Exhibit 10.220
RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT
by and between
ORGANON COMPANY
and
LIGAND PHARMACEUTICALS INCORPORATED
dated
FEBRUARY 11, 2000
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS............................................................................ 4
ARTICLE 2 - RESEARCH PROGRAM ...................................................................... 9
ARTICLE 3 - MANAGEMENT OF THE RESEARCH PROGRAM ................................................... 12
ARTICLE 4 - DEVELOPMENT PROGRAM .................................................................. 14
ARTICLE 5 - LICENSES -- RESEARCH, DEVELOPMENT,
MARKETING AND MANUFACTURING .......................................................... 15
ARTICLE 6 - ROYALTIES, MILESTONES AND OTHER PAYMENTS.............................................. 16
ARTICLE 7 - INFRINGEMENT ACTIONS BY THIRD PARTIES................................................ 21
ARTICLE 8 - CONFIDENTIALITY....................................................................... 21
ARTICLE 9 - PUBLICATION .......................................................................... 23
ARTICLE 10 - PATENTS AND INVENTIONS................................................................. 24
ARTICLE 11 - REPRESENTATIONS AND WARRANTIES........................................................ 26
ARTICLE 12 - TERM AND TERMINATION ................................................................. 28
ARTICLE 13 - FORCE MAJEURE......................................................................... 31
ARTICLE 14 - ASSIGNMENT............................................................................ 31
ARTICLE 15 - REGULATORY MATTERS..................................................................... 32
ARTICLE 16 - SEVERABILITY.......................................................................... 32
ARTICLE 17 - INDEMNIFICATION ...................................................................... 33
ARTICLE 18 - MISCELLANEOUS ........................................................................ 33
2
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT
THIS RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT, (this "Agreement"),
effective the 11th day of February, 2000 (the "Agreement Date"), is by and
between N.V. ORGANON COMPANY (herein "Organon"), having its principal place of
business at Xxxxxxxxxxx 000, 0000XX, Xxx, Xxxxxxxxxxx, and LIGAND
PHARMACEUTICALS INCORPORATED (herein "Ligand"), a Delaware corporation, having
its principal place of business at 00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000. Organon and Ligand may be referred to herein individually as a
"Party" or collectively as the "Parties".
R E C I T A L S
WHEREAS, Ligand has developed certain expertise and acquired certain
proprietary rights relating to the discovery and development of pharmaceutical
products for the treatment and prevention of diseases, which products act
through the progesterone receptor;
WHEREAS, Organon has certain expertise in the discovery, development,
marketing and sales of pharmaceutical products which act through the
progesterone receptor;
WHEREAS, Organon and Ligand desire to engage in a joint research and
development effort to discover and/or design Nonsteroidal Compounds which act
through the progesterone receptor and to develop pharmaceutical products from
such compounds (the "Collaboration"); and
WHEREAS, in conjunction with such joint research and development,
Organon desires to sponsor certain research activities to be carried out by
Ligand, and Ligand and Organon desire that Organon commercialize products
resulting from the joint research;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, Organon and Ligand agree as follows:
3
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the terms defined in this Article 1
shall have the respective meanings set forth below:
"ACT" shall have the meaning set forth in Section 10.5.
"AFFILIATE" shall mean, with respect to a Party, any other business entity
which directly or indirectly controls, is controlled by, or is under common
control with, such Party. As used in this definition of "Affiliate", the term
"control" shall mean direct or indirect beneficial ownership of more than ***%
of the voting or income interest in such business entity or if it directly or
indirectly possesses the power to direct or cause the direction of the
management and policies of the other business entity by any means whatsoever.
"AFFILIATED CUSTOMER" shall mean, with respect to a Party, any Affiliate or
Sublicensee.
"ANDA" shall have the meaning set forth in Section 10.5.
"BACKGROUND TECHNOLOGY" shall mean all technology, inventions, information,
data, know-how, compounds and materials (whether or not patented or patentable)
that (a) relate to the discovery, design, synthesis, delivery, development,
testing, use, manufacture or sale of Collaboration Compounds, Collaboration Lead
Compounds or Products for use in the Field, (b) exist as of the Commencement
Date, (c) are owned or Controlled by a Party hereto, and (d) are considered
necessary for the conduct of the Collaboration by both Parties. Background
Technology owned or Controlled by Ligand shall be referred to herein as "Ligand
Background Technology. Background Technology owned or Controlled by Organon
shall be referred to herein as "Organon Background Technology".
"BACKUP COMPOUND" shall have the meaning set forth in Section 6.10.2.
"CLAIM" shall have the meaning set forth in Article 17.
"CLINICAL CANDIDATE" shall mean a Collaboration Compound in Clinical
Development.
"CLINICAL DEVELOPMENT" shall mean the development of any Collaboration
Compound in the Field from and after the initiation of a Phase I clinical trial,
through and including product registration.
"COLLABORATION" shall have the meaning set forth in the third paragraph in
the Recitals.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
4
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
"COLLABORATION COMPOUND" shall mean a Nonsteroidal Compound which is first
identified, first confirmed, first discovered, or first synthesized and
identified by either Ligand or Organon as mediating the activity of the
Designated Target during the Research Term and those Nonsteroidal Compounds
under development by Organon as of the Commencement Date that mediate the
activity of the Designated Target.
"COLLABORATION LEAD COMPOUND" shall mean a Collaboration Compound or
Background Technology compound, other than Ligand Background Technology
compounds that are "Existing Compounds," and whose commercial use is restricted,
*** that has met criteria established by the JRC of safety and efficacy for
advancement into Pre-Clinical Development during the Research Term or any
extension thereof and which is selected by Organon as a Collaboration Lead
Compound according to Section 4.1. Attached hereto as Exhibit D is a complete
list of the Ligand Background Technology compounds whose commercial use is
restricted ***.
"COLLABORATION TECHNOLOGY" shall mean (a) all Collaboration Compounds and
information related thereto; (b) such technology, inventions, information, data,
know-how and materials (whether or not patented or patentable) that (i) a Party
hereto owns or Controls, (ii) related to the Field and (iii) are conceived,
generated or reduced to practice during the Research Term pursuant to the
Research Program, including, without limitation, improvements on either Party's
Background Technology; and (c) all patents, trade secrets and other intellectual
property rights covering any of (a) or (b).
"COMMENCEMENT DATE" shall mean February 11, 2000.
"COMPETING PRODUCT" shall mean, with respect to each specified
Collaboration Compound or Product, any other Collaboration Compound or Product
which (a) exhibits therapeutic or prophylactic activity which is similar to that
exhibited by such specified Collaboration Compound or Product, or (b) which is
being developed for *** for which the specified Collaboration Compound or
Product is also being developed.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 8.2
"CONTROL" OR "CONTROLLED" shall mean possession of the ability to grant the
licenses or sublicenses as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party.
"DESIGNATED TARGET" shall mean the progesterone receptor, including all
isoforms and variants thereof.
"DEVELOPMENT CANDIDATE" shall mean a Collaboration Lead Compound which
meets Organon's standard XXXX criteria and enters Pre-Clinical Development and
for which Organon has developed a synthesis which it believes can be used for
making quantities adequate for Clinical
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
5
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
Development and which has been used to generate sufficient quantities of the
material for Pre-Clinical Development and Phase I.
"EUROPE" shall mean The Netherlands, France, Germany, Great Britain, Italy
and Spain.
"EXTENSION TERM" shall have the meaning set forth in Article 2.11.
"FDA" shall mean the United States Food and Drug Administration or any
successor entity thereto.
"FIELD" shall mean the discovery, characterization, design and development
of Nonsteroidal Compounds for the treatment or prevention of diseases whose
beneficial effects are mediated through the Designated Target.
"FINAL DEVELOPMENT PLAN" shall mean a detailed plan prepared by Organon for
completing the preclinical development of a Collaboration Compound based on a
Ligand chemical template which is adequate for submission of an IND and which is
to be carried out in the time period described in Section 12.9 (a).
"FTES" shall mean one or more researchers with appropriate qualifications
employed by Ligand or Organon and assigned to work on the Collaboration with
such time and effort to constitute one such researcher working on the
Collaboration on a full time basis for no less than ***(***) hours per year.
"IND" shall mean an Investigational New Drug Application as defined in the
United States Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, or any corresponding foreign equivalent.
"INDEMNIFIED GROUP" shall have the meaning set forth in Article 17.
"INVENTION" shall have the meaning set forth in Section 10.2.
"INVENTOR" shall have meaning set forth in Section 10.2.
"JOINT RESEARCH COMMITTEE" or "JRC" shall mean the joint research committee
composed of representatives of Ligand and Organon described in Section 3.1
hereof.
"NDA" shall mean a New Drug Application as defined in the United States
Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or any
corresponding foreign equivalent.
"NET SALES" shall mean with respect to a Product, or product subject to
royalty under this Agreement , the gross amount invoiced to Non-Affiliated
Customers for all units of such Product,
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
6
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
or product subject to royalty under this Agreement , sold by Organon and its
Affiliated Customers, after deduction for the following items ***.
"NON-AFFILIATED CUSTOMER" shall mean any purchaser of Product who is not an
Affiliated Customer.
"NONSTEROIDAL COMPOUND" shall mean a compound which is not a Steroid.
"PATENT RIGHTS" shall mean, with respect to Organon or Ligand (a) all
patent applications heretofore or hereafter filed in any country within the
Territory owned or Controlled by or licensed to Ligand or Organon during the
Term of this Agreement, together with any and all United States and foreign
patents that have issued or in the future issue therefrom, and (b) all
divisionals, continuations, continuations-in-part, reexaminations, reissues,
renewals, substitutions, confirmation, registrations, revalidations, extensions
or additions to any such patents and patent applications and patents issuing
thereon; all to the extent and only to the extent that Ligand or Organon now has
or hereafter will have the right to grant licenses or other rights thereunder.
Patent Rights owned or Controlled by Ligand shall be referred to herein as
"Ligand Patent Rights. Patent Rights owned or Controlled by Organon shall be
referred to herein as "Organon Patent Rights".
"PHASE I", "PHASE II", and "PHASE III" shall mean Phase I (or Phase I/II),
Phase II and Phase III clinical trials, respectively, in each case as prescribed
by the applicable Regulatory Agency's regulations.
"PRE-CLINICAL DEVELOPMENT" shall mean, after selection of a Collaboration
Lead Compound under Section 4.1, all activities undertaken by Organon to develop
the Collaboration Lead Compound in the Field up to and including the initiation
of Phase I clinical trials or, in the U.S., filing of an IND on such
Collaboration Lead Compound, which are determined by the JRC or Organon to be
necessary or desirable to file an IND on such Collaboration Lead Compound,
including the preparation and filing of an IND.
