***CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT (INDICATED BY
ASTERISKS) HAS BEEN OMITTED AND FILED
SEPRATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER 17 C.F.R.
SECTIONS 200.80(b)(4) AND 240.24b-2
Exhibit 10.35
AGREEMENT
This Agreement effective as of July 28, 2004 ("Effective Date") is made between
Anadys Pharmaceuticals, Inc. having a place of business at 0000 Xxxxxxxxxx Xxx,
Xxx Xxxxx, XX 00000 ("Anadys") and Xxxxxxxx-Xx Xxxxx Inc. having a place of
business at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Roche").
WHEREAS, Anadys has expertise in designing, synthesizing, and optimizing small
molecule target activators;
WHEREAS, Roche has expertise in pharmaceutical research and development,
including in vitro and in vivo testing of [...***...] ([...***...]);
WHEREAS, Roche has discovered and synthesized certain lead molecules that
[...***...]; and
WHEREAS, Anadys and Roche desire to enter into an agreement for Anadys to design
and synthesize [...***...] based on the lead molecules provided by Roche and
input obtained from the in vitro and in vivo testing of the molecules to be
synthesized by Anadys as [...***...];
NOW, THEREFORE, the parties agree as follows:
1. TARGET. The target that is to be [...***...] is [...***...] ("Target").
2. LEAD MOLECULES. Roche shall provide Anadys with lead molecules that will
be used by Anadys to design and synthesize molecules optimized for
[...***...] of the Target.
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3. PLAN AND MOLECULES. Anadys and Roche have agreed on an initial research
plan ("Research Plan") under which Anadys and Roche shall use commercially
reasonable efforts to design and synthesize molecules that are optimized
for [...***...] of the Target ("Molecules") based on the lead molecules
provided by Roche. The Research Plan may be later revised by the JRC, as
defined in Paragraph 4. Once Molecules have been synthesized, they will be
subject to in vitro screening by Anadys or Roche to determine the extent
to which such Molecules [...***...] the Target. Thereafter, the Molecules
that meet certain minimum requirements in the in vitro screening, as
determined by the JRC, will be tested by Roche, as specified in the
Research Plan. Such Molecules that are synthesized by Anadys shall be
initially provided to Roche in amounts between [...***...] milligrams
([...***...] mg) and [...***...] milligrams ([...***...] mg). Anadys shall
provide Roche with the structure of each such Molecule and any information
about the Molecule that is available to Anadys. If the JRC determines that
one or more Molecules are suitable for further development, then such
Molecules may serve as lead molecules and be used to design and synthesize
additional Molecules that are further optimized for [...***...] of the
Target as above. All activities referred to above shall constitute the
"Project." To aid in understanding the goal of the Project, the desired
attributes of Molecules are as specified in the Research Plan.
4. JOINT RESEARCH COMMITTEE. Roche and Anadys shall establish a joint
research committee ("JRC") to oversee, review, manage and direct the
activity under the Research Plan. The responsibilities of the JRC shall
include: (i) monitoring and reporting the progress of the activity of the
Project, (ii) revising the Research Plan as necessary, and (iii) resolving
any conflicts between the parties. The JRC shall include three (3)
representatives of each party that are selected by that party. Roche
representatives can include representatives that are employees of an
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Affiliate. "Affiliate" means (i) a business entity which owns a
controlling interest in Roche, (ii) a business entity which is owned by
Roche, or (iii) a business entity, the majority ownership of which is
common to the majority ownership of Roche. Each party may replace its
representatives at any time, upon written notice to the other party.
During the Collaboration Term (as defined below), unless otherwise agreed
to by the Parties, the JRC shall meet at least quarterly, at such
locations or by such teleconferencing means as the parties may decide.
Each party shall be responsible for all of its expenses associated with
attending the JRC meetings. Anadys shall prepare written minutes of each
JRC meeting and shall prepare a written record of all JRC voting and
decisions, whether made at a JRC meeting or otherwise. Anadys shall submit
the written minutes of each JRC meeting and the written record of all JRC
voting and decisions to Roche for review within one (1) week after the JRC
meeting, and upon signature by Roche, the minutes and written voting and
decision record shall become final. Decisions of the JRC shall be made by
unanimous vote, with each Party having a single vote. If there is a
dispute between the parties with respect to a specific matter that cannot
be resolved by the JRC, such matter shall be referred for resolution to an
officer of each party, then if still unresolved, Roche shall make the
final decision.
