License and Collaboration Agreement

Exhibit 10.1

CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. OMISSIONS ARE DESIGNATED AS [†].

 

License and Collaboration Agreement

by and between

Xenon Pharmaceuticals Inc.

and

Neurocrine Biosciences, Inc.

Dated as of December 2, 2019

 

 

 

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List of Exhibits

 

 

 

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LICENSE AND COLLABORATION AGREEMENT

This License and Collaboration Agreement (this “Agreement”) is made as of December 2, 2019 (the “Effective Date”), by and between Xenon Pharmaceuticals Inc., a Canadian corporation (“Xenon”), having its principal office at ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, and Neurocrine Biosciences, Inc., a Delaware corporation (“Neurocrine”), having its principal office at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, U.S.  Neurocrine and Xenon are referred to in this Agreement individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Xenon is a biopharmaceutical company discovering and developing therapies for neurological disorders, including rare central nervous system disorders;

WHEREAS, Neurocrine is a biotechnology company that discovers, develops and commercializes therapies for neurological and other disorders; and

WHEREAS, Xenon and Neurocrine desire to establish a collaboration under which the Parties will identify, research and develop sodium channel inhibitors, including Xenon’s clinical candidate XEN901 and preclinical candidates XEN393, XPC’535 and XPC’391, which compounds Neurocrine will have the exclusive right to further develop and commercialize, all under the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Neurocrine and Xenon hereby agree as follows:

Article 1
DEFINITIONS

Unless the context otherwise requires, the terms in this Agreement with initial letters capitalized will have the meanings set forth below, or the meanings as designated in the indicated places throughout this Agreement.

1.1. “Academic Agreements” is defined in Section 4.9.

1.2. “Acquired Competing Product” is defined in Section 2.8(a).

1.3. “Acquired Competing Program” is defined in Section 2.8(a).

1.4. “Acquisition Party” is defined in Section 2.8(a).

1.5. “Active Pharmaceutical Ingredient” means any preclinically or clinically active material that provides pharmacological activity in a pharmaceutical product (excluding formulation components such as coatings, stabilizers, excipients or solvents, adjuvants or controlled release technologies).

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1.6. “Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person.  For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of a Person, whether by the ownership of more than fifty percent (50%) of the voting stock of such Person, or by contract or otherwise.

1.7. “Alliance Manager” is defined in Section 3.6.

1.8. “Average 30-Day VWAP” means the average of the daily VWAPs of the Common Shares for each of the thirty (30) Trading Days ending on, and including, the Trading Day immediately preceding the relevant date, rounded to the nearest whole cent.

1.9. “Change of Control” means, with respect to a Party, (a) the acquisition of beneficial ownership, directly or indirectly, by any Third Party of securities or other voting interest of such Party representing a majority or more of the combined voting power of such Party’s then outstanding securities or other voting interests, (b) any merger, consolidation or business combination involving such Party with a Third Party that results in the holders of beneficial ownership (other than by virtue of obtaining irrevocable proxies) of the voting securities or other voting interests of such Party (or, if applicable, the ultimate parent of such Party) immediately prior to such merger, consolidation or business combination ceasing to hold beneficial ownership of more than fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, consolidation or business combination, or (c) any sale, lease, exchange, contribution or other transfer to a Third Party (in one transaction or a series of related transactions) of all or substantially all of the assets of such Party.

1.10. “Clinical Trial” means a clinical trial in human subjects that has been approved by an institutional review board, ethics committee or Regulatory Authority, as applicable, and is designed to measure the safety and/or efficacy of a therapeutic product.

1.11. “Co-Funded Costs” is defined in Section 6.7(c).

1.12. “Co-Funded Product” is defined in Section 8.4.

1.13. “Co-Funding Notice Period” is defined in Section 6.7(b).

1.14. “Co-Funding Option” is defined in Section 6.7(b).

1.15. “Combination Product” means (a) a pharmaceutical product that consists of a Compound and at least one other Active Pharmaceutical Ingredient that is not a Compound; or (b) any combination of a Product and another pharmaceutical product that contains at least one other Active Pharmaceutical Ingredient that is not a Compound, where such products are not formulated together but are sold together as a single product and invoiced for a single price.  The other Active Pharmaceutical Ingredient(s) in clause (a) and the other pharmaceutical product(s) in clause (b) are each referred to as the “Other Product(s)”.

1.16. “Commercialize” or “Commercialization” means any and all activities, whether undertaken before or after Regulatory Approval, that are directed to marketing, promoting, distributing, detailing, offering for sale or selling a Product (as well as importing and exporting activities in connection therewith), including the commercial manufacture of Compounds and Products.

1.17. “Committee” means the JSC and each subcommittee or sub-team established by the JSC.

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1.18. “Common Shares” means the common shares, no par value per share, of Xenon.

1.19. “Compound” means any of the following: (a) XEN901, (b) each DTC Compound and (c) each Research Compound.

1.20. “Confidential Information” of a Party means all Know-How, unpublished patent applications and other information and data of a financial, commercial, business, operational or technical nature of such Party or any of its Affiliates that is: (a) disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form; or (b) learned by the other Party pursuant to this Agreement.

1.21. “Confidentiality Agreement” is defined in Section 14.8.

1.22. “Control”, “Controls” or “Controlled”, when used in reference to any compound, Know-How, Patent Rights or other intellectual property rights of either Party or its Affiliates, means the possession by such Party or its Affiliates of the legal authority or right (whether by ownership, license or otherwise) to grant a license, sublicense, access or other right (as applicable) to such compound or under such Know-How, Patent Rights, or other intellectual property rights to the other Party on the terms and conditions set forth herein without breaching the terms of any agreement with a Third Party.

1.23. “Cover” means, with respect to the applicable Product and Patent Rights, that but for the rights granted to a Person under such Patent Rights, the manufacture, use, offer for sale, sale or importation of such Product by such Person would infringe a Valid Claim included in such Patent Rights, or in the case of a Patent Right that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a patent with the then-current claims.

1.24 “Covering Claim” is defined in Section 1.106.

1.25. “Develop” or “Development” means all development activities for any Product, including all preclinical studies, clinical testing, manufacturing development, process development, toxicology studies, manufacturing and distribution of drug product for use in Clinical Trials (including placebos and comparators), statistical analyses, and the preparation, filing and prosecution of any NDA, MAA or other application for Regulatory Approval for any Product, as well as all regulatory affairs related to any of the foregoing.

1.26. “Development Candidate” means a particular Development Track Compound or Research Compound that is designated by the JSC to be progressed to IND-enabling studies.

1.27. “Development Track Compound” or “DTC” means any of (a) XEN393, (b) XPC’535 and (c) XPC’391; provided that the compound in the preceding clauses (a)-(c) that is not selected by the JSC as a Development Candidate pursuant to Section 3.1(h) to be the subject of IND-enabling studies pursuant to the DTC Initial Development Plan (and such compound’s salts, hydrates, isotopes, solvates, esters, free acids or bases, polymorphs, enantiomers, metabolites and prodrugs) will be deemed a Research Compound and not a DTC.

1.28. “DTC Initial Development Plan” is defined in Section 5.2.

1.29. “DTC Product” means any Product containing a DTC.

1.30. “Disclosing Party” is defined in Section 12.1(a).

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1.31. “Dollar” means U.S. dollars, and “$” shall be interpreted accordingly.

1.32. “Early Compounds” means those Compounds listed on Exhibit F.

1.33. “EMA” means the European Medicines Agency or any successor agency thereto.

1.34. “Excluded Compound” means any compound listed on Exhibit G.

1.35. “Executive Officers” is defined in Section 3.5.

1.36. “FDA” means the United States Food and Drug Administration or any successor governmental agency that is responsible for approving the sale of pharmaceuticals in the United States.

1.37. “FDCA” means the United States Federal Food, Drug, and Cosmetic Act, as amended.

1.38. “Field” means the treatment, cure, diagnosis, prediction, detection and/or prevention of any disease, disorder, state, condition and/or malady in humans.

1.39. “Final Development Plan” is defined in Section 6.7(a).

1.40. “First Commercial Sale” means, with respect to any Product in any country or jurisdiction in the Territory, the first arm’s length sale of such Product to a Third Party by Neurocrine or its Affiliates or sublicensees for distribution, use or consumption in such country or jurisdiction after Regulatory Approval has been obtained for such Product in such country or jurisdiction.

1.41. “FTE” means the equivalent of a full-time employee’s work for a twelve (12)-month period (consisting of a total of 2,080 hours per year of dedicated effort), conducting activities under the Research Plan or under an Initial Development Plan or otherwise under this Agreement.  In no event shall any one individual be counted as more than one (1) FTE.

1.42. “FTE Cost” means, for any period, the FTE Rate multiplied by the number of FTEs used in such period.

1.43. “FTE Rate” means [†] per FTE per year.

1.44. “GAAP” means U.S. generally accepted accounting principles.

1.45. “Generic Product” means, with respect to a particular Product and regulatory jurisdiction, any pharmaceutical product that (a) is lawfully sold by a Third Party that is not an Affiliate or sublicensee of Neurocrine under a regulatory approval granted by a Regulatory Authority in such regulatory jurisdiction to such Third Party and (b) contains the same Compound (or any salt, hydrate, isotope, solvate, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of such Compound) as such Product.

1.46. “Genentech License” means that certain Collaborative Research and License Agreement between, on the one hand, Xenon, and on the other hand, Genentech, Inc. and ▇. ▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇ Ltd. (together, “Genentech”), dated as of December 22, 2011, as amended by Letter Agreement dated August 14, 2012, Letter Amendment dated October 31, 2012, Letter Amendment dated December 20, 2012, Letter dated December 23, 2014, Letter Amendment #4 dated August 29, 2013, Letter Agreement dated November 19, 2015, Letter Amendment #6 dated November 10, 2015, Letter Agreement dated May 8, 2015, and Amended and Restated Letter Amendment #7 dated September 27, 2018, and as amended by Xenon and Genentech after the Effective Date to the extent permitted under Section 10.2(r)(vii).

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1.47. “GLP” or “Good Laboratory Practices” means the then-current Good Laboratory Practices for the methods, facilities and controls to be used in the conduct of pre-clinical laboratory studies in the United States, including the regulations promulgated under the FDCA, the requirements and standards endorsed by the FDA as set forth in 21 C.F.R. Part 58, and comparable regulatory standards promulgated by the EMA or any other Regulatory Authority applicable to the Territory, in each case, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH.

1.48. “GMP” or “Good Manufacturing Practices” means the then-current Good Manufacturing Practices methods, facilities, and controls to be used for the manufacture, processing, packing, or holding of a drug to assure that it meets the requirements of the FDCA for safety and has the identity and strength and meets the quality and purity characteristics appropriate to its intended use as set forth in 21 C.F.R. Parts 210 and 211, European Directive 2003/94/EC, Eudralex 4, Annex 16, ICH Guideline Q7A, and, with respect to any other country or jurisdiction in the Territory, the equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture, in each case, as they may be updated from time to time.

1.49. “Governmental Authority” means any federal, state, national, provincial or local government, or political subdivision thereof, or any multinational organization or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, or any court or tribunal (or any department, bureau or division thereof, or any governmental arbitrator or arbitral body).

1.50. “ICH” means the International Council for Harmonisation of Technical Requirements for Pharmaceuticals in Human Use.

1.51. “IND” means: (a) an Investigational New Drug Application as defined in the FDCA and regulations promulgated thereunder or any successor application or procedure (including any Clinical Trial application, Clinical Trial exemption or similar or equivalent application or submission for approval) required to initiate clinical testing of a Product in humans in the United States; (b) a counterpart of any Investigational New Drug Application that is required in any other country or jurisdiction in the Territory before beginning clinical testing of a Product in humans in such country or jurisdiction to be filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority; and (c) all supplements and amendments to any of the foregoing.

1.52. “IND Acceptance” means, with respect to an IND for a XEN901 Product, either (a) [†] days after submission of such IND to the FDA (such [†]-day period, the “Initial Period”), if at such time the FDA has confirmed in writing that it has no comments to such IND, or (b) if the FDA indicates during the Initial Period that it will have comments to the IND, either (i) Neurocrine’s failure to notify Xenon of a Neurocrine Negative IND Decision pursuant to Section 6.3(b) within [†] days after Neurocrine’s receipt of such comments or (ii) the JSC’s failure to make a JSC Negative IND Decision pursuant to Section 6.3(b) within the applicable time periods under Section 3.5, or (c) [†] days after submission of such IND to the FDA, if at such time the FDA has taken no action with respect to such IND.

1.53. “Indication” means a generally acknowledged disease or medical condition with respect to which at least one adequate and well-controlled Clinical Trial is required to support inclusion of such disease or medical condition in the indication statement of a package insert approved by the FDA, EMA or PMDA for a Product; provided that (a) prevention and treatment of the same disease or medical condition shall not be separate Indications and (b) the treatment or prevention of the same disease or medical condition in different populations (e.g., adult and pediatric) shall not be separate Indications.

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1.54. “Initial Development Plan” means each of (a) the DTC Initial Development Plan, and (b) the XEN901 Initial Development Plan, in each case, as amended, modified or supplemented in accordance with this Agreement.

1.55. “Initial Development Program” is defined in Section 5.1.

1.56. “Initial Equity Purchase Price” is defined in Section 8.1(b).

1.57. “Initiation” means, with respect to a Clinical Trial of a Product, the first dosing of the first human subject in such Clinical Trial.

1.58. “Inventory” means all quantities of Compound and Product that are (a) in Xenon’s or its Affiliate’s possession as of the Effective Date or (b) manufactured by a Third Party for Xenon or its Affiliate after the Effective Date or prior to the Effective Date and in such Third Party’s possession as of the Effective Date, as such quantities are described on Exhibit H.

1.59. “Joint Inventions” means any Know-How that is discovered, developed, invented or created jointly by or on behalf of both Parties or their respective Affiliates or Third Parties acting on their behalf as a result of exercising a Party’s rights or performing its obligations under this Agreement.

1.60. “Joint Patent Rights” means any Patent Rights that claim Joint Inventions.

1.61. “Joint Steering Committee” or “JSC” is defined in Section 3.1.

1.62. “JSC Negative IND Decision” is defined in Section 6.3(b).

1.63. “Know-How” means any information, materials (e.g., biological materials, chemical compounds), inventions, discoveries, improvements, developments, processes, methods, protocols, procedures, techniques, formulas, data, know-how and trade secrets, in each case, whether or not patentable, but excluding any Patent Rights.

