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EXHIBIT 10.11
CONFIDENTIAL
BINDING LETTER OF INTENT & MEMORANDUM OF AGREEMENT
BETWEEN
LEXICON GENETICS INCORPORATED AND ARENA PHARMACEUTICALS, INC.
This BINDING LETTER OF INTENT & MEMORANDUM OF AGREEMENT ("Agreement") is
effective as of April 3, 2000 ("Effective Date") by and between Lexicon Genetics
Incorporated ("Lexicon") and Arena Pharmaceuticals, Inc. ("Arena").
Lexicon and Arena, as of the Effective Date, have agreed to both be
bound by the following terms and conditions, with the understanding that Lexicon
and Arena shall make a good faith effort to prepare and sign a final agreement
("Final Agreement") within forty-five (45) days of the Effective Date. The
effective date of the Final Agreement shall be the Effective Date, and all terms
and conditions set forth in the Agreement shall be incorporated into the Final
Agreement.
1. SCOPE OF COLLABORATION
The collaboration between Lexicon and Arena shall comprise two (2)
components, a Feasibility Component [Section 1(A)] and an Alliance Component
[Section 1(B)]:
A. FEASIBILITY COMPONENT
1. Arena Obligations. Arena shall, within fifteen (15)
days of the Effective Date, provide to Lexicon two (2) human G protein coupled
receptors (GPCR) that have been subjected to Arena's CART Technology, with one
(1) GPCR for which the endogenous ligand is known (the "Known GPCR"), and the
other GPCR for which the endogenous ligand is not known (the "Orphan GPCR"). The
receptors provided by Arena to Lexicon shall be in a form appropriate for use by
Lexicon as contemplated herein. All costs and liability borne by Arena for Arena
Obligations shall be the obligation of Arena. During the Feasibility Component,
Arena shall use best reasonable commercial efforts to complete: development of
screening assays comprising the Known GPCR and the Orphan GPCR; screening of
Arena's internal chemical library using assays comprising the Known GPCR and the
Orphan GPCR; and selection of at least one chemical compound for in vivo
analysis ("In Vivo Compounds - Feasibility"). Arena shall use best reasonable
commercial efforts to provide sufficient quantities of such In Vivo Compounds -
Feasibility to Lexicon for in vivo analysis thereof, such in vivo analysis by
Lexicon to be restricted exclusively to the animals of Section 1(A)(2).
(i). With respect to the Known GPCR, the Parties
agree that the Known Receptor shall not be
included within the Alliance Component of
Section 1(B), and that Lexicon shall have no
rights to, inter alia, such Known Receptor or
any assays comprising the Known Receptor or any
chemical compounds developed by Arena (and/or
any partner of Arena) using such Known Receptor.
(ii). With respect to the Orphan GPCR, the Parties
agree that if the Alliance Component of Section
1(B) is initiated, then such Orphan Receptor
shall be included as a part of
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the Alliance Component, with the exception that
if Arena enters into a licensing arrangement
with a Third Party (where such licensing
arrangement includes the Orphan Receptor) before
Lexicon establishes the viability of any
animal(s) whose genome comprises or excludes
such Orphan Receptor, then the Orphan Receptor
shall not be included as a part of the Alliance
Component.
2. Lexicon Obligations. Lexicon shall utilize the two (2)
GPCRs provided to it by Arena under Section 1(A)(1) in the application of
Lexicon's Knock-In and Knock-Out Technology for the establishment of (i)
heterozygous and homozygous gene-targeted mice whose genomes have been altered
to include, for one set of mice, the CART Technology Known GPCR, and for another
set of mice, mice whose genomes have been altered to exclude the mouse GPCR
corresponding to the Known GPCR; and (ii) heterozygous and homozygous
gene-targeted mice whose genomes have been altered to include, for one set of
mice, the CART Technology Orphan GPCR, and for another set of mice, mice whose
genomes have been altered to exclude the mouse GPCR corresponding to the Orphan
GPCR. For each GPCR provided by Arena to Lexicon under this Section 1(A)(2),
Lexicon shall use best reasonable commercial efforts to establish a sufficient
number of offspring for evaluation of the effects, if any, of inclusion of the
CART Technology GPCRs within the respective mouse genomes, or exclusion of the
corresponding mouse GPCR from the respective mouse genomes. All costs and
liability borne by Lexicon for Lexicon Obligations shall be the obligation of
Lexicon.