5. TERM. The term of the Project shall begin on the Effective Date and
continue until the date eighteen (18) month after Roche makes the first
research funding payment, unless mutually extended by the Parties
("Collaboration Term"). The term of the Agreement shall begin on the
Effective Date and continue until the latter of (i) the date on which the
Collaboration Term ends or (ii) the date on which no payments are due
under this Agreement.
6. EXCLUSIVITY. For a period beginning on the Effective Date and continuing
until a date [...***...] following the date on which the Collaboration
Term
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ends, Anadys will not work on the Target and the Molecules (other than as
permitted pursuant to Section 7) except as a part of the Project.
7. OWNERSHIP AND LICENSES. Roche shall own all Molecules and all intellectual
property related to the Molecules. Anadys shall promptly assign to Roche
all such intellectual property and shall ensure that all persons working
for Anadys and on the Project have such an obligation to assign all
intellectual property to Roche. Any invention that is conceived and
reduced to practice during the Project but is not related to the Molecules
shall be owned by the party that made the invention or, in the case of a
joint invention, by both parties. Inventorship shall be determined in
accordance with U.S. patent law. Anadys grants to Roche a non-exclusive,
worldwide, fully paid up, royalty-free, license under any other
intellectual property that is created before or during the Collaboration
Term that it may own or control to the extent necessary for Roche to make,
have made, use, sell, offer for sale, and import the Molecules or
Compounds. Anadys shall have the right to use the Molecules for screening
purposes, except against the Target. Roche grants to Anadys a
non-exclusive, worldwide, fully paid up, royalty-free, license under the
intellectual property generated during the Project to the extent necessary
for Anadys to use the Molecules for screening purposes, except against the
Target.
8. RESEARCH FUNDING. Roche shall fund [...***...] ([...***...]) full time
equivalents (FTEs) [...***...] at [...***...] dollars ($[...***...]) per
FTE per annum to work exclusively on the Project. The JRC shall have the
discretion to increase the number of FTEs, subject to Anadys staffing
capacity.
[...***...]
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It is envisaged that the FTEs will be from the functional areas designated
above. However, the final selection of functional areas is subject to the
discretion of the JRC. Funding for the FTEs shall be on a quarterly basis,
payable in advance. The first payment for research funding by Roche to
Anadys shall be made within [...***...] after the Effective Date. Anadys
shall provide Roche with an invoice for each payment due and Roche shall
pay Anadys within [...***...] days after receiving such invoice.
9. MILESTONE PAYMENTS.
"Product" means a pharmaceutical product that contains [...***...]. If a
Product is being developed by Roche, an Affiliate or a sub-licensee and
reaches a following milestone event ("Milestone Event"), then Roche shall
pay to Anadys [...***...] after receiving an invoice from Anadys the
corresponding milestone payment:
Start Phase I US$[...***...]
Start Phase II US$[...***...]
Start Phase III US$[...***...]
NDA Filing USA US$[...***...]
EU US$[...***...]
First Commercial Sale USA US$[...***...]
EU US$[...***...]
The terms "Phase I," "Phase II," and "Phase III" have the meaning ascribed
in 21 C.F.R. Section 312.21(a), (b), and (c), respectively, as may be
amended. "Start" with reference to Phase I, Phase II or Phase III means
the dosing of the first patient in that phase's first clinical trial.
"NDA" means a New Drug Application having the meaning ascribed in 21
C.F.R. Section 314.50 or its equivalent in the European Union. "First
Commercial Sale"
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means the first sale of a Product by or on behalf of Roche after receiving
approval from the U.S. Food and Drug Administration or its equivalent in
the European Union.
Roche shall have no obligation to commercialize or otherwise pursue any
Molecule or Product. However, if Roche develops Product that reaches a
Milestone Event, then Roche shall notify Anadys promptly after the
occurrence of such Milestone Event.
10. ROYALTIES. If a Product is sold by or on behalf of Roche, then Roche shall
pay to Anadys during the Royalty Term a royalty on worldwide Net Sales of
any such Product, as follows:
Worldwide Net sales ($ million) Royalty rate (%)
[...***...] [...***...]
[...***...] [...***...]
"Royalty Term" means, in the case of any Product, in any country, the
period of time commencing on the First Commercial Sale of such Product in
any such country and ending upon the later of (a) [...***...] years after
the date of First Commercial Sale in such country, and (b) the expiration
of the last to expire of the patent rights claiming the Molecule (or any
salt, ester, acid, base or pro-drug of the Molecule) or Compound per se
contained in such Product, either specifically or generically, in such
country.
a. NET SALES "Net Sales" means (i) the amount of gross sales of
the Product invoiced by Roche, its Affiliates and its sub-licensees to
independent third parties less deductions of returns and return reserves
(including allowances actually given for spoiled, damaged, out-dated,
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rejected, returned Product sold, withdrawals and recalls), rebates (price
reductions, rebates to social and welfare systems, charge backs or
reserves for chargebacks, cash sales incentives, cash discounts,
government mandated rebates and similar types of rebates, e.g.
