.8, and
Articles 1, 4 and 7, shall survive the termination for any reason of this
Agreement. Except as specifically provided in this Agreement, neither party
shall be liable to the other due to the termination of this Agreement as
provided herein, whether in loss of good will, anticipated profits or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
ALZA Corporation Alkermes, Inc.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Pops
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Title: Chief Executive Officer Title: Chief Executive Officer
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EXHIBIT A-1
Brain Tumor Study
DESIGN SUMMARY:
***
ESTIMATED TIMEFRAME:
***
ESTIMATED COST FROM DATE OF AGREEMENT:
$***
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TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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XXXXXXX X-0
Xxxxxxxxxx Studies
DESIGN SUMMARY:
***
ESTIMATED TIMEFRAME:
***
ESTIMATED COST FROM DATE OF AGREEMENT:
$***
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TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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CONFIDENTIAL
EXHIBIT B
TERM SHEET
RMP-7 (bradykinin-based receptor-mediated permeabilizer)
DEFINITIVE DEVELOPMENT AND COMMERCIALIZATION
AGREEMENT*
PARTIES: Alkermes, Inc. ("Alkermes") and ALZA Corporation
("ALZA").
PRODUCT: RMP-7 (bradykinin-based receptor-mediated permeabilizer)
and any formulations, dosage forms or improvements
thereof.
AGREEMENT: Definitive Development and Commercialization Agreement
(the "Definitive Agreement"), pursuant to which the
parties will complete the development of the Product and
ALZA will have worldwide commercialization rights to the
Product for the life of the Product, subject to the
terms of the Product Development Agreement between
Alkermes and Alkermes Clinical Partners, L. P. (the
"Partnership"). Subject to the terms of such Product
Development Agreement and pursuant to the Definitive
Agreement, Alkermes will grant to ALZA the sole and
exclusive right to commercialize the Product, including
an exclusive license or sublicense (with right to
further sublicense) under any and all patents and
know-how owned or controlled by Alkermes which are
necessary or useful to commercialize the Product, solely
for the purpose of commercializing the Product.
TERRITORY: Worldwide, divided into two subterritories:
Subterritory A United States and Canada
Subterritory B all other countries of the world
-------------------------------
* Capitalized terms used in this Term Sheet have their meanings set forth
in the Clinical Collaboration and Option Agreement to which this Term
Sheet is an exhibit (the "Option Agreement"), unless otherwise defined
herein.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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DEVELOPMENT FEE: Upon execution of the Agreement, either (i) ALZA will
pay Alkermes a development fee (the "Development Fee")
in an amount equal to the anticipated Development Costs
necessary to complete the Program determined in
accordance with Section 2.4 of the Option Agreement (the
"Anticipated Completion Costs"), or (ii) ALZA will agree
to fund, on an ongoing basis, such Anticipated
Completion Costs necessary to complete the Program.
COMMERCIALIZATION
FEES: ALZA will pay Alkermes the following commercialization
fees with respect to the Product:
***
***
MANUFACTURING AND
SUPPLY: Alkermes will be responsible for manufacturing the
Product for clinical studies and commercial supply. The
Definitive Agreement will include appropriate
contingency plans to assure continued supply in the
event that Alkermes is unable to supply. Alkermes will
be responsible for the Product meeting specifications
and will provide a standard manufacturing warranty.
COLLABORATION
COMMITTEE: A Collaboration Committee, consisting of an equal number
of members from each party (expected to be 3 to 5
members from each party), will be responsible for the
oversight of the completion of development, clinical
testing, regulatory process, launch, marketing and
promotion of the Product. The Collaboration Committee
will be responsible for reviewing clinical plans and
results, marketing, promotional and other
Product-related plans and materials, (including annual
promotional budgets), marketing expenses and other
Product-related matters. All Development Costs of both
parties will be incurred pursuant to work plans and cost
estimates approved by the Collaboration Committee.
Each member of the Collaboration Committee will have one
vote. ALZA will have the tie-breaking vote with respect
to all
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sales, marketing and promotional activities. Alkermes
will have the tie breaking vote with respect to
nonpromotional regulatory matters.
PROPRIETARY RIGHTS
AND INDEMNIFICATION
FOR INFRINGEMENT: As between Alkermes and ALZA, Alkermes will own all
patents related to the Product and any improvements to
the Product.
(ALZA acknowledges that Alkermes may not own all such
patents, but may have licensed them from third parties).
