EXHIBIT 10.20
MATERIAL TESTING AGREEMENT
This Agreement is made this 18th day of April, 2002 by and between Sosei Co.,
Ltd. ("Sosei"), having its registered office at 0-00-0, Xxxxxxxxx, Xxxxxxx-xx,
Xxxxx, Xxxxx and CombinatoRx, Incorporated, having a usual place of business at
000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, X.X.X. ("CombinatoRx").
WHEREAS, Sosei owns or controls certain chemical compounds and technical
information relating thereto, and wishes to undertake screening of such
compounds that have been agreed upon by the parties (Compounds) for the purpose
of discoveries related to single therapeutic effect agents and discoveries
related to combination therapeutic effect agents (Purpose), and
WHEREAS, CombinatoRx has a capability to and is willing to undertake such
screening with respect to the Compounds in order to look for discoveries related
to single therapeutic effect agents and discoveries related to combination
therapeutic effect agents utilizing its proprietary screening assay system, in
accordance with the terms and conditions hereinafter appearing.
NOW THEREFORE, the parties hereto agree to the following:
A. DEFINITIONS. The following definitions shall apply to this Agreement:
1. COMMERCIAL PURPOSES shall mean the sale, lease, license, or other transfer
of the Compounds to a for-profit organization. Commercial Purposes shall
also include uses of the Compounds by any organization, including
CombinatoRx, to perform contract research, to produce or manufacture
products for general sale, or to conduct research activities that result in
any sale, lease, license or transfer of the Compounds to a for-profit
organization. However, industrially sponsored academic research shall not
be considered a use of the Compounds for Commercial Purposes per se, unless
any of the above conditions of this definition are met. Further, any use of
the Compounds by either Sosei or CombinatoRx in accordance with the terms
hereunder will not be considered a use for Commercial Purposes.
2. AFFILIATE shall mean any corporation, firm, partnership or other entity
which directly or indirectly controls, in controlled by, or is under common
control with either of the parties.
3. CONFIDENTIAL INFORMATION shall mean trade secrets and proprietary and
confidential technical information relating to the Compounds and business
information including all information, data and materials concerning
current, future or proposed equipment, materials, apparatus, processes,
formulations, samples, techniques, drawings, specifications, production
quantities, costs, suppliers, customers, know-how and the like which is
disclosed by either party hereto to the other party hereto hereunder or
generated as the results of screening carried out by CombinatoRx hereunder.
Confidential Information disclosed in writing must be marked as such and
oral disclosure must be confirmed in a written summary transmitted from one
party hereto to the other party hereto with thirty (30) business days.
4. SINGLE THERAPEUTIC EFFECT AGENTS shall mean a therapeutic effect derived
from the use of a compound as one agent on a disease, condition or
disorders as can be reasonably scientifically ascertained, hypothesized
and/or extrapolated from the screening assay data.
5. COMBINATION THERAPEUTIC EFFECT AGENTS shall mean a combination of two (2)
or more compounds which, in combination, exert a therapeutic effect in a
disease, condition or disorder as can be reasonably scientifically
ascertained, hypothesized and/or extrapolated from the screening assay
data.
6. DRP COMPOUNDS shall mean those compounds that the Confidential Information
relating thereto has been disclosed by Sosei to CombinatoRx under the
confidentiality agreement dated February 12, 2002 between the parties
("Confidentiality Agreement") with the code number starting with the word
"DRP".
7. DRPM COMPOUNDS shall mean those compounds that the Confidential Information
relating thereto has been disclosed by Sosei to CombinatoRx under the
Confidentiality Agreement with the code number starting with word "DRPM".
8. ORIGINATOR shall mean the third party from whom Sosei has received the
rights to perform re-profiling of the DRP Compound and the license under
the intellectual property rights necessary to commercialize such specific
DRP Compound for novel indications thereof in the Collaboration Countries.
9. ORIGINATOR RETAINED COUNTRIES shall mean those countries in which the
Originator has retained either partially or in total development rights to
the novel indications of a DRP Compound, particular of which is shown in
the Schedule attached hereto.
