EXHIBIT 10.16
CONFIDENTIAL
------------
[* * *]: CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS EXHIBIT
OPTION AGREEMENT
----------------
THIS AGREEMENT, is made and entered into this 1st day of May, 1998
("Effective Date") by and between BioMarin Pharmaceutical Inc., having its
principal office at 00 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, ("BioMarin")
and X. X. Xxxxx & Co., having its principal office at Xxx Xxxx Xxxxxx Xxxx, Xxxx
Xxxxx, Xxxxxxx 00000-0000 ("Grace").
RECITALS
A. Grace owns certain Patent Rights, as defined below.
B. BioMarin is interested in evaluating the feasibility of
commercializing products based on such Patent Rights, and in acquiring an
exclusive worldwide license thereunder.
X. Xxxxx is willing to grant to BioMarin an option to acquire such a
license, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
Grace and BioMarin hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
I.1 "License Agreement" shall mean the license agreement described in
-----------------
Article III below.
I.2 "Licensed Product" shall mean any product whose manufacture, use or
----------------
sale would infringe a Valid Claim in the country for which such product is
manufactured, used or sold.
I.3 "Option Period" shall mean the three (3) year period commencing as of
-------------
the Effective Date.
I.4 "Patent Rights" shall mean all subject matter claimed in the
-------------
following:
(a) The United States patent Numbers 5,145,681 and 5,505,943, and
United States Patent Application Serial number 867731, filed June 2, 1997, and
any continuations, continuations-in-part, divisions and substitutions of any of
such patent and patent applications and all renewals, reissues and extensions of
any such patent; and
1
(b) Any foreign patents and/or applications that are counterparts of
a patent described in subparagraph (a) above, including any patent or
application that claims subject matter claimed in, or that takes priority from,
a patent described in subparagraph (a) above.
I.5 "Related Technology" shall mean any biological materials, and any
------------------
research and development information, inventions, know-how, and all pre-
clinical, clinical and other technical data, in each case that are owned by
Grace, or possessed by Grace with the fight to provide to others, as of the
Effective Date, which in each case relate to the practice of the Patent Rights.
I.6 "Valid Claim" shall mean a claim of an issued and unexpired patent
-----------
included within the Patent Rights, which has not been held unenforceable, or
invalid by a court or other governmental agency of competent jurisdiction, and
which has not been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise.
ARTICLE II
OPTION GRANT
------------
II.1 Subject to the payment of the fee specified in IV.1 below, Grace
hereby grants to BioMarin an exclusive option, for the duration of the Option
Period, to acquire an exclusive fight and license, with a fight to grant and
authorize sublicenses under the Patent Rights and Related Technology, to make,
use and sell Licensed Products, to practice any process, method or procedure of
the Patent Rights and Related Technology and to otherwise exploit the Patent
Rights and the Related Technology. If BioMarin fails to pay any of the specified
fees within 30 days of the due date, BioMarin's option under this Agreement
shall terminate.
II.2 The option contained herein may be exercised by BioMarin at any time
during the Option Period, by so notifying Grace in writing.
ARTICLE III
TERMS OF LICENSE
----------------
III.1 Upon BioMarin's exercise of the option granted under Article II
above, BioMarin and Grace shall enter into a License Agreement, on reasonable
and customary terms and conditions, pursuant to which Grace grants to BioMarin
the license contemplated by Section II. 1 above. The terms of such License
Agreement shall include, but not be limited to, the following:
2
(a) Royalties payable to Grace on sales by BioMarin, its affiliates
and sublicensees of Licensed Products to independent customers, as outlined
on Exhibit "A" attached hereto.
(b) The right for BioMarin to terminate upon notice in writing to
Grace (i) the License Agreement in its entirety or (ii) as to any patent
application in the Patent Rights, provided that no change in the royalty
obligation would be made.
(c) Either Party would have the fight to assign the License
Agreement to a third party that succeeds to substantially all of the
business or assets to which the subject matter of the License Agreement
relates.
