1
EXHIBIT 10.23
CONFIDENTIAL TREATEMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 240.24b-2. * INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A
CONFIDENTIAL TREATEMENT REQUEST THAT IS
FILED SEPARATELY WITH THE COMMISSION.
RESEARCH AND DEVELOPMENT AGREEMENT
THIS RESEARCH AND DEVELOPMENT AGREEMENT (the "Agreement") is made as of
the 18th day of December, 1998 by and between Isis Pharmaceuticals, Inc.
("ISIS"), a Delaware Corporation having a principal place of business at 0000
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, and Zeneca Limited., 00 Xxxxxxxx
Xxxx, Xxxxxx X0X0XX, Xxxxxx Xxxxxxx ("ZENECA").
BACKGROUND
ISIS is engaged in the research and development of therapeutic
pharmaceutical products known as antisense oligonucleotides, and ISIS has
accumulated considerable knowledge in the field of molecular biology, including
processes and techniques relating to the design, investigation and research
(including the synthesis) of oligonucleotides and oligonucleotide analogues.
ZENECA has expertise in the research, development, distribution and
exploitation of prophylactic and therapeutic treatments for human use.
ZENECA and ISIS wish to establish a collaborative relationship to work
jointly with one another with the aim to identify antisense compounds which
inhibit the in vivo synthesis of certain biological molecules primarily involved
in various disease processes, initially focusing on cancer in humans for ZENECA
development and commercialization of products containing such antisense
compounds initially focusing on specific targets.
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement but not otherwise defined will
have the meaning set forth in Exhibit A.
ARTICLE 2
RESEARCH PROGRAM; ANNUAL RESEARCH SUPPORT
2.1 Goal of Research Collaboration.
(a) The goal of the Research Collaboration is, through the combined
efforts of ISIS and ZENECA scientists and using ISIS and ZENECA
technology, to discover Compounds having the potential to be
commercialized as drugs for
* CONFIDENTIAL TREATMENT REQUESTED
1
2
human therapeutic use. The Research Collaboration will be conducted
by ISIS and ZENECA and will be managed by the Joint Research
Committee.
(b) Research relating to a Target includes the elaboration of necessary
cellular, biochemical and molecular-biological approaches (i.e., the
development of the knowledge not already available to the two
parties, the development and setting up of relevant assays) towards
the inhibition of the expression of the protein target molecules by
Antisense Technology as well as the conception, design, synthesis
and development of therapeutic entities, including the
characterization of their biophysical and pharmacokinetic
properties. Subject to Section 3.1 the research relating to a Target
will explore all reasonable therapeutic applications of a Compound.
(c) The Research Collaboration will include access to all ISIS
Technology for purposes of developing Compounds within the terms of
article 7 except as described below. The Research Collaboration does
not include research relating to or access by ZENECA to ISIS
technology or Know-How relating to [ * ]. When and if the Parties
decide to include such technology and research in the Research
Collaboration, they will negotiate in good faith additional
technology access fees to reflect ISIS investment in the technology
and an appropriate increase in the Research Payments to fund
additional research relating thereto.
(d) ZENECA and ISIS will work together exclusively on the use of
Antisense Technology to discover, develop or commercialize antisense
inhibitors for any Target for which ZENECA has an Active Target
Program. ISIS will not license or assign to a Third Party any ISIS
Target Patents relating to a particular target for so long as ZENECA
has an Active Target Program for that Target.
2.2 Management of the Research Program.
(a) The Research Collaboration will be managed by a Joint Research
Committee composed of 4 members: 2 members to be designated by each
party. The initial composition of the Joint Research Committee is
set forth in Exhibit C. Each party will be entitled to designate
from time-to-time a successor to the member previously designated by
it unless the other party has a reasonable objection to such
successor.
(b) The Joint Research Committee will hold meetings as necessary but at
least twice per year, at times and locations to be mutually agreed
upon. The minutes of the meetings will be recorded and marked
"confidential" and will be subject to the secrecy obligations and
restrictions on use contained in Paragraphs 12.2 and 12.3.
* CONFIDENTIAL TREATMENT REQUESTED
2
3
(c) The Joint Research Committee will review and evaluate the work on
the Research Collaboration. Its functions will be to decide:
(i) on Targets to be included within the Research
Collaboration;
(ii) on Research Target Profiles for any Target (including any
subsequent modifications of such Research Target Profile);
(iii) on therapeutic indications to be pursued for Compounds
inhibiting a Target;
(iv) the territorial patenting strategy for Compounds and the
"freedom to operate" position by patent due diligence on
new Targets or Compounds;
(v) assignment of financial resources and personnel to specific
Targets; and/or emphasis among Targets;
(vi) approval of Target-specific Research Plans;
(vii) determination of whether a Compound fulfills the Research
Target Profile;
(viii) approval of Excess Research Costs;
(ix) when necessary, on taking appropriate action to adopt
alternative approaches or to make recommendations on
redirecting or restructuring the Research Plan set out in
Exhibit B; and
(x) determine the detailed manufacturing specifications for
research Compounds
(d) The Joint Research Committee will act by unanimous decision.
Disputes will be resolved pursuant to Paragraph 13.11 hereof.
2.3 Information and Reports.
ISIS will promptly make available and disclose to ZENECA all information
regarding the design, synthesis and screening of lead antisense
oligonucleotides for the Targets generated by ISIS in carrying out the
Research Collaboration. All discoveries or inventions made by ISIS in
undertaking the Research Collaboration will be promptly disclosed to
ZENECA. ISIS will keep ZENECA promptly informed of all patenting
activities undertaken by ISIS, including without limitation, the
opportunity to comment on the specifications filed after any first
provisional or priority patent filing on any invention and patent
prosecution in PCT, USA, Europe and Japan. ISIS and ZENECA will exchange
at a minimum, monthly verbal or written reports, presenting a meaningful
summary of the work done under this Agreement. In addition, at ZENECA's
request, ISIS will provide written reports of any studies performed by
ISIS required to support regulatory submissions to be made by ZENECA,
its Affiliates or Sublicensee and will allow ZENECA, its Affiliates or
Sublicensees to use the data included in such reports to support such
submissions.
3
4
2.4 Technology Access Fee; Research Payments.
(a) ZENECA will pay to ISIS [ * ] million in technology access fees
payable as follows:
(i) [ * ]
(ii) [ * ]
(iii) [ * ]
(b) As payment for the research to be conducted by ISIS in the Research
Collaboration, ZENECA will pay to ISIS [ * ] during the Research
Term, in four equal quarterly installments of [ * ] (the "Research
Payments"). [ * ]
(c) Within 12 months of the Effective Date, Zeneca may either add or
substitute [ * ] as an Initial Target in the Research Collaboration
pursuant to Paragraph 2.7 hereof. If [ * ] is added as a Target,
[ * ]. The Joint Research Committee will determine the length of the
[ * ] project and related research payments.
(d) The Research Payments will be applied exclusively to cover only work
of the [ * ] employed in carrying out work under this Research
Collaboration [ * ]. Any studies or work agreed by ZENECA to be
conducted outside ISIS, or within ISIS but outside the scope of the
Research Plan described in Exhibit B (including, without limitation
any ISIS Development Expenses), and any compound to be supplied
[ * ], as described above in any calendar year will be paid for by
ZENECA separately, with such costs called "Excess Research Costs."
Excess Research Costs will be invoiced by ISIS to ZENECA with
payment due within [ * ] of receipt of invoice. Excess Research
Costs for [ * ] will be billed at [ * ] (including an appropriate
allocation of the costs of process development, analytical
development and scale up for such manufacture). [ * ]
2.5 The Research Term.
(a) The Research Term will be [ * ] years beginning with the Effective
Date and will be cancelable by ZENECA for any reason [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
4
5
(b) The Research Term may be extended by mutual consent at any time
prior to the end of the [ * ] year for [ * ] additional extensions
of [ * ] as specified by ZENECA at the time of the extension, based
on the program of work agreed to by the Joint Research Committee on
the terms contained herein, [ * ]. The scope of the Research
Payments for each subsequent year will be mutually agreed to by the
Joint Research Committee in the light of the agreed Research
Collaboration program needs. Notwithstanding the foregoing, if the
program of work is earlier completed or if the program appears
unlikely to be successful, the Parties can, upon mutual agreement,
terminate any extension of the Research Term sooner.