1.64. “Knowledge” of a Party means (a) the actual knowledge of any “executive officer” (as defined in Rule 3b-7 promulgated under the Securities Exchange Act of 1934) of such Party or any director level and above employees with direct operational responsibility for intellectual property, legal or regulatory matters, as the case requires, or (b) what any such individual should have known following reasonable and due inquiry.

1.65. “Law” means any federal, state, local, foreign or multinational law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any order by any Governmental Authority, or any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law.

1.66. “Major Indication” means any Indication that has a prevalence [†] of at least [†].  For clarity, focal seizures is a Major Indication.

1.67. “Major Indication EE Milestone Equity Purchase Price” is defined in Section 8.3(b).

1.68. “Major Market” means any of the U.S., Japan, the United Kingdom, Germany, France, Italy and Spain.

1.69. “Materials” is defined in Section 4.10(a).

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1.70. “MAA” means a Marketing Authorization Application filed with the EMA.

1.71. “NASA Compound” means any compound listed or described on Exhibit T.

1.72. “NDA” means any New Drug Application, as defined in the FDCA, filed pursuant to the requirements of the FDA, as more fully defined in 21 C.F.R. Part 314 et seq.

1.73. “Net Sales” means, with respect to any Product, the gross amounts invoiced by Neurocrine and its Affiliates and sublicensees for sales of such Product in the Field to unaffiliated Third Parties, less the following deductions with respect to such sales that are either included in the billing as a line item as part of the gross amount invoiced, or otherwise documented as a deduction in accordance with GAAP, to be specifically attributable to the actual sales of such Product:

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Notwithstanding the foregoing, amounts received or invoiced by Neurocrine or its Affiliates or sublicensees for the sale of Products among Neurocrine and its Affiliates and sublicensees shall not be included in the computation of Net Sales hereunder; unless such Affiliate or sublicensee is the end user of such Product.

Notwithstanding the foregoing, Net Sales shall not include any transfers or dispositions of Products at or below cost and supplied for use in Clinical Trials or under early access, compassionate use, samples, named patient, indigent access, patient assistance or other charitable or promotional purposes.

In the event any Product is sold in the form of a Combination Product, on a country-by-country basis, Net Sales for such Combination Product shall be calculated as follows:

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1.74. “Neurocrine’s Commercially Reasonable Efforts” means, with respect to Neurocrine’s obligations under this Agreement to research, Develop or Commercialize a Compound or Product, the carrying out of such obligations or tasks with a level of efforts and resources that are consistent with the reasonable, diligent and good faith efforts that a biopharmaceutical company of a similar size would normally use in the conduct of research, development and commercialization of other similarly situated pharmaceutical products at a similar stage of development or commercialization and with similar commercial and market potential, taking into account all relevant factors, including patent and regulatory exclusivity, safety and efficacy, product profile, competitiveness of the market, and profitability (including pricing and reimbursement); provided that with respect to Neurocrine’s obligations under this Agreement to use Commercially Reasonable Efforts to complete a Phase 2a Clinical Trial of a XEN901 Product for SCN8A-EE, after IND Acceptance of an IND for XEN901 in SCN8A-EE and prior to the completion of such Phase 2a Clinical Trial Neurocrine shall not be entitled to discontinue development of such XEN901 Product for SCN8A-EE solely as a result of the market potential and profitability (including pricing and reimbursement) of such XEN901 Product for SCN8A-EE.

1.75. “Neurocrine Development Plan” is defined in Section 6.2.

1.76. “Neurocrine Know-How” means all Know-How and Neurocrine’s interest in any Joint Inventions, in each case that is/are (a) Controlled by Neurocrine or any of its Affiliates (i) as of the Effective Date or (ii) thereafter during the Term as a result of Neurocrine or any of its Affiliates exercising Neurocrine’s rights or performing its obligations under this Agreement, and (b) reasonably necessary or useful for the research, Development, manufacture or Commercialization of Compounds or Products, but excluding any Know-How related to any compound that is not a Compound.

1.77. “Neurocrine Licensed IP” means all Neurocrine Patent Rights and Neurocrine Know-How and Neurocrine’s interest in the Joint Patent Rights.

1.78. “Neurocrine Negative IND Decision” is defined in Section 6.3(b).

1.79. “Neurocrine Patent Rights” means all Patent Rights, but excluding the Joint Patent Rights, that are (a) Controlled by Neurocrine or any of its Affiliates (i) as of the Effective Date or (ii) during the Term as a result of Neurocrine or any of its Affiliates exercising Neurocrine’s rights or performing its obligations under this Agreement, and (b) reasonably necessary or useful for the research, Development, manufacture or Commercialization of Compounds or Products, but excluding any Patent Rights to the extent claiming any compound that is not a Compound.

1.80. “Neurocrine Research IP” means all Neurocrine Licensed IP that is reasonably necessary or useful for Xenon to conduct its activities under the Research Program, Initial Development Program or otherwise under this Agreement.

1.81. “Pain Field” means treating pain indications and pain associated with other diseases or conditions by modulating NaV1.7.

1.82. “Patent Certification Notice” is defined in Section 9.3(a)(i).

1.83. “Patent Rights” means all patents and patent applications (which for the purpose of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including all divisionals, continuations, substitutions, continuations-in-part, re-examinations, reissues, additions, renewals, revalidations, extensions, registrations, pediatric exclusivity periods and supplemental protection certificates and the like of any such patents and patent applications, and any and all foreign equivalents of the foregoing.

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1.84. “Person” means any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization or other entity.

1.85. “Phase 1 Clinical Trial” means a Clinical Trial the principal purpose of which is a preliminary determination of safety in healthy individuals or patients, including the trials referred to in 21 C.F.R. § 312.21(a), or its successor regulation, or the equivalent in any foreign country.

1.86. “Phase 2 Clinical Trial” means a Clinical Trial conducted in any country that (a) would satisfy the requirements of 21 C.F.R. § 312.21(b), or its successor regulation, or the equivalent in any foreign country, (b) is intended to explore one or more doses, dose responses, and duration of effect, and to generate initial evidence of efficacy and safety, for a Product in the target patient population and (c) includes a control group of patients that receive either a placebo, an active comparator or a lower dose of such Product than the non-control group receives.  A Phase 2 Clinical Trial may be either a phase 2a Clinical Trial or a phase 2b Clinical Trial but shall exclude in all cases any phase 1/2 Clinical Trial or any open label Clinical Trial.

1.87. “Phase 3 Clinical Trial” means a Clinical Trial in an extended human patient population designed to obtain data determining efficacy and safety of a Product to support Regulatory Approval in the proposed therapeutic Indication, as more fully described in 21 CFR § 312.21(c) or its successor regulation or the equivalent in any foreign country.

1.88. “PMDA” means the Japanese Pharmaceuticals and Medical Devices Agency or any successor entity thereto.

1.89. “Pricing Approval” means such governmental approval, agreement, determination or decision establishing prices for a Product that can be charged and/or reimbursed in any country or jurisdictions where the applicable Governmental Authorities approve or determine the price and/or reimbursement of pharmaceutical products.

1.90. “Product” means any pharmaceutical product that contains a Compound, alone or in combination with one or more other Active Pharmaceutical Ingredients, in any formulation, dosage form, or package configuration and for any mode of administration.  For purposes of Section 8.6 and Section 8.7, all Products containing the same Compound (including any salt, hydrate, isotope, solvate, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug thereof) will be considered a single Product.

1.91. “Product Infringement” is defined in Section 9.3(a)(i).

1.92. “Product Marks” is defined in Section 9.7.

1.93. “Proof of Concept Study” is defined in Section 6.1.

1.94. “Receiving Party” is defined in Section 12.1(a).

1.95. “Regulatory Approval” means any and all approvals, licenses, registrations, or authorizations of the relevant Regulatory Authority, including Pricing Approvals, that are necessary for the Development, manufacture, use, storage, import, transport or Commercialization of the applicable Product in a particular country or jurisdiction.

1.96. “Regulatory Authority” means any applicable Governmental Authority responsible for granting Regulatory Approvals for Products, including the FDA, EMA, PMDA and any corresponding national or regional regulatory authorities.

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1.97. “Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights (other than Patent Rights) conferred by any Regulatory Authority with respect to a Product in a given country or regulatory jurisdiction, including orphan drug exclusivity, new chemical entity exclusivity, data exclusivity and pediatric exclusivity.

1.98. “Regulatory Materials” means any regulatory application, submission, notification, communication, correspondence, registration and other filings made to, received from or otherwise conducted with a Regulatory Authority in order to Develop, manufacture, market, sell or otherwise Commercialize a Compound or Product in a particular country or jurisdiction.  Regulatory Materials includes any IND, NDA or MAA or other foreign equivalents.

1.99. “Reimbursed Costs” is defined in Section 8.2.

1.100. “Research Budget” is defined in Section 4.2.

1.101. “Research Compound” means (a) any Select NaV Inhibitor that (i) is Controlled by Xenon or any of its Affiliates as of the Effective Date, including any NASA Compound, (ii) is identified or researched by Xenon or Neurocrine under the Research Program or (iii) is claimed in the Xenon Patent Rights set forth on Exhibit A, including the Early Compounds, but excluding in each case (i)-(iii) XEN901 or any DTC and (b) any salt, hydrate, isotope, solvate, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of any compound described in the preceding clause (a), but in each case (a) and (b) excluding all Excluded Compounds.

1.102. “Research Plan” is defined in Section 4.2.

1.103. “Research Product” means any Product that contains a Research Compound.

1.104. “Research Program” is defined in Section 4.1.

1.105. “Research Term” is defined in Section 4.4(a).

1.106. “Royalty Term” means, with respect to a Product and country, the period commencing upon the First Commercial Sale of such Product in such country and ending upon the latest of: (a) the expiration of the last-to-expire Valid Claim in (i) the Joint Patent Rights filed during the Research Term or the [†] period thereafter or (ii) the Xenon Patent Rights, in each case (i) and (ii) that Cover such Product in such country (a “Covering Claim” for such Product and country); (b) ten (10) years after such First Commercial Sale of such Product in such country; or (c) the expiration of Regulatory Exclusivity for such Product in such country.

1.107. “SCN8A-EE” means epileptic encephalopathy caused by a mutation in the SCN8A gene.

1.108. “SCN8A-EE Milestone Equity Purchase Price” is defined in Section 8.3(b).

1.109. “Select NaV Inhibitor” means any compound that binds to and inhibits either or both of the Targets as its primary mechanism of action (i.e., any in vitro activity on any other target being inferior to the in vitro inhibition of the Targets).

1.110. “Share Cap” is defined in Section 8.1(c).

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1.111. “Sublicense Agreement” means any agreement entered into following the Effective Date, and pursuant to which Neurocrine, its Affiliate or sublicensee grants a license, or an option or right to a license, under the licenses granted to Neurocrine pursuant to Section 2.1, but excluding, in each case, any agreements providing for outsourced contract research, regulatory, or manufacturing services that pertain to a Compound or Product.

1.112. “Subsequent Development” is defined in Section 6.1.

1.113. “Subsequent IND Equity Purchase Price” is defined in Section 8.3(c)(ii).

1.114. “Subsequent SCN8A-EE IND Acceptance” is defined in Section 8.3(c).

1.115. “Targets” means the voltage-gated sodium channels NaV1.2 and NaV1.6.

1.116. “Technology Transfer” means the transfer of materials, documents, information, protocols, components or other items that are necessary or reasonably useful to manufacture Compounds and/or Products; provided that for clarity, any such transfer shall not be deemed a transfer of title or any license to intellectual property rights other than as expressly provided in other provisions of this Agreement.

1.117. “Term” is defined in Section 13.1.

1.118. “Territory” means the world.

1.119. “Third Party” means any Person other than a Party or an Affiliate of a Party.

1.120. “Third Party Technology” is defined in Section 9.6(a).

1.121. “Trading Day” means a day on which trading in the Common Shares generally occurs on the Nasdaq Stock Market.

1.122. “Untested Compound” means any compound listed on Exhibit U.

1.123. “Unilateral Termination Notice” is defined in Section 13.2(a).

1.124. “United States” or “U.S.” means the United States of America, including its territories and possessions.

1.125. “Valid Claim” means a claim of (a) an issued and unexpired patent (as may be extended through supplementary protection certificate or patent term extension or the like) that has not been revoked or held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable judgment (or judgment from which no appeal was taken within the allowable time period) and which claim has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise, or (b) a pending patent application that (i) has been pending less than seven (7) years from its earliest priority date, (ii) was filed and is being prosecuted in good faith and (iii) has not been cancelled, withdrawn or abandoned or finally rejected by an administrative agency action from which no appeal has or can be taken.

1.126. “Voucher” is defined in Section 6.9.

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1.127. “VWAP” means, for any Trading Day with respect to a security, the per share volume-weighted average price as reported by Bloomberg Financial L.P. or a comparable nationally recognized financial information service provider for the period from 9:30 a.m. New York City time to 4:00 p.m. New York City time or such other primary trading session for such security for such Trading Day.

1.128. “XEN393” means (a) the compound having the structure set forth on Exhibit C or (b) any salt, hydrate, solvate, isotope, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of such compound.

1.129. “XEN901” means (a) the compound having the structure set forth on Exhibit B or (b) any salt, hydrate, isotope, solvate, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of such compound.

1.130. “XEN901 Development Budget” is defined in Section 5.2.

1.131. “XEN901 Initial Development Plan” is defined in Section 5.2.

1.132. “XEN901 Neurocrine Development Plan” is defined in Section 6.2.

1.133. “XEN901 Product” means any Product containing XEN901.

1.134. “Xenon’s Commercially Reasonable Development Efforts” means, with respect to Xenon’s obligations under this Agreement to research or Develop a Compound or Product, the carrying out of such obligations or tasks with a level of efforts and resources that are consistent with the reasonable, diligent and good faith efforts that a biopharmaceutical company of a similar size would normally use in the conduct of research or development of other similarly situated pharmaceutical products at a similar stage of development taking into account all relevant scientific and regulatory factors, including the safety and efficacy profile of the Compound or Product.

1.135. “Xenon Know-How” means all Know-How and Xenon’s interest in any Joint Inventions, in each case that is/are (a) Controlled by Xenon or any of its Affiliates (i) as of the Effective Date or (ii) thereafter during the Term as a result of Xenon or its Affiliates exercising Xenon’s rights or performing its obligations under this Agreement, and (b) reasonably necessary or useful for the research, Development, manufacture or Commercialization of Compounds or Products, but excluding any Know-How related to any compound that is not a Compound.