3. Joint Evaluation. In the event that mice of Section
1(A)(2) are established, Lexicon shall: (i) evaluate and analyze the mice; (ii)
provide Arena with a sufficient number of such mice, including an approximate
equal number of male(s) and an approximate number of female(s) as maintained by
Lexicon, if and when each gender is represented (but not more than 50% of the
total mice established shall be provided to Arena) for Arena's evaluation and
analysis; and (iii) conduct mutually-agreed to in vivo analysis of the In Vivo
Compounds - Feasibility using such mice. The Parties shall jointly work together
and share the results of their respective evaluations with each other. The
objective of such evaluations and analyses shall be to determine the effect(s),
if any, of the inclusion of the CART Technology Known GPCR receptor and/or the
inclusion of the CART Technology Orphan GPCR receptor and/or the exclusion of
the corresponding Known and Orphan GPCR mouse receptors, on the resulting mice.
Each Party agrees to utilize reasonable efforts within a reasonable time frame
to complete its evaluation and analysis, but in no event shall the respective
evaluation and analysis exceed twelve (12) months from the birth of any
gene-targeted mice of Section 1(A)(2). The Parties shall thereafter jointly
discuss the results of the evaluations and analysis and determine, in good
faith, whether to proceed to the Alliance Component of Section 1(B); to
terminate the collaboration; or to jointly modify the collaboration. In the
event that the Parties jointly decide to terminate the collaboration, the
obligations of each Party of Section 1(A)(4)(ii) shall continue for a period of
five (5) years from the date of such termination. The Parties agree to
establish, in good faith, mutually acceptable criteria for the biological
analyses to be conducted on the mice within ninety (90) days after the Effective
Date, and to attach such criteria to the Final Agreement in the form of an
appendix.
4. Joint Obligations. During the Feasibility Component,
each Party shall:
(i) grant to the other a co-exclusive license under
its applicable intellectual property and
technology rights
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necessary to establish and use gene-targeted
mice based upon the CART Technology Known GPCR
receptor and to establish and use gene-targeted
mice based upon the CART Technology Orphan
receptor, each as contemplated in Section
1(A)(1) herein; and
(ii) (a) Arena shall not license to any Third Party
the right to make, have made, use, have used,
sell, have sold its CART Technology to establish
any mice whose genome comprises the CART
Technology GPCRs of Section 1(A)(1), and
(b) Lexicon shall not establish for, nor license
to, any Third Party (nor shall Lexicon itself
make, have made, use, have used, sell, have
sold, import into the United States or have
imported into the United States) any animal
whose genome comprises the CART Technology GPCRs
of Section 1(A)(1), or transfer or sell an to
any Third Party any animal whose genome
comprises CART Technology GPCRs of Section
1(A)(1). Notwithstanding the above, Lexicon
shall be permitted to independently develop
genetically altered mice with endogenous
versions of the GPCRs of Section 1(A)(1) for
itself and with Third Parties.
5. Joint Rights. In the event that any gene-targeted mice
of Section 1(A)(2) are established, each Party shall have an equal interest
therein, subject to the following: (i) when a patent position is taken with
respect to such mice or related gene targeted cells, Lexicon shall be
responsible for the preparation and filing thereof (and Arena shall provide
assistance in the preparation thereof), with costs to be split equally between
Lexicon and Arena, and each Party shall be named as an assignee, irrespective of
inventorship, with cost and fees associated with such preparation and filing to
be borne equally by the Parties; (ii) neither Party shall commercialize in any
manner the gene-targeted mice of Section 1(A)(2) without the express, written
consent of the other; (iii) when a scientific presentation and/or paper is
presented and/or published regarding the gene-targeted mice of Section 1(A)(2)
or CART Technology GPCRs of Section 1(A)(1), the Parties, to the extent
consistent with scientifically-accepted parameters, shall include employees of
each Party as co-authors, and in all cases, reference shall be made to both
Lexicon and Arena on all such presentations and/or papers; (iv) with respect to
animals developed using CART Technology Known GPCR, Arena shall not sell nor
license such animals to any Third Party; and (iv) with respect to animals
developed using CART Technology Orphan Receptor, if the Orphan GPCR is not part
of the Alliance Component, then Arena not sell not license such animals to any
Third Party.