2.6 Proposal of Compounds for Development.
(a) During the course of the Research Collaboration, the Joint Research
Committee will propose to ZENECA Compounds, which the Joint Research
Committee determines meet the Research Target Profile for selection
as Development Candidates. ZENECA will have [ * ] days after
receiving the Joint Research Committee's proposal to accept or
reject any such Compound.
(b) Within [ * ] days of [ * ], ZENECA will pay to ISIS an [ * ] and
ZENECA will have the exclusive right to develop and commercialize
such Development Candidate and subsequent Development Candidates
inhibiting the same Target as provided herein.
2.7 Rejected Compounds.
(a) Compounds which the Joint Research Committee determines meet
Research Target Profile but which are not accepted by ZENECA for
development as Development Candidates will continue to be owned in
their entirety by ISIS. [ * ]
(b) [ * ]
(c) [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
5
6
2.8 Expansion of the Research Collaboration; Substitution or Addition of
Targets.
(a) ZENECA may, upon mutual agreement with ISIS, at any time during the
first [ * ] months of the Research Collaboration Term, substitute or
add [ * ] as a Target. [ * ] may be (i) substituted for one of the
other Initial Targets or for any subsequently added Cancer-Related
Target for no additional technology access fee and, assuming that
the mutually agreed research plan for [ * ] is similar to that for
the Target being substituted, for no additional Research Payments or
(ii) added as a Target by initiation of a research program and an
increase in the Research Payments which will be agreed by the Joint
Research Committee, subject to the Inflation Rate beginning on the
second anniversary of the Effective Date. The substitution or
addition may occur (i) with [ * ] months prior notice for a
substitution or [ * ] months prior notice for an addition; and (ii)
upon agreement by ZENECA, if required, that the Research
Collaboration Term will extend for a period to be determined by the
Joint Research Committee to include the term of the Surviving
research program following such substitution or addition.
(b) ZENECA may, upon mutual agreement with ISIS at any time during the
Research Collaboration Term add additional Cancer-Related Target(s)
and subsequently substitute or add such Cancer-Related Target(s) to
the Research Collaboration. The substitution or addition to the
Research Collaboration may occur (i) with at least [ * ] months
notice for a substitution or addition; (ii) upon agreement by ZENECA
that the Research Collaboration Term will continue for at least
[ * ] months following the substitution or addition. If a
substitution is made, assuming that the mutually agreed upon
research plan for the new Target is similar to that for the Target
being substituted, there will be no increase in Research Payments
when such substitution is made. Addition of Cancer-Related Targets
will require the payment of additional technology access fees [ * ].
In addition, if the Target is [ * ], the Parties will agree on
additional upfront funding [ * ]; [ * ], [ * ]. If ZENECA designates
a desire to [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
6
7
(c) ZENECA may, upon mutual agreement with ISIS at any time during the
Research Collaboration Term add additional Non-Cancer-Related
Target(s), and subsequently substitute or add such
Non-Cancer-Related Target(s) to the Research Collaboration. The
substitution or addition to the Research Collaboration may occur (i)
with at least [ * ] months notice for a substitution or [ * ] months
notice for an addition; (ii) upon agreement by ZENECA that the
Research Collaboration Term will continue for at least [ * ] months
following the substitution or addition. If a substitution is made,
assuming that the mutually agreed upon research plan for the new
Target is similar to that for the Target being substituted, there
will be no increase in Research Payments when such substitution is
made. Addition of non-cancer-related Targets will require the
payment of additional technology access fees [ * ]. If ZENECA
designates a desire to add [ * ].
(d) ISIS and ZENECA will negotiate in good faith any additional terms
for the substitution or addition of Targets beyond the Initial
Targets. ISIS will have no obligation to substitute or add a Target
for one that is subject to active discussions, negotiations or an
agreement with a Third Party. ISIS will notify ZENECA of the
initiation of discussions with a Third Party regarding Apoptosis
Targets unless it is precluded from doing so by confidentiality
restrictions.
* CONFIDENTIAL TREATMENT REQUESTED
7
8
(e) For purposes of this paragraph 2.7 "substitution" will mean the
termination of a research program relating to one Target and the
initiation of a similar research program for the substituted Target.
The Target for which the research program is terminated will
thereafter be deemed to be an Abandoned Target and the new Target
will become a Target for purposes of this Agreement.
2.9 Termination of Research Program for a Target.
(a) ZENECA may at any time after [ * ] discontinue research relating to
any specific Target [ * ]. The Joint Research Committee will
determine the reallocation of the funding for a discontinued Target
among the other Targets. For each Abandoned Target, ISIS will be
free to continue research on Compounds to inhibit such Target and to
use, make, have made and sell the resulting products for such
Abandoned Target in accordance with Paragraph 2.7.
(b) Discontinuation of research in a particular Target will not affect
the continuation of the Research Collaboration in accordance with
its terms.
ARTICLE 3
ZENECA DEVELOPMENT AND COMMERCIALIZATION
3.1 ZENECA Diligence Obligation.
(a) ZENECA will use commercially reasonable efforts to develop a
Development Candidate as expeditiously as possible consistent with
ZENECA's own practices for drugs of similar commercial potential and
for all indications for which ZENECA reasonably determines the
Development Candidate is likely to be commercially attractive. If
ZENECA determines that it will not develop a Development Candidate
for such commercially attractive indication outside of the initial
therapeutic focus of the Target as determined by the Joint Research
Committee, taking into account ZENECA's overall development plan for
the Development Candidate for all indications, ZENECA will
reasonably consider development and commercialization of the
Development Candidate by ISIS or a Third Party in any indication
ZENECA is not pursuing. Such consideration by ZENECA will be
intended to maximize the commercial value of the Development
Candidate to ZENECA and ISIS without jeopardizing the development or
commercialization of the Development Candidate by ZENECA in the
indication ZENECA is pursuing. Determination by ZENECA not to permit
such commercialization on the grounds that such development could
jeopardize the development or commercialization of the Development
Candidate shall be deemed to be reasonable.
* CONFIDENTIAL TREATMENT REQUESTED
8
9
(b) ZENECA will use commercially reasonable efforts to commercialize and
sell Collaboration Product in each of the Major Countries for all
commercially attractive indications as determined by ZENECA in
Article 3.1(a) as expeditiously as is reasonable consistent with
sound scientific and business judgment and ZENECA's practices with
drugs of similar commercial potential. ISIS will provide ZENECA with
assistance reasonably requested by ZENECA which will be billed to
ZENECA as ISIS Development Cost [ * ].
(c) If ZENECA fails in its obligations to develop or commercialize a
Development Candidate or Collaboration Product under subparagraph
(a) or (b) above, [ * ].
3.2 ISIS Diligence Obligation.
ISIS agrees to commit the resources set forth in Paragraph 2.4(c) to
exert the efforts necessary and reasonable and consistent with its
normal business practices to execute and substantially perform its
obligations under the Research Plan, to maintain and utilize the
scientific staff, laboratories, offices and other facilities consistent
with such undertaking and to reasonably cooperate with ZENECA in the
conduct of the Research Collaboration.
3.3 Discontinuation by ZENECA of Development or Commercialization.
ZENECA may discontinue development of any Development Candidate or
commercialization of any Collaboration Product by giving written notice
to ISIS. Upon such discontinuation, all rights to such Development
Candidate will revert to ISIS and be considered an Abandoned Compound.
Failure of ZENECA to develop a Development Candidate or commercialize a
Collaborative Product pursuant to Paragraph 3.1 will be deemed to
constitute discontinuation of
* CONFIDENTIAL TREATMENT REQUESTED
9
10
development or commercialization and the Development Candidate or
Collaboration Product will become an Abandoned Compound with or without
notice to ISIS hereunder. [ * ].