"PRIMARY SCREENING" shall mean conducting any assay, screen or other test
on a compound under the Research Program to determine initially whether such
compound mediates the activity of the Designated Target, including without
limitation such assays, screens and other tests set forth in the Technical
Operating Plan and which Ligand currently has in its possession.
"PRODUCT" shall mean a pharmaceutical product which has as one of its
active ingredients a Collaboration Lead Compound that has been approved by the
applicable Regulatory Agency for marketing in a country for treatment,
palliation or prevention of disease in the Field.
"PRODUCT-LIGAND" shall mean a Product resulting from a Collaboration Lead
Compound that is based on a chemical template originated by Ligand.
"PRODUCT-ORGANON" shall mean a Product resulting from a Collaboration Lead
Compound that is based on a chemical template originated by Organon from an
Organon Background Technology compound.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
7
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
"PROJECT LEADER" shall have the meaning set forth in Section 3.3.
"REGULATORY AGENCY" shall mean the FDA and agencies of other governments of
other countries having similar jurisdiction over the development, manufacturing,
registration and marketing of pharmaceutical products.
"RESEARCH PROGRAM" shall mean the program of research in which Ligand and
Organon will participate and which is described generally in the Technical
Operating Plan.
"RESEARCH TERM" shall have the meaning set forth in Section 2.2.
"SECONDARY SCREENING" shall mean conducting any assay, screen or other test
using intracellular receptors on a Collaboration Compound for the purpose of
confirming the results of the Primary Screening or to test such Collaboration
Compound for cross-reactivity with other than the Designated Target.
"STEROID" shall mean a compound possessing ***.
"SUBLICENSEE" shall mean any Third Party who is granted the right to sell a
Product.
"TECHNICAL OPERATING PLAN" shall mean the research plan for the conduct of
the collaboration set forth in present form in Exhibit B hereto. The Technical
Operating Plan may be modified from time to time by the JRC in accordance with
Section 3.1.2.
"TERM OF THIS AGREEMENT" shall mean the period from the Agreement Date
until, with respect to each Product, the expiration of the last royalty
obligation owed by one Party to the other with respect to such Product, or until
this Agreement is otherwise terminated pursuant to its terms.
"TERRITORY" shall mean the entire world.
"THIRD PARTY" shall mean any party other than Organon or Ligand or an
Affiliate of either of them.
"TRIGGER EVENT" shall have the meaning set forth in Section 6.10.1.
"VALID CLAIM" shall mean a claim of an issued, unexpired and unabandoned
patent included within the Patent Rights owned or Controlled by a Party, which
has not been held unenforceable or invalid by a court or other governmental
agency of competent jurisdiction, and which has not been disclaimed or admitted
to be invalid or unenforceable through reissue or otherwise.
"WITHHELD PARTY" shall have the meaning set forth in Section 6.6.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
8
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
"WITHHOLDING PARTY" shall have the meaning set forth in Section 6.6.
ARTICLE 2
RESEARCH PROGRAM
2.1. CONDUCT OF RESEARCH. Each Party shall diligently conduct the work
assigned to it in the Technical Operating Plan in a professional manner and in
compliance with all requirements of applicable laws and regulations. Promptly
after the Agreement Date, each Party shall disclose to the other all Background
Technology then possessed by it which it deems to be relevant to the Field and
which it deems to be necessary or helpful for the other Party to perform the
work set out in the Technical Operating Plan. Each Party agrees to commit the
qualified and experienced personnel, facilities, equipment, expertise and other
resources necessary to perform its obligations under the Research Program.
2.2. RESEARCH TERM. The term of the Research Program ("Research Term")
shall begin on the Commencement Date and shall terminate on the second
anniversary of the Commencement Date, unless Organon elects to extend the
Research program in accordance with article 2.11 or terminate the Research
Program early in accordance with article 12.7.
2.3. ALLOCATION OF PERSONNEL. During the Research Term Ligand shall
allocate ***(***) FTEs for the areas of activity agreed to by the JRC and set
forth in the Technical Operating Plan. Organon shall allocate *** (***) FTEs for
the areas of activity agreed to by the JRC and set forth in the Technical
Operating Plan.
2.4. SCREENING RESPONSIBILITY. Ligand shall have primary responsibility for
conducting *** and *** as set forth in the Technical Operating Plan and as
designated by the JRC.
2.5. TRANSFER OF BACKGROUND TECHNOLOGY. Commencing after the Commencement
Data, and from time to time thereafter, each Party shall disclose to the other
Party such of its Background Technology as is reasonably necessary to enable the
other Party to perform Collaboration activities hereunder in accordance with the
Technical Operating Plan. During the Research Term, each Party will provide the
other Party with reasonable technical assistance relating to the use and
practice of such Party's Background Technology, solely to the extent permitted
under the licenses granted to the other Party herein. Absent an express decision
by the JRC, Ligand Background Technology will not be applied to the development
of Collaboration Compounds which are based on an Organon originated chemical
template.
2.6. SUBCONTRACTS. Neither Ligand nor Organon shall subcontract to Third
Parties portions
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
9
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
of the Technical Operating Plan to be performed by it or contract with
consultants to provide services specifically relating to the Technical Operating
Plan to any Third Party without the prior consent of the JRC, which consent
shall not be unreasonably withheld. Any such subcontractor shall enter into a
confidentiality agreement with the contracting Party which shall require such
subcontractor to maintain Confidential Information in confidence, and any such
subcontractor shall be required to comply in all material respects with all
requirements of applicable laws and regulations, together with all applicable
good laboratory practices and good manufacturing practices. The contracting
Party shall negotiate and execute the applicable agreement with such Third
Party, at its expense, and shall supervise and be responsible under this
Agreement for such subcontracted work. All such subcontracts shall contain terms
consistent with the terms of this Agreement.
2.7. INFORMATION AND REPORTS CONCERNING COLLABORATION TECHNOLOGY. All
Collaboration Technology made by either Party will be promptly disclosed to the
other Party, with significant discoveries or advances being communicated as soon
as practical after such information is obtained or its significance is
appreciated. The Parties will exchange at least monthly verbal or written
reports presenting a meaningful summary of their activities performed under this
Agreement. In addition to the foregoing, each Party shall promptly provide to
the other, as necessary, biological materials and the structures of all
Collaboration Compounds prepared or developed by such Party pursuant to the
Research Program.
2.8. FUNDING OF THE RESEARCH PROGRAM. In consideration for Ligand's
performance of its obligations under the Research Program, Organon shall pay
Ligand an amount for the FTEs employed by Ligand in the Research Program
according to the following schedule:
During year 2000: $*** per FTE per year.
From January 1st 2001 to December 31, 2001: $*** per FTE per year
***
During the Research Term, Organon shall pay Ligand quarterly in advance for
services to be performed by Ligand's FTEs under the Research Program upon
receipt of an invoice from Ligand. The first payment shall be due and payable on
the Commencement Date and shall include payment for any services to be rendered
between the Commencement and the next calendar quarter. Subsequent payments
shall be due and payable on the first day of each calendar quarter starting with
the calendar quarter starting on April 1, 2000. Ligand shall apply the research
funding it receives from Organon under this Agreement solely toward the conduct
of research with the goal of achieving the objectives of the Research Program.
2.9. ***. During the Research Term Ligand and Organon shall conduct
research with respect to identifying Collaboration Lead Compounds based on both
Ligand and Organon chemical
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
10
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
templates. Except as permited in Article 12, during the Research Term, ***.
2.10 RECORDS.
2.10.1 RECORDS. Ligand and Organon each shall maintain records, in
sufficient detail and in accordance with recognized scientific practices
appropriate for patent purposes, which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in the performance
of the Research Program (including all data in the form required under all
applicable laws and regulations). Such records shall include books, records, raw
data, reports, research notes, charts, graphs, comments, computations, analyses,
recordings, photographs, computer programs and documentation thereof, computer
information storage means, samples of materials and other graphic or written
data generated in connection with the Research Program including any data
required to be maintained pursuant to all requirements of applicable laws, rules
and regulations.
2.10.2 INSPECTION OF RECORDS. During the Research Term and ***, Ligand
and Organon each shall have the right, during normal business hours and upon
reasonable notice, to inspect all such records of the other Party to the extent
reasonably required for the performance of its obligations under this Agreement
(with the Party owning the records determining what is reasonably required).
Each Party shall maintain such records and the information of the other Party
contained therein in confidence in accordance with Article 8 and shall not use
such records or information except to the extent otherwise permitted by this
Agreement. Ligand shall maintain sufficient records to verify the calculation of
Ligand's allocation of Ligand FTEs to the Research Program as required under
Section 2.3. Ligand shall supply Organon with quarterly reports of the FTE
allocation to the Research Program. Not more than once each year during the
Research Term and *** Organon shall have the right, during normal business hours
and upon reasonable notice, to audit such records to verify such allocation.
Organon shall treat all financial information subject to review under this
Section 2.10 as confidential in accordance with the terms of Article 8. Ligand
shall promptly reimburse Organon for any overcharge for services provided under
the Research Program.
2.11. EXTENSION OF RESEARCH TERM. Organon shall have the right to further
extend the Research Term for additional ***(***) *** periods (the "Extension
Term") by giving Ligand written notice at least *** (***) *** before the second
anniversary of the Commencement Date with respect to the first such Extension
Term and *** (***) *** before the expiration of any subsequent Extension Term;
provided, however, that the cummulative Extension Term shall not exceed ***
(***) *** unless agreed to by Ligand. The amount paid to Ligand per FTE during
any extension shall be in accordance with Section 2.8.
2.12 ***
2.13 *** In accordance with ARTICLE 312.160, Title 21, Code of US Federal
Regulations, the Parties certify that the Background Technology compounds and
Collaboration Compounds
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
11
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
transferred from one Party to the other under this Agreement will be used
only for laboratory research or clinical research in accordance with applicable
law. ***
ARTICLE 3
MANAGEMENT OF THE RESEARCH PROGRAM
3.1 JOINT RESEARCH COMMITTEE.
3.1.1 COMPOSITION OF THE JRC. The Research Program and all
pre-clinical testing of Collaboration Compounds before commencing Pre-Clinical
Development shall be conducted under the direction of the JRC. The JRC shall be
composed of three (3) named representatives of Organon and three (3) named
representatives of Ligand. The named representatives shall designate one member
to serve as chairperson of the JRC for the first year of the Research Term.
Thereafter, the JRC will appoint a successor chairman. Each Party will identify
its representatives to the JRC within thirty (30) days after the Commencement
Date and each Party shall have the right to replace its representatives at any
time in its sole discretion after giving notice to the other Party.