Pharmaceutical Price Regulation Scheme, Medicaid), volume (quantity)
discounts, taxes (value added or sales taxes, government mandated
exceptional taxes and other taxes directly linked to the gross sales
amount) ("Adjusted Gross Sales") minus (ii) a lump sum deduction of
[...***...] percent ([...***...]%) of Adjusted Gross Sales in lieu of
those sales related deductions which are not accounted for within Roche on
a product by product basis (e.g. outward freights, postage charges,
transportation insurance, packaging materials for dispatch of goods,
custom duties, bad debt, and discounts granted later than at the time of
invoicing). Notwithstanding the foregoing, amounts received by Roche, its
Affiliates and sublicensees for the sale of Product among Roche, its
Affiliates or sublicensees for resale shall not be included in the
computation of Adjusted Gross Sales and Net Sales.
b. COMBINATION PRODUCT If the Product, in addition to the
Molecule or Compound, contains other pharmaceutically active agent(s)
("Combination Product"), then the parties shall meet approximately one (1)
year prior to commercial launch of such Combination Product to negotiate
in good faith and agree to an appropriate adjustment to Net Sales to
reflect the relative significance of the Molecule or Compound and the
other pharmaceutically active agent(s) contained in the Combination
Product.
c. CALCULATION Roche shall calculate royalties on Net Sales
quarterly as of March 31, June 30, September 30, and December 31 (each
being the last day of an "Accounting Period') and shall pay royalties on
Net Sales quarterly within the ninety (90) days after the end of each
Accounting Period in which such Net Sales occur. "Accounting Period"
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means a calendar quarter commencing respectively on January 1,
April 1, July 1, and October 1, each being the first day of an Accounting
Period, and finishing respectively on March 31, June 30, September 30, and
December 31, each being the last day of an Accounting Period.
d. CURRENCY Royalties on Net Sales shall be paid by Roche in U.S.
Dollars. Whenever calculating royalties requires conversion from any
currency, Roche shall make such conversion as follows:
When calculating the Adjusted Gross Sales for countries other than the
United States of America, Roche shall convert the amount of such sales in
currencies other than Swiss Francs into Swiss Francs as computed in
Roche's central Swiss Francs Sales Statistics for the countries concerned,
using for internal foreign currency translation Roche's then current
standard practices actually used on a consistent basis in preparing its
audited financial statements. Upon converting the amount of Adjusted Gross
Sales into Swiss Francs, Roche shall convert into US Dollars (or other
currency), using the daily rate (Reuters) at the last working day for the
applicable period.
e. REPORTS With each payment Roche shall provide in writing for
the relevant Accounting Period at least the following information split by
U.S. and rest of world:
(i) Adjusted Gross Sales;
(ii) Net Sales; and
(iii) Total Royalty payable.
f. TAXES Anadys shall pay all sales, turnover, income, revenue,
value added, and other taxes levied on account of milestones,
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royalties and any other payments accruing or made to Anadys under this
Agreement. If provision is made in law or regulation of any country for
withholding of taxes of any type, levies or other charges with respect to
any royalty or other amounts payable under this Agreement to Anadys, then
Roche shall promptly pay such tax, levy or charge for and on behalf of
Anadys to the proper governmental authority, and shall promptly furnish
Anadys with receipt of payment. Roche shall be entitled to deduct any such
tax, levy or charge actually paid from royalty or other payment due Anadys
or be promptly reimbursed by Anadys if no further payments are due Anadys.
Each party agrees to assist the other party in claiming exemption from
such deductions or withholdings under double taxation or similar agreement
or treaty from time to time in force and in minimizing the amount required
to be so withheld or deducted.
g. RECORDS Roche and its Affiliates shall keep, and shall require
its licensees and sublicensees to keep, full, true and accurate books of
account containing all particulars that may be necessary for the purpose
of calculating all royalties payable under this Agreement. Such books of
accounts shall be kept at their principal place of business. At Anadys'
expense, Anadys has the right to engage Roches' officially appointed
independent public accountant to perform, on behalf of Anadys an audit,
conducted in accordance with international accounting standards (IAS), of
such books and records of Roche and its Affiliates, its licensees and
sublicensees, that are deemed necessary by Roche's independent public
accountant to report on Net Sales of Product for the period or periods
requested by Anadys and the correctness of any report or payments made
under this Agreement.