3.4 ISIS Right to Develop and Commercialize Abandoned Compounds.
(a) [ * ].
(b) Following the occurrence of any event described in 3.4(a) above and
at ISIS' request, ZENECA will provide in so far it is legally able
to do so, and on a non-exclusive basis to ISIS all rights, licenses
or other permissions obtained including, without limitation all
clinical and preclinical data, regulatory submissions obtained by
ZENECA together with, access to ZENECA technology utilized by ZENECA
in the development of such Development Candidate both of which exist
at the date a Development Candidate becomes an Abandoned Compound
and are necessary or useful to continue the development and/or
commercialization of such Abandoned Compound, [ * ]:
[ * ]
Royalties will be paid to ZENECA hereunder on the same basis and
terms as royalties are paid to ISIS by ZENECA hereunder.
[ * ].
* CONFIDENTIAL TREATMENT REQUESTED
10
11
3.5 ZENECA Right to Reconsider Abandoned Compounds.
(a) If ISIS pursues the development and/or commercialization of an
Abandoned Compound, ZENECA will have a right of first negotiation to
reacquire such Abandoned Compound on the earlier of: (i) if ISIS
determines that it desires to license such Abandoned Compound to a
Third Party (a commercial distribution arrangement will explicitly
not be considered a license for these purposes) or (ii) prior to
initiation of Pivotal Quality Clinical Study for such Abandoned
Compound if ISIS has not licensed rights to a Third Party at that
time. If ZENECA desires to be considered a commercial distributor
for an Abandoned Product, ISIS will reasonably consider such
request.
(b) At the time ZENECA has the right to reacquire an Abandoned Compound,
ISIS will provide ZENECA with access to all material data relating
to such Abandoned Compound. ZENECA will have [ * ] following receipt
of such information to initiate good faith negotiations with ISIS.
Should the Parties fail to reach a mutually agreeable set of terms,
ISIS will be free to license the Abandoned Compound to a Third Party
on terms no more favorable to such Third Party than those last
offered by ZENECA, or to continue on its own to develop and
commercialize the Abandoned Compound.
3.6 Shared Compounds.
ZENECA may, at its option, offer to ISIS the opportunity to participate
in the joint development and commercialization of a Development
Candidate, on a [ * ].
3.7 Progress Reports.
Beginning on January 30 in the calendar year in which, in the case of
ZENECA the first Development Candidate is accepted by ZENECA and in the
case of ISIS, an Abandoned Compound is taken into development by ISIS
or, if the period following such acceptance to January 30 is less than 6
months, then on the following January 30, each party will submit to the
other on each January 30 an annual written progress report summarizing
its activities related to product development and clinical evaluation of
Development Candidates and Abandoned Compounds as appropriate and the
efforts to secure governmental approval to market the Collaboration
Products.
3.8 Compulsory Licensing.
If a Third Party seeks a compulsory license for a Collaboration Product
in accordance with appropriate provisions of the laws of any country and
ISIS and ZENECA agree that the Third Party is legally entitled to such
license or the Third
* CONFIDENTIAL TREATMENT REQUESTED
11
12
Party is awarded such license by a decision of the appropriate
governmental authority to make such decisions, the granting of such
license will not constitute a breach of ISIS' obligations ZENECA will
have right to reduce the royalty on sales in such country to an amount
no greater than the amount payable by the said Third Party as
consideration for the compulsory license.
ARTICLE 4
PAYMENTS FOR DEVELOPMENT CANDIDATES
4.1 Milestone Payments.
(a) Subject to Subparagraph (b) and (d) below, in addition to the other
payments required to be made by ZENECA hereunder, ZENECA will pay to
ISIS the following amounts with respect to each Development
Candidate to reach each milestone:
[ * ]
(b) [ * ].
(c) [ * ].
(d) [ * ].
* CONFIDENTIAL TREATMENT REQUESTED
12
13
4.2 Royalty.
(a) In consideration of the license rights set forth in Article 7
hereof, ZENECA will pay a royalty to ISIS on each Collaboration
Product equal to:
[ * ].
(b) The royalties payable hereunder [ * ].
4.3 Term of Royalty Obligations.
[ * ]. ZENECA will notify ISIS promptly upon introduction of each
Collaboration Product in each country. Upon termination of the royalty
payment obligation, ZENECA will have, in perpetuity, a fully paid
license under the ISIS Technology to discover, develop, make, have made,
use, sell, have sold Collaboration Product without further accounting to
ISIS.
* CONFIDENTIAL TREATMENT REQUESTED
13
14
4.4 Payments by ZENECA.
Royalties owed by ZENECA to ISIS pursuant to this Article 4 will be paid
no later than 45 days after the end of the calendar quarter during which
such royalties accrued.
4.5 Currency Conversion.
Royalties will be calculated and paid in United States dollars. For the
purpose of computing the Net Sales Revenue made in a currency other than
United States dollars, ZENECA will convert such currency from local
currency to pounds sterling on a consistent monthly basis using a 5 day
average of exchange rates published by Reuters and then convert such
pounds sterling to United States dollars monthly using the average of
the exchange rate from pounds sterling to United States dollars
published by Reuters for the same 5 days provided, however, that with
respect to Net Sales Revenue from sales made in a currency other than
United States dollars by ZENECA's Affiliates a quarterly exchange rate
shall be used for both the conversion from local currency to pound
sterling and from pound sterling to United States dollars that is the
average of the foregoing exchange rates for each of the three months in
the quarter. The foregoing conversion method is in accordance with
ZENECA's current accounting policies. In the event ZENECA's policies for
currency conversion change in the future, the parties will meet and
mutually agree upon a new conversion method.
4.6 Taxation of Payments.
ZENECA will withhold taxes from the royalty or other payments as
required by the internal tax law of the U.K. In the case of such
withholding being applicable, ISIS may apply for the reduction of rate
of withholding tax under the U.K./U.S. Income Tax Treaty with the
assistance of ZENECA and, provided the claim is accepted and ZENECA is
duly authorized by the Inland Revenue, ZENECA will apply the reduced
rate accordingly. If applicable laws required that taxes be withheld,
ZENECA will deduct those taxes from the remittable payments, make timely
payment of the taxes to the proper taxing authority, and send a
confirmation of such payment in a form approved by the UK Inland Revenue
to ISIS within 60 days following that payment.
4.7 Interest.
All payments due hereunder from ZENECA that are not paid to ISIS when
due and payable as specified in the Agreement will bear interest at an
annual rate [ * ], or at such lower rate of interest as will then be the
maximum rate permitted by applicable law.
* CONFIDENTIAL TREATMENT REQUESTED
14
15
ARTICLE 5
MANUFACTURING AND SUPPLY
5.1 Research Supply.
ISIS agrees to supply all of ZENECA's requirements of Development
Candidates for its research program under the Research Collaboration in
the amounts and in accordance with the specifications set out in Exhibit
F.
5.2 Clinical Supply.
ISIS will, if ZENECA requests, supply all of ZENECA's requirements of
Development Candidates required for clinical trials [ * ]. ISIS will
supply clinical material on the same basis as research material billed
as Excess Research Costs pursuant to mutually agreed upon
specifications. ZENECA will provide ISIS with 18-month rolling forecast
and a final purchase order [ * ]. Timing of deliveries will be scheduled
consistent with ISIS' other facility requirements and ZENECA's
reasonable needs for clinical supply stocking. The Parties will
negotiate in good faith the terms of a clinical supply agreement
containing these and other customary terms. If ISIS is not able to
supply Development Candidates or if ZENECA determines to obtain supply
from a Third Party, then ISIS will, at ZENECA's request, promptly
transfer all necessary technology and technical assistance [ * ].