3.1.2 RESPONSIBILITIES OF THE JRC. The purposes of the JRC shall be to
review, direct, supervise and coordinate all operational and scientific aspects
of the Research Program and all pre-clinical testing of Collaboration Compounds
before commencement of Pre-Clinical Development. As part of its
responsibilities, the JRC shall (a) promptly after the Commencement Date affirm
criteria of safety and efficacy set forth in the Technical Operating Plan for
advancement of Collaboration Compounds into Pre-Clinical Development as
Collaboration Lead Compounds and establish joint research teams to carry out the
Research Program, (b) review the research by Ligand and Organon under the
Research Program and the pre-clinical testing of Collaboration Compounds before
commencement of Pre-Clinical Development and amend the Technical Operating Plan
accordingly, (c) monitor the progress of the Research Program and evaluate the
work performed and the results obtained in relation to the goals of the Research
Program, (d) plan future activities under, and make any necessary or desirable
modifications to, the Research Program and the Technical Operating Plan, (e)
recommend Collaboration Compounds for further evaluation by the Parties under
the Research Program and for Pre-Clinical Development and Clinical Development
by Organon, and (f) perform such other functions to which the Parties agree. The
Party hosting each meeting of the JRC promptly shall prepare and deliver to the
other Party within fifteen (15) business days after the date of such meeting,
minutes of such meeting setting forth all decisions of the JRC relating to the
Research Program in form and content reasonably acceptable to the other Party.
3.1.3 MEETINGS OF THE JRC. The JRC shall meet at least once each
quarter during the Research Term, at such times and places as agreed to by
Ligand and Organon, alternating between San Diego, California and Oss, The
Netherlands, or such other locations as the Parties shall agree. The JRC and any
of its members may meet or attend meetings by telephone or video conference. The
JRC will communicate regularly by telephone, facsimile and video conference.
Meetings and telephone and video conferences of the JRC may be attended by such
other directors,
12
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
officers, employees, consultants and other agents of Ligand and Organon as the
Parties from time to time reasonably agree. Ligand and Organon will bear their
own costs in attending such meetings.
3.1.4 ACTIONS BY THE JRC. All decisions of the JRC shall be made by
unanimous vote of all of the members.
3.2 DISAGREEMENTS. All disagreements within the JRC shall be resolved by
presenting the disagreement to Xxxxx X. Xxxxxxxx or his successor as Chief
Executive Officer on behalf of Ligand, and the Managing Director R&D on behalf
of Organon, or their designees, for good faith resolution, for a period of
***(***) ***. If such disagreement is not resolved by the end of such *** (***)
*** period, the Parties shall be free to pursue any legal or equitable remedy
available to them.
3.3 PROJECT LEADERS. Ligand and Organon each shall appoint a person (a
"Project Leader") to coordinate its part of the Research Program. The Project
Leaders shall be the primary contacts between the Parties with respect to the
Research Program. Each Party shall notify the other within thirty (30) days of
the date of the Commencement Date of the appointment of its Project Leader and
shall promptly notify the other Party upon changing this appointment.
ARTICLE 4
DEVELOPMENT PROGRAM
4.1. PRE-CLINICAL DEVELOPMENT. The JRC will review the characteristics of
the Collaboration Compounds identified under the Research Program, and the JRC
will attempt to select certain Collaboration Compounds to be recommended to
Organon for further work in the Field as a "Collaboration Lead Compound".
Further, Organon shall have the right in its sole discretion, but without the
obligation, during the Term of the Agreement to select (either on its own or in
response to a recommendation from the JRC) Collaboration Compounds or Background
Technology compounds for such further work in the Field. Upon a written
recommendation by the JRC, Organon will use diligent efforts to conduct all
needed studies on such Collaboration Compound or Background Technology compound
to determine if such Collaboration Compound or Background Technology compound
shall be selected by Organon as a "Collaboration Lead Compound" and shall make
such selection within *** (***) *** of such recommendation by the JRC. If so
selected, Organon shall conduct Pre-Clinical Development of each such selected
Collaboration Compound in such manner as Organon shall determine in its sole
discretion, upon availability of an adequate supply of the Collaboration
Compound for Pre-Clinical Development and Phase I, and shall inform Ligand and
the JRC of the progress and results thereof. If not selected, then Ligand shall
have the right ***(***) *** following the date of recommendation by the JRC to
develop and commercialize the compound as if it were an abandoned Collaboration
Compound in accordance with Section 5.3.1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
13
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
if the abandoned Collaboration Compound is based on a chemical template
originated by Ligand.
4.2. CLINICAL DEVELOPMENT. Organon shall use diligent efforts to pursue the
Clinical Development and commercialization of each Collaboration Lead Compound
at its own expense and under its sole discretion. Notwithstanding anything else
in this Agreement, but subject to Ligand's rights under Section 5.3, Organon
shall have the sole discretion to determine (a) which Products to develop or
market or to continue to develop or market, (b) which Products to seek
regulatory approval for, and (c) when and where and how and on what terms and
conditions, to market such Products in the Territory.
4.3 DEVELOPMENT INFORMATION. Organon shall be the owner of any data,
information, inventions and discoveries generated as a result of the
Pre-Clinical Development, Clinical Development and commercialization of
Collaboration Lead Compounds and Products. Within thirty (30) days after the end
of each twelve (12) month period following the commencement of Preclinical
Development by Organon of the first Collaboration Lead Compound, Organon shall
provide to Ligand a reasonably detailed written development report which shall
describe the progress of the Preclinical Development and/or Clinical Development
of the Collaboration Lead Compound or Product and the filing and obtaining of
the approvals necessary for marketing. The report shall contain not less than
the information identified in Exhibit A hereto.
ARTICLE 5
LICENSES -- RESEARCH, DEVELOPMENT,
MARKETING AND MANUFACTURING
5.1 CROSS-LICENSES TO BACKGROUND TECHNOLOGY. Each Party hereby grants and
agrees to grant to the other a worldwide, non-exclusive, royalty-free license to
use and practice such Party's Background Technology solely to the extent
necessary for the other Party to perform its obligations under the Research
Program, until the termination of the Research Term. Notwithstanding the
foregoing, the granting Party may terminate such license granted by it hereunder
immediately upon its termination of this Agreement for breach by the other Party
under Section 12.3.
5.2 LICENSE GRANT TO ORGANON. Ligand hereby grants to Organon an exclusive,
worldwide license, with the right to sublicense, which license shall be
exclusive even as to Ligand, under Ligand's Patent Rights and Collaboration
Technology owned or Controlled by or licensed to Ligand, including Ligand's
rights in any jointly owned Patent Rights to the extent necessary, to develop,
make, have made, use, manufacture, have manufactured, import, promote, offer for
sale, sell, distribute, market and commercialize (with the right to sublicense)
any Products in the Field.
14
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
The rights granted Organon by Ligand under this Section 5.2 do not include the
right to commercialize compounds which ***.
5.3 LIGAND RIGHTS.
5.3.1 At any time ***, Ligand shall have the right in its sole
discretion at its sole expense, for its own benefit or together with an
Affiliate or Third Party, to develop and commercialize in the Territory those
Collaboration Lead Compounds which Organon notifies Ligand that it has abandoned
or elected not to develop in the Field if the abandoned Collaboration Lead
Compound is based on a chemical template originated by Ligand, provided that
Organon, or any of its Affiliates or Sublicensees is not developing or
commercializing the Collaboration Lead Compound for any other pharmaceutical
purpose and not conducting Pre-Clinical Development or Clinical Development with
respect to, or selling or commercializing, a Competing Product.
5.3.2 Except in the case of termination by Organon under Section 12.3
below, if Organon notifies Ligand that ***, Ligand shall have the right in its
sole discretion at its sole expense, for its own benefit or together with an
Affiliate or Third Party, to commercialize such Product in such abandoned
country, provided that Organon, its Affiliates or Sublicensees is ***.
5.3.3 In the event that Organon decides, in its sole discretion, to
license a Product to Third Parties, it shall first notify Ligand in writing and
offer to negotiate such arrangement with Ligand. If Ligand notifies Organon that
it desires to negotiate for such rights within ***(***) *** of receipt of
notification from Organon, the Parties shall in good faith and for a period of
*** (***) ***, negotiate the terms of any such commercial arrangement. If no
definitive written agreement on such terms is reached within such *** (***) ***
period, Organon may at any time thereafter transfer such rights to a Third
Party.
5.3.4 If Ligand exercises its rights under Sections 5.3.1 or 5.3.2
with respect to any Collaboration Lead Compound or Product owned by or licensed
to Organon, Organon (a) shall grant to Ligand an exclusive license (with the
exclusive right to sublicense) to make, have made, use and sell (i) such
abandoned Collaboration Lead Compounds in the Field in the Territory or (ii)
such Products in the Field in the country(ies) for which Organon has abandoned
the Product, (b) shall provide Ligand, at Ligand's expense, with all such
information and data which Organon, its Affiliates or Sublicensees reasonably
has available in such country or the Territory as the case may be, for example
access to drug master file, clinical and QA data and the like, and shall execute
such instruments as reasonably necessary , to effectuate such license , and (c)
thereafter shall have no further rights under this Agreement in the Territory
with respect to such Collaboration Lead Compound or in the abandoned
country(ies) with respect to such Product except as expressly provided in this
Agreement. If Ligand exercises the right to develop and commercialize a
Collaboration Lead Compound or Product under Sections 5.3.1 or 5.3.2, upon
exercise that right shall be exclusive and with the right to grant sublicenses.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
15
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
ARTICLE 6
ROYALTIES, MILESTONES AND OTHER PAYMENTS
6.1. REIMBURSEMENT FOR RESEARCH AND DEVELOPMENT. As consideration for
research and development expense incurred by Ligand in the Field, upon receipt
of an invoice from Ligand, Organon shall pay Ligand a fee of ***(***) due and
payable upon ***.
6.2. ROYALTIES PAYABLE BY ORGANON. In consideration for the technology and
know-how provided by Ligand to the Research Program and for the licenses granted
to Organon herein, Organon shall pay to Ligand a royalty on worldwide sales of
Products by Organon and Affiliated Customers to Non-Affiliated Customers of
Organon equal to a percentage of the annual Net Sales of such Products, where
the percentage rate applicable to a particular sale shall be determined based on
the total annual Net Sales of Products and whether the Product is a
Product-Ligand or a Product-Organon according to the following rate schedule:
Annual Net Sales (in millions)
ROYALTY PERCENTAGE OF EACH PRODUCT IN THE TERRITORY
PRODUCT-LIGAND PRODUCT-ORGANON
***% ***% up to ***
***% ***% in excess of *** and up to ***
***% ***% in excess of *** and up to ***
***% ***% in excess of ***
By way of clarification, the royalty on a Product-Ligand with annual Net Sales
of *** million would be ***% for the first *** million, ***% for the second ***
million, ***% for the next *** million and ***% for the remaining *** million.
