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EXHIBIT 10.167
DEVELOPMENT AND LICENSE AGREEMENT
(TARGRETIN)
BETWEEN
▇▇▇ ▇▇▇▇▇ AND COMPANY
AND
LIGAND PHARMACEUTICALS INCORPORATED
DATED NOVEMBER 25, 1997
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DEVELOPMENT AND LICENSE AGREEMENT
(TARGRETIN)
THIS DEVELOPMENT AND LICENSE AGREEMENT ("AGREEMENT") is entered into as
of November 25, 1997 between ▇▇▇ LILLY AND COMPANY, an Indiana corporation
having its principal place of business at Lilly ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("LILLY"),
AND
LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("LIGAND").
RECITALS
WHEREAS, Ligand is developing a compound known as Targretin for
oncology, dermatology and metabolic diseases, and is engaged in a specific
research program and development program aimed at understanding the applications
of Targretin; and
WHEREAS, Lilly is interested in developing and commercializing
pharmaceutical products to treat and prevent medical conditions, including, but
not limited to, diabetes mellitus, obesity, insulin resistance, dyslipidemia and
cardiovascular disorders associated with insulin resistance and obesity and
would like to collaborate with Ligand in an effort to develop and commercialize
Targretin for use in treating these medical conditions; and
WHEREAS, Ligand and Lilly believe that each party can bring significant
and complementary strengths to such a collaboration.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter recited, the parties agree as follows:
ARTICLE 1
DEFINITIONS
When used in this Agreement, each of the following terms shall have the
meanings as set forth below:
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1.1 "AFFILIATE" shall mean any company or entity controlled by,
controlling, or under common control with a party hereto and shall include
without limitation any company fifty percent (50%) or more of whose voting stock
(or other comparable ownership interest for an entity other than a corporation)
is owned or controlled, directly or indirectly, by a party, and any company or
entity which owns or controls, directly or indirectly, fifty percent (50%) or
more of the voting stock (or other comparable ownership interest for an entity
other than a corporation) of a party or equivalent power to direct the
management or policies of such company or entity.
1.2 "AGREEMENT TERM" shall mean the term of this Agreement, including
any extensions thereof, commencing on the Effective Date and ending upon the
expiration or earlier termination of this Agreement.
1.3 "ALLIANCE DIRECTORS COMMITTEE" shall mean the committee described in
Section 2.3.
1.4 "CALENDAR QUARTER" shall mean a quarter ending on March 31, June 30,
September 30 or December 31 of each Calendar Year.
1.5 "CALENDAR YEAR" shall mean the twelve month period ending on
December 31.
1.6 "COLLABORATION AGREEMENT" shall mean the Collaboration Agreement of
even date herewith among Lilly, Ligand and Allergan Ligand Retinoid
Therapeutics, Inc.
1.7 "COMBINATION PRODUCT" shall mean a Drug Product which, in addition
to Targretin, contains one or more pharmaceutically active ingredients.
1.8 "COMMERCIALIZATION PROGRAM" shall mean all activities related to the
development and commercialization of a Drug Product that occur after Phase III
Enrollment including, without limitation, the conduct of Phase III Clinical
Trials, activities associated with the preparation, filing and prosecution of an
NDA and all activities related to commercialization of a Drug Product. The
Commercialization Program shall also include all activities relating to
manufacturing, including, without limitation, manufacturing process development
and scale-up, chemistry, manufacturing and controls, and related activities
regardless of whether they occur before or after Phase III Enrollment, and all
research and related activities in support of an NDA that occur after Phase III
Enrollment.
1.9 "CONFIDENTIAL INFORMATION" shall mean all information, inventions,
know-how and data disclosed by one party to the other party, or its respective
Affiliates, pursuant to this Agreement, including without limitation,
information relating to research and development plans, experiments, results and
plans, the existence of compounds, therapeutic leads, candidates and products,
clinical and preclinical data, trade secrets and manufacturing,
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marketing, financial, regulatory, personnel and other business information and
plans, whether in oral, written, graphic or electronic form and whether in
existence as of the Effective Date or developed or acquired in the future,
except where such information (i) is public knowledge at the time of disclosure
by the disclosing party, (ii) becomes public knowledge through no fault of the
receiving party, (iii) was in the possession of the receiving party at the time
of disclosure by the disclosing party as evidenced by proper business records or
(iv) is disclosed to the receiving party by a Third Party, to the extent such
Third Party's disclosure was not in violation of any obligation of
confidentiality.