5.3 Commercial Supply.
(a) ZENECA will be free to obtain commercial supply of Collaboration
Products from the manufacturer of its choice. If ZENECA desires ISIS
to provide commercial supply of Collaboration Products and if ISIS
has the capacity and desire to do so, the parties will negotiate in
good faith the terms of a commercial supply agreement to be
concluded before the initiation of the first Pivotal Quality
Clinical Trial.
(b) If ISIS is not able to provide commercial supply or ZENECA
determines to manufacture Collaboration Products itself or through
an Affiliate or have Collaboration Products manufactured by a Third
Party then ISIS will, at ZENECA's request, promptly transfer all
necessary technology and technical assistance and grant a [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
15
16
[ * ].
5.4 Manufacturing Information.
As reasonably requested by ZENECA, ISIS will provide ZENECA all
information in ISIS control relating to Development Candidates and
Collaboration Products being developed by ZENECA including without
limitation information regarding process, in process control methods,
final product characterization/analysis methods, scale, cost and
alternative manufacturing sites.
ARTICLE 6
BOOKS AND RECORDS
6.1 Recordkeeping; Audit.
(a) Each party will keep accurate accounts and records in sufficient
detail to properly determine the royalties payable to the other
under this Agreement for at least 3 years following the end of the
calendar quarter to which they pertain.
(b) Each party will make available such accounts and records for
inspection during such 3 year period by a certified public
accountant retained by the other for such purpose, solely for the
purpose of verifying the royalty payments hereunder. Such
inspections may be made no more than once in each calendar year, at
reasonable times mutually agreed upon by the parties after at least
15 days written notice to the other.
(c) If an audit concludes that additional royalties were owed during the
period audited, the party in default will pay the additional
royalties within 45 days of the date the other party delivers to it
the accounting firm's written report. The fees charged by such
accounting firm will be paid by the party initiating the inspection
unless the additional royalties owed by the party in default exceed
5% of the royalties paid for the period subject to the audit, in
which case that party will pay the fees of the accounting firm.
(d) Each party will include in each sublicense granted by it pursuant to
this Agreement a provision requiring the Sublicensee to make reports
to the other party, to keep and maintain records of sales made
pursuant to such sublicense and to grant access to such records by
the other's independent accountant to the same extent required of
the Licensor under this agreement.
(e) Each party will treat all financial information subject to review
under this Paragraph 6.1 or under any sublicense agreement in
accordance with the confidentiality provisions of this Agreement.
* CONFIDENTIAL TREATMENT REQUESTED
16
17
(f) ISIS will maintain complete and accurate records which are relevant
to its expenditure of research manpower provided under this
Agreement pursuant to the Research Plan. With reasonable notice,
said records will be open during reasonable business hours for a
period of from [ * ] for examination at ZENECA's expense by an
independent certified public accountant appointed by ZENECA and
reasonably acceptable to ISIS. Such examination will be for the sole
purpose of verifying for ZENECA the cost of the research conducted
and whether or not funds received by ISIS from ZENECA were used for
conducting the research.
ARTICLE 7
LICENSE GRANTS
7.1 License for Collaboration Products.
In consideration of the payments made under Paragraphs 2.6, 4.1 and 4.2:
(a) ISIS hereby grants to ZENECA and its Affiliates during the term of
the Collaboration a co-exclusive (with ISIS), worldwide,
non-transferable royalty free license under the [ * ] subject to the
terms of this Agreement, solely to the extent necessary or
appropriate to carry out ZENECA's responsibilities under this
Agreement.
(b) Upon payment by ZENECA of the milestone payment due on [ * ], ISIS
will grant to ZENECA (i) a worldwide exclusive, sublicensable
license under the portions of the ISIS Technology necessary to make,
have made, use and sell such Collaboration Product and the right to
xxx any Third Party for any act of infringement of any such portion
of the ISIS Technology in the event that the Third Party infringes
an ISIS Target Patent under this 7.1(b), (ii) a worldwide,
exclusive, sublicensable license to the ISIS Target Patents relating
to the Target of the Collaboration Product to make, have made, use
and sell such Collaboration Product and to xxx any Third Party for
any act of infringement within the scope of the claims of such ISIS
Target Patent. [ * ].
(c) Nothing contained herein will be deemed to grant a license to any
technology not owned or controlled by ISIS or to any technology of
which ISIS is a licensee but for which ISIS is prohibited from
granting sublicenses all which technology existing at the date of
this Agreement is identified in Exhibit G.
* CONFIDENTIAL TREATMENT REQUESTED
17
18
(d) For any technology acquired by ISIS from a Third Party before the
Effective Date (which is described in Exhibit G) or after the
Effective Date which is necessary or useful to make, use or sell a
Collaboration Product, before such technology is included in any
license granted pursuant to Paragraph 7.1(a), ZENECA and ISIS will
negotiate a mutually agreeable set of terms for the inclusion of
such technology, which terms will consider the cost to ISIS to
acquire and develop such technology as well as any milestone or
royalty payments ISIS may owe to the licensor with respect to such
technology. [ * ].
(e) ISIS will not take any action after the Effective Date that would
encumber its technology in any way that would impair its ability to
grant the licenses contemplated hereunder.
(f) ZENECA agrees that the rights and licenses granted hereunder do not
provide to ZENECA the right to use ISIS Technology for any purpose
except as expressly provided in this Paragraph 7.1.
ARTICLE 8
TERM AND TERMINATION
8.1 Term.
This Agreement will be in effect beginning the Effective Date and,
unless otherwise terminated by operation of law or by acts of the
Parties in accordance with the terms of this Agreement, will remain in
effect until the last to expire of any royalty obligation under
Paragraph 4.2. [ * ].
8.2 Termination by Either Party.
(a) Termination for Breach.
In the event of either Party being in default of any material
obligation contained in this Agreement and failing to cure or obtain
the cure of such breach within [ * ] after receipt of written notice
thereof from the non-defaulting party ([ * ] in the case of any
payment required to be made hereunder); provided, however, that if
the defaulting party is unable to cure a breach for causes beyond
its reasonable control, then such sixty-
* CONFIDENTIAL TREATMENT REQUESTED
18
19
day period will be extended for a period of time reasonable under
the circumstances as long as the defaulting party is continuing to
pursue such a cure in good faith; provided, further that in the
event of a good faith dispute about payment amounts, the party
allegedly owing the money may deposit any contested amount (but not
the uncontested portion, which must be paid) in an interest bearing
escrow account pending resolution of such contest, with the
prevailing party receiving both principal and interest upon
resolution.
(b) Notwithstanding the foregoing, in the event of an uncured material
breach by one party the non-breaching party may choose not to
terminate this Agreement and to continue it in full force with all
of the rights and obligations of the Parties continuing in place and
may rely in stead on a damage remedy to compensate for the effects
of the breach.
8.3 Termination for Bankruptcy.
The institution by or against either party of proceedings to be
adjudicated as bankrupt or insolvent or to be reorganized or
released under any bankruptcy or equivalent statute applicable to
that party, the appointment of a receiver, liquidator or trustee, or
the making of an assignment for the benefit of creditors; provided,
however, that if any such proceeding is instituted without the
consent or acquiescence of that party against whom such order is
made, this Agreement may not be terminated if such party causes such
proceedings to be dismissed within 60 days from the date the
proceeding was instituted.
8.4 Termination By ZENECA Without Cause.
After the Research Collaboration Term as defined in Paragraph 2.5,
ZENECA may terminate this Agreement by written notice to ISIS.
8.5 Effects of Termination.
Upon termination of this Agreement by ISIS or ZENECA pursuant to
Paragraph 8.2 or 8.3, all rights and licenses granted by ISIS to ZENECA
will terminate and the right to develop Development Candidates and to
commercialize Collaboration Products will revert to ISIS.
ARTICLE 9
INVENTIONS AND PATENTS
9.1 Inventions.
ISIS will retain title to inventions, whether or not patentable, made
solely by employees of or consultants to ISIS, and to patents thereon.
ZENECA will retain
* CONFIDENTIAL TREATMENT REQUESTED
19
20
title to inventions, whether or not patentable, made solely by employees
of or consultants to ZENECA and to patents thereon. ISIS will hold title
to all inventions, whether or not patentable, made jointly by employees
of or consultants to ISIS and ZENECA and to patents thereon.