1.136. “Xenon Licensed IP” means all Xenon Patent Rights and Xenon Know-How and Xenon’s interest in the Joint Patent Rights.

1.137. “Xenon Patent Rights” means all Patent Rights, but excluding the Joint Patent Rights, that (a) are Controlled by Xenon or any of its Affiliates as of the Effective Date, including those set forth on Exhibit A; (b) are a result of Xenon or any of its Affiliates performing Xenon’s obligations or exercising Xenon’s rights under this Agreement and are Controlled by Xenon or any of its Affiliates during the Term, but excluding any Patent Rights that otherwise arise out of the Xenon Retained Rights set forth in Subsection 2.2(b), or (c) come under the Control of Xenon or its Affiliates as a result of the Academic Agreements, and in the case of each of (a), (b) or (c) that are reasonably necessary or useful for the research, Development, manufacture or Commercialization of Compounds or Products, but excluding any Patent Rights to the extent claiming any compound that is not a Compound.  

1.138. “Xenon Retained Rights” means Xenon’s rights under the Xenon Licensed IP that it expressly retains pursuant to the provisions of Section 2.2.

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1.139. “Xenon’s Share” is defined in Section 8.4.

1.140. “XPC’391” means (a) the compound having the structure set forth on Exhibit E (b) any salt, hydrate, solvate, isotope, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of such compound.

1.141. “XPC’535” means (a) the compound having the structure set forth on Exhibit D or (b) any salt, hydrate, solvate, isotope, ester, free acid or base, polymorph, enantiomer, metabolite or prodrug of such compound.

1.142. Interpretation.  This Agreement has been prepared in the English language, and the English language shall control its interpretation.  In this Agreement, unless otherwise specified:

Article 2
LICENSES AND EXCLUSIVITY

2.1. Licenses to Neurocrine.

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2.2. Xenon Retained Rights.  Notwithstanding the rights granted to Neurocrine in Section 2.1(a), Xenon retains a non-exclusive, non-licensable, non-transferable (except to Xenon’s Affiliates and permitted assignees pursuant to Section 14.3), royalty-free, fully paid up worldwide right to use or reference (a) the Xenon Licensed IP as reasonably necessary to conduct the activities allocated to Xenon under this Agreement or under the Research Plan, Initial Development Plan and Subsequent Development in accordance with the terms of this Agreement, and (b) the Xenon Licensed IP for screening purposes only with respect to Compounds other than XEN901, and each DTC and Research Compound that is designated as a Development Candidate by the JSC; provided that (i) Xenon shall not conduct any in vivo studies with any Compound under this clause (b) and (ii) Xenon shall not publish the results of any activities under this clause (b) without Neurocrine’s prior written consent.  Xenon hereby grants to Neurocrine a non-exclusive license, with the right to grant sublicenses through multiple tiers in connection with a sublicense under the licenses granted in Section 2.1, under all Patent Rights resulting from Xenon’s use of the Xenon Licensed IP under the preceding clause (b), solely as necessary for the practice of the licenses granted in Section 2.1).

2.3. Right to Sublicense.  Neurocrine shall have the right to grant sublicenses through multiple tiers, under any or all of the rights granted in Section 2.1, to its Affiliates and to Third Parties; provided, the granting by Neurocrine of a sublicense shall not relieve Neurocrine of any of its obligations hereunder, including, without limitation, the obligation to make milestone and royalty payments pursuant to Article 8, whether or not such payments are based on activities of any of its Affiliates or sublicensees.  Each Sublicense Agreement in which Neurocrine or its Affiliate or sublicensee grants a sublicense under the Xenon Licensed IP shall be in writing and subject and subordinate to, and consistent with, the relevant terms and conditions of this Agreement.  Neurocrine shall provide Xenon with a copy of any Third Party Sublicense Agreement (with all accompanying schedules, exhibits, and referenced documents), and any amendment thereto, within [†]days after its execution; provided that Neurocrine shall have the right to redact any (a) financial terms and (b) other unrelated technical or business information, so long as such redaction does not adversely affect the ability of Xenon to confirm such Sublicense Agreement’s compliance with the terms of this Agreement.  

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2.4. License to Xenon.  Neurocrine hereby grants to Xenon and its Affiliates a non-exclusive license, without the right to grant sublicenses, under the Neurocrine Research IP solely to conduct the activities allocated to Xenon under the Research Plan, Initial Development Plan and Subsequent Development or otherwise under this Agreement in accordance with the terms of this Agreement.

2.5. Transfer of Xenon Licensed IP.  Promptly after the Effective Date, Xenon shall provide Neurocrine with copies of all Know-How in the Xenon Licensed IP in existence as of the Effective Date.  On an ongoing basis thereafter during the Research Term, upon Neurocrine’s reasonable request, Xenon shall provide Neurocrine with complete and accurate copies of all such Know-How generated since the last such transfer under this Section 2.5.  The Parties shall cooperate with each other in good faith to enable a smooth transfer of such Know-How to Neurocrine.  Upon Neurocrine’s reasonable request during the Research Term, Xenon shall provide reasonable technical assistance, including making appropriate employees available to Neurocrine at reasonable and mutually convenient times, places and frequency and upon reasonable prior notice, for the purpose of assisting Neurocrine to understand and use the Know-How in the Xenon Licensed IP in connection with Neurocrine’s Development of Products.  The transfer of Xenon Know-How pursuant to this Section 2.5 shall be made in a manner such that the value, usefulness and confidentiality of the Xenon Know-How delivered by Xenon is preserved.

2.6. No Implied Licenses.  Except as explicitly set forth in this Agreement, neither Party shall be deemed by estoppel or implication to have granted the other Party any license or other right to any intellectual property of such Party.  All rights not otherwise expressly granted hereunder by a Party shall be retained.

2.7. Exclusivity.

2.8. Acquisitions.

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Article 3
GOVERNANCE

3.1. Joint Steering Committee.  The Parties shall establish a joint steering committee (the “Joint Steering Committee” or the “JSC”), composed of [†] representatives of each Party having research or development roles within such Party, each having sufficient experience and responsibility within such Party to make decisions arising within the scope of the JSC’s responsibilities.  The JSC will at all times consist of an equal number of members from each Party.  The JSC shall coordinate and oversee the Research Program and the Initial Development Program, and shall in particular:

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3.2. Duration of the JSC.  The JSC will disband upon the completion or earlier termination of both the Research Program and Initial Development Program.

3.3. Limitations of Committee Authority.  Each Committee shall have only the powers expressly assigned in this Article 3 and elsewhere in this Agreement and shall not have the authority to: (a) modify or amend the terms and conditions of this Agreement; (b) waive or determine either Party’s compliance with the terms and conditions of this Agreement; (c) decide any issue in a manner that would conflict with the express terms and conditions of this Agreement; or (d) make any determination with respect to the applicable Party’s satisfaction of its obligations hereunder to use Neurocrine’s Commercially Reasonable Efforts or Xenon’s Commercially Reasonable Development Efforts, as applicable.

3.4. Committee Membership and Meetings.

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3.5. Decision-Making.  All decisions, determinations, approvals or consents of each Committee shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote.  The Parties will strive to reach consensus on all Committee decisions, acting in good faith and using diligent efforts.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before any Committee that is within its authority, the representatives of the Parties cannot reach unanimous agreement as to such matter within [†] days after such matter was brought to such Committee for resolution, such disagreement shall be referred to the JSC (in the case of disagreements at any Committee other than the JSC) or the Chief Executive Officer of Xenon or his/her nominee and the Chief Business Development Officer of Neurocrine or his/her nominee (the “Executive Officers”) (in the case of disagreements at the JSC) for resolution.  If the Executive Officers cannot resolve such matter within [†] days after such matter has been referred to them, then Neurocrine shall have the right to decide such matter; provided that Neurocrine shall not use its final decision-making authority to approve any amendment to (a) the Research Plan or to any Initial Development Plan that requires Xenon to conduct any activities that Xenon reasonably determines that it does not have the resources or capabilities to conduct or (b) the DTC Initial Development Plan that would increase Xenon’s costs incurred thereunder that are not reimbursed by Neurocrine without Xenon’s prior written consent (it being understood that the DTC Initial Development Plan will at all times include the information set forth in Section 5.2(a)).  Xenon agrees that it has the resources and capabilities to conduct all activities allocated to Xenon in the Research Plan and the XEN901 Initial Development Plan as of the Effective Date.

3.6. Alliance Managers.  In addition to the JSC described in Section 3.1, Neurocrine and Xenon each acknowledge and agree that it would be beneficial to the Research Program and the Initial Development Program for each to have a senior representative with a general understanding of the activities under such programs to act as an alliance manager (each, an “Alliance Manager”), and each will appoint such person to the extent each Party in its sole discretion determines it is practical.  It is envisioned that the Alliance Managers will serve as a single point of contact within each Party with responsibility for facilitating communication and collaboration between the Parties.  Each Party’s Alliance Manager may attend JSC meetings as appropriate and will be provided access to decision-making representatives of such Party.

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Article 4
RESEARCH PROGRAM

4.1. General.  Subject to the terms and conditions of this Agreement, the Parties shall undertake a joint research collaboration during the Research Term to discover, identify and preclinically develop Research Compounds (the “Research Program”).  The Research Program is intended to include the preclinical development of Xenon’s existing non-clinical Research Compounds and the discovery of new back-up and follow-on Research Compounds to XEN901 and the DTCs as clinical Development Candidates for subsequent Development and Commercialization by Neurocrine.

4.2. Research Plan; Research Budget.  During the Research Term, the Parties shall conduct the Research Program in accordance with a written research plan that, at a minimum: (a) allocates research responsibilities between the Parties; (b) sets forth the details and anticipated timing of the research activities to be conducted by each Party; and (c) sets forth the minimum number of Xenon FTEs conducting such activities (as amended, modified or supplemented in accordance with this Agreement, the “Research Plan”).  The Research Plan will set forth activities to be conducted by the Parties leading up to, and including the preparation of, an IND for one or more Research Compounds, but will not including the filing of such INDs by Neurocrine.  The Research Plan will be conducted in accordance with an operational and research budget including all of Xenon’s FTE Costs and the anticipated out-of-pocket costs to be incurred by Xenon to conduct its activities under the Research Plan (the “Research Budget”).  As of the Effective Date, the Parties have agreed upon an initial Research Plan describing the research activities to be conducted in the first year of the Research Program and corresponding initial Research Budget, which are attached to this Agreement as Exhibit J.  From time to time during the Research Term (and no less frequently than once per calendar quarter), the JSC shall review the Research Plan and Research Budget and, as appropriate and to the extent necessary, prepare and approve amendments thereto.  In addition, no later than December 1 of each calendar year during the Research Term, the Parties shall prepare an amended Research Plan and Research Budget describing research activities and the research and operational budget for the subsequent calendar year, which shall be submitted for review and approval by the JSC.  Upon JSC approval of any amendment or modification to the Research Plan and Research Budget, the JSC will attach such amended or modified Research Plan and Research Budget to the minutes of the JSC meeting at which the same is approved and provide a copy of such minutes to each Party within [†] days.  If the terms of the Research Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

4.3. Designation of Development Candidates.  From time to time during the Research Term, either Party may nominate a DTC or Research Compound as a potential Development Candidate for the JSC’s consideration.  Promptly after such nomination, each Party shall present to the JSC the data and results it has obtained with respect to such DTC or Research Compound, and the JSC shall determine whether such DTC or Research Compound shall be approved as a Development Candidate or whether additional research activities should be conducted with respect to such DTC Research Compound, after which such DTC or Research Compound may be reconsidered for designation as a Development Candidate.  If the JSC approves a particular DTC or Research Compound as a Development Candidate, then the Parties shall proceed to IND-enabling studies of such DTC or Research Compound during the Research Term as set forth in the Research Plan.

4.4. Research Term.

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4.5. Research Costs.  Each Party shall be solely responsible for all costs such Party incurs to conduct its activities under the Research Plan; provided that Neurocrine shall reimburse Xenon for the FTE Costs and out-of-pocket costs incurred by Xenon in accordance with the Research Budget to conduct its activities under the Research Plan, as provided in Section 8.2.

4.6. Conduct of Research.  Each Party shall conduct the activities assigned to it under the Research Plan.  Each Party shall conduct such activities in accordance with the timelines in the Research Plan, in good scientific manner and in compliance with all applicable Laws.

4.7. Research Records.  Each Party shall maintain complete, current and accurate records of all activities conducted by it under the Research Program, and all data and other information resulting from such activities.  Such records shall be in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes.  Each Party shall document all non-clinical studies in formal written study reports according to applicable Laws and national and international guidelines (e.g., ICH and GLP).  Neurocrine shall have the right to review and copy such records maintained by Xenon at reasonable times and to obtain access to the original documents to the extent reasonably necessary for regulatory and patent purposes.

4.8. Research Reports.  Xenon shall keep Neurocrine reasonably informed of its progress under the Research Program, and upon request provide Neurocrine with copies of all data and results generated by or on behalf of Xenon in the course of performing the Research Program.  Each Party shall provide the JSC with reports detailing its Research Program activities and the results of such activities at each regularly scheduled JSC meeting.  The Parties shall discuss the status, progress and results of the Research Program at JSC meetings.

4.9. University Collaborators.  Neurocrine acknowledges that as of the Effective Date, Xenon has entered into agreements with academic institutions to conduct specified research using certain Compounds, as listed on Exhibit K, and that Xenon may enter into similar agreements after the Effective Date solely as and to the extent set forth on Exhibit K (collectively, the “Academic Agreements”).  Except to the extent prohibited under an Academic Agreement, Xenon shall keep Neurocrine reasonably informed of the activities under the Academic Agreements, including by providing copies of any proposed publication or presentation of the results of such research and any invention disclosure of inventions made under such research, in each case within [†] days after Xenon’s receipt thereof from the counterparty to any Academic Agreement.  Neurocrine shall have the right to require Xenon to exercise its rights under the Academic Agreements with respect to reviewing and commenting on publications and presentations and exercising options or other rights with respect to intellectual property arising thereunder (subject to Section 9.6 with respect to any such intellectual property to be in-licensed by Xenon).