10. COLLABORATION COUNTRIES shall mean all countries which are not the
Originator Retained Countries.
B. SAMPLE SUPPLY. Sosei will promptly without charge, provide CombinatoRx with
samples of the Compounds in such quantities and form as shall be agreed
upon in advance between the parties for the screening by CombinatoRx for
the Purpose together with such Confidential Information relating to the
Compounds which Sosei possesses and is needed or requested by CombinatoRx
for screening, mechanistic analysis and the commercial assessment of a
potential discovery. Further, as Sosei's library of available DRP and DRPM
Compounds increases, Sosei agrees that any additional Compounds shall be
promptly provided to CombinatoRx for screening hereunder.
C. SCREENING. CombinatoRx shall, promptly after receipt from Sosei of the
samples of the Compounds and the Confidential Information relating thereto,
carry out the screening of the Compounds utilizing its aforementioned
proprietary screening assays systems.
D. USE OF COMPOUNDS. CombinatoRx agrees:
1. that the Compounds will be used only in CombinatoRx laboratories and only
laboratory personnel under CombinatoRx's immediate and direct control or in
laboratories directly contracted by CombinatoRx, whose personnel are bound
by the terms of this Agreement;
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2. to use the Compounds only for screening for the Purpose and NOT for any
other purpose including the Commercial Purposes;
3. that the Compounds will be received, handled, stored, used and disposed of
in compliance with all applicable laws, regulations and guidelines, and in
accordance with safe and prudent practices, and will not be administered to
human subjects or provided to any third parties, nor will any animals or
plants exposed to the Compounds, or products of such animals or plants be
used for food; and
4. that CombinatoRx has adequate systems, procedures and personnel to review
and oversee arrangements for the receipt, handling, storage, use and
disposal of experimental materials of the nature of the Compounds, and that
it will ensure that all persons involved in receiving, handling, storing,
using or disposing of the Compounds are adequately qualified by training
and experience to do so safely and legally.
E. CONFIDENTIALITY. CombinatoRx agrees to keep in confidence and not to use
for any purpose other than for the Purpose or not to disclose nor make
available to any third party the Confidential Information received from
Sosei or generated by CombinatoRx hereunder. However, the Confidential
Information may be disclosed only to those employees of CombinatoRx who are
reasonably required to access such information for the Purpose and who have
been informed of the confidential nature of such information and agree to
act in accordance with the terms and conditions of this Agreement.
Notwithstanding the foregoing, nothing herein shall limit the use or
disclosure of such Confidential Information which:
1. is legally in the possession of CombinatoRx or its employees prior to
receipt thereof from Sosei;
2. enters into the public domain through no fault of CombinatoRx or its
employees;
3. is disclosed to CombinatoRx without restrictions or breach of any duty of
confidentiality by a third party who has the right to make such disclosure;
4. is independently developed by or for CombinatoRx without reference to
Sosei's Confidential Information; or
5. In the event CombinatoRx is required by law or legal process to disclose
any Confidential Information, CombinatoRx shall provide prompt notice of
such to Sosei so that legal protection for the Confidential Information may
be sought.
F. TRANSFER OF COMPOUNDS. CombinatoRx shall not transfer the Compounds to any
others (except to its employees who are bound to CombinatoRx by like
obligations and conditions restricting access, use, and continued use of
the Compounds) without the express written consent of Sosei.
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G. WARRANTY. CombinatoRx acknowledges that the Compounds are experimental
products of research that may not have been fully characterized, and will
accept the Compounds as is and entirely at its own risk.
H. TERM. This Agreement shall come into force on the date first written above
and continue in full force and effect for a period of three (3) years (the
"Term"), unless terminated earlier by any provision of this Agreement.
The provisions of Clauses E, F, G, I and J shall survive the termination of this
Agreement for ten (10) years.