9.2 Patents.
ISIS will be responsible to diligently file, prosecute and maintain in
force and defend in those countries in the world determined by the JRC
all patent applications and patents for ISIS Target Patents. [ * ]. If
ISIS declines to apply for or decides to abandon any ISIS Target Patent
and relinquish its rights thereunder in any particular country, it will
promptly notify ZENECA in writing and ZENECA will have the right to
assume responsibility for maintaining such patent application or patent,
at its own expense and in its own name. ISIS agrees to cooperate with
ZENECA so as to enable ZENECA to undertake such maintenance without loss
of patent rights. ZENECA will have complete responsibility for such
continued maintenance and may, in its sole discretion, allow any such
patent application or patent to lapse at any time.
9.3 Patent Marking.
ZENECA, its Affiliates and Sublicensees will xxxx all Collaboration
Products made, used or sold under the terms of this Agreement, or their
containers, in accordance with the applicable patent marking laws, as
required.
9.4 Defense of Patent Infringement Suits.
(a) Notwithstanding the foregoing, [ * ].
(b) In the event that [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
20
21
[ * ].
(c) In the event that [ * ].
(d) If a Third Party asserts that the manufacture, use or sale of any
Collaboration Product infringes a patent owned or controlled by a
Third Party, ZENECA will be solely responsible for defending and
settling in its sole discretion against any such assertions. ISIS
will provide all reasonable assistance requested by ZENECA to defend
or settle such action. ISIS will have the right at its own expense
to participate in such suit at its own expense.
(e) The Parties acknowledge that, under certain licenses listed on
Exhibits G-1 and G-3 and other licenses that Isis may acquire in the
future and which ISIS shall notify ZENECA of in writing, royalties
might owe to parties from whom ISIS has acquired nonsublicensable
licenses if ISIS is not the manufacturer of a Collaboration Product
and no royalty reduction will be made by reason of these royalties.
9.5 Suits for Third-Party Infringement.
(a) Each party will advise the other promptly upon its becoming aware of
any third party infringement of an ISIS Target Patent. ISIS agrees,
within reasonable business judgement and at its own discretion, to
promptly take such action as is required to restrain such
infringement at its own cost. ZENECA will cooperate fully with ISIS
at ISIS' expense in ISIS' attempt to restrain such infringers.
ZENECA may be represented by counsel of its own selection at its own
expense at any suit or proceeding brought by ISIS to restrain such
infringement. ISIS will bear the expense of any suit or suits and
will obtain all benefits of the recoveries from such suit or suits,
whether by judgment, award, decree or settlement up to an amount
equal to [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
21
22
[ * ] and the remainder will be allocated among ISIS and ZENECA in a
manner reasonably calculated to correspond to the relative
distribution of profits on the Collaboration Product(s) to which
such recovery pertains between ISIS and ZENECA.
(b) If, within 14 days of becoming aware of a third party infringement
under 9.5(a), ISIS fails to institute an infringement suit that
ZENECA feels is reasonably required, ZENECA will have the right, at
its own discretion, to institute an action for infringement. ZENECA
will bear the expense of any such suit or suits and will obtain all
of the benefits of the recoveries from such suit or suits, whether
by judgement, award, decree or settlement up to an amount equal to [
* ] and the remainder will be allocated among ISIS and ZENECA in a
manner reasonably calculated to correspond to the relative
distribution of profits on the Collaboration Product(s) to which
such recovery pertains between ISIS and ZENECA. Should ZENECA bring
any such suit, ISIS will cooperate in all reasonable ways with
ZENECA in any such suit or suits at ISIS' expense. ISIS may be
represented by counsel of its own selection at its own expense.
(c) If the parties agree to mutually share expenses and to pursue an
infringement suit together, they will (i) share in any and all
benefits in the recovery from such suit, whether by judgment, award,
decree or settlement in the manner mutually agreed among them, and
(ii) agree on the lead plaintiff, selection of counsel and other
litigation strategy matters.
ARTICLE 10
WARRANTIES AND DISCLAIMERS
10.1 Representations and Warranties.
(a) Each party warrants to the other party that it is free to enter into
this Agreement and carry out its obligations hereunder, and that its
execution and delivery of this Agreement and performance of its
obligations hereunder will not violate, be in conflict with, or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under any agreement to
which it is party or by which it is bound.
(b) Each party warrants to the other that, to the best of its knowledge,
its use (or use by the other party under this Agreement) of its
existing technology does not infringe any issued patent of any Third
Party of which it is aware, and it has not received any
communication alleging that it has infringed or acted in conflict
with, or by conducting its business as proposed, would infringe or
act in conflict with the right of any Third Party.
* CONFIDENTIAL TREATMENT REQUESTED
22
23
(c) Neither Party has granted, nor during the term of the Agreement will
grant, any right to any Third Party relating to its respective
technology which would conflict with the rights granted to the other
Party in this Agreement.
(d) [ * ].
10.2 Disclaimer.
ALL ITEMS, INFORMATION AND MATERIALS PROVIDED TO ZENECA BY ISIS
HEREUNDER ARE TO BE USED BY ZENECA FOR INVESTIGATIONAL PURPOSES ONLY.
NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, OF ANY KIND, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 11
INDEMNITY AND INSURANCE
11.1 Indemnity.
(a) Each Party (the "Indemnifying Party") will indemnify, defend and
hold the other Party (the "Indemnified Party") harmless from and
against any and all liabilities, claims, damages, costs, expenses or
money judgments incurred by or rendered against the Indemnified
Party and its Affiliates and sublicensees arising out of any
injuries to person and/or damage to property resulting from (a)
negligent acts of the Indemnifying Party performed in carrying out
its obligations hereunder, including failure by the Indemnifying
Party to provide the Indemnified Party with any information of the
Indemnifying Party's which, if timely received would have avoided
injury, death or damage, provided such failure to provide such
information is due to negligence on the part of the Indemnifying
Party, and (b) personal injury to the Indemnified Party's employees
or agents or damage to the Indemnified Party's property resulting
from acts performed by, under the direction of, or at the request of
the Indemnifying Party in carrying out activities contemplated by
this Agreement.
(b) In addition to its obligations in Paragraph 11.1(a) hereof, ZENECA
will indemnify and hold ISIS harmless from and against any and all
liabilities, claims, damages, costs, expenses or money judgments
which result from the manufacture (other than manufacture by ISIS),
use, promotion and sale of Development Candidates or Collaboration
Products under this Agreement.
* CONFIDENTIAL TREATMENT REQUESTED
23
24
(c) The Indemnifying Party's obligations hereunder as to any claim are
subject to (i) its being given prompt notice thereof; (ii) the sole
right to control the defense and settlement; and (iii) the lack of
negligence or willful misconduct leading to the claim by the
Indemnified Party.
11.2 Insurance.
Each Party will obtain and maintain, in all places in which
Collaboration Products are developed, used or sold, product liability
insurance in the amounts and with the deductibles customarily maintained
by that party and which are consistent with its obligations with respect
to the products sold. Each Party will provide to the other information
concerning the existence of such insurance upon request from time to
time.
ARTICLE 12
TRADENAMES, TRADEMARKS, CONFIDENTIALITY AND PUBLICATIONS
12.1 Tradenames and Trademarks.
Nothing contained in this Agreement will be construed as conferring any
right of one Party to use in any manner any tradename or trademark of
the other Party or any of its Affiliates without such other party's
prior written consent and approval as to form.