4.10. Materials.

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4.11. Subcontractors.  Xenon shall not subcontract any of its obligations under this Agreement to a Third Party without the prior written consent of Neurocrine, which shall not be unreasonably withheld, conditioned or delayed.  Neurocrine may perform its activities under the Research Program and its Development and Commercialization activities through one or more subcontractors.  Upon any permitted subcontracting by a Party, such Party shall remain responsible for the work delegated to, and payment to, its subcontractors to the same extent it would if it had done such work itself, and shall enter into a written agreement with each subcontractor that is consistent with this Agreement, including provisions relating to confidentiality, non-use and intellectual property.

4.12. Consequences of the End of the Research Term.  From and after the expiration of the Research Term, Xenon will have no obligation to perform any further activities in furtherance of the Research Program.

Article 5
Initial Development Program

5.1. Initial Development Program.  Subject to the terms and conditions of this Agreement, the Parties will conduct a collaborative Development program for XEN901 and the DTCs under the direction of the JSC.  Such program will include:  (i) completion of any preclinical and clinical studies that are ongoing as of the Effective Date of any XEN901 Product and the two (2) DTC Products selected by the JSC pursuant to Section 3.1(h) as Development Candidates, (ii) a pharmacokinetic drug-drug interaction and food effect Phase 1 Clinical Trial of a XEN901 Product to examine the adequacy of a new pediatric formulation, and (iii) all preclinical studies of two (2) DTC Products containing the two (2) DTCs designated as Development Candidates by the JSC pursuant to Section 3.1(h), in each case, to the extent such preclinical studies are required to support IND submission and preparation of an IND for each such DTC Product (the “Initial Development Program”).

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5.2. Initial Development Plans.  The Initial Development Program shall be conducted pursuant to two (2) Initial Development Plans, one (1) for XEN901 and one (1) for the two (2) DTCs designated as Development Candidates.  If the terms of an Initial Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.  From time to time (and no less frequently than once per calendar quarter), as set forth in Section 3.1(j), the JSC shall review each of the Initial Development Plans and, as appropriate, and to the extent necessary, prepare and approve amendments thereto.  Upon JSC approval of any amendment or modification to an Initial Development Plan, the JSC will attach such amended or modified Initial Development Plan to the minutes of the JSC meeting at which the same is approved and provide a copy of such minutes to each Party within [†] days.

5.3. Development Efforts.  Xenon shall use Xenon’s Commercially Reasonable Development Efforts, and Neurocrine shall use Neurocrine’s Commercially Reasonable Efforts, to conduct the Development activities assigned to such Party under the Initial Development Plans.  Each Party shall conduct such activities in accordance with the timelines in the Initial Development Plans, in good scientific manner and in compliance with all applicable Laws.

5.4. Development Costs.  Each Party shall be solely responsible for all costs such Party incurs to conduct its activities under the Initial Development Plans; provided that (a) Neurocrine shall reimburse Xenon for the FTE Costs and out-of-pocket costs incurred by Xenon in accordance with the XEN901 Development Budget to conduct its activities under the XEN901 Initial Development Plan, as provided in Section 8.2, and (b) the JSC may determine that Neurocrine will reimburse Xenon’s FTE Costs and out-of-pocket costs to conduct any particular activities under the DTC Initial Development Plan, in which case the JSC will prepare a budget for such activities and Neurocrine will reimburse such costs as provided in Section 8.2.  For clarity, Xenon shall be solely responsible for all of Xenon’s FTE Costs and out-of-pocket costs incurred in connection with its performance of activities pursuant to the DTC Initial Development Plan, except as provided in the preceding clause (b).

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5.5. Development Records.  Each Party shall maintain complete, current and accurate records of all activities conducted by it under the Initial Development Program, and all data and other information resulting from such activities.  Such records shall be in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes.  Each Party shall document all non-clinical studies and Clinical Trials in formal written study reports according to applicable Laws and national and international guidelines (e.g., ICH, GCP, GLP, and GMP).  Neurocrine shall have the right to review and copy such records maintained by Xenon at reasonable times and to obtain access to the original to the extent necessary for regulatory and patent purposes.

5.6. Data Exchange and Development Reports.  Xenon shall promptly provide Neurocrine with copies of all data and results generated by or on behalf of Neurocrine in the course of performing the Initial Development Program, including, in each case of data arising from Clinical Trials, in a form that is reasonably suitable for Neurocrine to readily conduct statistical analysis using such data or in such other form as the JSC may agree from time to time.  Each Party shall provide the JSC with reports detailing its Initial Development Program activities and the results of such activities at each regularly scheduled JSC meeting.  The Parties shall discuss the status, progress and results of the Initial Development Program at JSC meetings.

5.7. Effect of Completion of the Initial Development Plans.  From and after the completion of the activities allocated to Xenon pursuant to either Initial Development Plan, Xenon will have no obligation to perform any further activities in respect of the Development of XEN901 Products or DTC Products, as applicable to the completed Initial Development Plan, except as otherwise agreed by the Parties in writing.

Article 6
DEVELOPMENT, REGULATORY AND MANUFACTURING

6.1. Subsequent Development.  Except for the activities set forth in the Research Plan, the XEN901 Initial Development Plan, or the DTC Initial Development Plan, Neurocrine shall be solely responsible, at its sole cost and expense (but subject to the Co-Funding Option), for all Development of the Compounds and Products (the conduct of such activities is referred to herein as the “Subsequent Development”), including the conduct of a Phase 1b Clinical Trial (e.g., open-label study in patients) or Phase 2 Clinical Trial of a XEN901 Product in children with SCN8A-EE (as described in the XEN901 Neurocrine Development Plan, the “Proof of Concept Study”).  Notwithstanding the foregoing, the Parties may mutually agree that Xenon will conduct particular activities with respect to the Subsequent Development of XEN901 or a DTC that are not included in an Initial Development Plan, in which case Neurocrine will reimburse all FTE Costs and out-of-pocket costs incurred by Xenon to conduct such activities.

6.2. Subsequent Development Plans.  Neurocrine shall conduct all Subsequent Development of any Compound or Product pursuant to a development plan for such Compound or Product (each, a “Neurocrine Development Plan”).  Each Neurocrine Development Plan will set forth the timeline and summary of all preclinical and clinical activities to be conducted by or on behalf of Neurocrine thereunder with respect to the applicable Product.  The Neurocrine Development Plan for XEN901 (as amended, modified or supplemented, the “XEN901 Neurocrine Development Plan”) will include the timeline and details of the Proof of Concept Study.  As of the Effective Date, Neurocrine has prepared the initial XEN901 Neurocrine Development Plan, which is attached to this Agreement as Exhibit M.  Prior to commencing Subsequent Development of any other Product, Neurocrine shall prepare a Neurocrine Development Plan therefor and submit such Neurocrine Development Plan to the JSC (or, if the JSC has disbanded, to Xenon) for review and discussion.  If the terms of any Neurocrine Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

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6.3. XEN901 INDs.

6.4. Development Efforts; Diligence.  Neurocrine shall use Neurocrine’s Commercially Reasonable Efforts to conduct all Development activities under the Neurocrine Development Plans.  Neurocrine shall conduct such activities in accordance with the timelines in the Neurocrine Development Plans, in good scientific manner and in compliance with all applicable Laws.  Neurocrine shall be solely responsible for all Subsequent Development; provided that Neurocrine shall use Neurocrine’s Commercially Reasonable Efforts to Develop and seek Regulatory Approval for at least two (2) Products in the Field in the Major Markets.  Without limiting the foregoing, following IND Acceptance of an IND for XEN901 in SCN8A-EE, Neurocrine shall use Neurocrine’s Commercially Reasonable Efforts to complete a Phase 2 Clinical Trial of a XEN901 Product in SCN8A-EE.

6.5. Development Records.  Neurocrine shall maintain complete, current and accurate records of all activities conducted by it under the Neurocrine Development Program, and all data and other information resulting from such activities.  Such records shall be in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes.  Neurocrine shall document all non-clinical studies and Clinical Trials in formal written study reports according to applicable Laws and national and international guidelines (e.g., ICH, GCP, GLP, and GMP).

6.6. Development Costs.  Neurocrine shall be solely responsible for all costs it incurs to conduct all Subsequent Development of Compounds and Products, subject to Xenon’s Co-Funding Option as described below.

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6.7. Co-Funding Option.  On the terms set forth in this Section 6.7, Xenon shall have the right to exercise the Co-Funding Option as described below with respect to the first of a XEN901 Product or a DTC Product to reach the Co-Funding Notice Period.  Upon the commencement of the Co-Funding Notice Period for one (1) such Product, the Parties’ rights and obligations under this Section 6.7 will terminate with respect to the other such Products.

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6.8. Subsequent Development Reports.  Neurocrine shall keep Xenon reasonably informed as to the progress and results of its and its Affiliates’ and sublicensees’ Subsequent Development of Products in the Territory.  Without limiting the foregoing, from time to time, and in no event less than within [†] days after the end of each calendar year during the Term, Neurocrine shall provide Xenon with an updated Neurocrine Development Plan for each Product in Development including significant ongoing or upcoming Development activities expected to be performed in the following calendar year and a report that summarizes the Subsequent Development activities performed in the prior calendar year.  In addition, if Xenon has exercised the Co-Funding Option pursuant to Section 6.7, then the Parties shall meet in person no less than once per calendar year during the conduct of activities under the Final Development Plan to discuss the Subsequent Development of the Product for which Xenon has exercised its Co-Funding Option.  Neurocrine’s obligation to provide updated Neurocrine Development Plans to Xenon, and if applicable, to meet in person to discuss progress of the Subsequent Development, will terminate on a Product-by-Product basis following the First Commercial Sale of such Product anywhere in the Territory.

6.9. Voucher.  If the FDA grants Neurocrine a Rare Pediatric Disease Priority Review Voucher in connection with the approval of an NDA for a XEN901 Product (the “Voucher”), then Neurocrine may, at its option: (a) sell the Voucher to a Third Party in an arm’s length transaction, in which case the revenue received from such sale, less any reasonable and documented out-of-pocket costs incurred by Neurocrine in connection with such sale, will be shared [†] between Neurocrine and Xenon, with such payment to be made to Xenon within [†] days after Neurocrine’s receipt of invoice from Xenon, such invoice to be issued after Neurocrine reports such sale to Xenon (which Neurocrine shall do within [†] days after the closing thereof); (b) keep the Voucher for its own use for a product other than a Product, in which case Neurocrine shall pay to Xenon an amount equal to [†] of the intrinsic value of the Voucher, which will equal the average price of the [†] most recent (at the time of Neurocrine’s use of the Voucher) arm’s length sales of a Rare Pediatric Disease Priority Review Voucher for which the sale price was publicly disclosed, such payment to be made within [†] days after Neurocrine’s use of the Voucher; or (c) use the Voucher for a Product, in which case no payments would be due to Xenon.  If Neurocrine has not sold the Voucher or used the Voucher for any product (including a Product) within [†] years after the date the Voucher is granted to Neurocrine, then Neurocrine will make the payment described in the preceding clause (b) to Xenon, where the payment will be based on the [†] most recent publicly disclosed sale prices at the end of such [†] year period.  If the FDA grants Neurocrine a Rare Pediatric Disease Priority Review Voucher in connection with any Product other than a XEN901 Product, Neurocrine will retain all rights to such voucher without any payment or other obligations to Xenon.

6.10. Regulatory.

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6.11. Inventory.  Xenon hereby sells and assigns to Neurocrine, and Neurocrine hereby purchases from Xenon, all of the Inventory, for no additional consideration beyond the consideration set forth in Article 8; provided that Neurocrine will reimburse Xenon for fifty percent (50%) of the documented costs Xenon incurs to a Third Party manufacturer for any Inventory described on Exhibit H that is manufactured after the Effective Date. Xenon may use the Inventory to conduct its activities under the Research Program and the Initial Development Program as provided in the Research Plan and Initial Development Plans.  Xenon will deliver the Inventory DDP (Incoterms 2010) to the location of Neurocrine or its designee as selected by Neurocrine.  Xenon represents and warrants to Neurocrine that (a) the Inventory will meet the applicable specifications set forth on Exhibit N, (b) the Inventory identified as GMP materials on Exhibit H has been manufactured, stored and transported in accordance with GMP and (c) all Inventory has been manufactured, stored and transported in material compliance with all Laws applicable to such item of Inventory.

6.12. Manufacturing.

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Article 7
COMMERCIALIZATION

7.1. Commercialization.  As between the Parties, Neurocrine will have the exclusive right to conduct, and will be solely responsible for all aspects of, the Commercialization of Products in the Territory, including: (a) developing and executing a commercial launch and pre-launch plan, (b) manufacturing and supplying Products for commercial use, (c) negotiating with applicable Governmental Authorities and private payors regarding the price and reimbursement status of the Products; (d) marketing and promotion; (e) booking sales and distribution and performance of related services; (f) handling all aspects of order processing, invoicing and collection, inventory and receivables; (g) providing customer support, including handling medical queries, and performing other related functions; and (h) conforming its practices and procedures to applicable Laws relating to the marketing, detailing and promotion of Products in the Territory.  As between the Parties, Neurocrine shall bear all costs and expenses incurred in connection with the Commercialization of Products in the Territory.

7.2. Diligence.  Neurocrine shall use Neurocrine’s Commercially Reasonable Efforts to Commercialize each Product in each Major Market in which it receives Regulatory Approval.

7.3. Commercialization Reports.  At least [†] prior to the planned commercial launch of a Product, and annually thereafter following the First Commercial Sale of such Product, Neurocrine shall provide Xenon with a report of Neurocrine’s significant Commercialization activities with respect to such Product in the Major Markets since the last such report.  Such Commercialization reports shall include a summary of Commercialization activities performed in the prior calendar year in the Major Markets and a summary of significant ongoing or upcoming Commercialization activities expected to be performed in the current calendar year in the Major Markets.