Upon termination of this Agreement, Sosei may request that CombinatoRx return or
destroy the Compounds and the Confidential Information received from Sosei
hereunder, including any copies or derivatives thereof in whatever form,
CombinatoRx shall otherwise promptly destroy or dispose of samples of the
Compounds and all the Confidential Information supplied by Sosei to CombinatoRx
hereunder, including any copies or derivatives thereof in whatever form, except
one copy of the Confidential information and so much of the Components as needed
may be retained for archival purposes only.
I. INTELLECTUAL PROPERTY. In case of the DRP Compounds, parties hereto and the
Originator of the DRP Compounds, and, in case of DRPM Compounds, both
parties, shall have the right to jointly file patent applications claiming
inventions derived from the screening by CombinatoRx hereunder through the
use of the Compounds and/or the Confidential Information in any country of
the world, unless any of the parties hereto including said Originator agree
not to file or unwilling to file such patent application in any country of
the world, and in such case the party(ies) who wish to file such patent
application shall have the right to file such patent application by itself
or themselves, as the case may be. Upon specific request of any party
hereto, the other party(ies) agree to assist the first party to file such
patent application by providing such other party(ies) with all necessary
information and documents and by doing such actions, which are reasonably
necessary for the filing of such patent applications.
The costs associated with procuring the patents (such as, but not limited
to, filing prosecuting, granting, recording, translations, maintenance fees
and annuities) shall be borne by the party(ies) who owns the rights to file
and who wish to actually file such patent application in each country of
the world. In the event that it is agreed among parties who have the right
to file and who wish to actually file such patent application that one
party will on behalf of all applicants of such patent application take all
necessary procedures in relation to such patent application (including but
not limited to, filing, prosecuting, granting, recording, translating,
maintaining of such patent application) under full consultation with the
other applicant(s) of such patent application, the other applicant(s) of
such patent application shall reimburse the first party for the costs and
expenses related to such procurement of such patent application within
thirty (30) days after such other applicant(s) has received from the first
party a statement of such costs and expenses.
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J. TERMS AND RESULTS OF SCREENING. Upon completion of a screening, CombinatoRx
shall provide Sosei with: (A) the data that ranks the Compound(s) and
identifies the level of effect in the assay plus such other data and
information as necessary for Sosei to understand the test results; and (B)
the data and test results to support a patent application if, and when, a
patent application is filed. Sosei shall have the right to disclose the
data to the Originator, if any, so long as Sosei confirms that the
Originator is bound by the terms and conditions of this Agreement, and
provided that CombinatoRx is acknowledged as the contributor of the data.
Further, it is understood and agreed that CombinatoRx alone shall determine
the ranking and prioritization of all screening assays and be responsible
for and control all research relating to the Compounds including, the
decision to terminate a test(s).
K. FURTHER DEVELOPMENT AND LICENSE. In the event that any discovery which is
considered to be patentable in major countries of the word related to
Single Therapeutic Effect Agents or Combination Therapeutic Effect Agents
are made with respect to a Compound, the parties will be entitled to file
patent applications as noted in Article I, and the commercializing rights
to the Single Therapeutic Effect Agents and the Combination Therapeutic
Effect Agents will be as follows:
I. DRP Compounds:
(A) All discoveries related to Single Therapeutic Effect Agents with
respect to any particular DRP Compound shall be licensed to the
Originator of such particular DRP Compound and/or Sosei
(depending upon the arrangements between such Originator and
Sosei) in the Originator Retained Countries and to Sosei in the
Collaboration Countries and CombinatoRx shall grant a license to
the Originator and/or Sosei (depending upon the arrangements
between such Originator and Sosei) in the Originator Retained
Countries and to Sosei in the Collaboration Countries and Sosei
shall pay to CombinatoRx a royalty at such percentage as shall be
then agreed upon between the parties hereto of net sales from all
resulting commercial products in all countries of the world
(regardless of whether sales thereof is made by itself or its
licensees including the Originator, if any).