Clinical data developed pursuant to the Definitive
Agreement will be owned by the parties jointly, and
neither party may use such data outside the Definitive
Agreement without the prior written consent of the other
party. Alkermes will indemnify ALZA against any
liability arising from any claim that the manufacture,
use or sale of the Product infringes the proprietary
rights of any third party.
OTHER
INDEMNIFICATION: ALZA will indemnify Alkermes against any liability
arising from ALZA's marketing and promotional activities
with respect to the Product.
Alkermes will indemnify ALZA against any liability
arising from: (i) the design, use or manufacture of the
Product and (ii) any claims of the Partnership or any
other third party for any payments or rights relating to
the Product as a result of any arrangements between the
Partnership or such third party and Alkermes.
CONFIDENTIALITY
AND NONDISCLOSURE: Neither party will disclose the existence or the terms
of this term sheet or the Definitive Agreement without
the prior written consent of the other party, subject to
the requirements of applicable law. If a public
announcement is to be made (because it is required by
law or because the parties so agree), the parties will
work together on a statement that is acceptable to both,
and will work diligently to coordinate their disclosures
with respect to the subject matter of any arrangements
between them.
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TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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IMPROVEMENTS,
AND COMPETING
PRODUCTS: ALZA will have the right to market all improvements,
including formulation or similar changes, to the
Product.
During the term of the Definitive Agreement, Alkermes
will not develop for sale in the Territory or
commercialize or have commercialized in the Territory
(or assist in any activities directed thereto), either
alone or with a third party other than ALZA, any other
bradykinin-based product, or any other product intended
to increase the flow of drugs through or across the
blood brain barrier, except pursuant to Alkermes'
existing transferrin receptor-mediated delivery program.
TERMINATION: Each party will have the right to terminate the
Definitive Agreement due to an uncured material breach
by the other party after notice and a reasonable
opportunity to cure.
ALZA will have the right to terminate the Definitive
Agreement on 90 days' written notice to Alkermes.
In the event of termination by ALZA other than due to
Alkermes' breach, all rights to the Product will revert
to Alkermes. In such event, Alkermes will be entitled to
use jointly owned Program Information (excluding market
research, market data, marketing and sales information,
and promotional and related materials).
In the event of a material breach of the Definitive
Agreement by Alkermes which remains uncured following
notice and an opportunity to cure, ALZA may terminate
the Definitive Agreement and will be entitled to an
exclusive license (including any required sublicenses),
subject to the Product Development Agreement, to market,
sell and distribute the Product worldwide for which ALZA
will pay Alkermes a royalty on net sales (such royalty
to be specified in the Definitive Agreement) for a
specified period of time.
THE PARTNERSHIP: The Definitive Agreement will include appropriate
provisions to ensure that Alkermes' obligations to the
Partnership and its limited partners are fulfilled, in
order to preserve Alkermes'
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
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(and therefore ALZA's) rights to the Product. Such
provisions will include the right of ALZA to fulfill
Alkermes' obligations if Alkermes fails to do so, in
order to preserve ALZA's rights to the Product, with
appropriate and timely adjustments to the economic
arrangements if and to the extent that ALZA must fulfill
Alkermes' obligations in order to preserve ALZA's rights
to the Product.
SUBTERRITORY A
PROVISIONS:
Development Costs: If ALZA elects to pay the Development Fee upon exercise
of the Option in a lump sum payment, Alkermes will fund
all Development Costs up to the amount of the
Development Fee. In connection therewith, Alkermes will
reimburse ALZA, on a monthly basis, all of ALZA's
Development Costs of the Program for Subterritory A,
until the amounts paid by Alkermes to ALZA plus the
amounts incurred by Alkermes, in each case, as
Development Costs under the Definitive Agreement, equal
the Development Fee.
If ALZA elects to pay the Anticipated Completion Costs
on an ongoing basis, rather than paying the Development
Fee, then ALZA will reimburse Alkermes, on a monthly
basis, for Alkermes' Development Costs duly incurred
under the Definitive Agreement, until the total
Development Costs for Subterritory A incurred by both
parties under the Definitive Agreement equal the
Anticipated Completion Costs.
If the total Development Costs of the Program in
Subterritory A incurred by the parties under the
Definitive Agreement and as approved by the
Collaboration Committee exceed the Development Fee or
the Anticipated Completion Costs, as the case may be,
the parties will bear any excess equally, on an ongoing
basis, with appropriate monthly reimbursement.