12.2 Confidentiality.
ZENECA and ISIS agree for themselves, and for their Affiliates and
Sublicensees, and on behalf of their respective officers, employees and
agents, that for the greater of five years following the expiration or
termination of this Agreement or fifteen years from the Effective Date,
each will treat as confidential, using the maximum degree of care that
it uses for its own proprietary information, and that it will not use
(except as permitted under this Agreement) for its own benefit or the
benefit of any third party, any of the Confidential Information
furnished to it by the other party unless the furnishing party otherwise
agrees in writing or unless the party receiving the Confidential
Information is required to disclose such Confidential Information to a
court of law or to appropriate governmental agencies to enable the
recipient to secure governmental approval of a Collaboration Product. In
each such case, the recipient will notify the disclosing party of the
requirement and work together with the disclosing party to obtain the
maximum amount of confidentiality provided by such court of law or
governmental agency.
12.3 Shared Confidential Information.
In the course of performance of this Agreement, the Parties may jointly
develop, invent or discover information, which will be considered to be
the "Shared
24
25
Confidential Information" of both Parties. Each Party agrees that it
will take the same steps to protect the confidentiality of the Shared
Confidential Information as it takes to protect its own proprietary and
confidential information.
Each Party will protect and keep confidential and will not publish or
otherwise disclose to any Third party, except as contemplated by this
agreement or with the other Party's written consent, the Shared
Confidential Information for the same period which covers the
Confidential Information. Each Party may, however, use any Shared
Information for any purpose provided that such use will not be deemed a
license or grant of any additional right or license other than or in
addition to the rights and licenses granted in this Agreement.
This Paragraph 12.2 and 12.3 supersedes any confidential disclosure
agreement between the Parties as to the subject matter hereof. Any
confidential information under such agreement will be treated as
Confidential Information hereunder.
12.4 Publications.
ISIS and ZENECA agree to discuss the timely publication in respected
scientific journals of articles prepared by their respective researchers
relating to such researchers' work on Development Candidates or
Collaboration Products with a view toward resolving the competing
interests of confidentiality and desired scientific credit through
publication. The manuscript of each proposed publication will first be
submitted to both parties and if either Party advises within 30 days of
receipt of the manuscript that publication of particular information
would materially diminish the commercial value of a Development
Candidates or Collaboration Products, publication of such information
will be delayed for such time as the parties agree, in order to permit
the preparation of patent applications or other documents to protect the
commercial interests of the parties. The Parties acknowledge that
publication delay may be beneficial to ensure that patent filings
contain appropriate support and, as a result, the Party whose invention
is involved will inform the other of the time reasonably required to
ensure an optimal patent coverage strategy and both parties agree to
abide by that decision. Notwithstanding the foregoing, there will be no
publication of any Confidential Information or Shared Confidential
Information reasonably valuable to ISIS or ZENECA without the agreement
of both ISIS or ZENECA.
ARTICLE 13
MISCELLANEOUS
13.1 Bankruptcy.
All rights and licenses granted under or pursuant to this Agreement by
ISIS to ZENECA are, and will otherwise be deemed to be, for purposes of
Section 365(n) of Title 11, U.S. Code (the "Bankruptcy Code"), licenses
of rights to "intellectual property" as defined under section 101(60) of
the Bankruptcy Code. The Parties
25
26
agree that ZENECA, as a licensee of such rights under this Agreement,
will retain and may fully exercise all of its rights and elections under
the Bankruptcy Code. ISIS agrees during the term of this Agreement to
create and maintain current copies or, if not amenable to copying,
detailed descriptions or other appropriate embodiments, of all such
intellectual property. The Parties further agree that, in the event of
the commencement of a bankruptcy proceeding by or against ISIS under the
Bankruptcy Code, ZENECA will be entitled to a complete duplicate of (or
complete access to, as appropriate) any such intellectual property and
all embodiments of such intellectual property, and same, if not already
in its possession will be promptly delivered to ZENECA (a) upon any such
commencement of a bankruptcy proceeding upon written request therefore
by ZENECA, unless ISIS elects to continue to perform all of its
obligations under this Agreement or (b) if not delivered under (a)
above, upon the rejection of this Agreement by or on behalf of ISIS upon
written request therefore by ZENECA.
13.2 Waiver.
No waiver by either party hereof of any breach or default of any of the
covenants or agreements herein set forth will be deemed a waiver as to
any subsequent or similar breach or default.
13.3 Assignment.
This Agreement will be binding upon and inure to the benefit of the
parties hereto and their successors and assigns; provided, however, that
neither party will assign any of its rights and obligations hereunder to
a non-Affiliate without the consent of the other party which consent
will not be withheld unreasonably except as incident to the merger,
consolidation, reorganization, or acquisition of stock or assets
affecting substantially all of the assets or actual voting control of
the assigning party with regard to the business unit to which this
Agreement relates.
13.4 Notices.
Any notice or other communication required or permitted to be given to
either party hereto will be in writing and will be deemed to have been
properly given and to be effective on the date of delivery if delivered
in person or by telex or facsimile or 2 business days after mailing by
expedited delivery or 5 days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of ISIS: Isis Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: CEO (Fax: 000-000-0000)
With copy to: B. Xxxxx Xxxxxxxx
(Fax: 000-000-0000)
26
27
In the case of ZENECA [ * ]
Either party may change its address or fax number for communications by
a notice to the other party in accordance with this Paragraph 13.4.
13.5 Governing Law.
This Agreement will be interpreted and construed in accordance with the
substantive laws of the State of Delaware. ZENECA and ISIS hereby submit
to the jurisdiction and venue and procedural rules of the United States
District Courts for the State of Delaware for any action hereunder that
is permitted consistent with Paragraph 13.11. ZENECA and ISIS agree that
service of process may be effected against each of them by certified or
registered mail with respect to legal actions commenced in any such
jurisdiction by the other, its successors or assigns.
13.6 Amendment.
No amendment or modification hereof will be valid or binding upon the
parties unless made in writing and signed by both parties.
13.7 Force Majeure and Hardship.
(a) Any delays in performance by any party under this Agreement will not
be considered a breach of this Agreement if and to the extent caused
by occurrences beyond the reasonable control of the party affected,
including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, fire,
flood, explosion, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence will immediately
notify the other party and the time for performance of any
obligation hereunder, except the due diligence obligations set forth
in Paragraph 3.1, will be extended by the actual time of delay
caused by the occurrence.
(b) If for reasons unforeseen at the Effective Date the performance of
this Agreement becomes an undue burden for either party the parties
will in good faith negotiate for an appropriate amendment hereof
with a view to alleviating or eliminating said burden.
* CONFIDENTIAL TREATMENT REQUESTED
27
28
13.8 Independent Contractors.
Nothing contained in this Agreement will be construed to create an
agency, partnership or employer and employee relationship between ISIS
and ZENECA. At no time will one party make commitments or incur any
charges or expenses for or in the name of the other party except as
specifically provided herein.
13.9 Severability.
If any term, condition or provision of this Agreement is held to be
unenforceable for any reason, it will, if possible, be interpreted
rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms,
conditions and provisions of this Agreement will remain valid and
enforceable to the full extent.
13.10 Entire Agreement.
This Agreement when they are executed embody the entire understanding of
the parties with respect to the subject matter of this Agreement and
will supersede all previous communications, representations or
understandings, either oral or written, between the parties relating to
the subject matter hereof.
13.11 Dispute Resolution.
Any dispute or claim arising out of or in connection with the Agreement
will be resolved as follows: (i) for a period of 30 days after a dispute
arises the CEO of ISIS and the Research and Development Director of
ZENECA Pharmaceuticals business will negotiate in good faith in an
effort to resolve the dispute and (ii) if the dispute has not been
resolved at the close of such 30 day period, the matter will be finally
settled by binding arbitration under the Rules of Arbitration of the
American Arbitration Association, by their arbitrators appointed in
accordance with said rules; provided that if the parties cannot agree on
who is to serve as the arbitrator, each party will appoint one nominee
and those nominees will in turn jointly appoint the third arbitrator.
Arbitration will take place in Delaware. The costs of the arbitration,
including administrative and arbitrators' fees, will be shared equally
by the parties; provided, that each party will bear the costs of its own
attorneys' fees and expert witness fees. Judgment on an award rendered
by an arbitrator or arbitrators may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief without breach of this arbitration provision.