(d) [***]
(e) [***]
III.2 In the event that BioMarin and Grace do not enter into the License
Agreement within six (6) months after BioMarin's exercise, in accordance with
Section I1.2, of the option granted hereunder, BioMarin may either:
(a) Initiate a binding arbitration proceeding, pursuant to which
the terms of the License Agreement shall be established (consistent with
Section III. 1 above). Such arbitration shall be conducted in accordance
with the roles of the American Arbitration Association, and the parties
agree that the arbitrator shall be an individual experienced in
pharmaceutical product licensing. BioMarin may exercise such fight to
initiate arbitration by so notifying Grace within three (3) months after
the end of the six (6) month period described above (such combined nine (9)
month period being referred to below as the "Negotiation Period"). In such
event, Grace and BioMarin will use all reasonable efforts to conclude the
arbitration proceeding as expeditiously as possible; or
(b) Allow the option to lapse by so notifying Grace in writing
within the Negotiation Period. In such event, BioMarin shall have a right
of first refusal with respect to any grant by Grace of a license or other
fight with respect to a patent or application within the Patent Rights
during the twelve (12) month period after the Negotiation Period. If Grace
proposes to make such a grant during such period, Grace shall notify
BioMarin of the proposed terms and conditions of such grant. If BioMarin
does not agree to acquire such license or right on the terms specified in
Grace's notice, Grace shall be free to grant such fights to a third party
on the terms offered in Grace's notice to BioMarin.
3
[*CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE IV
PAYMENT
-------
IV.1 In consideration of the option granted in Article II above, BioMarin
shall pay to Grace the option fees in accordance with the schedule and for the
stated amounts as set forth on Exhibit "B".
ARTICLE V
REPRESENTATIONS BY GRACE
------------------------
V.1 Grace represents and warrants that: (i) Grace owns all rights, title
and interest in and to the Patent Rights existing as of the Effective Date; (ii)
Grace has the fight to enter into this Agreement, to fully comply with the terms
and conditions of this Agreement, and to enter into the License Agreement and to
grant to BioMarin the fights and licenses contemplated in Section II.1 above;
(iii) Grace has not executed any agreement or contract that is inconsistent with
the fights and licenses granted or to be granted hereunder; and (iv) Grace will
not grant rights to any third party under the Patent Rights during the Option
Period.
ARTICLE VI
REPRESENTATIONS BY BIOMARIN
---------------------------
VI.1 BioMarin represents and warrants that (i) it shall use its best
efforts to produce material toxicology studies of the products based on the
Patent Rights during the period between the first and second anniversary of the
Effective Date; and (ii) it shall use its best efforts to commence clinical
testing of the products based on the Patent Rights after the second anniversary
of the Effective Date; and (iii) BioMarin has the fight to enter into this
Agreement, to fully comply with the terms and conditions of this Agreement, and
to enter into the License Agreement and comply with its terms and conditions.
ARTICLE VII
PATENT PROSECUTION AND MAINTENANCE.
-----------------------------------
VII.1 Grace shall use reasonable efforts to prosecute, as Grace sees fit
and maintain in the countries listed in Exhibit "C" patent applications and
patents within the Patent Rights, using counsel selected by Grace and with due
consultation with BioMarin. Grace shall not abandon or lapse any patent
applications or patents without first offering
4
these to BioMarin. Grace shall provide BioMarin with copies of all relevant
documentation so that BioMarin may be informed and apprised of the continuing
prosecution, and BioMarin agrees to keep this documentation confidential.
VII.2 Grace shall use reasonable efforts, with due considerations to the
stage of prosecution, to amend any patent application within the Patent Rights
to include claims requested by BioMarin to protect the products contemplated by
BioMarin to be sold under the License Agreement.
ARTICLE VIII
CONFIDENTIALITY
---------------
VIII.1 During the term of this Agreement and for a period of two (2) years
thereafter, BioMarin and Grace shall use their best efforts to protect the
confidentiality of proprietary information provided it by the other party and
identified in writing or orally as confidential and proprietary and not to use
such information except for the purposes of this Agreement. This obligation of
confidentiality shall not apply to information which (a) is or becomes known
publicly through no fault of the other party; (b) is obtained or learned by the
receiving party from a third party entitled to disclose it; (c) is already known
to the receiving party at the time of disclosure, as shown by the receiving
party's prior written records; or (d) is developed by the receiving party
independent of any disclosure made hereunder, which can be demonstrated by
written or other documentary evidence. This obligation of confidentiality does
not apply when such disclosure of information is required by law.
ARTICLE IX
TERM AND TERMINATION
--------------------
IX.1 Unless otherwise required by Section III.2(a) this Agreement shall
become effective on the Effective Date and, unless sooner terminated pursuant to
this Article IX, shall continue in full force and effect until the date of the
Expiration of the Option Period.
IX.2 In the event the License Agreement is entered into by and between
Grace and BioMarin pursuant to Article III, this Agreement shall be replaced
thereby and any and all provisions of this Agreement shall cease to be
effective.
IX.3 BioMarin may notify Grace in writing of its election not to
exercise the option contained herein prior to the expiration of the Option
Period, in which event this Agreement shall cease to be effective upon such
notification. It is understood that BioMarin shall have no obligation to
exercise the option granted hereunder or, after exercise thereof, to enter into
the License Agreement.