Article 8
FINANCIAL PROVISIONS

8.1. Upfront Payments.

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8.2. Reimbursement of Research Costs and XEN901 Initial Development Costs.  Neurocrine shall reimburse the reasonable and documented FTE Costs and out-of-pocket costs incurred by Xenon to conduct its activities under the Research Plan and its activities under the XEN901 Initial Development Plan (and, to the extent determined by the JSC, its activities under the DTC Initial Development Plan) (such costs, collectively, to the extent permitted under the following proviso, the “Reimbursed Costs”); provided that (a) Neurocrine shall not be obligated to reimburse any FTE Costs in excess of the budgeted amount for the applicable activity or any out-of-pocket costs in excess of [†] of the budgeted amount for the applicable activity, and (b) with respect to any amounts payable to a contract research organization, Xenon shall notify Neurocrine promptly upon becoming aware that such amounts exceed or will exceed the budgeted amount, and Neurocrine shall only be obligated to pay any such amounts in excess of [†] of the budgeted amounts to the extent that Neurocrine approves such excess in writing (which approval Neurocrine shall not unreasonably withhold, condition or delay).  Within [†] days after the end of each calendar quarter during which Xenon has incurred any Reimbursed Costs, Xenon shall submit to Neurocrine a reasonably detailed invoice setting forth all such Reimbursed Costs incurred in such calendar quarter.  Upon Neurocrine’s request, Xenon shall promptly provide Neurocrine with reasonable supporting documentation and use good faith efforts to resolve any dispute or inquiry that Neurocrine may have over any amount so invoiced.  Neurocrine shall pay to Xenon the Reimbursed Costs so invoiced (or the undisputed portion thereof) within [†] days after the receipt of each such invoice.  For clarity, any Reimbursed Cost must be incurred in accordance with the Research Plan or the XEN901 Initial Development Plan, and Neurocrine shall have no obligation to reimburse any amount not contemplated by either such plan or in excess of the amounts described above.

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8.3. IND Milestone Payment for XEN901 Product.

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8.4. Co-Funding of Development Costs.  If Xenon exercises the Co-Funding Option under Section 6.7 for either a XEN901 Product or a DTC Product (the “Co-Funded Product”) in a Major Indication, then within [†]days after the end of each calendar quarter during which Neurocrine incurs any Co-Funded Costs, Neurocrine shall submit to Xenon a reasonably detailed invoice setting forth all reasonable and documented Co-Funded Costs actually incurred by Neurocrine in such calendar quarter and invoicing Xenon for its fifty percent (50%) share of such Co-Funded Costs (“Xenon’s Share”).  Upon Xenon’s request, Neurocrine shall promptly provide Xenon with reasonable supporting documentation and use good faith efforts to resolve any dispute or inquiry that Xenon may have over any amount so invoiced.  Xenon shall pay to Neurocrine Xenon’s Share of Co-Funded Costs so invoiced (or the undisputed portion thereof) within [†] days after the receipt of each such invoice.  If Xenon is unable to pay the full amount of Xenon’s Share of the Co-Funded Costs, then Xenon shall have [†] months after the original due date to pay all past due amounts of Xenon’s Share of Co-Funded Costs to Neurocrine; provided that if any milestone payment or royalty payment is due from Neurocrine to Xenon during such [†] month period, Neurocrine shall have the right to offset such past due amounts of Xenon’s Share of Co-Funded Costs against such milestone or royalty payment.  If Xenon does not pay (or Neurocrine does not otherwise fully recover) such past due amount of Xenon’s Share of Co-Funded Costs within such [†] month period, then Neurocrine shall have the right to terminate Xenon’s right to receive increased royalties (as set forth in Section 8.7(c)) upon [†] days written notice to Xenon.  For clarity, upon such termination, Neurocrine shall have no obligation to reimburse any Co-Funded Costs previously paid by Xenon.  If Xenon does pay or Neurocrine fully recovers such past due amounts of Xenon’s Share of Co-Funded Costs within such [†]month period, and Xenon is subsequently unable to pay Xenon’s Share of Co-Funded Costs, then Neurocrine shall have the right to terminate Xenon’s right to receive increased royalties (as set forth in Section 8.7(c) upon [†]days written notice to Xenon, without any [†] month cure period.

8.5. Development Milestone Payments.

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8.6. Sales Milestones.

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8.7. Royalty Payments

 

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8.8. Third Party Payment Obligations.  Subject to Section 8.7(e)(ii) and Section 9.6, each Party shall be responsible for the payment of royalty, milestone and other payments due to Third Parties under any agreements between such Party (or its Affiliates) and Third Parties on account of Neurocrine’s and its Affiliates’ and sublicensees’ Development, manufacture and Commercialization of Products in the Field in the Territory.  Without limiting the foregoing, Xenon shall be solely responsible for all payments due under the Genentech License. In the event that Xenon has failed to make any payment on account of Neurocrine’s or its Affiliate’s or sublicensee’s sale of any Product when due under the Genentech License, and has failed to cure such non-payment within the applicable cure period under the Genentech License, Xenon will provide notice to Neurocrine at least [†] days prior the end of the applicable cure period and Neurocrine shall have the right, but no obligation, to pay any such royalties directly to Genentech and to deduct any such royalties paid to Genentech against any payments to Xenon under this Agreement.

8.9. Currency; Exchange Rate.  All payments to be made by a Party to the other Party under this Agreement shall be made in Dollars by bank wire transfer in immediately available funds to a bank account designated by written notice from the Party receiving the payment.  The rate of exchange to be used in computing the amount of currency equivalent in Dollars shall be the rate used by Neurocrine or Xenon, as applicable, in its financial reporting in accordance with applicable GAAP or other standard as then-used by Neurocrine or Xenon, as applicable.  

8.10. Late Payments.  If a Party does not receive payment of any sum due to it on or before the due date therefor, simple interest shall thereafter accrue on the sum due from the due date until the date of payment at a per-annum rate of prime (as reported in The Wall Street Journal (U.S., Eastern Edition) plus [†] points or the maximum rate allowable by applicable Law, whichever is less.

8.11. Taxes.

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8.12. Financial Records and Audit.

Article 9
INTELLECTUAL PROPERTY RIGHTS

9.1. Inventions.

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9.2. Patent Prosecution.

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9.3. Patent Enforcement.

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9.4. Orange Book Listing. Neurocrine and Xenon shall discuss in good faith the Patent Rights (including Xenon Patent Rights, Neurocrine Patent Rights, Joint Patent Rights or other Patent Rights) that will be included in the Orange Book maintained by the FDA or similar or equivalent patent listing source, if any, in other countries in the Territory for Products, provided that Neurocrine shall have the sole right to determine which Patent Rights will be included, after considering Xenon’s comments in good faith.  Xenon will provide such assistance as may be reasonably requested by Neurocrine in connection with such listing.

9.5. Patent Term Extensions. The Parties shall cooperate in obtaining patent term restoration (under but not limited to the U.S. Drug Price Competition and Patent Term Restoration Act and its foreign equivalents), supplemental protection certificates or their equivalents, and patent term extensions with respect to the Xenon Patent Rights and Joint Patent Rights in any country and/or region where applicable.  Subject to the exercise of Neurocrine’s Commercially Reasonable Efforts, Neurocrine shall determine which Xenon Patent Rights, Joint Patent Rights and Neurocrine Patent Rights it shall apply to extend in any country or region in the Territory for any Product, and shall file for such extension at Neurocrine’s cost and expense.  Xenon shall provide all assistance reasonably requested by Neurocrine in connection with such filings.

9.6. Third Party Technology.

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9.7. Trademarks.  Neurocrine shall have the right to brand Products using Neurocrine related trademarks and any other trademarks and trade names it determines appropriate, which may vary by country or within a country (“Product Marks”).  Neurocrine shall own all rights in the Product Marks and shall have the sole right to register and maintain the Product Marks in the countries and regions that it determines, at Neurocrine’s cost and expense.

Article 10
REPRESENTATIONS AND WARRANTIES

10.1. Mutual Representations and Warranties.

  Each Party hereby represents and warrants to the other Party as follows:

10.2. Additional Representations, Warranties and Covenants of Xenon. Xenon represents and warrants and, as applicable, covenants to Neurocrine as follows, as of the Effective Date:

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10.3. Additional Neurocrine  Representations, Warranties and Covenants.

10.4. Mutual Covenants.

10.5. Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY, AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

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Article 11
INDEMNIFICATION

11.1. Indemnification by Xenon.  Xenon shall defend, indemnify, and hold Neurocrine and its Affiliates and their respective officers, directors, employees and agents (the “Neurocrine Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such Neurocrine Indemnitees, resulting from any claims, suits, proceedings or causes of action brought by such Third Party (collectively, “Claims”) against such Neurocrine Indemnitees to the extent arising or resulting from: (a) the conduct of the Research Program or Initial Development Program by Xenon or any of its Affiliates or subcontractors; (b) the negligence or willful misconduct of any of the Xenon Indemnitees; (c) Xenon’s breach of any covenant, representation or warranty set forth in this Agreement; or (d) following the termination of this Agreement in its entirety or on a Product-by-Product basis, as applicable, the Development, manufacture or Commercialization of Compounds and Products by or on behalf of Xenon or its Affiliates or the use or practice of the Neurocrine Licensed IP, Compounds or Products by or on behalf of Xenon, its Affiliates or sublicensees (including any Claim arising from any personal injury, death or property damage); except, in each case (a)-(d), to the extent such Claims (i) arise out of or result from a breach by Neurocrine of any covenant, representation or warranty of Neurocrine in this Agreement, or (ii) arise out of or result from the negligence or willful misconduct of any Neurocrine Indemnitees.

11.2. Indemnification by Neurocrine. Neurocrine shall defend, indemnify, and hold Xenon and its Affiliates and their respective officers, directors, employees and agents (the “Xenon Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such Xenon Indemnitees, resulting from any Claims against such Xenon Indemnitees to the extent arising or resulting from: (a) the conduct of the Research Program or Initial Development Program by Neurocrine or any of its Affiliates or subcontractors; (b) the Development, manufacture or Commercialization of Compounds and Products by or on behalf of Neurocrine or its Affiliates or the use or practice of the Xenon Licensed IP, Compounds or Products by or on behalf of Neurocrine, its Affiliates or sublicensees (including any Claim arising from any personal injury, death or property damage); (c) the negligence or willful misconduct of any of the Neurocrine Indemnitees; or (d) Neurocrine’s breach of any covenant, representation or warranty set forth in this Agreement; except, in each case (a)-(d), to the extent such Claims (i) arise out of or result from a breach by Xenon of any covenant, representation, or warranty of Xenon in this Agreement, or (ii) arise out of or result from the negligence or willful misconduct of any Xenon Indemnitee.

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11.3. Indemnification Procedure.  As a condition to seeking indemnification under Section 11.1 or Section 11.2, a Party (the “Indemnified Party”) shall inform the other Party (the “Indemnifying Party”) of the Claim giving rise to the obligation to indemnify pursuant to this Article 11 as soon as reasonably practicable after receiving notice of the Claim; provided that any delay in informing Indemnifying Party will relieve the Indemnifying Party of its obligations under this Article 11 only to the extent it is actually prejudiced by such delay.  The Indemnifying Party shall have the right to assume the defense of any such Claim for which it is obligated to indemnify the Indemnified Party.  The Indemnified Party shall cooperate with the Indemnifying Party and the Indemnifying Party’s insurer as the Indemnifying Party may reasonably request, and at the Indemnifying Party’s cost and expense.  The Indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any Claim that has been assumed by the Indemnifying Party.  Neither Party shall have the obligation to indemnify the other Party in connection with any settlement made without the Indemnifying Party’s written consent, which consent shall not be unreasonably withheld or delayed.  If the Parties cannot agree as to the application of Section 11.1 or Section 11.2 as to any Claim, pending resolution of the dispute pursuant to Section 14.7, the Parties may conduct separate defenses of such Claim, with each Party retaining the right to claim indemnification from the other Party in accordance with Section 11.1 or Section 11.2 upon resolution of the underlying Claim.

11.4. Mitigation of Loss.  Each Indemnified Party shall take and shall procure that its Affiliates take all such reasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate any Claims (or potential losses or damages) under this Article 11.  Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

Article 12
CONFIDENTIALITY; PUBLICATION

12.1. Duty of Confidence.  Subject to the other provisions of this Article 12:

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12.2. Exceptions.  The foregoing obligations as to particular Confidential Information of a Disclosing Party shall not apply to the extent that the Receiving Party can demonstrate that such Confidential Information:

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the Receiving Party.

12.3. Authorized Disclosures.  Notwithstanding the obligations set forth in Section 12.1 and Section 12.5, a Party may disclose the other Party’s Confidential Information to the extent such disclosure is reasonably necessary in the following instances:

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Confidential Information that is disclosed pursuant to this Section 12.3 shall remain otherwise subject to the confidentiality and non-use provisions of this Article 12.  

12.4. Scientific Publication.  Xenon shall not publish or otherwise publicly disclose any results of studies carried out under this Agreement or prior to the Effective Date related to the Compounds or Products without the prior written approval of Neurocrine, which Neurocrine may grant or withhold in its sole discretion, unless such information has already been publicly disclosed in the same format either prior to the Effective Date or after the Effective Date through no fault of Xenon and otherwise not in violation of this Agreement and remains accurate at the time of re-publication, and except for the publications listed on Exhibit R.  Nothing in this Agreement will restrict, or be deemed to restrict, Neurocrine from publishing the results of any studies conducted hereunder related to Compounds or Products.

12.5. Publicity; Term of Agreement.

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Article 13
TERM AND TERMINATION

13.1. Term.  The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier terminated pursuant to Section 13.2, shall continue on a Product-by-Product and country-by-country basis until the expiration of the Royalty Term for such Product in such country.  Upon the expiration of the Royalty Term for a particular Product and country, the license granted by Xenon to Neurocrine under Section 2.1(a) with respect to such Product and country shall become fully-paid, royalty free, perpetual and irrevocable.

13.2. Termination.

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13.3. Effects of Termination.

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13.4. Alternative to Termination.  If Neurocrine has the right to terminate this Agreement pursuant to Section 13.2(b) for Xenon’s uncured material breach, then in lieu of such termination, Neurocrine may elect, upon written notice to Xenon: (i) to reduce all subsequent payments from Neurocrine to Xenon under this Agreement by fifty percent (50%) or (ii) to terminate this Agreement.

13.5. Survival.  Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination.  Without limiting the foregoing, the provisions of Article 11 and 12, and Sections 4.10, 8.9, 8.10, 8.11, 8.12, 9.1(a), 10.5, 13.3, 13.5, 13.6, 14.3, 14.5, 14.6, 14.7, 14.12, 14.13 and 14.14 shall survive the expiration or termination of this Agreement.

13.6. Termination Not Sole Remedy.  Termination is not the sole remedy under this Agreement and, whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remedies shall remain available except as agreed to otherwise herein.