28
29
13.12 Government Approvals.
The Parties agree to make all filings with governmental agencies as
shall be required by law in connection with this Agreement and the
activities contemplated hereunder.
IN WITNESS WHEREOF, the Parties have executed this Agreement, in duplicate
originals, by their respective officers hereunto duly authorized, as of the day
and year hereinabove written.
Isis Pharmaceuticals, Inc.
BY _________________________________________
B. Xxxxx Xxxxxxxx
Title: Executive Vice President
Zeneca Limited
By _________________________________________
C.R.W. Xxxxx
Title: Legal Director, Authorized Signatory
29
30
EXHIBIT A
DEFINITIONS
1.1 "ABANDONED COMPOUND" means a Development Candidate which ZENECA
subsequently ceases to develop or commercialize pursuant to Paragraph
3.1(b) or 3.3.
1.2 "ABANDONED TARGET" means (i) any Target for which another Target is
substituted pursuant to Paragraph 2.8; (ii) any Target following
termination of the research program for such Target; and (iii) all Targets
upon termination of the Research Collaboration.
1.3 "ACTIVE TARGET PROGRAM" means (i) an ongoing research program as part of
the Research Collaboration on the Target; (ii) an active clinical
development program for a Development Candidate inhibiting such Target; or
(iii) a marketing and commercialization program for a Collaboration
Product inhibiting such Target.
1.4 "AFFILIATE" means, as to ISIS, any corporation, company, partnership,
joint venture or firm which controls, is controlled by, or is under common
control with, ISIS; and, as to ZENECA, any enterprise which, directly or
indirectly, is controlled by ZENECA alone or together with partners of
ZENECA or partners of ZENECA alone, as long as such control exists. For
the purpose of the preceding sentence, the word "control" means the
ownership of at least 50% of the outstanding voting stock of such
enterprise or, a comparable equity interest in any other type of entity.
1.5 "ANTISENSE TECHNOLOGY" means the selective inhibition of protein synthesis
at the nucleic acid level. This inhibition is caused by the binding of an
oligonucleotide or an analog thereof (termed "oligonucleotide") to the
complementary sequence. In particular, an oligonucleotide will
specifically bind to the sequence of the selected messenger or viral RNA
by base-pairing and will hence bring about a selective inhibition of gene
expression.
1.6 [ * ].
1.7 "CANCER-RELATED TARGETS" means Targets added to the Research Collaboration
pursuant to Paragraph 2.8 whose primary therapeutic use is the treatment
of cancer.
1.8 "COLLABORATION PRODUCT(S)" means a Development Candidate which ZENECA
commercialize itself or through its Affiliate or Sublicensees.
* CONFIDENTIAL TREATMENT REQUESTED
1
31
1.9 "COMPOUNDS" means any oligonucleotide or analogs designed using Antisense
Technology for use as a human therapeutic to inhibit a Target as part of
the Research Collaboration.
1.10 "CONFIDENTIAL INFORMATION" means any confidential information including,
without limitation, information which is disclosed by one party to the
other relating to any technology research project, development project or
plan, manufacturing process, technology or plan, marketing or commercial
plan, financial or personnel matter relating to either Party, its present
or future products whether within or outside the Collaboration, whether in
oral, written, graphic or electronic form. Confidential Information will
not include information which:
(a) is or will have been known to the receiving party prior to the
disclosure by the other party as evidenced by written record or
other proof; or
(b) is or will have been public knowledge through no fault of the
receiving party; or
(c) has been received from a Third Party who did not acquire it directly
or indirectly from the disclosing party; or
(d) is independently developed by the receiving party without the use of
or reference to information disclosed by the other party.
The material financial terms of this Agreement constitute Confidential
Information.
1.11 "DEVELOPMENT CANDIDATE" means a Compound and formulation which meets the
Research Target Profile and is accepted for development by ZENECA.
Chemical modifications to a Development Candidate or materially different
formulations that have a significant effect on the commercial desirability
of the Development Candidate will be considered separate Development
Candidates.
1.12 "EFFECTIVE DATE" means December 18, 1998.
1.13 "EXCESS RESEARCH COSTS" means the costs of the Research Collaboration in
addition to Research Payments described in subparagraph 2.4(b). [ * ].
Excess Research Costs for outside expenditures will be billed at cost.
Excess Research Costs for ISIS performance outside the tasks outlined in
the Research Plan will be billed at ISIS' Personnel Fully Burdened Rate.
1.14 "FDA" means the United Stated Food and Drug Administration or an
equivalent agency in a Major Country.
* CONFIDENTIAL TREATMENT REQUESTED
2
32
1.15 "FIRST COMMERCIAL SALE" means the first transfer for value of title to a
Collaboration Product by ZENECA, its Affiliates or Sublicensees to a
non-Affiliate for consideration in any arm's length transaction or the
first use (excluding the supply of clinical trial materials) of a
Collaboration Product by ZENECA, its Affiliates or Sublicensees in a
country following Governmental Approval in such country, whichever occurs
first. For the purpose of this definition all transfer of title to
reasonable quantities of any free samples of Collaboration Product or to
clinical trial material shall not constitute a First Commercial Sale.
1.16 [ * ].
1.17 "IND" means the regulatory filing required to initiate Phase I Clinical
Trials in the US or any other country. If Phase I Clinical Trials are
initiated without a requirement for regulatory filing or approval an IND
will be deemed to have been filed on initiation of Phase I Clinical
Trials.
1.18 "INFLATION FACTOR" will mean an annual adjustment based upon changes in
the Consumer Price Index for Urban Wage Earnings and Clerical Worker -
U.S. City Average, for the prior 12 months, rounded up to the nearest
$5,000 per FTE.
1.19 [ * ].
1.20 "ISIS DEVELOPMENT EXPENSES" means costs incurred by ISIS to conduct, at
ZENECA's request, additional work on a Compound after it has been
designated a Development Candidate and will include ISIS labor, billed at
the ISIS Personnel Fully-Burdened Rate (which will include overhead items
such as operating leases, rents, equipment, supplies and related
departmental and company overhead) plus outside expenses including the
cost of raw materials for compound supply, clinical grants, laboratory
work, CRO, outside data management charges, charges for outside
pharmacokinetic, toxicological and other testing, and an appropriate
allocation of all manufacturing functions which directly benefit a
Development Candidate including process development and analytical
research and development.
1.21 "ISIS KNOW-HOW" means all proprietary inventions, technology, trade
secrets, clinical and preclinical results (collectively, "inventions")
discovered or developed by ISIS prior to the Effective Date which are
necessary or useful to make, use or sell Collaboration Products and which
are not covered by ISIS Patents. ISIS Know-How will also include any
inventions which are not covered by ISIS Patents which are necessary or
useful to make, use or sell Collaboration Products, discovered or
developed by ISIS after the Effective Date or acquired by ISIS from
* CONFIDENTIAL TREATMENT REQUESTED
3
33
Third Parties before or after the Effective Date provided that ISIS is
free to license such inventions to ZENECA, and, provided further, that if
ISIS developed or acquired such inventions for or from a Third Party, ISIS
and ZENECA have mutually agreed on the terms upon which ISIS will provide
such inventions to ZENECA, as provided for in Paragraph 7.1(c).
1.22 "ISIS PATENTS" means any and all patents, both foreign and domestic, which
relate to inventions made by ISIS on or prior to the Effective Date which
are necessary or useful to make, use or sell Collaboration Products
including without limitation ISIS Target Patents. ISIS Patents will also
include any patents relating to inventions made by ISIS after the
Effective Date or licensed to ISIS before or after the Effective Date
which are necessary or useful to make, use or sell Collaboration Products,
provided that ISIS is free to license such patents to ZENECA and, provided
further, that if ISIS developed or acquired such inventions for or from a
Third Party, ISIS and ZENECA have mutually agreed on the terms upon which
ISIS will provide such patents to ZENECA as provided in Paragraph 7.1(c).
