Common use of Development Project Proposal Clause in Contracts

Development Project Proposal. By the end of the Feasibility Study, the Joint Steering Committee may direct a Joint Project Team to cooperate with it for the preparation of a Development Project Proposal for submission to the Management Committee, which shall be prepared in light of the results of Screening Activities and the Feasibility Study. The Development Project Proposal shall detail the work plan for the Development Project (including the design, development, optimization, scale-up and validation of a Commercial Strain for production of a Commercial Compound through a fermentation process, the design, development, optimization and scale-up of the downstream processing steps which transform Commercial Compounds into the intended Product(s), technology transfer activities, any regulatory and testing/certification activities for the approval of the Product(s) and any planning activities for transferring the Commercial Strain, Commercial Compound and Product to the JV Company or to a Party as may be agreed hereunder for implementation of the Commercialization Plan), the required competencies, skills and experiences of those persons to be assigned to the applicable activities, a budget that includes corresponding resources and costs, a timeline and a milestone schedule with well-defined milestones associated with Go / No Go decisions and measurable deliverables, including the final milestone which would trigger entry into the production and commercialization phase. It is expected that the preparation of the Development Project Proposal for a specific Candidate Compound, if applicable, will take an average of eight (8) weeks. Each Development Project Proposal shall include a proposed Commercialization Plan for the Product(s) which are intended to result from the proposed Development Project (including the production plan for the use of the relevant Commercial Strains and Commercial Compounds to produce such Product(s), anticipated capital expenditures and operating expenses, timing for market entry and evaluation of market acceptance, supply chain analysis and sharing of the profits in accordance with this Agreement). In addition, each Development Project Proposal for a Candidate Compound shall include an agreed upon scope related to such Development Project within which either Party shall have the ability to pursue improvements as set forth in Section 2.3 (the “Improvement Scope”). The Improvement Scope is intended to give each Party some latitude to improve upon Commercial Strains, Commercial Compounds and Products, and the means of producing them. In addition, each Development Project Proposal for a Candidate Compound shall include an agreed upon Development Project Scope for which neither Party will have the ability to use any Collaboration IP to compete with such Development Project as defined in the corresponding Development Project Scope outside of the R&D Collaboration. Prior to approving a Development Project Plan, the Management Committee shall determine if the Product(s) developed under a Development Project Plan are Large Market Products. If the Management Committee does not designate such Product (s) as Large Market Product(s), then such Product(s) will not be classified as a Large Market Product. In assessing whether a Product is a Large Market Product, the Management Committee shall make a reasonable determination in light of the anticipated market size, industry structure, market channels and commercial contracting practices of the Product(s) at-issue.