The royalties shall be payable with respect to a particular Product, on a
country-by-country basis, until the later of (a) expiration in the particular
country of the last to expire Valid Claim owned or Controlled by Ligand or
jointly owned by Ligand and Organon that is necessary to make, use, import for
sale or sell such Product in such country, or (b) *** (***) *** from the date of
the first sale of such Product to a Third Party in such country; provided that
such royalty obligation shall terminate upon ***.
6.3 ADJUSTMENTS TO ROYALTY.
(a) No ROYALTY CREDIT. All royalties Organon is already obligated as of the
Agreement Date, or becomes obligated after the Agreement Date, to pay to any
Third Party in connection with the manufacture, use or sale of a Collaboration
Lead Compound or Product shall be the sole obligation of Organon and shall not
affect royalties payable to Ligand under this Agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
16
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
6.4 CURRENCY OF PAYMENT. All payments to be made under this Agreement shall
be made in United States dollars in the United States by wire transfer to a bank
account designated by the Party to be paid. Royalties earned shall first be
determined in the currency of the country in which they are earned and then
converted to its equivalent in United States currency. The buying rates of
exchange for the currencies involved into the currency of the United States
quoted by Citibank (or its successor in interest) in New York, New York at the
close of business on the last business day of the quarterly period in which the
royalties were earned shall be used to determine any such conversion.
6.5 PAYMENT AND REPORTING. The royalties due under Section 6.2 shall be
paid quarterly, within three (3) months after the close of each calendar
quarter, or earlier if practical (i.e., on or before the last day of each of the
months of June, September, December and March), immediately following each
quarterly period in which such royalties are earned. With each such quarterly
payment, the payer shall furnish the payee a royalty statement setting forth on
a country-by-country basis the total number of units, gross amount invoiced,
deductions taken according to each category listed in the Net Sales definition,
and Net Sales of each royalty-bearing Product sold hereunder for the quarterly
period for which the royalties are due.
6.6 TAXES WITHHELD. Any income or other tax that one Party hereunder, its
Affiliates or Sublicensees is required to withhold (the "Withholding Party") and
pay on behalf of the other Party hereunder (the "Withheld Party") with respect
to the royalties payable under this Agreement shall be deducted from and offset
against said royalties prior to remittance to the Withheld Party; provided,
however, that in regard to any tax so deducted, the Withholding Party shall give
or cause to be given to the Withheld Party such assistance as may reasonably be
necessary to enable the Withheld Party to claim exemption therefrom or credit
therefor, and in each case shall furnish the Withheld Party proper evidence of
the taxes paid on its behalf.
6.7 COMPUTATION OF ROYALTIES. All sales of Products between the selling
Party and any of its Affiliated Customers shall be disregarded for purposes of
computing Net Sales and royalties under this Section 6, but in such instances
royalties shall be payable only upon sales of the selling Party and its
Affiliated Customers to Non-Affiliated Customers. Nothing herein contained shall
obligate either Party to pay the other Party more than one royalty on any unit
of a Product.
6.8 LICENSES TO AFFILIATES AND SUBLICENSEES. Each Party shall, at the other
Party's reasonable request, enter into license and/or royalty agreements
directly with the other Party's Affiliates and permitted Sublicensees, in lieu
of the license grant to or royalty obligation of the requesting Party; provided
such agreements would not decrease the amount of royalties which would be owed
hereunder. Such agreements shall contain the same language as contained herein
with appropriate changes in parties and territory, and this Agreement shall be
amended as appropriate. No such license and/or royalty agreement will relieve
Organon or Ligand, as the case may be, of its obligations hereunder, and such
Party will guarantee the obligations of its Affiliate or sublicense in any such
agreement. Royalties received directly from one Party's Affiliates and
Sublicensees shall be credited towards such Party's royalty obligations under
this Agreement, as applicable.
6.9 RESTRICTIONS ON PAYMENTS. Payment of royalties under this Agreement
shall be adjusted
17
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
or excused to the extent necessary to comply with statutes, laws, codes or
government regulations in a particular country which restrict or prevent such
royalty payments by the seller of Products.
6.10 Milestone Payments.
6.10.1 TRIGGER EVENTS: As additional consideration for Ligand's
participation in the Research Program, Organon shall pay Ligand, at the times
set forth below, milestone payments set forth below with respect to each
Collaboration Lead Compound based on a chemical template originated by Ligand to
achieve such milestone, except as permitted in Section 6.10.2. Organon shall pay
Ligand, at the times set forth below, ***% of the milestone payments set forth
below with respect to each Collaboration Lead Compound based on a chemical
template originated by Organon,
a. ***
b. ***
c. ***
d. ***
e. ***
For convenience of reference, each of the events described in clauses (a)
through (e) above is referred to herein as a "Trigger Event".
6.10.2 BACKUP COMPOUNDS. Except as provided in this Section 6.10.2,
***. If development of the more advanced Collaboration Lead Compound is
abandoned prior to occurrence of the Trigger Event described in Section
6.10.1(e), Organon will have to make *** per cent (***%) of the milestone
payments for Trigger Events achieved by the Backup Compound that were not
achieved by the abandoned Collaboration Lead Compound. If the Backup Compound
reaches a Trigger Event before the Collaboration Lead Compound for which it is a
backup compound, Organon will make *** per cent (***%) of the milestone payment
for that and each subsequent Trigger Event reached by the Backup Compound but
shall not be required to make the milestone payment for that and each subsequent
Trigger Event realized by the Collaboration Lead Compound for which a milestone
payment is made for the Backup Compound. If a Backup Compound reaches Trigger
Event 6.10.1(b) for a different therapeutic indication than that for which the
Collaboration Lead Compound is being developed, Ligand shall be paid the
6.10.1(a) milestone and the 6.10.1(b) milestone and thereafter the Backup
Compound shall be treated under 6.10.1 as a Collaboration Lead Compound. If a
Collaboration Lead Compound reaches Trigger Event 6.10.1(e) and Organon
continues to develop a Backup Compound for it, upon reaching the next Trigger
Event for that Backup Compound Organon shall pay Ligand the milestone payment
for that and all prior Trigger
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
18
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
Events reached by the Backup Compound and thereafter the Backup Compound shall
be treated under 6.10.1 as a Collaboration Lead Compound.
6.11 AUDITS.
6.11.1 AUDITS. Upon the written request of Ligand and not more than
once in each calendar year, Organon shall permit an independent certified public
accounting firm of nationally recognized standing, selected by Ligand and
reasonably acceptable to Organon, at Ligand's expense, to have access during
normal business hours to such of the records of Organon as may be reasonably
necessary to verify the accuracy of the royalty reports hereunder for eight (8)
quarters prior to the date of such request. The accounting firm shall be bound
by confidentiality obligations and shall disclose to Ligand only whether the
records are correct or not and, if applicable, the amount of any discrepancies.
6.11.2 If such accounting firm concludes that additional royalties
were owed during such period, Organon shall pay the additional royalties within
*** (***) *** of the date Ligand delivers to Organon such accounting firm's
written report so concluding. The fees charged by such accounting firm shall be
paid by Ligand; provided, however, if the audit discloses that the royalties
payable by Organon for the audited period are more than *** percent (***%) of
the royalties actually paid for such period, then Organon shall pay the
reasonable fees and expenses charged by such accounting firm.
6.11.3 Organon shall include in each permitted sublicense granted by
it pursuant to the Agreement a provision requiring the Sublicensee to make
reports to Organon, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by Ligand's accounting firm to
the same extent required of Organon under the Agreement. Upon the expiration of
twenty-four (24) months following the end of any year, the calculation of
royalties payable with respect to such year shall be binding and conclusive upon
Ligand, Organon and its Sublicensees, and such Sublicensees shall be released
from any liability or accountability with respect to royalties for such year.
ARTICLE 7
INFRINGEMENT ACTIONS BY THIRD PARTIES
If a Party, or to its knowledge, any of its Affiliates or Sublicensees
shall be sued or threatened to be sued for infringement of a patent or other
intellectual property rights of a Third Party because of the reasonable
development, manufacture, use or sale of Collaboration Compounds, Collaboration
Lead Compounds or Products or any other action undertaken by such Party under
this Agreement, such Party shall promptly notify the other in writing of the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
19
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
institution or threat of such action. The Party sued or threatened to be sued
shall have the right, in its sole discretion, to control the defense and
settlement of such claim at its own expense, in which event the other Party
shall cooperate fully in the defense of such suit and furnish to the Party sued
all evidence and assistance in its control. Any judgments, settlements or
damages payable with respect to legal proceedings covered by this Article 7
shall be paid by the Party which controls the litigation, subject to any claims
against the other Party for breach of this Agreement or otherwise available at
law or in equity. Any Third Party royalty payments required to be paid as the
result of a judgment or settlement under this Article 7 shall be paid by the
Party controlling the suit subject to any claims against the other Party for
breach of this Agreement or otherwise available at law or in equity; provided,
however, (a) in the case of a Product sold by Organon, if such Third Party
royalty payments or damages arise from the infringement of a patent published or
granted before the date of this Agreement having a claim or claims which cover
the screening activities of Ligand or use of Ligand Background Technology under
the Research Program, the Third Party royalty payments or damages shall be
creditable against the royalty due Ligand under Article 6; or (b) in the case of
a Product sold by Organon, if such Third Party royalty payments arise from the
infringement of a granted patent published after the date of this Agreement
having a claim or claims which cover the screening activities of Ligand or use
of Ligand Background Technology under the Research Program, *** per cent (***% )
of the Third Party royalty payments shall be creditable against the royalty due
Ligand under Article 6, but in no event shall the royalty due Ligand be reduced
by more than ***per cent (***%) under this subsection (b).
ARTICLE 8
CONFIDENTIALITY
8.1 NONDISCLOSURE OBLIGATIONS. Except as otherwise provided in this Article
8 and subject to Article 9 hereof, during the Term of this Agreement and for a
period of *** (***) *** thereafter, (a) both Parties shall maintain in
confidence all Collaboration Technology and information and data developed
pursuant to the Collaboration and solely owned by the disclosing Party or
jointly owned by the Parties; and (b) both Parties shall also maintain in
confidence and use only for purposes of this Agreement all Background Technology
and all other information and data supplied by the other Party under this
Agreement.