h. AUDIT Upon timely request and at least sixty (60) working
days' prior written notice from Anadys, such audit shall be conducted as
an additional audit work during Roche's annual audit of the countries
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specifically requested by Anadys, during regular business hours in such a
manner as to not unnecessarily interfere with Roche's normal business
activities, and shall be limited to results in the two (2) calendar years
prior to audit notification. Such audit shall be at Anadys' cost and shall
not be performed more frequently than once per calendar year nor more
frequently than once with respect to records for a particular Product
covering any specific period of time. All information, data documents and
abstracts herein referred to shall be used only for the purpose of
verifying royalty statements or compliance with this Agreement, shall be
treated as Roche Confidential Information subject to the obligations of
this Agreement and need neither be retained more than one (1) year after
completion of an audit hereof, if an audit has been requested; nor more
than two (2) years from the end of the calendar year to which each shall
pertain; nor more than one (1) year after the date of termination of this
Agreement. Audit results shall be shared by Roche and Anadys. If the audit
reveals an overpayment, Anadys shall promptly reimburse Roche for the
amount of the overpayment. If the audit reveals an underpayment, Roche
shall promptly make up such underpayment. If the audit reveals that the
royalties owed by Roche to Anadys for the countries specifically requested
and for any calendar year in total have been understated by more than
[...***...] percent ([...***...]%), Roche shall, in addition, pay the
reasonable costs of such additional audit work. The failure of Anadys to
request verification of any royalty calculation within the period during
which corresponding records must be maintained will be deemed to be
acceptance of the royalty reporting.
11. INTELLECTUAL PROPERTY. Since (i) Roche owns all intellectual property
related to the Molecules and (ii) Anadys must assign to Roche all such
intellectual property, Roche shall have the sole and exclusive right to
obtain and defend any such intellectual property at its sole discretion.
Anadys shall use commercially reasonable efforts to assist Roche, at
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Roche's cost, by executing documents related to such intellectual property
and providing a reasonable amount of technical input as may be requested
by Roche.
12. TERMINATION. This Agreement shall remain in effect for the Term, except in
the event of material breach or bankruptcy, in which case the
non-breaching/non-bankrupt party shall notify the breaching party in
writing. If the breach/bankruptcy is not corrected within [...***...]
after receipt of such notice, then the non-breaching party may terminate
the Agreement. In addition, during the Collaboration Term, Roche may
terminate the Project at will, provided that Roche pays to Anadys an
amount equal to [...***...] dollars (US$[...***...]) [...***...].
Termination of the Project during the Collaboration by Roche shall not
impact upon the other terms and conditions of the Agreement, which shall
remain in effect. Termination of this Agreement shall not relieve the
parties of any obligation accruing prior to such expiration or
termination, including the payment of milestones and royalties.
13. CONFIDENTIALITY AND PUBLICATION. During the Collaboration Term and for
[...***...] years thereafter, the receiving party shall not publish or
otherwise disclose to a third party, other than an Affiliate, and shall
not use for any purpose other than as expressly provided for in this
Agreement any Information furnished to it by the other party through the
end of the Collaboration Term (collectively, "Confidential Information").
For the purpose of this Section 13, the term "receiving party" with
respect to Roche shall include Affiliates that agree to be bound by the
terms and conditions of this Agreement. Each receiving party may use
Confidential Information of the other party only to the extent required to
accomplish the purposes of this Agreement. Each receiving party will use
at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its employees, agents,
consultants
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and other representatives do not disclose or make any unauthorized use of
the other party's Confidential Information. Confidential Information shall
not include information which the receiving party can prove by competent
tangible evidence: (i) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party, generally known or
available; (ii) is known by the receiving party at the time of receiving
such information, as evidenced by its tangible records; (iii) is hereafter
furnished to the receiving party by a third party, as a matter of right
and without restriction on disclosure; (iv) is independently discovered or
developed by the receiving party without the use of Confidential
Information of the disclosing party; or (v) is the subject of a written
permission to disclose provided by the disclosing party. The terms of this
Agreement shall be considered Confidential Information, except to the
extent that the parties authorize otherwise. Notwithstanding the
foregoing, (i) each Party shall have the right to disclose the material
terms of this Agreement in confidence to any bona fide potential investor,
investment banker, acquirer, merger partner or other potential financial
partner, and where reasonably practicable, shall obtain an adequate
agreement of confidentiality consistent with the terms of this Agreement,
and (ii) if a Party is required to make a disclosure of this Agreement in
a regulatory filing, then it will be permitted to do so, provided that it
gives reasonable advance notice to the other Party of such disclosure and
endeavors in good faith to secure confidential treatment of sensitive
information or a protective order related to such information. The parties
agree that the press release attached hereto is an authorized disclosure.