Article 14
GENERAL PROVISIONS

14.1. Force Majeure.  Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, earthquakes or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party or unavailability of materials related to the manufacture of Compounds or Products.  The affected Party shall notify the other Party in writing of such force majeure circumstances as soon as reasonably practicable, and shall promptly undertake and continue diligently all reasonable efforts necessary to cure such force majeure circumstances or to perform its obligations in spite of the ongoing circumstances.

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14.2. Rights in Bankruptcy or Insolvency.  All rights and licenses granted under or pursuant to this Agreement by Xenon are, and shall otherwise be deemed to be, licenses of rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code and for purposes of Section 365(n) of the U.S. Bankruptcy Code, and of a “right to use intellectual property” as used in the Bankruptcy and Insolvency Act (the “BIA”) and the Companies’ Creditors Arrangement Act (the “CCAA” and, collectively with the BIA and U.S. Bankruptcy Code, the “Bankruptcy Laws”).  The Parties agree that Neurocrine, as licensee of intellectual property and of a right to use intellectual property under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Laws.  The Parties further agree that in the event of a rejection, disclaimer, or resiliation of this Agreement by Xenon in any proceeding by or against Xenon under any of the Bankruptcy Laws, (a) Neurocrine shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property that are necessary for Neurocrine to practice its license to such intellectual property, which, if not already in Neurocrine’s possession, shall be promptly delivered to it upon its written request therefor, and (b) Xenon shall not interfere with Neurocrine’s rights to such intellectual property, and shall reasonably assist and not interfere with Neurocrine in obtaining such intellectual property and such embodiments of such intellectual property from another entity.  The term “embodiments” of intellectual property means all tangible embodiments of the intellectual property licensed hereunder to the extent of the license scope.  All rights, powers and remedies provided in this Section 14.2 are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at Law or in equity (including any of the Bankruptcy Laws) in the event of the commencement of a case under any of the Bankruptcy Laws.

14.3. Assignment.  This Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, either Party may, without consent of the other Party, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate of such Party, or in whole to its successor in interest in connection with the sale of all or substantially all of its shares or its assets to which this Agreement relates, or in connection with a merger, acquisition or similar transaction.  Any attempted assignment not in accordance with this Section 14.3 shall be null and void and of no legal effect.  Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement.  The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns.

14.4. Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties shall in such an instance make a good faith effort to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

14.5. Notices.  All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by internationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

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If to Xenon:

Xenon Pharmaceuticals Inc.
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇

▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇

▇▇▇▇▇▇

Attn: Legal Affairs Department

▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇-▇▇▇▇▇▇.▇▇▇

with a copy to:

▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP

Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.

If to Neurocrine:

Neurocrine Biosciences, Inc.

▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇

▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Fax: ▇▇▇-▇▇▇-▇▇▇▇

Attention: Chief Legal Officer

or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice shall be deemed to have been given: (a) when delivered if personally delivered on a business day (or if delivered on a non-business day, then on the next business day); (b) on the business day after dispatch if sent by internationally-recognized overnight courier; or (c) on the fifth (5th) business day following the date of mailing, if sent by mail.  All notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement, shall be in the English language.

14.6. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York and the patent laws of the United States without reference to any rules of conflict of laws.

14.7. Dispute Resolution.  The Parties recognize that disputes as to matters arising out of or in connection with this Agreement, including any question regarding its formation, existence, validity or termination, or either Party’s rights or obligations hereunder, but excluding any dispute arising from the JSC, which will be resolved in accordance with Section 3.5 (collectively, “Disputes”) may arise from time to time; provided however, and notwithstanding any decision by the JSC, any disputes regarding an allegation of a Party’s material breach of this Agreement shall be subject to the dispute resolution procedures set forth in this Section 14.7.  It is the objective of the Parties to establish procedures to facilitate the resolution of such Disputes in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Section 14.7 to resolve any such Dispute if and when it arises.

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14.8. Entire Agreement; Amendments.  This Agreement, together with the Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof.  Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, with respect to the subject matter hereof are superseded by the terms of this Agreement.  The Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement.  This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representative(s) of both Parties hereto.  The Parties agree that, effective as of the Effective Date, that certain Confidential Disclosure Agreement between the Parties dated March 26, 2019 (the “Confidentiality Agreement”) shall be terminated, and that disclosures made prior to the Effective Date pursuant to the Confidentiality Agreement shall after the Effective Date be subject to the confidentiality and non-use provisions of this Agreement.

14.9. Headings.  The captions to the several Articles, Sections and subsections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.

14.10. Independent Contractors.  It is expressly agreed that Xenon and Neurocrine shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Xenon nor Neurocrine shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

14.11. Waiver.  The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise.

14.12. Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

14.13. Performance by Affiliates.  Each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates; and the performance of such obligations or rights by any Affiliate shall be deemed to be the performance by such Party.  Each Party shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance.  Each Party shall be responsible for ensuring the performance of its obligations under this Agreement and any failure of any Affiliate performing obligations of a Party hereunder shall be deemed to be a failure by such Party to perform such obligations.  

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14.14. Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING LOSS OF PROFITS, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREIN OR ANY BREACH OF THE TERMS OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 14.14 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 11.1 OR SECTION 11.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF Article 12.

14.15. Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

14.16. Business Day Requirements.  In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a business day then such notice or other action or omission shall be deemed to be required to be taken on the next occurring business day.

14.17. Counterparts.  This Agreement may be executed in two or more counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the Parties intending to be bound have caused this License and Collaboration Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

 

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Exhibit A

Xenon Patent Rights

 

 

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Exhibit B

XEN901

 

[†]

 

 

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Exhibit C

XEN393

 

[†]

 

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Exhibit D

XPC’535

 

[†]

 

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Exhibit E

XPC’391

 

[†]

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Exhibit F

Early Compounds

 

 

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Exhibit G

Excluded Compounds

 

 

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Exhibit H

Inventory (Quantity)

 

[†]

[†]

 

 

[†]

 

[†]

 

[†]

8

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[†]

[†]

[†]

[†]

 

9

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Exhibit I

Initial JSC Members

 

Neurocrine

[†]

 

Xenon

[†]

 

 

10

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Exhibit J

Research Plan and Research Budget

 

Overarching Goals:

• Xenon and Neurocrine will collaborate in the conduct of a research program to discover, identify and develop Research Compounds

• The goal of the Research Program will be to discover back-up and follow-on compounds to XEN901 and XEN393 including from different chemical series, as clinical development candidates

 

Key Action Items for Research Collaboration:

• Neurocrine and Xenon to work together to complete Research Plan, including defining:

[†]

[†]

[†]

 

 

 

 

 

 

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Exhibit K

Academic Agreements

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

 

[†]

 

 

 

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Exhibit L

XEN901 Initial Development Plan

 

The XEN901 Initial Development Plan includes activities associated with the completion of the Phase 1 PK study, the 6- and 9- month GLP studies and CMC activities associated with manufacturing campaigns for Phase 2 clinical studies.  [†]

 

 

[†]

[†]

 

 

13

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Exhibit M

XEN901 Neurocrine Development Plan

 

[†]

 

 

 

14

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Exhibit N

Specifications

 

[†]

 

 

[Redactions continue for 4 pages]

 

 

 

 

 

 

15

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Exhibit O

Xenon’s Supply Agreements

 

[†]

 

 

 

 

[†]

 

16

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[†]

 

 

 

17

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Exhibit P

Form of Share Purchase Agreement

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this “Agreement”), is made as of December 2, 2019 (the “Signing Date”), by and between Neurocrine Biosciences, Inc. (the “Investor”), a Delaware corporation, and Xenon Pharmaceuticals Inc. (the “Company”), a Canadian corporation.

RECITALS

WHEREAS, the Company and the Investor have entered into the Collaboration Agreement; and

WHEREAS, pursuant to the terms and subject to the conditions set forth in this Agreement, the Company desires to issue and sell to the Investor, and the Investor desires to subscribe for and purchase from the Company, certain common shares, no par value per share, of the Company (the “Common Shares”), in the amount and at a purchase price determined in accordance with the Collaboration Agreement; and

NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Investor and the Company agree as follows:

Article 1
Definitions

1.1 Defined Terms.  When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

“2014 Equity Incentive Plan” shall mean the Company’s 2014 Equity Incentive Plan, as amended to date and as the same may be amended and/or restated from time to time.

“2019 Inducement Equity Incentive Plan” shall mean the Company’s 2019 Inducement Equity Incentive Plan, as amended to date and as the same may be amended and/or restated from time to time.

“Affiliate” shall mean, with respect to any Person, another Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.  Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if such Person (ii) owns, directly or indirectly, beneficially or legally, more than fifty percent (50%) of the outstanding voting securities or capital stock of such other Person, or has other comparable ownership interest with respect to any Person other than a corporation; or (ii) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of such other Person.  For the purposes of this Agreement, in no event shall the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates, nor shall the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates.

“Aggregate Purchase Price” shall mean $20,000,000.

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“Acquisition Transaction” shall mean (i) any sale, license, lease, exchange, transfer or other disposition of the assets of the Company or any subsidiary of the Company constituting more than 50% of the consolidated assets of the Company in any one transaction or in a series of related transactions; or (ii) any merger, consolidation, business combination, share exchange, reorganization or similar transaction or series of related transactions involving the Company or any subsidiary of the Company whereby the holders of voting capital stock of the Company immediately prior to any such transaction hold less than 50% of the voting stock of the Company or the surviving corporation (or its parent company) immediately after the consummation of any such transaction.

“Agreement” shall have the meaning set forth in the Preamble.

“Board” shall mean the Board of Directors of the Company.

“Business Day” shall mean a day on which banking institutions in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and San Diego, California, United States are open for business, excluding any Saturday or Sunday.

“Change of Control” shall mean the transfer, in one transaction or a series of related transaction, as a result of which any Person or group of Persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of the total voting power of the voting securities of the Company.

“Closing Conditions” shall mean the conditions to Closing set forth in Article 6, Article 7, and Article 8 hereof.

“Collaboration Agreement” shall mean the License and Collaboration Agreement, dated December 2, 2019, between the Investor and the Company.

“Company SEC Documents” shall mean the required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) required to be filed by it under the Securities Act and the Exchange Act, and any required amendments to any of the foregoing, with the SEC.

“DOJ” shall mean the U.S. Department of Justice.

“Effective Date” shall have the meaning given to such term in the Collaboration Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“FTC” shall mean the U.S. Federal Trade Commission.

“GAAP” shall mean generally accepted accounting principles in the United States.

“Governmental Authority” shall mean any multinational, federal, national, state, provincial, local or other entity, office, commission, bureau, agency, political subdivision, instrumentality, branch, department, authority, board, court, arbitral or other tribunal exercising executive, judicial, legislative, police, regulatory, administrative or taxing authority or functions of any nature pertaining to government.

“LAS” shall mean the Nasdaq Notification Form: Listing of Additional Shares.

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“Law” shall mean any law, statute, rule, regulation, order, judgment or ordinance having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

“Material Adverse Effect” shall mean any change, event or occurrence that, individually or in the aggregate, results in a material adverse effect on the business, or results of operations, assets or condition of the Company and its subsidiaries taken as a whole, provided, however, that no change, event, circumstance, occurrence or development resulting from the following shall be deemed (either alone or in combination) to constitute or shall be taken into account in determining whether there has been a Material Adverse Effect: (A) changes in conditions in the United States or global economy or capital or financial markets generally, including changes in interest or exchange rates, (B) changes in general legal, regulatory, political, economic or business conditions or changes in generally accepted accounting principles in the United States or interpretations thereof, (C) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, (D) earthquakes, hurricanes, floods or other natural disasters, (E) the announcement of this Agreement, the Collaboration Agreement or the transactions contemplated hereby and thereby, (F) any change in the Company’s stock price or trading volume or any failure to meet internal projections or forecasts or published revenue or earnings projections of industry analysts (provided that the underlying events giving rise to any such change shall not be excluded, except to the extent any such event is included in clause (A) through (E) of this definition) or (G) any breach, violation or non-performance by the Investor or any of its Affiliates under the Collaboration Agreement, provided, however, that the events excluded in clauses (A), (B), (C) and (D) shall only be excluded to the extent the effects of such events are not disproportionately adverse on the Company and its subsidiaries as compared to other companies operating in the Company’s industry.

“Person” shall mean any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, Governmental Authority or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

“Rule 144” shall mean Rule 144 promulgated under the Securities Act.

“SEC” shall mean the U.S. Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Stock Option Plan” shall mean the Company’s Amended and Restated Stock Option Plan, as amended to date and as the same may be amended and/or restated from time to time.

“Termination Date” shall mean the date that is six months following the Signing Date.

“Third Party” shall mean any Person other than the Investor, the Company or any Affiliate of the Investor or the Company.

“Transfer Agent” shall mean the Company’s transfer agent.

 

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Article 2
Purchase and Sale of Common Shares

Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue and sell to the Investor and the Investor shall purchase from the Company, 1,408,847 Common Shares (the “Purchased Shares”), for the Aggregate Purchase Price.

Article 3
Closing; Deliveries.

3.1 Closing.  The closing of the purchase and sale of the Purchased Shares hereunder (the “Closing”) shall take place remotely via the exchange of documents and signatures at 9:00 a.m. New York City time on the Signing Date, provided that all of the Closing Conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction at such time of such conditions) have been satisfied or waived, or at such other time, date, and location as the parties may agree.

3.2 Deliveries.

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Article 4
Representations and Warranties of the Company

The Company hereby represents and warrants to the Investor that:

4.1 Organization, Good Standing and Qualification.

4.2 Capitalization and Voting Rights.

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4.3 Subsidiaries.  Except as otherwise disclosed in the Company SEC Documents, the Company does not own or control, directly or indirectly, any corporation, association or other entity.

4.4 Authorization.

4.5 No Defaults.  The Company is not (i) in violation of its Articles of Incorporation or By-laws or similar organizational documents; (ii) in default (nor, with the giving of notice or lapse of time, would it be in default) under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the Company is a party or by which it may be bound, or to which any of its properties or assets are subject (an “Existing Instrument”); or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

4.6 No Conflicts.  The execution, delivery and performance of this Agreement and the Collaboration Agreement, the issuance and sale of the Purchased Shares and the consummation of the transactions contemplated by this Agreement and the Collaboration Agreement (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the articles of continuance or by-laws of the Company, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.