[ * ]. "Patents" as used herein will include, without limitation, all
substitutions, extensions, reissues, renewals, divisions, continuations,
continuations-in-part, inventors' certificates and all foreign
counterparts of the aforementioned. Attached hereto as Exhibit G is a list
of all ISIS' licenses as of the Effective Date that may be relevant to the
Research Collaboration including the technology covered and the royalty
rate.
1.23 "ISIS PERSONNEL FULLY-BURDENED RATE" means [ * ].
1.24 "ISIS TARGET PATENTS" means claims of ISIS Patents arising out of
inventions made by ISIS during the Research Collaboration which cover
specific antisense compounds directly inhibiting a particular Target.
1.25 "ISIS TECHNOLOGY" means ISIS Patents, ISIS Target Patents and ISIS
Know-How.
1.26 "JOINT RESEARCH COMMITTEE" means the Committee defined in Paragraph 2.2.
1.27 "MAJOR COUNTRY" means the United States, Japan, the Federal Republic of
Germany, France, the United Kingdom or other European Community country if
chosen by ZENECA to be rapporteur country for the Hi-Tech product
registration procedure within the European Community.
1.28 "NDA" means a New Drug Application filed with FDA after completion of
clinical trials to obtain marketing approval for a commercial product in
the United States or equivalent application for regulatory approval in
other countries.
* CONFIDENTIAL TREATMENT REQUESTED
4
34
1.29 "NET SALES REVENUE" means the total invoiced amount of all sales of
Collaboration Product by ZENECA its Affiliates or Sublicensees less:
i) Prompt payment or other trade or other quantity discounts,
rebates or retroactive price reductions actually allowed and
taken in such amounts as are customary in the trade;
ii) Commissions paid or allowed to distributors and agents who are
independent Third Parties other than such parties who are
performing detailing functions;
iii) Amounts repaid or credited by reason of timely failure or
rejection or recalls (whether voluntary or mandatory);
iv) Customs, duties and taxes (other than franchise or income taxes
on the income of ZENECA) actually paid or withheld;
v) Allowances [ * ] in any period including any allowances for bad
debt, provided that upon the extinguishment of any such
allowance, the extinguishment will be determined to be a receipt;
and
vi) Transportation and delivery charges [ * ] in any period,
including insurance premiums.
Net Sales Revenue shall exclude:
i. The transfer of reasonable and customary quantities of free
samples of Collaboration Product, clinical trial materials and
sales to an Affiliate or a Sublicensee, other than for subsequent
resale.
ii. Sales or transfers of Collaboration Product among ZENECA and its
Affiliate unless the receiving party is the consumer or user of
the Collaboration Product.
iii. Use by ZENECA, its Affiliates or Sublicensees of Collaboration
Product for any use connected with the securing of regulatory
approval or validating of a manufacturing process or the
obtaining of other necessary marketing approvals for
Collaboration Product.
If ZENECA, its Affiliates or Sublicensees intend to use a Collaboration
Product rather than resell it, the sales price for such Product will be
calculated based on the average of the sales of Collaboration Product to
Third Parties during the period in which such Collaboration Product is
transferred to such Affiliate or Sublicensee and included in Net Sales
Revenue as if sold to a Third Party at such price during such period.
Net Sales Revenue will be calculated in U.S. dollars in accordance with
Paragraph 4.5.
* CONFIDENTIAL TREATMENT REQUESTED
5
35
1.30 "NON-CANCER-RELATED TARGETS" means Targets added to the Research
Collaboration pursuant to Paragraph 2.8(c) whose primary therapeutic use
is the treatment of a disease or diseases other than cancer.
1.31 "PARTY" means ISIS or ZENECA, or ISIS and ZENECA.
1.32 "PHASE II CLINICAL TRIALS" means the initial clinical testing of a
Compound in humans who are patients with a disease for which the Compound
is being tested with the intention of gaining a preliminary assessment of
the safety, efficacy and dosing regimen of a Compound in treating such
disease.
1.33 "PIVOTAL QUALITY CLINICAL TRIAL" will mean a human clinical trial of a
Compound designed to be of a size and statistical power to support an NDA
Filing alone or in combination with other studies. If it is unclear
whether or not a study design will be sufficient to support an NDA Filing
(other than by virtue of the uncertainty of efficacy data from that trial)
the study will be deemed to be a Pivotal Quality Trial on the initiation
of activities to support an NDA Filing. Initiation of a Phase III clinical
study will be deemed to be initiation of a Pivotal Quality Study.
1.34 "RESEARCH COLLABORATION" means the collaboration between ISIS and ZENECA
to discover antisense drugs as defined in this Agreement.
1.35 "RESEARCH PAYMENTS" mean the regular payments described in Paragraph
2.4(b) as increased and pursuant to Paragraph 2.4(c) and 2.8, but will not
include the Excess Research Costs.
1.36 "RESEARCH TARGET PROFILE" means the scientific criteria specified by the
Joint Research Committee to be fulfilled for a Compound to be met prior to
designation of the Compound as a Development Candidate and prior to the
initiation of IND-enabling toxicology, pharmacology and pharmacokinetic
studies, including the methods for testing Compounds to determine whether
the Profile is met. [ * ].
1.37 "SHARED COMPOUND" means a Development Candidate which ZENECA proposes and
ISIS accepts to develop and commercialize on a shared basis pursuant to
Paragraph 3.5.
1.38 "SUBLICENSEE" means any Third Party (including a distributor) who is given
the right to market and sell a Collaboration Product. A Third Party who is
given only the right to sell a Collaboration Product (such as a
wholesaler) will not be considered a Sublicensee. It is recognized and
agreed that distributors appointed by ZENECA whose sole function is to
purchase and resell Collaboration Product are not sublicensees for the
purpose of this definition.
* CONFIDENTIAL TREATMENT REQUESTED
6
36
1.39 "TARGETS" means specific individual molecular targets either initially or
from time-to-time, collectively the Initial Targets, Cancer-Related
Targets, and Non-Cancer-Related Targets. When an Active Target Program for
a Target terminates, that Target will cease to be a Target and will
thereafter become an Abandoned Target. Targets will include the Initial
Targets plus any other Targets added or substituted pursuant to Paragraph
2.8 hereof, with any Abandoned Target when abandoned. Research relating to
the Targets includes the elaboration of necessary cellular, biochemical
and molecular-biological approaches (i.e., the development of the
knowledge not already available to the two partners, the development and
setting up of relevant assays) towards the inhibition of the expression of
the proteinic target molecules by Antisense Technology as well as the
conception, design, synthesis and development of therapeutic entities,
including the characterization of their biophysical and pharmacokinetic
properties.
1.40 [ * ].
1.41 "THIRD PARTY" means any party other than ISIS and its Affiliates or ZENECA
and its Affiliates and Sublicensees.
1.42 "THIRD PARTY SUPPLIER" means any person or entity other than a party to
this Agreement, its Affiliates, and/or its respective employees from whom
ZENECA purchases commercial quantities of Bulk Drug Substance.
1.43 "ZENECA FIELD OF USE" means [ * ].
* CONFIDENTIAL TREATMENT REQUESTED
7
37
EXHIBIT B
COLLABORATION RESEARCH PLAN
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
8
38
EXHIBIT C
JOINT RESEARCH COMMITTEE COMPOSITION
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
9
39
EXHIBIT D
RESEARCH TARGET PROFILE FOR THE INITIAL TARGETS
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
1
40
EXHIBIT E
TECHNICAL MILESTONE CRITERIA
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
1
41
EXHIBIT F
MANUFACTURING SPECIFICATIONS
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
1
42
EXHIBIT G-1
ISIS LICENSES
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
1
43
EXHIBIT G-2
ISIS LICENSES
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
2
44
EXHIBIT G-3
ISIS LICENSES
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
3
45
EXHIBIT H
GMO TERM SHEET
ISIS REVISED PROPOSAL FOR NON-EXCLUSIVE LICENSE
November 12, 1998
[ * ]
ENTIRE EXHIBIT REDACTED.
* CONFIDENTIAL TREATMENT REQUESTED
1