8.2 PERMITTED DISCLOSURES. For purposes of this Article 8, information and
data described in clauses (a) or (b) of Section 8.1 above shall be referred to
as "Confidential Information". To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement, (a) a Party may disclose Confidential Information it is otherwise
obligated under this Article 8 not to disclose to its Affiliates, Sublicensees,
consultants, outside contractors, clinical investigators, agent, suppliers and
other Third Parties on a need-to-know basis on condition that such persons or
entities agree to keep the Confidential Information confidential for the same
time periods
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
20
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
and to the same extent as such Party is required to keep the Confidential
Information confidential; (b) a Party or its Affiliates or Sublicensees may
disclose such Confidential Information to government or other regulatory
authorities to the extent that such disclosure is reasonably necessary to
conduct Pre-Clinical Development, Clinical Development or commercialization of
Collaboration Lead Compounds or Products or to obtain patents on Collaboration
Compounds, Collaboration Lead Compounds or Products ; (c) a Party may disclose
Confidential Information as required by applicable law, regulation or judicial
process, provided that, where practicable, such Party shall give the other Party
prior written notice thereof and adequate opportunity to object to any such
disclosure or to request confidential treatment thereof; and (d) a Party may
disclose Confidential Information as permitted under Article 9.
The obligation not to disclose or use the Confidential Information shall
not apply to any part of the Confidential Information that (i) is or becomes
patented, published or otherwise part of the public domain other than by acts of
the Party obligated not to disclose such Confidential Information or its
Affiliates or Sublicensees in contravention of this Agreement; or (ii) is
disclosed to the receiving Party or its Affiliates or Sublicensees by a Third
Party, provided such Confidential Information was not obtained by such Third
Party directly or indirectly from the other Party on a confidential basis; or
(iii) prior to disclosure under this Agreement, was already in the possession of
the receiving Party or any of its Affiliates or Sublicensees, provided such
Confidential Information was not obtained directly or indirectly from the other
Party on a confidential basis; (iv) is independently developed by the receiving
Party or any of its Affiliates of sublicenses without aid or use of the
Confidential Information; or (v) is disclosed in a press release agreed to by
both Parties under Section 8.3 below.
8.3. PUBLICITY. All publicity, press releases and other announcements
relating to this Agreement or the transactions contemplated hereby (other than
publications by Organon of results of Pre-Clinical Development, Clinical
Development or post-marketing research) shall be reviewed in advance by, and
shall be subject to the approval of, both Parties; provided, however, that
either Party may (a) disclose the terms of this Agreement to the extent required
to comply with applicable securities laws and in that case , the non-disclosing
Party shall have the right to review and comment on such disclosure prior to its
submission and the disclosing Party shall cooperate to minimize the scope and
content of such disclosure, and (b) disclose the terms of this Agreement to
prospective lenders, investment bankers and other financial institutions of its
choice solely for purposes of financing the business operations of such Party,
but only if the disclosing Party obtains a signed confidentiality agreement with
such entity upon terms similar to those contained in this Article 8. The Parties
have agreed to issue a press release in the form attached hereto as Exhibit C
following execution of this Agreement.
21
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
ARTICLE 9
PUBLICATION
The Parties shall cooperate in appropriate publication of the results of
the Research Program, but subject to the predominating interest to obtain patent
protection for any patentable subject matter. To this end, it is agreed that
prior to any public disclosure of such results, the Party proposing disclosure
shall send the other Party a copy of the information to be disclosed, and shall
allow the other Party *** from the date of receipt in which to determine whether
the information to be disclosed contains subject matter for which patent
protection should be sought prior to disclosure, or otherwise contains
Confidential Information of the reviewing Party which such Party desires to
maintain as a trade secret. If notification is not received during the ***, the
Party proposing disclosure shall be free to proceed with the disclosure. If due
to a valid business reason or a belief by the non-disclosing Party that the
disclosure contains subject matter for which a patentable invention should be
sought, then prior to the expiration of the ***, the non-disclosing Party shall
so notify the disclosing Party, who shall then delay public disclosure of the
information for an additional period of up to *** to permit the preparation and
filing of a patent application on the subject matter to be disclosed or other
action to be taken. The Party proposing disclosure shall thereafter be free to
publish or disclose the information. The determination of authorship for any
paper shall be in accordance with accepted scientific practice. In no event may
any publication or other disclosure contain a Party's Confidential Information
without such Party's prior written consent. Ligand shall not publish the results
of the Pre-Clinical Development or the Clinical Development of any Collaboration
Lead Compound or any other information or data relating to a Collaboration
Compound, Collaboration Lead Compound or Product without Organon's prior written
consent. Organon may publish the results of the Pre-Clinical Development and
Clinical Development without Ligand's prior written consent provided that no
such publication shall contain Confidential Information solely owned by Ligand.
ARTICLE 10
PATENTS AND INVENTIONS
10.1 OWNERSHIP OF BACKGROUND TECHNOLOGY. Except as otherwise set forth
herein, each Party shall retain ownership or Control, as the case may be, over
its Background Technology. The owner of any patentable Background Technology
shall have the right, at its option and expense, to prepare, file and prosecute
(including without limitation in administrative proceedings such as oppositions
and interferences) in its own name any patent applications with respect to such
Background Technology and to maintain any patents issued.
10.2 OWNERSHIP OF COLLABORATION TECHNOLOGY. Except as otherwise set forth
herein, ownership of Collaboration Technology (whether or not patentable) shall
be owned by the Party(ies)
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
22
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
whose employee(s) are determined to be inventors in accordance with United
States laws of inventorship. Subject to Section 10.3, the owner (the "Inventor")
of any patentable Collaboration Technology (an "Invention") shall have the
right, at its option and expense and through attorneys and agents of its choice,
to prepare, file and prosecute (including any proceedings relating to reissues,
reexaminations, protests, interferences and requests for patent extensions or
supplementary protection certificates) in its own name any patent applications
with respect to any Invention owned by it and to maintain any patents issued. In
connection therewith, the non-Inventor Party agrees to cooperate with the
Inventor at the Inventor's expense in the preparation and prosecution of all
such patent applications and in the maintenance of any patents issued. The
obligations set forth in this Section 10.2 shall survive the expiration or
termination of this Agreement.
10.3 JOINT INVENTIONS. ***; however, subject to Section 10.2, Organon will
have the rights and responsibilities of the Inventor as described in this
Section 10 with respect to the preparation, filing, prosecution and maintenance
of patent applications in the name of both owners for any such patentable, ***
and Ligand shall have the rights and responsibilities of *** therein. Organon
shall have the right but not the obligation to pay all expenses in connection
with the preparation, filing and prosecution of patent applications that claim
patentable, ***. Organon shall from time to time notify Ligand of the amount of
such expenses, and Ligand shall promptly thereafter pay Organon ***percent
(***%) of its out-of-pocket expenses. As used in the preceding sentence
"out-of-pocket expenses" means direct costs, excluding internal labor costs.
Ligand may elect in writing to disclaim all interest in any jointly invented
Invention, in which case (a) such Invention will be solely owned by Organon, and
Ligand will cooperate to assure Organon's sole ownership, (b) Ligand will have
no further interest in such Invention, by ownership, license or otherwise, and
(c) Ligand will not be responsible for reimbursing Organon for any expenses
incurred by Organon from and after the date that Organon receives Ligand's
written disclaimer. Organon may elect in writing to disclaim all interest in any
jointly invented Inventions, in which case (i) such Invention will be solely
owned by Ligand and Ligand shall be solely liable for any expenses incurred with
respect to such Invention after Organon's disclaimer, and Organon will cooperate
to assure Ligand's sole ownership, (ii) Organon will have no further interest in
such Invention, by ownership, license or otherwise, and (iii) Organon will, at
Ligand's cost and request, continue the preparation, filing and prosecution of
the relevant patent application(s) for up to four weeks following Organon's
delivery of written disclaimer, if failure to so continue would have a material
adverse impact on such patent application(s).
10.4 PROTECTION OF PATENT RIGHTS.
(a) The Inventor shall prepare, prosecute and maintain (and shall use
reasonable efforts to keep the other Party currently informed of all steps to be
taken in such preparation, prosecution and maintenance) all of its Patent Rights
which claim an Invention and upon request shall furnish the other Party with
copies of such Patent Rights and other related correspondence relating to such
Invention to and from patent offices and permit the other Party to offer its
comments thereon before the Inventor makes a submission to a patent office which
could materially affect the scope or validity
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
23
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
of the patent coverage that may result. The Inventor will inform the
Non-Inventor of the countries in which it intends to file for Patent Rights. The
non-Inventor Party shall offer its comments promptly, including any request that
the Patent Rights be filed in additional countries. Ligand and Organon shall
each promptly notify the other of any infringement or unauthorized use of an
Invention which comes to its attention.
(b) If the Inventor fails to (i) fulfill its obligations under this Section
10, (ii) protect against abandonment of a Patent Right which claims an
Invention, or (iii) file for Patent Rights in a country requested by the
Non-Inventor, the Inventor shall permit the non-Inventor Party, at its option
and expense, to undertake such obligations, and thereafter such Patent Rights
shall be deemed to be assigned to such non-Inventor Party in the affected
countries. The Party not undertaking such actions shall fully cooperate with the
other Party and shall provide to the other Party whatever assignments and other
documents that may be needed in connection therewith. The Party finally
conducting legal actions or proceedings against an alleged infringer or other
Party shall be entitled to any damages or costs awarded against such infringer
or other Party.
(c) In the event Ligand or Organon becomes aware of any actual or
threatened infringement of any Patent Right of either Party which claims an
Invention, that Party shall promptly notify the other, and the Parties'
representatives shall promptly discuss how to proceed in connection with such
actual or threatened infringement. If both Parties participate in the conduct of
a legal action pursuant to this Section 10.4(c), (i) if one Party files, the
actual costs and expenses of such action shall be reimbursed first to the filing
Party and then to the participating Party out of any damages or other monetary
awards recovered therein in favor of Organon or Ligand, or (ii) if both Parties
file, the actual costs and expenses of such action shall be reimbursed
proportionally between the Parties out of any damages or other monetary awards
recovered therein in favor of Organon or Ligand, based on the actual costs and
expenses incurred by each Party in connection with such action. Any remaining
damages received by Organon shall then be treated as Net Sales of Product by
Organon. If one Party alone conducts such legal action, ***percent (***%) of the
actual costs and expenses of such action shall be reimbursed to such Party out
of any damages or other monetary awards; any remaining damages shall then be
treated as Net Sales of Product. If either Party commences any actions or
proceedings (legal or otherwise) pursuant to this Section 10.4(c), it shall
prosecute the same vigorously at its expense and shall not abandon or compromise
them or fail to exercise any rights of appeal without giving the other Party the
right to take over the prosecuting Party's conduct at such other Party's own
expense.