4.7 No Governmental Authority or Third Party Consents.  No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency is required for the execution, delivery and performance by the Company of each of this Agreement or the Collaboration Agreement or the issuance and sale of the Purchased Shares, except (i) such filings as may be required to be made with the SEC, with any state blue sky or securities regulatory authority or any Canadian securities regulatory authority, which filings shall be made in a timely manner in accordance with all applicable Laws, and (ii) with respect to the Purchased Shares, the filing with the Nasdaq Stock Market of, and the absence of unresolved issues with respect to, an LAS and, if required, a Nasdaq Shares Outstanding Change Form.

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4.8 Valid Issuance of Shares.  The Purchased Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company against payment therefor at Closing, will be validly issued, fully paid and non-assessable, and the issuance and sale of the Purchased Shares is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase the Shares.

4.9 Litigation.  There is no action, suit, proceeding, inquiry or investigation brought by or before any governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company, would reasonably be expected to have a Material Adverse Effect.  No material labor dispute with the employees of the Company, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the knowledge of the Company, is threatened or imminent.

4.10 Licenses and Other Rights; Compliance with Laws.  The Company possesses such valid and current certificates, authorizations or permits required by state, federal, provincial or foreign regulatory agencies or bodies to conduct its business as currently conducted and as described in the Company SEC Documents (“Permits”), except where the failure to so possess could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.  The Company is not in violation of, or in default under, any of the Permits, except for such violations or defaults as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect.

4.11 Company SEC Documents; Financial Statements; Nasdaq Stock Market.

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4.12 Absence of Certain Changes.  Since September 30, 2019, (i) there has not occurred any event that has caused or would reasonably be expected to cause a Material Adverse Effect on the Company and its subsidiaries, taken as a whole; (ii) other than as described in the Company SEC Documents, the Company has not entered into any transactions not in the ordinary course of business that are material, individually or in the aggregate, to the Company; and (iii) other than as described in the Company SEC Documents, there has not been any material decrease in the share capital or any material increase in any short-term or long-term indebtedness of the Company and there has been no dividend or distribution of any kind declared, paid or made by the Company or any repurchase or redemption by the Company of any class of share capital.

4.13 Offering.  Subject to the accuracy of the Investor’s representations set forth in Sections 5.5, 5.6, 5.7, 5.9, 5.10 and 5.11 hereof, the offer, sale and issuance of the Purchased Shares to be issued in conformity with the terms of this Agreement constitute transactions which are exempt from the registration requirements of the Securities Act and from all applicable state registration or qualification requirements.  Neither the Company nor any Person acting on its behalf will take any action that would cause the loss of such exemption.

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4.14 No Integration.  The Company has not, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Purchased Shares in a manner that would require registration of the Purchased Shares under the Securities Act.

4.15 Brokers’ or Finders’ Fees.  There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement or the Collaboration Agreement.

4.16 Investment Company.  The Company is not and, immediately after giving effect to the offering and sale of the Purchased Shares and the application of the proceeds thereof, will not be required to register as an “investment company” under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

4.17 No General Solicitation.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Purchased Shares by any form of general solicitation or general advertising.  The Company has offered the Purchased Shares for sale only to the Investor.

4.18 Foreign Corrupt Practices.  Neither the Company nor, to the knowledge of the Company, any agent or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company: (i) directly or indirectly used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any direct or indirect unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any domestic government official, such foreign official or employee or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable non-U.S. anti-bribery Law.

4.19 Regulation M Compliance.  The Company has not taken, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Purchased Shares.

4.20 Office of Foreign Assets Control.  Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

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4.21 Development Matters.

4.22 Intellectual Property.  

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4.23 Real and Personal Property.  The Company has good and marketable title in fee simple (in the case of real property) to, or has valid and marketable rights to lease or otherwise use, all items of real or personal property, which are material to the business of the Company taken as a whole, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects except such as do not, individually or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company.  The real property, improvements, equipment and personal property held under lease by the Company are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company.

4.24 Environmental Matters.  Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:  (i) the Company is not in violation of any federal, state, provincial, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”); (ii) the Company has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements; (iii) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company; and (iv) to the knowledge of the Company, there are no events or circumstances existing as of the date hereof that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company relating to Hazardous Materials or any Environmental Laws.

4.25 Taxes.  The Company (i) has timely filed all necessary federal, state, local and foreign tax returns (or timely filed extensions with respect to such returns), and all such returns were true, complete and correct, (ii) has paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes which the Company is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) does not have any tax deficiency or claims outstanding or assessed or, to its knowledge, proposed against it, except those, in each of the cases described in clauses (i), (ii) and (iii) above, that would not, singularly or in the aggregate, reasonably be expected to have a Material Adverse Effect The accruals and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period.

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4.26 Insurance.  The Company carries or is covered by, insurance in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses, at a similar stage of development, in similar industries.  The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect. The Company has not been denied any insurance coverage which it has sought or for which it has applied.

Article 5
Representations and Warranties of the Investor

The Investor hereby represents and warrants to the Company that:

5.1 Organization; Good Standing.  The Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Investor has all requisite corporate power and corporate authority to enter into this Agreement, to purchase the Purchased Shares and to perform its obligations under and to carry out the other transactions contemplated by this Agreement.

5.2 Authorization.

5.3 No Conflicts.  The execution, delivery and performance of this Agreement and the Collaboration Agreement, the subscription for and purchase of the Purchased Shares and the consummation of the transactions contemplated by this Agreement and the Collaboration Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Investor pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Investor is a party, by which the Investor is bound or to which any of the property or assets of the Investor is subject, (ii) result in any violation of the provisions of the certificate of incorporation or by-laws or similar organizational documents of the Investor or (iii) result in the violation of any law or statute or any judgment, order, rule  or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Investor or any of its subsidiaries, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a material adverse effect on the Investor’s ability to perform its obligations or consummate the transactions contemplated hereby in accordance with the terms of this Agreement.

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5.4 No Governmental Authority or Third Party Consents.  No consent, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Investor of each of this Agreement or the Collaboration Agreement or with the subscription for and purchase of the Purchased Shares.

5.5 Purchase Entirely for Own Account.  The Investor is subscribing for the Purchased Shares as principal and acknowledges that the Purchased Shares shall be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation or otherwise distributing the Purchased Shares.  The Investor can bear the economic risk of an investment in the Purchased Shares indefinitely and a total loss with respect to such investment.  The Investor does not have and will not have as of the Closing any contract, undertaking, agreement, arrangement or understanding with any Person to sell, transfer or grant participation to a Person any of the Purchased Shares.

5.6 Disclosure of Information.  The Investor has received or has had full access to all the information from the Company and its management that the Investor considers necessary or appropriate for deciding whether to purchase the Purchased Shares hereunder.  The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the Company, its financial condition, results of operations and prospects and the terms and conditions of the offering of the Purchased Shares sufficient to enable it to evaluate its investment.

5.7 Investment Experience and Accredited Investor Status.  The Investor is an “accredited investor” (as defined in Regulation D under the Securities Act).  The Investor has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Purchased Shares to be purchased hereunder.

5.8 Acquiring Person.  As of the Signing Date, neither the Investor nor any of its Affiliates beneficially owns, and immediately prior to the Closing, neither the Investor nor any of its Affiliates will beneficially own (in each case, as determined pursuant to Rule 13d-3 under the Exchange Act without regard for the number of days in which a Person has the right to acquire such beneficial ownership, and without regard to Investor’s rights under this Agreement), any securities of the Company, except for securities that may be beneficially owned by employee benefit plans of either the Investor or any of its Affiliates.

5.9 Residence. The Investor is not a resident or subject to the securities laws of a Province or Territory of Canada and has complied with the applicable securities legislation in the jurisdiction of its residence, in each case as they relate to the purchase of the Purchased Shares hereunder.

5.10 No “Bad Actor” Disqualification.  The Investor has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act.  The Investor’s responses in the questionnaire delivered to the Company by the Investor related to qualification under Rule 506(d)(1) are true and correct as of the Signing Date and will remain true and correct as of the Closing.

5.11 Restricted Securities.  The Investor understands that the Purchased Shares, when issued, shall be “restricted securities” under U.S. federal securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such Laws the Purchased Shares may be resold without registration under the Securities Act only in certain limited circumstances.  The Investor represents that it is familiar with Rule 144, as presently in effect.

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5.12 Legends.  The Investor understands that any certificates representing the Purchased Shares shall bear the following legends:

5.13 Financial Assurances.  As of the Signing Date, the Investor has, and as of the Closing, the Investor will have, access to cash in an amount sufficient to pay to the Company the Aggregate Purchase Price.

5.14 SEC Reports.  The Investor has reviewed the Company SEC Documents.

Article 6
Investor’s Conditions to Closing

The Investor’s obligation to purchase the Purchased Shares at the Closing is subject to the fulfillment as of the Closing of the following conditions (unless waived in writing by the Investor):

6.1 Representations and Warranties.  The representations and warranties made by the Company in Article 4 hereof shall be true and correct as of the Signing Date and as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date; provided, however, that for purposes of this Section 6.1, all such representations and warranties of the Company (other than Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, and 4.11 hereof) shall be deemed to be true and correct for purposes of this Section 6.1 unless the failure or failures of such representations and warranties to be so true and correct, without regard to any “material,” “materiality” or “Material Adverse Effect” qualifiers set forth therein, constitute a Material Adverse Effect.

6.2 Covenants.  All covenants and agreements contained in this Agreement to be performed or complied with by the Company on or prior to the Closing shall have been performed or complied with in all material respects.

6.3 Collaboration Agreement.  The Collaboration Agreement shall not have been terminated in accordance with its terms and shall be in full force and effect as of the Closing.

6.4 No Material Adverse Effect.  From and after the Signing Date until the Closing, there shall have occurred no event that has caused a Material Adverse Effect.

6.5 Listing.  The Purchased Shares shall be eligible and approved for listing on the Nasdaq Stock Market.

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Article 7
Company’s Conditions to Closing

The Company’s obligation to issue and sell the Purchased Shares at the Closing is subject to the fulfillment as of the Closing of the following conditions (unless waived in writing by the Company):

7.1 Representations and Warranties.  The representations and warranties made by the Investor in Article 5 hereof shall be true and correct as of the Signing Date and as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

7.2 Covenants.  All covenants and agreements contained in this Agreement to be performed or complied with by the Investor on or prior to the Closing shall have been performed or complied with in all material respects.

7.3 Collaboration Agreement.  The Collaboration Agreement shall not have been terminated in accordance with its terms and shall be in full force and effect.

Article 8
Mutual Conditions to Closing

The obligations of the Investor and the Company to consummate the Closing are subject to the fulfillment as of the Closing of the following conditions:

8.1 Absence of Litigation.  There shall be no action, suit, proceeding or investigation by a Governmental Authority pending or currently threatened in writing against the Company or the Investor (i) that questions (A) the validity of this Agreement or (B) the right of the Company or the Investor to enter into this Agreement or to consummate the transactions contemplated hereby or thereby or (ii) which, if determined adversely, would impose substantial monetary damages on the Company or the Investor as a result of the consummation of the transactions contemplated by this Agreement.

8.2 No Prohibition.  No provision of any applicable Law and no judgment, injunction (preliminary or permanent), order or decree shall be in effect that prohibits, makes illegal or enjoins the consummation of the transactions contemplated hereby.

Article 9
Termination

9.1 Pre-Closing Termination.  This Agreement may be terminated at any time prior to the Closing by:

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9.2 Effect of Pre-Closing Termination.  In the event of the termination of this Agreement pursuant to Section 9.1 hereof, (i) this Agreement (except for this Section 9.2 and Article 11 hereof (other than Section 11.12), and any definitions set forth in this Agreement and used in such sections) shall forthwith become void and have no effect, without any liability on the part of any party hereto or its Affiliates, and (ii) all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the agency or other Person to which they were made or appropriately amended to reflect the termination of the transactions contemplated hereby; provided, however, that nothing contained in this Section 9.2 shall relieve any party from liability for fraud or any intentional or willful breach of this Agreement.

Article 10
Additional Covenants and Agreements

10.1 Market Listing.  From the Signing Date through the Closing, Company shall use all commercially reasonable efforts to (i) maintain the listing and trading of the Common Shares on the Nasdaq Stock Market and (ii) effect the listing of the Purchased Shares on the Nasdaq Stock Market, including submitting the LAS to the Nasdaq Stock Market.

10.2 Assistance and Cooperation.  Prior to the Closing, upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other party in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including using all reasonable efforts to accomplish the following: (i) taking all reasonable acts necessary to cause the conditions precedent set forth in Article 6, Article 7 and Article 8 hereof to be satisfied (including, in the case of the Company, promptly notifying the Investor of any notice from the Nasdaq Stock Market with respect to the LAS); (ii) taking all reasonable actions necessary to obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any); (iii) taking all reasonable actions necessary to obtain all necessary consents, approvals or waivers from Third Parties; and (iv) defending any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed.

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10.3 Lock-Up Agreement. During the period commencing with the Effective Date and ending on the earlier of (i) the twenty-four (24) month anniversary of the Effective Date and (ii) the date on which the Company first publicly announces the results of a Phase 2 Clinical Trial for a XEN901 Product (each as defined in the Collaboration Agreement) (the “Lock-Up Period”), without the prior approval of the Company, the Investor shall not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale or, or otherwise dispose of or transfer any of the Purchased Shares (together with (a) any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation, or similar recapitalization and (b) any shares of Common Stock issued as (or issuable upon the exercise of any warrant or other securities that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Shares (the “Lock-Up Securities”)), including, without limitation, any “short sale” or similar arrangement, or (ii) enter into any swap or any other agreement or any transaction that transfer, in whole or in part, directly or indirectly, the economic consequence of ownership of the Purchased Shares, whether any such swap or transaction is to be settled by deliver of securities, in cash or otherwise; provided, however, that the foregoing shall not (A) prohibit the Investor or its Affiliates from transferring Lock-Up Securities to an Affiliate of the Issuer if such transferee Affiliate executes an agreement with the Company to be bound by the restrictions set forth in this Section 10.3 and Section 10.4; (B) prohibit the Investor or its Affiliates from selling or otherwise disposing of or transferring Lock-Up Securities into a tender offer by a Third Party or an issuer tender offer by the Company; and (C) restrict any sale or other disposal or transfer of Common Shares which are not Lock-Up Securities held by an executive officer or director of the Investor for his or her personal account, or that may occur (or be deemed to occur) in connection with a Change of Control of the Investor (replacing references to “Company” with “Investor” in the definition of “Change of Control”). Transfers, sales and other disposals referred to in clauses (A) through (C) above are referred to herein as “Excluded Transfers”.