(B) All discoveries related to Combination Therapeutic Effect Agents
with respect to any particular DRP Compound shall be licensed to
the Originator of such particular DRP Compound and/or Sosei
(depending upon the arrangements between such Originator and
Sosei) in the Originator Retained Countries and to CombinatoRx in
the Collaboration Countries and Sosei shall, and shall cause the
Originator to, grant a license to CombinatoRx in the
Collaboration Countries and CombinatoRx shall grant a license to
the Originator and/or Sosei (depending upon the arrangement
between such Originator and Sosei) in the Originator Retained
Countries. Sosei shall pay to CombinatoRx a royalty at such
percentage as shall then be agreed upon between the parties
hereto of net sales from all resulting commercial products in all
Originator Retained Countries (regardless of whether sales
thereof is
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made by itself or its licensees including the Originator, if any)
and CombinatoRx shall pay to Sosei a royalty at such percentage
as shall then be agreed upon between the parties hereto of net
sales from all resulting commercial products in all Collaboration
Countries (regardless of whether sales thereof is made by itself
or its licensees).
(C) The percentage of the royalty referred to in (A) and (B) above
shall be determined in the rage of one percent (1%) to two
percent (2%) of net sales at the time when the parties negotiate
the relevant license agreement taking into account the
contribution by each of the parties hereto and the Originator to
the whole process of commercialization of the product in
question. The definition of net sales referred to in (A) and (B)
above shall be agreed upon between the parties at the time when
the parties negotiate the relevant license agreement taking into
account the usual and customarily terms in the industries.
II. DRPM Compounds:
(A) All discoveries related to Single Therapeutic Effect Agents
shall be owned exclusively by Sosei and CombinatoRx shall
grant to Sosei all necessary license world-widely for
freedom to operate without additional consideration and
agrees to promptly execute and deliver the licenses as
presented by Sosei.
(B) All discoveries related to Combination Therapeutic Effect
Agents shall be owned exclusively by CombinatoRx and Sosei
hereby grants all necessary licenses to CombinatoRx world-
widely for the freedom to operate without additional
consideration; and agrees to promptly execute and deliver
the licenses as presented by CombinatoRx.
It is agreed and understood that all such licenses for the DRP and DRPM
Compounds shall be exclusive, perpetual and, in addition to the stated royalty
rate, shall be upon other usual and customer terms and conditions generally
found in comparable licenses. The party being the licensor shall propose the
initial draft of the license and the parties shall thereafter negotiate in good
faith and conclude the negotiations within forty-five (45) days after the
delivery of the initial draft of the license. Where applicable, the license
shall incorporate the terms and conditions of this Agreement and, in all cases,
the license shall control in the event of a contest. Following the expiration of
an applicable patent, the royalty rate shall be reduced to One (1%) percent.
If no agreement is reached between CombinatoRx and Sosei for the further
development of any particular Compound, neither Sosei, nor CombinatoRx, nor the
Originator of such particular Compound, if any, may use any results of the
screening for any purpose whatsoever. In addition, no party (including, where
relevant, the Originator) shall, with knowledge of such results, try to
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replicate those results through another means in order to progress development
without the participation of the other parties for a period of not less that
twenty four (24) months.
It is understood that Sosei is in the business of providing compound libraries
to third parties, and that Sosei may grant such third parties rights to acquire
licenses for any particular Compounds prior to the execution of any further
agreement between the parties hereto. Accordingly, any rights to be granted to
CombinatoRx in a further agreement between the parties hereto shall not extend
to such particular Compound whereby (i) a third party (either alone or jointly
with Sosei) has filed a patent application with respect to such particular
Compound prior to the filing by CombinatoRx (either alone or jointly with Sosei)
of a patent application with respect to such particular Compound, (ii) Sosei has
previously granted a third party a license or other rights with respect to such
particular Compound , or (iii) as shown by contemporaneous documentation, Sosei
has previously decided to develop such particular Compound on its own behalf. It
is further understood that any particular Compound provided to third parties in
the course of Sosei's other business activities may result in third party patent
applications and patents, including patent applications and patents owned by
such third parties, or owned jointly by Sosei and such third parties, which
could affect the rights CombinatoRx may wish to acquire from Sosei with respect
to such particular Compound, and in such case, Sosei will promptly notify
CombinatoRx whenever such particular Compound becomes unavailable to
CombinatoRx. Subject to the immediately preceding provision of this Clause I,
Sosei represents and warrants that all of the DRP Compounds being delivered now
to CombinatoRx for screening are solely owned by Sosei and any Originator, all
of whom are bound by this Agreement.