Roche may disclose Anadys Confidential Information to the extent such
disclosure is reasonably necessary for (i) filing or prosecuting patents
in accordance with this Agreement or (ii) complying with applicable court
orders or governmental regulations.
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14. WARRANTIES AND INDEMNIFICATION. The parties warrant and represent that
they have the full right and authority to enter into this Agreement and
that they have no obligations or commitments inconsistent with this
Agreement. Anadys warrants and represents that its FTEs have the training
and expertise required to conduct the activities set forth in the Research
Plan and will do so in a professional manner. Each party ("Indemnitor")
shall indemnify and hold harmless the other party ("Indemnitee") from any
and all losses, costs, claims, demands, judgments and liability, including
reasonable attorney fees (collectively, "Losses") to which the Indemnitee
may become subject as a result of any claim, demand, action or other
proceeding by any third party to the extent such Losses result from the
Indemnitor's performance under this Agreement, except to the extent that
such losses, costs, claims, demands, judgments or liability are due to the
negligence or wrongful act(s) of the Indemnitee.
NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH
THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.
15. ASSIGNMENT. The services to be provided by Anadys cannot be assigned or
transferred by Anadys without the prior written consent of Roche, except
that an Affiliate of Anadys may perform all or a portion of the services
to be provided by Anadys, upon Roche's prior written consent, which shall
not be unreasonably denied.
16. COMPLIANCE WITH LAWS. It is the policy of both parties to comply with all
applicable laws, regulations, permits and consent orders and to act in a
proper and ethical manner. Accordingly, in connection with the services
provided hereunder each party agrees to comply with all applicable laws,
regulations, permits and consent orders.
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17. SEVERABILITY AND WAIVER. The provisions of this Agreement are severable,
and any judicial determination that one or more such provision is invalid
or unenforceable shall not affect the validity or enforceability of any
other provision, but rather shall cause this Agreement first to be
construed in all respects as if such invalid or unenforceable provision(s)
were modified to terms which are valid and enforceable and provide the
greatest temporal, geographic and other protection to Roche's and Anadys'
business interests; but if necessary, shall cause this Agreement to be
construed as if such invalid or unenforceable provision(s) were omitted.
No failure to exercise any right or demand performance of any obligation
under this Agreement shall be deemed a waiver of such right or obligation.
18. INDEPENDENT CONTRACTORS. Anadys understands and agrees that, in its
relationship with Roche under this Agreement, Anadys is acting in the
capacity of an independent contractor and that it has no authority to
represent or act on behalf of Roche without Roche's prior consent. Nothing
in this agreement should be construed to create an employee/employer
relationship between Roche and Anadys or any of its employees, agents,
principles or other individuals providing services to Roche on behalf of
Anadys.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
Roche and Anadys with respect to the services contemplated herein and
supersedes all previous negotiations, commitments and writings. No
modifications or amendments hereof shall be effective unless made in
writing and signed by an authorized representative of Anadys and an
authorized representative of Roche.
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20. CHOICE OF LAW. This Agreement shall be governed by the laws of the State
of New Jersey, without giving effect to New Jersey's choice of law
principles.
21. NOTICES. Official notices shall be in writing and delivered in person, by
mail (postage prepaid), by overnight courier or by facsimile as follows:
If to Anadys: Anadys Pharmaceuticals, Inc.
0000 Xxxxxxxxxx Xxx
Xxx Xxxxx, XX 00000
Tel: [...***...]
Fax: [...***...]
Attn: Senior Vice President, Corporate
Development and Finance, with a copy to
Senior Director of Legal Affairs
If to Roche: Xxxxxxxx-Xx Xxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn.: Corporate Secretary
Fax: [...***...]
Invoices shall be sent to: Xxxxxxxx-Xx Xxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Accounting
Fax: [...***...]
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original document, and all
of which together shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto, intending to be bound hereby, have
caused this Agreement to be executed as of the dates indicated here:
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XXXXXXXX-XX XXXXX INC. ANADYS PHARMACEUTICALS, INC.
By /s/ Xxx X. Xxxxxx, Ph.D. By /s/ Xxxxxxx X. Xxxxxx
--------------------------------- ---------------------------------
Name Xxx X. Xxxxxx, Ph.D. Name Xxxxxxx X. Xxxxxx
Title Vice President Preclinical Title Senior Vice President
Research & Development
Date 7/28/04 Date 7/28/04
122545
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