1.10 "COVER" (including variations thereof such as "Covering",
"Covered", and "Coverage") shall mean that the manufacture, use, import, offer
for sale or sale of Targretin or Drug Product would infringe a Valid Claim;
provided, with respect to a process or manufacturing patent, that such a Valid
Claim therein effectively precludes Third Parties from manufacturing, using,
importing, offering for sale and selling Drug Products. The determination of
whether Targretin or a Drug Product is Covered by a particular Valid Claim shall
be made on a country by country basis. A Valid Claim shall be deemed to provide
effective preclusion hereunder where (i) there is no competing Drug Product
being marketed or (ii) if a Drug Product is being marketed by a competitor, it
infringes the Valid Claim (including any period in which, and provided that, the
Valid Claim is being litigated).
1.11 "DATA EXCLUSIVITY PERIOD" shall mean the period, if any, during
which the FDA, or other equivalent regulatory agency in the case of countries
other than the United States, prohibits reference, for purposes of seeking
Regulatory Approval, to clinical and other data contained in the Regulatory
Approval package relating to a Drug Product, without the consent of the party
holding the NDA or equivalent Regulatory Approval.
1.12 "DEVELOPMENT PLAN" shall mean the plan described in Section 3.1.
1.13 "DEVELOPMENT PROGRAM" shall mean those activities with respect to a
Drug Product that occur after the earlier of December 15, 1998 or the filing of
an IND with respect to such Drug Product.
1.14 "DRUG DELIVERY SYSTEM" shall mean enhancements of a Drug Product
related to convenience of administration of the active ingredient such as
injectors, pens, inhalers, sustained release formulations or transdermal
patches, but not capsules, tablets, gel caps, solutions, normal pharmaceutical
excipients or the like.
1.15 "DRUG PRODUCT" shall mean every pharmaceutical composition in
finished product form which contains therapeutic levels of Targretin and which
is intended for administration to humans in the Field.
1.16 "EFFECTIVE DATE" shall mean the effective date of the Collaboration
Agreement.
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1.17 "FDA" shall mean the United States Food and Drug Administration.
1.18 "FIELD" shall mean the development and commercialization of Drug
Products for use in the treatment, palliation, prevention and/or remission of
all medical conditions including, but not limited to, diabetes mellitus,
obesity, insulin resistance, dyslipidemia and cardiovascular disorders
associated with insulin resistance and obesity, but excluding the treatment,
palliation, prevention and/or remission of cancer and dermatological disease.
1.19 "FIRST COMMERCIAL SALE" shall mean, in any particular country, the
first sale for use by the general public of a Drug Product after receipt of
Regulatory Approval in that country.
1.20 "GAAP" shall mean U.S. generally accepted accounting principles,
consistently applied.
1.21 "IND" shall mean an Investigational New Drug Application as defined
in the United States Food, Drug, and Cosmetic Act and applicable regulations
promulgated thereunder, as they are amended or supplemented from time to time,
or an equivalent application under any successor law or regulations.
1.22 "IND ACCEPTANCE" shall mean the earliest of (i) the filing with the
FDA of an IND and the failure by the FDA, within thirty (30) days following
filing, to object to the IND or institute a clinical hold, (ii) the removal of
the objection or clinical hold referred to in (i) above, if any, or (iii) the
acceptance of an equivalent application by the equivalent agency in a Major
Foreign Market country.
1.23 "JOINT PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country together with any patents that have issued or in the future issue
therefrom, jointly owned, in whole or in part, or jointly licensed by Ligand or
any Ligand Affiliate and Lilly or any Lilly Affiliate. In the circumstance where
the addition of new matter to a solely-owned patent application results in a
continuation-in-part that is a Joint Patent, only the new matter shall be deemed
jointly owned under this Agreement.
1.24 "JOINT PROGRAM COMMITTEE" shall mean the committee described in
Section 2.4 of this Agreement.
1.25 "JOINT TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable), tests, assays, quality control or other data, clinical and
preclinical results, technical information, and
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any physical, chemical or biological material, or any replication of any part of
such material, which are jointly developed or acquired by Ligand or any Ligand
Affiliate and Lilly or any Lilly Affiliate.
1.26 "LIGAND PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country together with any patents that have issued or in the future issue
therefrom, which are owned, controlled, or licensed (with the right to disclose
and sublicense and subject to the rights of Third Parties as of the Effective
Date), in whole or in part, by Ligand or any Ligand Affiliate, and which Cover
Targretin and/or Drug Products, but excluding any Joint Patents.
1.27 "LIGAND SYSTEMIC PRODUCT" shall mean any product sold or marketed
by or on behalf of Ligand or any Ligand Affiliate or sublicensee for use outside
the Field which contains Targretin and is intended for Systemic Administration.