5
IX.4 In the event BioMarin fails to pay any of the option payments of
Exhibit B to this Agreement within the thirty (30) days following its due date,
the Option shall immediately terminate and this Agreement shall cease to be
effective.
ARTICLE X
MISCELLANEOUS
-------------
X.1 This Agreement shall be construed and interpreted, and the fights
and obligations of the parties hereto shall be determined, in accordance with
the laws of the State of California, without regard to the conflicts of laws
principles thereof.
X.2 No alteration or amendment of this Agreement shall be effective
unless embodied in writing and executed by an authorized representative of each
party.
X.3 This Agreement, and the fights and obligations hereunder, shall not
be assigned by either party without the prior written consent of the other
party, except to the successor to or the assign of substantially all of the
business and assets of either party relating to the subject matter of this
Option Agreement and shall be binding upon the parties, their successors and
assigns.
X.4 The addresses of the parties for purposes of notices, payments and
other communications shall be as follows:
BIOMARIN PHARMACEUTICAL, INC.
00 Xxxxxxxx Xxxxx
Xxxxxx XX 00000
Attn: Xx. Xxxxxxxxxxx X. Xxxxx, Vice President of Research
X. X. XXXXX & CO.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attn: Xx. Xxxx Xxxxx, Director of Corporate Development
Either party, by notice to the other, may change its address for the
purpose of this Section X.
X.5 This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof and supersedes any previous
understandings and agreements, written or oral, which the parties hereto may
have reached with respect to the subject matter hereof.
6
IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement to
be executed as of the day and year first above written.
/s/ Xxxx Xxxxx
----------------------------------
("Grace")
By: /s/ Xxxx Xxxxx
------------------------------
/s/ Signature
----------------------------------
("BioMarin")
By: /s/ Xxxxxxxxxxx X. Xxxxx.
------------------------------
7
EXHIBIT "A"
-----------
ROYALTIES
---------
The royalties payable under the licenses shall be based on annual net sales
(ANS) of the Licensed Product as follows:
[***]
8
[*CONFIDENTIAL TREATMENT REQUESTED]
EXHIBIT "B"
-----------
PAYMENT SCHEDULE
----------------
1. $25,000 On the Effective Date.
2. $25,000 Upon acceptance of delivery of the Related Technology.
3. $50,000 Upon the earlier to occur of (i) successful production
of the products based on the Patent Rights or (ii) six months
from delivery of the Related Technology.
4. $125,000 On the first anniversary of the Effective Date.
5. $150,000 On the second anniversary of the Effective Date.
9
Report Date: APRIL 1, 1998 CASE SUMMARY REPORT CASEREPT: PAT002
PAGE: 67
Case Number: 7454 Reference Number: 07914 Group Code: 01 Priority: USA
Title: Compositions Containing Protease Produced By Disclosure Date: 03/09/1989 Disposition: A
Vibrio And Method Of Use In Debridement And Evaluation Date: 03/01/1991 Subject Codes: 305 307
Wound Healing Project Codes: 6350
Attorney: BJA Xxxxxxx X. Xxxxxx Key Words: Wound Healing
Orig Division: RES Washington Research Division Orig Department: 154
Owner: GNY X.X. Xxxxx & Co.-Conn. Office of Rec: Columbia, Maryland
Product Line: CTG Corporate Technical
Product Code: COD Commerical Development License
INVENTORS: DURHAM XX XXXXXXX DZ
Abstract:
Compositions and methods of use are provided for debriding and wound healing
applications. The Compositions contain certain proteases produced by
microrganisms of the genus vibrio. Europe designates: Austria, Belgium,
Denmark, France, Germany, Gt Britain, Greece, Holland, Italy, Luxembourg,
Spain, Sweden, Switzerland. Licensed agreement with Xxxxxxx & Xxxxxxx Medical
Ltd.