6. Breeding Restrictions. The gene-targeted mice of
Section 1(A)(2) shall not be bred with any other mice whose genome has been
altered (either by artificial means or by breeding-selection means) without the
joint written agreement of the Parties. The Joint Rights of Section 1(A)(5)
shall apply to the offspring of any breeding.
7. Transfer Restrictions. With respect to the gene-
targeted mice of Section 1(A)(2), as well as any tissue derived therefrom,
neither Party shall transfer any such
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mice, or any tissue derived therefrom, to any Third Party unless otherwise
agreed to in writing by both Parties.
B. ALLIANCE COMPONENT
To the extent that the Parties jointly agree to pursue the
Alliance Component of the collaboration, the following shall apply:
1. Steering Committee. The Parties shall establish a
Steering Committee comprised of three (3) employees from each Party (the
selection of which being in the sole discretion of each Party with respect to
its three employees as Members of the Steering Committee, and one (1) employee
of each Party as an Alternate. The responsibilities and duties of the Steering
Committee, Members and Alternates, with respect to the governance of the
Alliance Component, shall be mutually agreed-to by the Parties in the Final
Agreement. One example of a specific role for the Steering Committee shall be
the prioritization of the Alliance GPCRs for application of CART Technology
thereto and the development of gene-targeted mice based upon the CART Technology
Alliance GPCRs.
2. Alliance GPCRs. During the term of the Agreement, each
Party shall contribute an equal number of its unique and potentially
pharmaceutically relevant GPCRs to the Alliance to establish an "Alliance
Receptor Pool," with the number contributed by each Party to the Alliance
Receptor Pool not exceeding (10) such that the total number of GPCRs in the
Alliance Receptor Pool shall not be more than twenty (20). Each GPCR contributed
to the Alliance Receptor Pool shall be exclusively utilized in accordance with
the collaboration and shall not be licensed to any Third Party, except as
expressly provided for herein. Notwithstanding the foregoing, Lexicon shall be
permitted to independently develop genetically altered mice with endogenous
versions of the GPCRs of this Section 1(B)(2) for itself and with Third Parties.
3. Arena Obligations. Arena shall apply its CART
Technology to the Alliance Receptor Pool GPCRs in the order prioritized by the
Steering Committee. Following application of CART Technology thereto, the CART
Technology Alliance GPCRs provided by Arena to Lexicon shall be in a form
appropriate for use by Lexicon as contemplated herein. All costs borne and
liability by Arena for Arena Obligations shall be the obligation of Arena. For
each Alliance Receptor Pool GPCR, and in the order established by the Steering
Committee, Arena shall use best reasonable commercial efforts to complete prior
to the establishment of the animals of Section 1(B)(4): development of screening
assays comprising the CART Technology Alliance GPCR; screening of Arena's
internal chemical library using assays comprising the CART Technology Alliance
GPCR; and selection of at least one chemical compound for in vivo analysis ("In
Vivo Compounds - Alliance"). Arena shall use best reasonable commercial efforts
to provide sufficient quantities of such In Vivo Compounds - Alliance to Lexicon
for in vivo analysis thereof, such in vivo analysis by Lexicon to be restricted
exclusively to the animals of Section 1(B)(4).
4. Lexicon Obligations. Lexicon shall utilize the CART
Technology Alliance GPCRs provided to it by Arena under Section 1(B)(2) in the
application of Lexicon's Knock-In and Knock-Out Technology for the establishment
of heterozygous and homozygous gene-targeted mice whose genomes have been
altered using the CART Technology Alliance GPCRs as contemplated herein. For
each CART Technology Alliance GPCR, Lexicon shall use best reasonable commercial
efforts to establish a sufficient number of offspring for evaluation of the
effects, if any, of utilization of the CART Technology Alliance GPCR as
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contemplated herein. All costs and liability borne by Lexicon for Lexicon
Obligations shall be the obligation of Lexicon.