L. RIGHTS TO MATERIALS. The furnishing of the Confidential Information and
samples of the Compounds to CombinatoRx shall not constitute any grant or
license to CombinatoRx under any legal rights now or later held by Sosei
other than as stated in this Agreement. The provision of the Confidential
Information and samples of the compounds to CombinatoRx shall not alter any
pre-existing right to the Confidential Information and the Compounds.
M. NON-COMPETITION. CombinatoRx shall neither contact directly with the
Originator, originator and developer of any particular Compound for the
purpose of obtaining any license or making any arrangements directly with
the Originators, originator or developer with respect to such particular
Compounds not knowingly carry out its independent screening without Sosei's
involvement on such particular Compound, unless CombinatoRx can demonstrate
with written records that it has been already reviewing and screening such
particular Compound prior to the disclosure by Sosei to CombinatoRx under
the Confidentiality Agreement of information relating to such particular
Compound.
N. ENTIRE AGREEMENT AND REPRESENTATIONS. This Agreement reflects the entire
agreement between Sosei and CombinatoRx, and the Agreement may be modified
or altered only in writing. Each party represents and warrants to the other
that it has the full power and authority to enter into this Agreement; that
each signatory is duly empowered and authorized and that the Agreement is
binding on each party.
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O. INTERPRETATION AND JURISDICTION. The interpretation and validity of this
Agreement and the rights of the parties shall be governed by the laws of
the State of Delaware, U.S.A.
In case of any dispute arising out of this Agreement, the parties shall
endeavor to settle such dispute amicably between themselves. In the event
that the parties fail to agree, any such dispute shall be finally settled
by arbitration in accordance with the then applicable Rules of Arbitration
of the International Xxxxxxxx of Commerce by one or more arbitrators
appointed under the Rules. The place of arbitration shall be in Tokyo
(Japan) if the claimant is CombinatoRx, and in Boston (U.S.A.) if the
claimant is Sosei. The determination of such arbitration panel shall be
final and conclusive, and binding upon the parties hereto, it being however
agreed and understood that any patent right shall be governed by the laws
of the country in which such patent is filed.
P. PRESS RELEASE. The parties agree that, upon execution and delivery of this
Agreement, CombinatoRx and Sosei shall be entitled to issue a press release
announcing this Agreement after obtaining a prior consent of the other
party on the contents of such announcement.
CombinatoRx, Incorporated Sosei Co., Ltd.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Kenzo Nakajima
--------------------------- Name: Kenzo Nakajima
Name: Xxxxxx Xxxxxxx Title: Executive VP & COO
Title: Executive Vice President
& Chief Operating Officer
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SCHEDULE
The Originator Retained Countries are as follows:
1. XXX-000, XXX-000, XXX-000 xxx XXX-000: Xxxx.
2. DRP-003 through DRP-009, DRP-011 through XXX-000, XXX-000, XXX-000 xxx
XXX-000; Asia.
3. DRP-015 through DRP-017: Asia, however, both the Originator and Sosei
retain the right in North America.
4. DRP-020 through DRP-023: Asia and EU (member countries as of February 4,
2000), however, both the Originator and Sosei retain the right in all other
countries than EU and Asia.
5. DRP-026 through DRP-032: All countries except for EU (England, Germany,
Italy, Spain, Portugal, Belgium, Netherland, Luxemburg, Austria, Denmark,
Sweden, Finland, Ireland), however, both Originator and Sosei retain the
right in all countries other than EU, Asia and Oceania.
6. DRP-002: the right to commercialize DRP-002 will be determined only after
discussion between Sosei and the Originator but Sosei will have no right in
Japan in case the Originator wises to commercialize DRP-002 in Japan.
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