10.4 Sale Volume Limitation.  Following the expiration of the Lock-Up Period, without the prior approval of the Company, Investor shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale or, or otherwise dispose of or transfer during any calendar month greater than twelve and one-half percent (12.5%) of the aggregate number of Lock-Up Securities held by Investor or its Affiliates as of the last day of the Lock-Up Period; provided, however, that the foregoing shall not prohibit or restrict any Excluded Transfers.

10.5 Standstill.  Without the prior approval of the Company, from the Effective Date until the twenty-four (24) month anniversary of the Effective Date, the Investor agrees that it will not, and will cause its Affiliates to not, directly or indirectly:

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Notwithstanding anything to the contrary contained in this Agreement, (i) if at any time (A) a Third Party enters into an agreement with the Company contemplating a Change of Control, including a merger, consolidation or other business combination transaction or tender offer related thereto, or the purchase of all or substantially all of the assets of the Company and its subsidiaries, or publicly announces its intention to do so, then the foregoing restrictions set forth in this Section 10.5 shall be suspended and of no further force or effect until the termination of such agreement or the public announcement of a withdrawal or abandonment of such intention, at which time such restrictions will be reinstated and apply in full force and effect or (B) a Third Party commences, or publicly announces an intention to commence, a tender, exchange, or offer that, if consummated, would result in a Change of Control, then the foregoing restrictions set forth in this Section 10.5 shall be suspended and of no force or effect until the expiration or termination of a tender, exchange or offer that has been commenced or the public announcement of a withdrawal or abandonment of an intention to commence a tender, exchange or offer at which time such restrictions will be reinstated and apply in full force and effect; (ii) the Investor shall not be precluded from making any confidential offers or proposals to the Board in a manner reasonably believed not to require the Company to make a public announcement of such offer or proposal; provided that Investor shall not publicly disclose any such offers or proposals; and (iii) Investor and its Affiliates shall not be precluded from owning or acquiring interests in mutual funds or similar entities that own capital stock of the Company, and nothing herein shall prohibit passive investments by pension or employee benefit plans of Investor.

 

10.6 Legend Removal.

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Article 11
Miscellaneous

11.1 Governing Law; Dispute Resolution.  This Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the conflict of laws principles thereof that would require the application of the Law of any other jurisdiction.  Any disputes as to matters arising out of or in connection with this Agreement will be subject to the procedures set forth in Section 14.7 of the Collaboration Agreement.

11.2 Waiver.  Neither party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either party to assert a right hereunder or to insist upon compliance with any term of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition.  No waiver by either party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term except to the extent set forth in writing.

11.3 Notices.  All notices which are required or permitted hereunder shall be provided in accordance with Section 14.5 of the Collaboration Agreement.

11.4 Entire Agreement.  This Agreement and the Collaboration Agreement, together with the schedules and exhibits thereto, set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties and supersede and terminate all prior agreements and understanding between the parties.  There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the parties other than as set forth herein and therein.  No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the parties unless reduced to writing and signed by the respective authorized officers of the parties.

11.5 Headings; Pronouns; Section References; English Language.  Headings and any table of contents used in this Agreement are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa.  References in this Agreement to a section or subsection shall be deemed to refer to a section or subsection of this Agreement unless otherwise expressly stated.  This Agreement has been prepared in the English language, and the English language shall control its interpretation.

11.6 Severability.  If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

11.7 Assignment.  Except for an assignment of this Agreement or any rights hereunder by the Investor to an Affiliate, neither this Agreement nor any of the rights or obligations hereunder may be assigned by either the Investor or the Company without (i) the prior written consent of Company in the case of any assignment by the Investor or (ii) the prior written consent of the Investor in the case of an assignment by the Company.

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11.8 Parties in Interest.  All of the terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors, heirs, administrators and permitted assigns.

11.9 Counterparts.  This Agreement may be signed in counterparts, each and every one of which shall be deemed an original, notwithstanding variations in format or file designation which may result from the electronic transmission, storage and printing of copies from separate computers or printers.  Facsimile signatures and signatures transmitted via PDF shall be treated as original signatures.

11.10 Third Party Beneficiaries.  None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto.  No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

11.11 No Strict Construction.  This Agreement has been prepared jointly and will not be construed against either party.

11.12 Survival of Warranties.  The representations and warranties of the Company and the Investor contained in this Agreement shall survive the Closing and the delivery of the Purchased Shares.

11.13 Remedies.  The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law.  No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

11.14 Expenses.  Each party shall pay its own fees and expenses in connection with the preparation, negotiation, execution and delivery of this Agreement.

11.15 No Publicity.  The parties hereto agree that the provisions of Section 12.5 of the Collaboration Agreement shall be applicable to the parties to this Agreement with respect to any public disclosures regarding the proposed transactions contemplated by this Agreement or regarding the parties hereto or their Affiliates (it being understood that the provisions of Section 12.5 of the Collaboration Agreement shall be read to apply to disclosures of information relating to this Agreement and the transactions contemplated hereby).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties intending to be bound have caused this Share Purchase Agreement to be executed by their duly authorized representatives as of the Signing Date.

 

 

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Exhibit Q

Third Party Agreements

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

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Exhibit R

Abstracts submitted prior to Effective Date

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

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Exhibit S

Press Release

 

Neurocrine Biosciences and Xenon Pharmaceuticals Announce Agreement to Develop First-in-Class Treatments for Epilepsy

 

Neurocrine Biosciences Gains Rights to XEN901, a Clinical Stage Selective Nav1.6 Sodium Channel Inhibitor, Being Developed for the Treatment of Epilepsy

 

Xenon Receives $50 Million Upfront and Up to $1.7 Billion in Potential Development, Regulatory and Commercial Milestone Payments Across All Licensed Products, as well as Option to Co-Fund XEN901

 

 

SAN DIEGO and BURNABY, British Columbia, Dec. 2, 2019 – Neurocrine Biosciences, Inc. (Nasdaq: NBIX) and Xenon Pharmaceuticals Inc. (Nasdaq: XENE) announced a license and collaboration agreement to develop first-in-class treatments for epilepsy.

 

Neurocrine Biosciences gains an exclusive license to XEN901, a clinical stage selective Nav1.6 sodium channel inhibitor with potential in SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other forms of epilepsy, including focal epilepsy. In addition, Neurocrine Biosciences gains an exclusive license to pre-clinical compounds for development, including selective Nav1.6 inhibitors and dual Nav1.2/1.6 inhibitors. The agreement also includes a multi-year research collaboration to discover, identify and develop additional novel Nav1.6 and Nav1.2/1.6 inhibitors.

 

“We are excited to enter into this agreement with Xenon and leverage their expertise in precision medicine drug discovery to benefit the lives of people with epilepsy and serious neurological disorders,” said ▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D., Chief Executive Officer of Neurocrine Biosciences. “The agreement with Xenon strengthens Neurocrine Biosciences’ diverse and growing pipeline and reinforces our long-term commitment of becoming a leading neuroscience-focused biopharmaceutical company.”

 

“With its proven expertise in developing and commercializing treatments for neurological disorders, we believe Neurocrine Biosciences is an ideal partner to maximize the potential value of XEN901 for patients,” said ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer of Xenon. “Importantly, this collaboration represents a significant investment in XEN901 and Xenon’s earlier-stage Nav1.6 and Nav1.2/1.6 inhibitor programs and allows for a broader development of these promising compounds than we could accomplish independently. Furthermore, the additional capital from this transaction will support our efforts to advance and expand our proprietary pipeline.”

 

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License and Collaboration Details / Financial Terms

Under the terms of the agreement, Neurocrine Biosciences will be responsible for development costs associated with the programs and the agreement will be subject to the following terms:

 

Neurocrine Biosciences anticipates filing an IND application with the FDA in the middle of 2020 in order to start a proposed clinical trial for XEN901 in SCN8A-DEE patients.

 

Conference Call Information

Neurocrine Biosciences will provide further commentary on the collaboration during its presentation at the Evercore ISI 2nd Annual HealthCONx Conference at 8:45 a.m. EST on Tuesday, December 3, 2019.

 

Today, Xenon will host a conference call at 8:30 a.m. EST to provide commentary on the collaboration. To access the call, please dial (▇▇▇) ▇▇▇-▇▇▇▇, or (▇▇▇) ▇▇▇-▇▇▇▇ for international callers, and provide conference ID number 3665957.

 

Live audio webcasts of these presentations will be available under “Investors” on the companies’ respective websites at: ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇.▇▇▇▇▇-▇▇▇▇▇▇.▇▇▇. A replay of the webcast will be available for each presentation approximately one hour after the conclusion of each event and will be archived for approximately one month.

 

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About XEN901 Program for Epilepsy

XEN901 is a potent, highly selective Nav1.6 sodium channel inhibitor being developed to treat pediatric patients with SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other potential indications, including adult focal epilepsy. A Phase 1 clinical trial was completed using a powder-in-capsule formulation of XEN901 in healthy adult subjects.  Xenon has developed a pediatric-specific, granule formulation of XEN901, and juvenile toxicology studies to support pediatric development activities have recently been completed.

 

About Neurocrine Biosciences

Neurocrine Biosciences (Nasdaq: NBIX) is a neuroscience-focused, biopharmaceutical company with more than 25 years of experience discovering and developing life-changing treatments for people with serious, challenging and under-addressed neurological, endocrine and psychiatric disorders. The company's diverse portfolio includes FDA-approved treatments for tardive dyskinesia and endometriosis* and clinical development programs in multiple therapeutic areas including ▇▇▇▇▇▇▇▇▇'▇ disease, chorea in Huntington disease, congenital adrenal hyperplasia, uterine fibroids* and polycystic ovary syndrome*. Headquartered in San Diego, Neurocrine Biosciences specializes in targeting and interrupting disease-causing mechanisms involving the interconnected pathways of the nervous and endocrine systems. For more information, visit ▇▇▇▇▇▇▇▇▇▇.▇▇▇, and follow the company on LinkedIn. (*in collaboration with AbbVie)

 

About Xenon Pharmaceuticals Inc.

Xenon Pharmaceuticals (Nasdaq: XENE) is a clinical stage biopharmaceutical company committed to developing innovative therapeutics to improve the lives of patients with neurological disorders, including rare central nervous system (CNS) conditions. We are advancing a novel product pipeline of neurology therapies to address areas of high unmet medical need, with a focus on epilepsy. For more information, please visit ▇▇▇.▇▇▇▇▇-▇▇▇▇▇▇.▇▇▇.

 

Neurocrine Biosciences Forward-Looking Statements

In addition to historical facts, this press release contains forward-looking statements that involve a number of risks and uncertainties. These statements include, but are not limited to, statements related to the benefits to be derived from transactions with Xenon Pharmaceuticals Inc. and the timing of completion of our clinical, regulatory, and other development activities. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: the Company’s future financial and operating performance; risks or uncertainties related to the development of the Company's product candidates; risks that the FDA or other regulatory authorities may make adverse decisions regarding our product candidates; risks that clinical development activities may not be completed on time or at all; risks that clinical development activities may be delayed for regulatory, manufacturing, or other reasons, may not be successful or replicate previous clinical trial results, may fail to demonstrate that our product candidates are safe and effective, or may not be predictive of real-world results or of results in subsequent clinical trials; risks and uncertainties relating to competitive products and technological changes that may limit demand for a product candidate; risks that the benefits of the agreements with Xenon Pharmaceuticals Inc. may never be realized; risks that our product candidates may be precluded from commercialization by the proprietary or regulatory rights of third parties, or have unintended side effects, adverse reactions or incidents of misuse; and other risks described in the Company's periodic reports filed with the Securities and Exchange Commission, including without limitation the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2019. Neurocrine disclaims any obligation to update the statements contained in this press release after the date hereof.

 

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Xenon Pharmaceuticals Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. These forward-looking statements and supporting assumptions are not based on historical fact, and include statements regarding the timing of and results from clinical trials and other development activities, including those related to XEN901 and the other pre-clinical compounds covered by our collaboration with Neurocrine Biosciences; the potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of XEN901 and the other pre-clinical compounds covered by our collaboration with Neurocrine Biosciences; the anticipated timing of IND, or IND equivalent, submissions and the initiation of future clinical trials for XEN901 and the other pre-clinical compounds covered by our collaboration with Neurocrine Biosciences; our ability to achieve milestones in our collaboration with Neurocrine Biosciences and our other development programs; the progress and potential of our other ongoing development programs; and the potential receipt of milestone payments and royalties from our collaborators and partners. These forward-looking statements are based on current assumptions that involve risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties, many of which are beyond our control, include, but are not limited to: clinical trials may not demonstrate safety and efficacy of any of our or our collaborators' product candidates; our assumptions regarding our planned expenditures and sufficiency of our cash to fund operations may be incorrect; our ongoing discovery and pre-clinical efforts may not yield additional product candidates; any of our or our collaborators' product candidates may fail in development, may not receive required regulatory approvals, or may be delayed to a point where they are not commercially viable; we may not achieve additional milestones in our proprietary or partnered programs; the impact of competition; the impact of expanded product development and clinical activities on operating expenses; adverse conditions in the general domestic and global economic markets; as well as the other risks identified in our filings with the Securities and Exchange Commission and the securities commissions in British Columbia, Alberta and Ontario. These forward-looking statements speak only as of the date hereof and we assume no obligation to update these forward-looking statements, and readers are cautioned not to place undue reliance on such forward-looking statements.

 

“Xenon” and the Xenon logo are registered trademarks or trademarks of Xenon Pharmaceuticals Inc. in various jurisdictions. All other trademarks belong to their respective owner.

 

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Contact: Xenon Pharmaceuticals Inc.

▇▇▇▇ ▇▇▇▇▇ (Media & Investors)
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇-▇▇▇▇▇▇.▇▇▇

 

Contact: Neurocrine Biosciences, Inc.

▇▇▇▇▇▇ ▇▇▇ (Media)

▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

▇▇▇▇ ▇▇▇▇▇▇ (Investors)

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▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

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Exhibit T

NASA Compounds and other Research Compounds

 

 

[Redactions continue for 8 pages]

 

 

 

 

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Exhibit U

Untested Compounds

 

 

[Redactions continue for 7 pages]

 

 

 

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Exhibit V

Xenon Funded Activities for DTC Initial Development Plan

 

CMC

 

 

Non-Clinical

 

47