5. Joint Evaluation. In the event that Alliance mice of
Section 1(B)(2) are established, Lexicon shall: (i) evaluate and analyze the
mice; (ii) provide Arena with a sufficient number of such mice, including an
approximate equal number of male(s) and an approximate number of female(s) as
maintained by Lexicon, if and when each gender is represented (but not more than
50% of the total mice established shall be provided to Arena) for Arena's
evaluation and analysis; and (iii) conduct mutually-agreed to in vivo analysis
of the In Vivo Compounds - Alliance using such mice.. The Parties shall jointly
work together and share the results of their respective evaluations with each
other. The objective of such evaluations and analyses shall be to determine the
effect(s), if any, of the CART Technology Alliance GPCR(s) on the resulting
mice. Each Party agrees to utilize reasonable efforts within a reasonable time
frame to complete its evaluation and analysis, but in no event shall the
respective evaluation and analysis exceed twelve (12) months from the birth of
any mice of Section 1(B)(2). The Parties, via the Steering Committee, shall
thereafter jointly discuss the results of the evaluations and analysis and
determine, in good faith, the ability to proceed to the Licensing Component of
Section 2. The Parties agree to utilize the criteria for the biological analyses
of Section 1(A)(3) for such.
6. Joint Obligations. During the Alliance Component, each
Party shall:
(i) grant to the other a co-exclusive license under
its applicable intellectual property and
technology rights necessary to establish and use
gene-targeted mice comprising CART Technology
Alliance GPCRs; and
(ii) (a) Arena shall not license to any Third Party
the right to make, have made, use, have used,
sell, have sold its CART Technology to establish
any mice whose genome comprises CART Technology
GPCRs of Section 1(B)(2), and
(b) Lexicon shall not establish for, nor license
to, any Third Party (nor shall Lexicon itself
make, have made, use, have used, sell, have
sold, import into the United States or have
imported into the United States) any animal
whose genome comprises CART Technology GPCRs, or
transfer or sell an to any Third Party any
animal whose genome comprises CART Technology
GPCRs. Notwithstanding the above, Lexicon shall
be permitted to independently develop
genetically altered mice with endogenous
versions of Alliance Receptor Pool GPCRs for
itself and with Third Parties.
7. Joint Rights. In the event that any rights are
established in the gene-targeted mice or related cells of Section 1(B)(2), each
Party shall have an equal interest therein, subject to the following: (i) when a
patent position is taken with respect to such mice or related targeted cells,
Lexicon shall be responsible for the preparation and filing thereof (and Arena
shall provide assistance in the preparation thereof), with costs to be split
equally between Lexicon and Arena, and each Party shall be named as an assignee,
irrespective of
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inventorship with cost and fees associated with such preparation and filing to
be borne equally by the Parties; (ii) neither Party shall commercialize in any
manner the gene-targeted mice of Section 1(B)(2) except in accordance with the
provisions of Section 2; and (iii) when a scientific presentation and/or paper
is presented and/or published regarding the gene-targeted mice of Section
1(B)(2) or activated GPCR receptors regarding Section 1(B)(2), the Parties, to
the extent consistent with scientifically-accepted parameters, shall include
employees of each Party as co-authors, and in all cases, reference shall be made
to both Lexicon and Arena on all such presentations and/or papers.
8. Breeding Restrictions. The gene-targeted mice of
Section 1(B)(2) shall not be bred with any other any other mouse whose genome
has been altered (either by artificial means or by breeding-selection means)
without the unanimous written agreement of the Steering Committee. The Joint
Rights of Section 1(B)(7) shall apply to the offspring of any breeding.
9. Transfer Restrictions. With respect to the
gene-targeted mice of Section 1(B)(2), as well as any tissue derived therefrom,
neither Party shall transfer any such mice, or any tissue derived therefrom, to
any Third Party, except in accordance with the provisions of Section 2.
2. ALLIANCE LICENSING PROGRAM
A. EXCLUSIVITY OF ALLIANCE GPCRS The Parties acknowledge and
agree that their respective and unique GPCRs provided to the collaboration, and
any gene-targeted mice of Section 1(B)(2) comprising Alliance GPCRs, are to be
exclusively reserved for the collaboration, including the licensing to a Third
Party(ies) or including the use thereof in the development of any drug product
discovered using a version of the GPCR that is subject to the collaboration of
the Parties.