Evaluation Remarks: Commercially important
F F1 F1 Application Filing Patent Grant Publictn Exam Tax Renewal
S Country No Ip Number Date Number Date Date Date Date Date
--------------------------------------------------------------------------------------------------------------------------------
AUSTRIA 01 PI 91112732.2 07/29/1991 XX0000000 11/13/1996 2/26/1992 07/29/1997
BELGIUM 01 PI 91112732.2 07/29/1991 XX0000000 11/13/1996 07/29/1997
CANADA 01 PI 2046602-5 07/11/1991 07/11/1998 07/11/1993
DENMARK 01 PI 91112732.2 07/29/1991 OK0472011 11/13/1996 07/29/1997
U EUROPE 01 PI 91112732.2 07/29/1991 0472011 11/13/1996 07/29/1993
FRANCE 01 PI 91112732.2 07/29/1991 XX0000000 11/13/1996 07/29/1997
GERMANY 01 PI 91112732.2 07/29/1991 69123099.4 11/13/1996 07/29/1997
GREAT BRI 01 PI 91112732.2 07/29/1991 XX0000000 11/13/1996 07/29/1997
GREECE 01 PI 91112732.2 07/29/1991 J022412 11/13/1996 07/29/1997
HOLLAND 01 PI 91112732.2 07/29/1991 NL0472011 11/13/1996 07/29/1997
ITALY 01 PI 91112732.2 07/29/1991 XX0000000 07/29/1997
XXXXX 00 XX 000000/00 08/13/1991 08/13/1998
LUXEMBOUR 01 PI 91112732.2 07/29/1991 LU0472011 11/13/1996 00/00/0000
XXX XXXXX 00 XX 000000 07/12/1991 238954 05/17/1994 07/12/1995
SPAIN 01 PI 91112732.2 07/29/1991 91112732.2 11/13/1996 07/29/1997
SWEDEN 01 PI 91112732.2 07/29/1991 91112732.2 11/13/1996 07/29/1997
SWITZERLA 01 PI 91112732.2 07/29/1991 PO472011 11/13/1996 07/29/1997
A USA 01 CP 670612 03/13/1991
F Expiration Assoc Agn Spn Last
S Country Date Code Cod Div Tax
---------------------------------------------------------------------
AUSTRIA 07/29/2011 BARGE CTG 233.27
BELGIUM 07/29/2011 KIRKP CTG 128.19
CANADA GOWL GOW CTG 191.85
DENMARK 07/29/2011 XXXXX CTG 267.01
U EUROPE 11/13/1996 UEXKL CTG 1000.76
FRANCE 07/29/2011 WNSTN CTG 169.84
GERMANY 07/29/2011 UEXKL CTG 206.23
GREAT BRI 07/29/2011 XXXX CTG 240.09
GREECE 07/29/2011 THEOD CTG 163.00
HOLLAND 07/29/2011 VRIES VRI CTG 302.97
ITALY 07/29/2011 BREVE CTG 133.37
JAPAN ODAJ CTG 274.34
LUXEMBOUR 07/29/2011 XXXX CTG 96.79
NEW ZEALA 05/17/2011 PARK CTG 133.86
SPAIN 07/29/2011 XXXXX CTG 139.37
SWEDEN 07/29/2011 B&S CTG 143.15
SWITZERLA 07/29/2011 XXXX CTG 427.59
A USA 154 0.00
Report Date: APRIL 1, 1998 CASE SUMMARY REPORT CASEREPT: PAT002
PAGE: 51
Case Number: 7454 Reference Number: 07454 Group Code: 01 Priority: USA
Title: COMPOSITIONS CONTAINING PROTEASE PRODUCED BY Disclosure Date: 03/09/1989 Disposition: A
VIBRIO AND METHOD OF USE IN DEBRIDEMENT Evaluation Date: 08/01/1991 Subject Codes: 305 307
AND WOUND HEALING Project Codes: 4670
Attorney: BJA Xxxxxxx X. Xxxxxx Key Words: Wound Healing
Orig Division: RES Washington Research Division Orig Department: 154
Owner: GNY X.X. Xxxxx & & Co.-Conn. Office of Rec: Columbia, Maryland
Product Line: CTG Corporate Technical
Product Code: COD Commerical Development License
INVENTORS: DURHAM XX XXXXXXX DZ
Abstract:
COMPOSITIONS AND METHODS OF USE ARE PROVIDED FOR DEBRIDING AND WOUND HEALING
APPLICATIONS. THE COMPOSITIONS CONTAIN CERTAIN PROTEASES PRODUCED BY
MICROORGANISMS OF THE GENUS VIBRIO. Licensed agreement with Xxxxxxx & Xxxxxxx
Medical Ltd.
Evaluation Remarks: Commercially important
F Country F1 F1 Application Filing Patent Grant Publictn Exam Tax Renewal Expiration
S No Ip Number Date Number Date Date Date Date Date Date
----------------------------------------------------------------------------------------------------------------------------------
USA 01 PI 567884 08/15/1990 5145681 09/08/1992 03/08/2000 08/15/2010
F Country Assoc Agn Spn Last
S Cod Cod Div Tax
---------------------------------------------------
USA CTG 1002.00