10.5 NOTIFICATION OF PATENT TERM RESTORATION AND THIRD PARTY ABBREVIATED
NEW DRUG APPLICATIONS. Ligand or Organon, as the case may be, shall notify the
other Party of (a) the issuance of each U.S. patent, or foreign patent where
extension is possible, included within the Patent Rights which claim an
Invention, giving the date of issue and patent number for each such patent, and
(b) each notice pertaining to any patent included within the Patent Rights which
claim an Invention which it receives as patent owner pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984 (hereinafter called the
"Act") or equivalent foreign laws, including notices
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
24
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
pursuant to 21 U.S.C. ss.355(b)(3) and ss.355(j)(2)(B)from persons who have
filed an abbreviated NDA ("ANDA"). Such notices shall be given promptly, but in
any event within ten (10) calendar days of each such patent's date of issue or
receipt of each such notice pursuant to the Act, whichever is applicable. The
Parties will assist with each other's efforts to seek patent extensions within
the meaning of this Section 10.5.
10.6 Any dispute between the Parties regarding the inventorship of an
Invention or Joint Invention made under the Research Program shall be resolved
through appointment of an independent patent counsel, mutually acceptable to the
Parties, after consideration of all evidence submitted by the Parties. The
expense of the independent patent counsel shall be borne equally by Ligand and
Organon.
10.7 TRADE SECRETS. If a Party owns an Invention which can be usefully
practiced as a trade secret, it shall have the right to not seek Patent Rights
on that Invention and all rights to use that trade secret shall revert to it
upon expiration or termination of the Research Program. In the case of a jointly
owned Invention, if the Parties do not agree to keep it a trade secret, at the
request of either Party, the procedures of Articles 10.3 and 10.4 shall apply to
said Invention.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
Each Party hereby represents and warrants to the other Party as follows:
11.1 CORPORATE EXISTENCE AND POWER. Such Party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, (b) has the corporate power and authority and the
legal right to own and operate its property and assets, to lease the property
and assets it operates under lease, and to carry on its business as it is now
being conducted, and (c) is in compliance with all requirements of applicable
law, except to the extent that any noncompliance would not have a material
adverse effect on such Party's ability to perform its obligations under this
Agreement.
11.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such Party (a) has the
corporate power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder, and (b) has taken all necessary
corporate action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This Agreement has
been duly executed and delivered on behalf of such Party, and constitutes a
legal, valid, binding obligation, enforceable against such Party in accordance
with its terms and does not conflict with Ligand's obligations under the
agreement made between Ligand and American Home Products Incorporated prior to
the Agreement Date .
11.3 CONSENTS. All necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by such Party
in connection with the execution, delivery and performance of this Agreement
have been and shall be obtained.
25
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
11.4 NO CONFLICT. Notwithstanding anything to the contrary in this
Agreement, the execution and delivery of this Agreement and the performance of
such Party's obligations hereunder do not conflict with or violate any
requirement of applicable laws or regulations or any of the terms of its
certificate of incorporation or by-laws.
11.5 INTELLECTUAL PROPERTY. Such Party (a) owns or is the licensee in good
standing of all Patent Rights presently contemplated to be used by it in
connection with the Research Program, except to the extent that such use is to
be based upon patents, trademarks and other intellectual property furnished by
the other Party; (b) is not in default with respect to any license agreement
related to the Research Program; (c) has received no notice of infringement or
misappropriation of any alleged rights asserted by any Third Party in relation
to any Background Technology to be used by it in connection with the Research
Program and (d) is not aware of any patent, trade secret or other right of any
Third Party which could materially adversely affect its ability to carry out its
responsibilities under this Agreement or the other Party's ability to exercise
or exploit any license granted to it under this Agreement. Such Party agrees to
immediately notify the other Party in writing in the event such Party hereafter
becomes in default under any license agreement referred to in (b) above, or
receives a notice of the type referred to in (c) above or becomes aware of any
patent trade secret or other right of the nature referred to in subpart (d) of
the preceding sentence.
11.6 DISCLAIMER OF WARRANTIES. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED
AS A REPRESENTATION MADE, OR WARRANTY GIVEN, BY LIGAND OR ORGANON (A) THAT ANY
PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION WITHIN THE PATENT
RIGHTS, (B) THAT ANY PATENT WITHIN THE PATENT RIGHTS WHICH ISSUES WILL BE VALID,
OR (C) THAT, EXCEPT FOR THE PROVISIONS OF SECTION 11.5 HEREIN WHICH SHALL NOT BE
AFFECTED BY THIS SECTION 11.6, THE USE OF ANY LICENSE GRANTED HEREUNDER OR THE
USE OF ANY PATENT RIGHTS WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF
ANY THIRD PARTY. FURTHERMORE, NEITHER LIGAND NOR ORGANON MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PATENT
RIGHTS EXCEPT AS PROVIDED IN SECTION 11.5. LIGAND AND ORGANON EACH SPECIFICALLY
DISCLAIM THAT THE RESEARCH PROGRAM OR THE PRE-CLINICAL DEVELOPMENT OR CLINICAL
DEVELOPMENT WILL BE SUCCESSFUL, IN WHOLE OR IN PART, OR THAT ANY CLINICAL OR
OTHER STUDIES UNDERTAKEN BY IT WILL BE SUCCESSFUL. ORGANON DOES NOT WARRANT THAT
ITS EFFORTS TO RESEARCH, DEVELOP OR COMMERCIALIZE ANY COLLABORATION COMPOUND,
COLLABORATION LEAD COMPOUND OR PRODUCT WILL RESULT IN REGULATORY APPROVAL OF ANY
PRODUCT, NOR DOES ORGANON WARRANT THAT ANY SUCH PRODUCT WILL ACHIEVE ANY LEVEL
OF NET SALES OR BE CONTINUED IF IT OBTAINS REGULATORY APPROVAL. EXCEPT AS
OTHERWISE EXPRESSLY STATED HEREIN, EACH PARTY HEREBY DISCLAIMS ANY WARRANTY,
EXPRESSED OR IMPLIED, AS TO ANY PRODUCT SOLD OR PLACED IN COMMERCE BY OR ON
BEHALF OF ORGANON OR ITS AFFILIATES OR SUBLICENSEES.
26
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
ARTICLE 12
TERM AND TERMINATION
12.1 EXPIRATION. Unless terminated earlier by agreement of the Parties or
pursuant to this Article 12, this Agreement shall expire on the expiration of
the last to expire of all obligations to pay royalties under this Agreement.
12.2 TERMINATION OF AGREEMENT AT END OF RESEARCH TERM. Organon shall have
the right to terminate this Agreement at the end of the Research Term, or any
extension thereof, by giving Ligand ***(***) *** written notice if no
Collaboration Lead Compound has been selected. Each Party shall then return to
the other Party the Background Technology of such other Party that is in its
possession. After such termination Ligand shall have the right to develop and
market Collaboration Compounds based on a Ligand chemical template without the
obligation to pay milestones or royalties to Organon and Organon shall have the
right to develop and market Collaboration Compounds based on an Organon chemical
template without the obligation to pay milestones or royalties to Ligand.
12.3 TERMINATION FOR BREACH. A Party shall have the right to terminate the
Term of this Agreement for a material breach of this Agreement; provided,
however, that termination cannot occur until ***(***) *** after the giving of
notice of intention to terminate to the breaching Party and only if the breach
is not cured during such *** (***) *** period.
In the event of an uncured breach of a material obligation under this
Agreement, the non-breaching Party may terminate the Term of this Agreement and
each Party shall retain such ownership interest in the Collaboration Technology
as it shall hold on the date of the termination, provided, however, that (i) the
licenses granted to the non-breaching Party under Article 5 shall remain in full
force and effect (and the breaching Party shall transfer to the non-breaching
Party such Background Technology and Collaboration Technology as shall be
necessary to permit the non-breaching Party to continue conduct of the Research
Program) but the breaching Party shall forfeit all rights to develop and promote
all Collaboration Compounds, Collaboration Lead Compounds and Products, (ii) the
breaching Party shall not conduct any further research in the Field for a period
of *** from the effective date of such early termination, (iii) all licenses
granted to such breaching Party under this Agreement may be immediately
terminated by the non-breaching Party, (iv) any royalties due the breaching
Party under this Agreement shall be reduced by *** percent (***%), and (v) if
the breach relates specifically to a Collaboration Lead Compound or Product,
this Agreement may only be terminated as it relates to such Collaboration Lead
Compound or Product and shall remain in full force and effect as it relates to
all other Collaboration Lead Compounds and Products.
12.4 TERMINATION OF AGREEMENT BY ORGANON. Organon shall have the right to
terminate
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
27
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
this Agreement by giving written notice to Ligand of its intention to do so in
the event that neither Ligand nor Organon is able to obtain a license for
technology that is necessary for the conduct of the Research Program and that is
claimed in Third Party patents, or other intellectual property. Notice of
termination cannot be effective less than *** (***) *** from the date upon which
Organon advises Ligand in writing that such technology is necessary for the
conduct of the Research Program. The termination shall be effective *** (***)
*** after the giving of the notice. Upon termination each Party shall return to
the other Party the Background Technology of such other Party that is in its
possession. If Organon has selected a Collaboration Lead Compound prior to
termination under this section it shall be required to pay Ligand milestones and
royalties for its development and commercialization of the Collaboration Lead
Compound as a Product as if this agreement remains in full force and effect.
12.5 EFFECT OF EXPIRATION OR TERMINATION. Expiration or termination of this
Agreement shall not relieve the Parties of any obligation accruing prior to such
expiration or termination. The representations and warranties contained in this
Agreement as well as those rights and obligations contained in the terms of this
Agreement which by their intent or meaning have validity beyond the Term of this
Agreement shall survive the termination or expiration of this Agreement. The
provisions of Sections 2.10.2 and 4.3, and Articles 5, 8, 9, 11, and 17 shall
survive the expiration or termination of this Agreement. Any rights and
obligations which have accrued prior to termination or expiration of this
Agreement in any respect shall survive such termination or expiration.
12.6 BANKRUPTCY. Either Party shall have the right to terminate this
Agreement effective immediately in the event the other Party files a voluntary
petition in bankruptcy, is adjudicated as bankrupt, makes a general assignment
for the benefit of creditors, admits in writing that it is insolvent or fails to
discharge within fifteen (15) days an involuntary petition in bankruptcy filed
against it.
12.7 EARLY TERMINATION OF THE RESEARCH PROGRAM. Organon shall have the
right to terminate the Research Program, without termination of this Agreement,
by giving Ligand written notice of its intention to do so not later than
***(***) *** from the Commencement Date. The termination of the Research Program
will be effective *** (***) *** after the Commencement Date. After termination
of the Research Program Ligand shall have the right to use only Ligand
Background Technology in the Field, without restriction, including the right to
collaborate with a Third Party to develop Products based on a chemical template
originated by Ligand.