B. ALLIANCE LICENSING PROGRAM Arena acknowledges and agrees
that the core business of Lexicon includes, inter alia, the development of
gene-targeted mice for drug target validation purposes, and Lexicon acknowledges
and agrees that the core business of Arena includes, inter alia, the utilization
and licensing of its CART Technology for the discovery and development of drug
products; accordingly, the Parties agree that Arena shall have the exclusive
right to negotiate, using best reasonable commercial efforts, and license (i)
the activated Alliance GPCRs and, (ii) when requested, related mice of Section
1(B)(2) comprising CART Technology Alliance GPCRs (collectively, "Licensing
Package") to Third Parties; provided, however, that Lexicon shall have the final
decision as to the terms and conditions of the Licensing Package related to the
gene-targeted mice. Lexicon shall provide Arena, upon request, with the
necessary terms and conditions required by Lexicon to license such mice as part
of such Licensing Package. Prior to the consummation of any such agreement,
Arena, via the Steering Committee, shall submit to Lexicon the terms and
conditions of any such Third Party license agreement for Lexicon's approval,
such approval not to be unreasonably withheld. The Steering Committee shall be
informed in writing on a regular basis, but no less frequent than once every two
months, as to any such licensing activities on the part of Arena. To the extent
required, both Arena and Lexicon shall be signatories to any license agreement
with any Third Party licensee. The Parties agree to cooperate in the drafting of
any such Third Party license to ensure protection of the intellectual property
rights and technology of each Party.
C. JOINT LICENSING BENEFIT Irrespective of whether or not a
Licensing Package of Section 2 includes as a part thereof gene-targeted mice
comprising CART
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Technology Alliance GPCRs or a product developed from Arena's internal efforts
using such Alliance GPCRs, Arena and Lexicon shall share jointly and equally in
the upfront fees, milestone and royalty payments of any agreement with a Third
Party involving Alliance GPCRs. In the event that any agreement with a Third
Party involves equity investment payments made by such Third Party to Arena,
then with respect to the "premium amount" paid by a Third Party over the fair
market value of each Arena share, or the premium amount paid by a Third Party
over the last round of private financing if such equity is purchased at the time
in which Arena exists as a private company, the Parties agree to discuss, in
good faith, the sharing of any premium amount applicable to Alliance GPCRs. In
the event that Arena initiates internal development of a pre-clinical and/or
clinical compound(s) developed using an Alliance GPCR, then the Parties shall
determine, in good faith, the joint funding by Arena and Lexicon for the
development of such pre-clinical and/or clinical compound(s), and, based upon
such joint funding, the distribution between Arena and Lexicon of any fees and
revenue derived from the sale and/or licensing of such pre-clinical and/or
clinical compound(s).
3. MISCELLANEOUS
A. Both Lexicon and Arena further agree to cooperate, in good
faith, in the completion of the Final Agreement. Irrespective of the completion
of the Final Agreement, both Lexicon and Arena agree to be bound by the
foregoing terms and to treat the terms and conditions of the Agreement as a
legally binding contract with the rights, duties and obligations of each party
set forth as above.
B. Both Lexicon and Arena agree that the Agreement shall fully
incorporate the terms and conditions of the Mutual Non-Disclosure Agreement
between Lexicon and Arena, dated February 15, 2000.
C. Both Lexicon and Arena shall jointly create a press release
announcing the establishment of the Agreement within a reasonable time period
after the Effective Date; in the event that either Party desires not to
participate in a "joint" release, the other Party may itself issue the jointly
created press release. The Parties acknowledge and agree that the joint press
release of this Section 3(c) may be issued prior to completion of the Final
Agreement.
WHEREUPON, each party, having read and understood the foregoing, and
agreeing to be bound by the terms and conditions herein, have caused this
Agreement to be executed by their authorized agents as of the Effective Date.
ARENA PHARMACEUTICALS, INC. LEXICON GENETICS INCORPORATED
By: /s/ Xxxx Xxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxx Xxxx Name: Xxxxxx X. Xxxxx
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Title: President & CEO Title: President & CEO
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