Development Costs for purposes of the Definitive
Agreement will mean those costs approved in advance by
the Collaboration Committee for expenditure.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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Xxxxx XX Clinical
Studies: Each party will bear 50% of any Phase IV clinical
studies related to the Product in Subterritory A.
Sales and
Marketing: ALZA will be responsible for the marketing, sales and
distribution of the Product. ALZA will determine the
selling price of the Product, with the advice of the
Collaboration Committee. ALZA will promote the Product
using reasonable commercial efforts, comparable to those
used by other companies of similar size to promote
products of similar commercial potential.
Each party will receive half of the profits from Product
sales in Subterritory A (net sales less (i) ALZA's
marketing, sales and distribution expenses, (ii) royalty
payments, if any, to the Partnership and (iii) Alkermes'
manufacturing costs). This equal sharing will be
expressed in terms of a transfer price that is a
percentage of the annual average net selling price of
the Product during the prior calendar year, to be paid
by ALZA to Alkermes as follows:
percentage of average net
-------------------------
in each calendar selling price during the
---------------- ------------------------
year on net sales of prior calendar year
-------------------- -------------------
$*** ***%
*** ***%
*** ***%
Notwithstanding the foregoing, prior to the first
commercial sale of the Product in Subterritory A, the
parties will reconcile (using the principles embodied in
the exhibit attached hereto) the total amounts expended
by each party to develop the Product (an example of such
a reconciliation is contained in the chart attached
hereto), and to the extent that such reconciliation
indicates that the amounts ALZA has paid (and is
required to pay as future commercialization fees) is
more than 50% of the total Development Costs of the
Product from inception, then, at Alkermes' option,
either (i) 50% of the difference between the amounts
paid by ALZA and the
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amounts paid by Alkermes will be credited against
transfer price payments otherwise due to Alkermes under
the above table (provided, however, that the transfer
price will not, as a result of any such credit, be less
than ***% and any excess will be carried over until
fully utilized); or (ii) Alkermes will pay ALZA an
amount equal to such difference. The parties acknowledge
that Alkermes has expended approximately $*** through
September 30, 1997 in Development Costs.
Regulatory Activities: Alkermes will be responsible for preparing and
completing all FDA filings and related regulatory
activities necessary to obtain FDA clearance to market
the Product, with the cooperation of ALZA. Alkermes will
hold the NDA and NDS for the Product; however, Alkermes
will transfer to ALZA responsibility for filing, and
communicating with the FDA with respect to, marketing
and promotional materials for the Product.
SUBTERRITORY B
PROVISIONS:
Development Costs: The parties will share equally the Development Costs of
activities undertaken solely for Subterritory B, with
appropriate monthly reimbursement of the Development
Costs of activities approved by the Collaboration
Committee.
Sales and Marketing: In Subterritory B, ALZA may market the Product itself or
may arrange for distribution of the Product by third
parties.
Each party will receive half of the profits from Product
sales by ALZA (net sales less (i) ALZA's marketing,
sales and distribution expenses, (ii) royalty payments,
if any, paid to the Partnership and (iii) Alkermes'
manufacturing costs).
If a third party distributes the Product, each of
Alkermes and ALZA will be entitled to 50% of any
up-front and milestone payments received from
distributors for the rights to market the Product in
Subterritory B. Each party will also be entitled to 50%
of any ongoing payments from distributors, except that
(i) Alkermes will be reimbursed for its manufacturing
costs, and (ii) any ongoing clinical costs borne by
either Alkermes and ALZA will be reimbursed to the party
incurring
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TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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the expenses, in each case prior to the equal sharing of
distribution.
Regulatory Activities: Alkermes will be responsible for preparing and
completing the regulatory filings in other countries of
the Territory, with the cooperation of ALZA. All such
activities will be coordinated by the Collaboration
Committee.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN
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EXHIBIT C
ALKERMES DEVELOPMENT COSTS
***
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EXHIBIT D
ALZA DEVELOPMENT COSTS
***
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XXXXXXX X-0
RESEARCH EXPENSES
DIRECT EXPENSES
***
***
***
***
***
***
INDIRECT EXPENSES
***
***
***
***
***
***
***
***
***
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29
EXHIBIT D-2
GENERAL AND ADMINISTRATIVE EXPENSE
***
***
***
***
***
***
***
***
***
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FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