12.8 RIGHTS UPON ARTICLE 14 ASSIGNMENT. If Ligand makes a permitted
assignment of this Agreement under Article 14 other than to its Affiliate whose
performance it guarantees, Organon may terminate the Research Program with
Ligand and undertake the development of Products from Collaboration Compounds
and Collaboration Lead Compounds under the same terms and conditions of this
Agreement applicable when the Research Program runs its full course.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
28
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
12.9 OTHER TERMINATION RIGHTS.
a) Ligand shall have the right to terminate this Agreement in the
following circumstances: (i) if no Collaboration Compound based on a chemical
template originated by Ligand is declared a Development Candidate during the
Research Term (including any extension thereof as permitted by this Agreement or
by mutual agreement of Organon and Ligand), (ii) if no Development Compound
based on a chemical template originated by Ligand has become a Clinical
Candidate by the end of a period commencing on the end of the Research term and
ending *** later unless, prior to the expiration of the *** period, Organon has
presented Ligand with a Final Development Plan for a Development Compound based
on a chemical template originated by Ligand; (iii) *** after presentation of the
Final Development Plan if the Development Compound to which it is directed has
not become a Clinical Candidate; or (iv) if, after the end of the Research Term
(including any extensions thereof), Clinical Development of a Clinical Candidate
which is a Collaboration Compound based on a chemical template originated by
Ligand is abandoned except in the circumstance where another Development
Candidate or Clinical Candidate based on a clinical template originated by
Ligand has progressed in development such that, if it were the only such
compound in development, Ligand could not terminate under this Section 12.9.
b) In consideration of Ligand entering this Agreement, Organon agrees
not to declare a Collaboration Compound based on a chemical template originated
by Organon to be a Development Candidate during the period beginning on the
Commencement Date and ending on the second anniversary of the Commencement Date.
c) In the case of termination of this Agreement by Ligand pursuant to
subsection (a), all rights to Ligand Background Technology and Collaboration
Compounds based on a chemical template originated by Ligand shall resort to
Ligand. If Ligand develops and commercializes a Collaboration Compound based on
a Ligand chemical template after termination under subsection (a) above, it
shall owe no milestone or royalty payment to Organon based on the development
and commercialization of that Collaboration Compound. If Organon develops and
commercializes a Collaboration Compound based on an Organon chemical template
after termination under subsection (a) above, it shall owe no milestone or
royalties to Ligand based on development and commercialization of that
Collaboration Compound.
ARTICLE 13
FORCE MAJEURE
Neither Party shall be held liable or responsible to the other Party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement when such failure or
delay is caused by or results from causes beyond the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
29
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
reasonable control of the affected Party including but not limited to fire,
floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other Party, provided that the Party so affected
shall use its best efforts to avoid or remove such causes of non-performance and
shall continue performance hereunder with the utmost dispatch whenever such
causes are removed.
ARTICLE 14
ASSIGNMENT
This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations hereunder be assigned
or transferred ***; provided, however, that *** may, without such consent,
assign this Agreement and its rights and obligations hereunder in connection
with the transfer or sale of all or substantially all of its business pertaining
to this Agreement, or in the event of its merger or consolidation or change in
control or similar transaction. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. This Agreement shall be
binding upon, subject to the terms of the foregoing sentence, inure to the
benefit of the Parties' successors, legal representatives and assigns. A
permitted assignment under this Article 14 by Ligand shall not preclude the
exercise of Organon's right to terminate the Research Program under Section
12.8.
ARTICLE 15
REGULATORY MATTERS
15.1 SIDE EFFECTS AND ADVERSE EVENTS. Ligand shall advise Organon within
the time limits required by applicable FDA laws and regulations (or similar
foreign laws and regulations) by telefax or overnight delivery service addressed
to the attention of its Vice President, Medical Affairs of any unexpected side
effect, adverse reaction or injury which has been brought to Ligand's attention
at any place and which is alleged to have been caused by a Product. Organon
shall have all rights and responsibilities to report such side effect, adverse
reaction or injury to the appropriate regulatory authorities as required by
applicable law.
15.2 PRODUCT RECALL. In the event that Organon determines that an event,
incident or circumstance has occurred which may result in the need for a recall
or other removal of any Product, or any lot or lots thereof, from the market, it
shall notify Ligand with respect thereto. Organon shall, in its sole discretion,
have the right to order any such recall or other removal and Ligand shall
cooperate with such recall.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
30
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
15.3 REGULATORY MATTERS. From and after the Commencement Date, the
preparation, filing and prosecution of INDs, NDAs and other regulatory filings
required to be filed with any Regulatory Agency in respect of a Product will be
in the name of, under sole control of, and at the responsibility of Organon and
its Affiliates. Further, Organon and/or its Affiliates shall own all regulatory
31
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
documentation relating to such filings. The costs of preparation, filing and
prosecution of regulatory filings with regard to Products incurred on or after
the Commencement Date shall be borne entirely by Organon as long as Organon
retains rights to commercialize such Product hereunder. Organon shall be solely
responsible for all contacts and communications with governmental and regulatory
authorities with respect to all matters relating to any Product (including
reporting adverse drug reactions). Unless required by law, Ligand shall have no
contacts or communications with any governmental or regulatory authority
regarding any Product without the prior written consent of Organon. Ligand shall
provide Organon with copies of all communications received from any governmental
or regulatory authority relating to any Product and shall allow Organon at its
discretion to control and/or participate in any further contacts or
communications in connection therewith.
ARTICLE 16
SEVERABILITY
If any term or provision of this Agreement is held to be invalid, illegal
or unenforceable by a court or other governmental authority of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement, which shall remain in full force
and effect. The holding of a term or provision to be invalid, illegal or
unenforceable in a jurisdiction shall not have any effect on the application of
the term or provision in any other jurisdiction.
ARTICLE 17
INDEMNIFICATION
Each of Organon and Ligand agrees to indemnify, hold harmless, and defend
the other Party and its Affiliates and their respective employees, agents,
officers, directors and permitted assigns (such Party's "Indemnified Groups")
from and against any claims by a Third Party resulting in the award or payment
of any judgments, expenses (including reasonable attorney's fees), damages and
awards (collectively a "Claim") arising out of or resulting from (a) its
negligence or willful misconduct, (b) a breach of any of its representations,
warranties or obligations hereunder, or (c) such Party's research and
development, manufacture, use, promotion, marketing or sale of any Collaboration
Compounds, Collaboration Lead Compounds or Products, except to the extent that
such Claim arises out of or results from the negligence or misconduct of a Party
seeking to be indemnified and held harmless or the negligence or misconduct of a
member of such Party's Indemnified Group. A condition of this obligation is
that, whenever a member of the Indemnified Group has information from which it
may reasonably conclude an incident has occurred which could give rise to a
Claim, such indemnified Party shall immediately give notice to the indemnifying
Party of all pertinent data surrounding such incident and, in the event a Claim
is made, all members of the Indemnified Group shall assist the indemnifying
Party and cooperate in the gathering of information with respect to the time,
place and circumstances and in obtaining the names and addresses of any
32
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
injured Parties and available witnesses. No member of the Indemnified Group
shall make any payment or incur any expense in connection with any such Claim
without prior written consent of the indemnifying party, provided, however, that
an indemnitee may take any reasonably appropriate action that is necessary to
preserve or avoid prejudice to its interests after the indemnifying party has
been notified of the Claim if the indemnitor states that it does not believe
that the indemnification obligations described herein apply to such Claim or if
the indemnitor does not or cannot perform its indemnity obligations hereunder.
The indemnifying Party shall have the right, but not the obligation, to control
any such action. The obligations set forth in this Article 17 shall survive the
expiration or termination of this Agreement.
ARTICLE 18
MISCELLANEOUS
18.1 NOTICES. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, or U.S. overnight courier), U.S. overnight
courier, postage prepaid (where applicable), or delivered by certified mail,
postage prepaid, return receipt requested to the address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and (except as otherwise provided in this Agreement) shall be
effective upon receipt by the addressee.
If to Ligand: Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
With a copy to: Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Scientific Officer
If to Organon: Organon
Xxxxxxxxxxx 000
0000 XX Xxx
Xxx Xxxxxxxxxxx
Attention: Director Research
With a copy to: AKZONOBEL Nederland B.V.
Wethouder van Xxxxxxxxxx 0
0000 XX Xxx
Xxx Xxxxxxxxxxx
Attention: Legal Affairs Department
33
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
18.2 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to its
conflicts of law provisions, and shall not be governed by the United Nations
Convention on Contracts for the International Sale of Goods.
18.3 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the Parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both Parties hereto.
18.4 HEADINGS. The captions to the several Articles and Sections hereof are
not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
18.5 INDEPENDENT CONTRACTORS. Each of Organon and Ligand acknowledges and
agrees that neither it nor any of its employees are employees of the other Party
and that neither it nor any of its employees are eligible to participate in any
employee benefit plans of such other Party. Each of Organon and Ligand further
acknowledges that neither it nor any of its employees are eligible to
participate in any such benefit plans even if it is later determined that its or
any of its employees' status during the period of this Agreement was that of an
employee of the other Party. In addition, each of Organon and Ligand waives any
claim that it may have under the terms of any such benefit plans or under any
law for participation in or benefits under any of the other Party's benefit
plans.
18.6 WAIVER. The waiver by either Party hereto of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
18.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18.8 GOVERNING LANGUAGE: This Agreement has been prepared and executed in
the English language. No authorized translation has been prepared or executed.
In the event that any translation is prepared, the English language version of
this Agreement shall govern. All written correspondence between the parties
shall be in the English language, including all reports due under this
Agreement.
18.9 DISPUTE RESOLUTION.
a) The Parties shall attempt in good faith to resolve promptly any dispute
arising out of or relating to this Agreement by negotiation. If the matter can
not be resolved in the normal course of business any interested party shall give
the other party written notice of any such dispute not resolved, after which the
dispute shall be referred to the senior executives of the Parties as described
in Section 3.2 for resolution of JRC disputes , who shall likewise attempt to
resolve the
34
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
dispute.
If a dispute has not been resolved by negotiation within ***(***) *** of
the disputing party's written notice, or if the parties fail to meet within ***
(***) *** from such notice, the parties shall endeavour to settle the dispute by
mediation under the supervision of and in accordance with the guidelines of the
Centre for Dispute Resolution (CEDR) in London, UK. Unless otherwise agreed,
both parties or each individual party may request the CEDR to appoint an
independent mediator. The language of mediation shall be English and the seat of
the mediation shall be New York, New York.
b) If the dispute has not been resolved by non-binding means as provided in
subsection (a) above within ninety (90) days of the initiation of such
procedure, the dispute shall be finally and exclusively settled in New York, New
York, or any other mutually agreed upon venue under the Uncitral Arbitration
Rules by three (3) independent arbitrators appointed in accordance with said
Rules. The appointing authority shall be the American Arbitration Association.
The language of the arbitration shall be English. The arbitration, except as
provided in the paragraph below, shall be in lieu of any other remedy and the
award shall be final, binding and enforceable by any court having jurisdiction
for that purpose.
This Article shall, however, not be construed to limit or to preclude
either party from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief as necessary or appropriate.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
35
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
IN WITNESS WHEREOF, the Parties have executed this Research, Development
and License Agreement as of the date first set forth above.
ORGANON COMPANY LIGAND PHARMACEUTICALS
INCORPORATED
By: /S/ X.XXXXXXXXX By: /S/ XXXXXXX X. XXXXXXX
--------------------- --------------------------
Xxxxxxx X. Xxxxxxx
Title: Director Research Title: Senior Vice President,
General Counsel and
Secretary
By: /S/ X X XXXXXXXXX
---------------------
Title: Managing Director R&D
36
Ligand Initial [/s/WR]
Organon Initial [/s/JV]
EXHIBIT A
REPORTING REQUIREMENTS
Each report required under Section 4.3 will include the following:
1. The declaration of a Collaboration Compound to be a Collaboration Lead
Compound.
2. The Projected and actual dates of filing of each IND for a Collaboration
Lead Compound.
3. Projected and actual initiation dates for clinical trials for each
Collaboration Lead Compound for all indications.
4. Projected and actual dates of completion of clinical phases.
5. A summary of the purpose of each clinical trial of a Collaboration Lead
Compound.
6. The projected and actual completion dates of each trial of a Collaboration
Lead Compound.
7. Any projected and actual dates of NDA submissions for each Collaboration
Lead Compound and any FDA response thereto.
8. Copies of any publications (preclinical and clinical) by Organon or its
investigators or Organon's third party collaborators/investigators
concerning Collaboration Lead Compounds upon request by Ligand.
9. Copies of materials presented to financial analysts concerning a
Collaboration Lead Compound upon request by Ligand.
EXHIBIT B
TECHNICAL OPERATING PLAN
DEVELOPMENT OF PR AGONIST CLINICAL CANDIDATES
FOR ***
I. RESEARCH PROGRAM GOAL
To use Ligand's existing non-steroidal progestin templates to
develop clinical candidates which:
***
II. PR PROGRAM RATIONALE
***
III. PROFILE FOR A NOVEL NON-STEROIDAL PROGESTIN AGONIST
***
IV. INDICATIONS
A. PRIMARY
***
B. SECONDARY
***
V. MOLECULAR AND CELL-BASED PROFILING ASSAYS (PHASE I)
A. REPRESENTATIVE LIGAND ASSAYS
***
VI. EFFICACY AND SELECTIVITY ASSAYS
A. IN VITRO MODELS (PHASE I/II)
***
B. IN VIVO MODELS (PHASE I/II)
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
EXHIBIT B
TECHNICAL OPERATING PLAN
VII. MEDICINAL CHEMISTRY
A. ASSUMPTIONS
***
B. DRUG DISCOVERY ACTIVITIES
***
VIII. ACTIVITIES IN SUPPORT OF PRE-CLINICAL CANDIDATE OPTIMIZATION
A. BIOLOGY
***
B. CHEMISTRY
***
IX. APPENDICES
THE FOLLOWING (DRAFT) LISTS OF CRITERIA AND CONSIDERATIONS FOR THE
ORGANON-LIGAND CO-OPERATION ON NON-STEROIDAL, TISSUE SELECTIVE
PR-MODULATORS, IS PROVISIONAL AND INTENDED AS A POINT OF REFERENCE FOR THE
CRITERIA, STANDARDS AND CONSIDERATIONS TO BE INCORPORATED IN A FUTURE
PHARMACOCHEMICAL PLAN (PCP).
Abbreviations:
S&T:Synthesis & Testing
XXXX: Collaboration Lead Compound
PCP:PharmacoChemical Plan
A. S & T - AND XXXX-CRITERIA
***
B. QUALITATIVE XXXX-CRITERIA
(to be elaborated in PCP)
***
C. ORGANON STANDARD XXXX-CHECKLIST
(to be discussed and finalized in the PCP)
***
D. POTENCY-CRITERIA
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
EXHIBIT B
TECHNICAL OPERATING PLAN
E. FLOW-CHART FOR S & T PHASE
----------------------------------------------------------
Flow Chart of S&T PHASE
----------------------------------------------------------
***
F. DRAFT "CO"-STANDARDS
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
EXHIBIT C
------------------------------------------------------------------------------
PROPOSED PRESS RELEASE TIMETABLE
------------------------------------------------------------------------------
IF RECEIPT OF FUNDS IS CONFIRMED BY LIGAND ON MONDAY, FEBRUARY 14, 2000,
THEN ISSUE RELEASE MONDAY, FEBRUARY 14, 2000, AFTER MARKET CLOSES AT
5:15 P.M. EST
IF CONFIRMATION OF RECEIPT OF FUNDS IS NOT RECEIVED BY MID-DAY MONDAY,
THEN ISSUE RELEASE TUESDAY, FEBRUARY 15, 2000 BEFORE MARKET OPENS AT
8:15 A.M. EST OR
TUESDAY, FEBRUARY 15, 2000 AFTER MARKET CLOSES AT 5:15 P.M. EST
------------------------------------------------------------------------------
Ligand Contact: Xxxx X. Xxxxx
(000) 000-0000
Organon Contact: Xx. X.X. Xxxxxxxx
x00.000.000000
LIGAND AND ORGANON ENTER INTO RESEARCH COLLABORATION
-- COLLABORATION WILL FOCUS ON RESEARCH OF COMPOUNDS FOR THE TREATMENT AND
PREVENTION OF GYNECOLOGICAL DISORDERS --
SAN DIEGO, CALIFORNIA AND OSS, THE NETHERLANDS - February __, 2000 - Ligand
Pharmaceuticals Incorporated (Nasdaq: LGND) and Organon announced today that
they have signed a Collaboration Agreement to focus on the discovery,
characterization, design and development of small molecule compounds with
potential effects for the treatment and prevention of gynecological diseases
mediated through the progesterone receptor.
The objective of the collaboration is the discovery of new non-steroidal
compounds which are tissue-selective in nature and may have fewer side effects.
Such compounds may provide utility in hormone replacement therapy, oral
contraception, reproductive diseases, and other hormone-related disorders.
"The research collaboration with Organon marks Ligand's tenth research
collaboration to date and Ligand's fourth collaboration focusing on sex hormone
modulators," said Ligand Chairman, President and CEO Xxxxx X. Xxxxxxxx. "The
Organon collaboration should aid Ligand in its strategy of building a
diversified royalty-based business focusing on the development of Ligand's broad
technology platform, which includes the estrogen and progesterone receptor
modulators. Four products from existing collaborations focusing on these hormone
modulators are currently in clinical development."
Under the terms of the agreement, Ligand has received undisclosed up front
payments for research reimbursements and may receive milestone and royalty
payments on a product-by-product basis. Organon has been granted exclusive
worldwide rights to manufacture and sell any products resulting from the
collaboration.
Driek Vergouwen, Managing Director R&D of Organon commented on the new
collaboration: "The
collaboration with Ligand complements our internal research and development
programs in the areas of gynecology. Promising compounds resulting from this
collaboration could significantly augment Organon's existing portfolio of
marketed medicines in this field."
Xxxxxx Negro-Xxxxx, M.D., Ph.D., Ligand Senior Vice President of Research
and Development and Chief Scientific Officer, said, "Organon's strength in the
research, development and marketing of gynecological products in areas such as
contraception, hormone replacement therapy, osteoporosis and infertility
complements Ligand's leadership and technology in female hormone research. The
significant experience and pharmaceutical expertise of Organon will allow the
pursuit of development of our technology in large health care markets." N.V.
ORGANON
NV Organon develops and produces pharmaceutical products in fields such as
gynaecology, psychiatry, athero-thrombosis, and auto-immune diseases. The
company employs more than 11,500 employees worldwide. The company invests over
17 percent of its sales income in its drug discovery and development programmes.
NV Organon is one of the pharmaceutical business units of Akzo Nobel. Akzo
Nobel, based in the Netherlands, serves customers throughout the world with
healthcare products, coatings, and chemicals. The company currently employs
approximately 68,000 people in almost 75 countries. Consolidated sales for 1999
will total about EUR 12 billion (NLG 26 billion). LIGAND PHARMACEUTICALS
INCORPORATED
Ligand Pharmaceuticals Incorporated discovers, develops and markets new
drugs that address critical unmet medical needs of patients in the areas of
cancer, skin diseases, and men's and women's hormone-related diseases, as well
as osteoporosis, metabolic disorders and cardiovascular and inflammatory
diseases. In addition to the recently approved Targretin(R) capsules, Ligand had
two drugs approved during 1999 for marketing in the U.S. -- ONTAK(R) and
Panretin(R) gel -- that are being marketed through its specialty cancer and
HIV-center sales force in the U.S. Targretin(R) gel is currently under review by
the FDA for marketing approval in the U.S., and two additional oncology-related
products -- Morphelan(TM) (licensed from Elan) and Panretin(R) capsules -- are
in late-stage development. Ligand's proprietary drug discovery and development
programs are based on its leadership position in gene transcription technology,
primarily related to Intracellular Receptors (IR) and Signal Transducers and
Activators of Transcription (STATs).
This news release may contain certain forward-looking statements by Ligand
and actual results could differ materially from those described as a result of
factors outside of the control of Ligand. There can be no assurance that (a) the
collaborative arrangement will be successful or continued, (b) Ligand will
receive any further reimbursement amounts for the prior development of its
technology or any milestone payments for the discovery and/or development of any
compounds, (c) any compounds will be discovered and/or be deemed
appropriate for further testing, pre-clinical development or clinical
development, (d) any products under development by Ligand or any of its
collaborative partners, including Organon, will receive approval from the FDA or
other authorities to market any of these products; (e) if successfully developed
and thereafter approved, there will be a market for the drugs. Additional
information concerning these and other factors affecting Ligand's business can
be found in press releases as well as in Ligand's public periodic filings with
the Securities and Exchange Commission, available via our web site at
XXXX://XXX.XXXXXX.XXX. Ligand undertakes no obligations to update the matters
discussed herein to reflect events after the date of this press release.
# # #
NOTE: Panretin(R)and Targretin(R)are registered trademarks of Ligand
Pharmaceuticals Incorporated, and ONTAK(R)is a registered trademark of Seragen,
Inc., a wholly owned subsidiary of Ligand.
# # #
EXHIBIT D
(23 pages including cover page)
LIST OF THE LIGAND BACKGROUND TECHNOLOGY COMPOUNDS SUBJECT TO RESTRICTIONS ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
EXHIBIT D
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