1.28 "LIGAND TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable or patented), tests, assays, quality control or other data, clinical
and preclinical results, technical information, and any physical, chemical or
biological material, or any replication of any part of such material, which is
or has been developed or acquired either before or after the Effective Date
(with the right to disclose and sublicense and subject to the rights of Third
Parties as of the Effective Date) by Ligand or any Ligand Affiliate reasonably
necessary for the development, manufacture, use, import, offer for sale or sale
of Targretin and/or Drug Products.
1.29 "LIGAND TOPICAL PRODUCT" shall mean any product sold or marketed by
or on behalf of Ligand or any Ligand Affiliate which contains Targretin and is
topically applied but does not result in Systemic Administration of Targretin.
1.30 "LILLY PATENTS" shall mean all patents, both foreign and domestic
(including without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof), and all patent applications
(including provisional applications, divisions, continuations and
continuations-in-part), heretofore or hereafter filed or having any legal force
in any country, together with any patents that have issued or in the future
issue therefrom, owned, controlled, or licensed (with the right to disclose and
sublicense and subject to the rights of Third Parties as of the Effective Date)
in whole or in part, by Lilly or any Lilly Affiliate and which Cover Targretin
and/or Drug Products, but excluding any Joint Patents.
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1.31 "LILLY TECHNOLOGY" shall mean all tangible or intangible know-how,
trade secrets, routes of synthesis, ideas, processes, inventions (whether or not
patentable or patented), tests, assays, quality control or other data, clinical
and preclinical results, technical information, and any physical, chemical or
biological material, or any replication of any part of such material, which is
or has been developed or acquired either before or after the Effective Date
(with the right to disclose and sublicense and subject to the rights of Third
Parties as of the Effective Date) by Lilly or any Lilly Affiliate, reasonably
necessary for the development, manufacture, use, import, offer for sale or sale
of Targretin and/or Drug Products.
1.32 "LILLY ROYALTY TERM" shall mean, with respect to a Drug Product in
each country, (a) if the manufacture, use, import, offer for sale or sale of the
Drug Product in such country is Covered by a Lilly Patent, Ligand Patent or
Joint Patent, the period of time equal to the longer of (i) *** from the date of
First Commercial Sale of such Drug Product in such country or (ii) the
expiration of the last-to-expire applicable patent in such country; provided,
however, if the manufacture, use, import, offer for sale or sale of such Drug
Product is Covered only by a Valid Claim of a pending patent application in such
country, the Royalty Term shall expire, except as provided in (b) below, ***
from the date of the First Commercial Sale in such country unless (A) the
pending patent application Covering such Drug Product issues prior to the end of
such *** period, in which case the Lilly Royalty Term shall not expire at the
end of such *** period, or (B) the pending patent application Covering such Drug
Product issues after the end of such *** period, in which case the Lilly Royalty
Term shall expire at the end of such *** period but shall be reinstated from the
date the patent issues, or (b) if the manufacture, use, import, offer for sale
or sale of such Drug Product in such country is not so Covered by a Lilly
Patent, Ligand Patent or Joint Patent, the period of time *** in such country.
Ligand shall pay all royalties due to Allergan, Inc. on sales of Drug Products
by Ligand.
1.33 "MAJOR FOREIGN MARKETS" shall mean Japan, the United Kingdom,
France, Germany, Spain, Italy, or the European Union as an entity.
1.34 "MARKETING APPROVAL" shall mean the date on which Lilly, any Lilly
Affiliate, Sublicensee or permitted assignee first receives final approval of
the labeling letter in the United States or the equivalent approval in a Major
Foreign Market with respect to a particular Drug Product.
1.35 "NDA" shall mean, with respect to a particular Drug Product, the
New Drug Application filed with the FDA pursuant to 21 U.S.C. Section 357 and 21
C.F.R. Section 314 with respect to that Drug Product, as they are amended or
supplemented from time to time, or an equivalent application under any successor
law or regulations.
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1.36 "NDA FILING" shall mean, with respect to a particular Drug Product,
the acceptance of an NDA by the FDA or acceptance of an equivalent filing by the
equivalent agency in a Major Foreign Market country.
1.37 "NET SALES" shall mean, with respect to a Drug Product, the gross
amount invoiced by Lilly, a Lilly Affiliate or Sublicensee (other than Ligand
and any Ligand Affiliate) to unrelated third parties for the Drug Product, less:
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Such amounts shall be determined from the books and records of Lilly,
Lilly's Affiliate or Lilly's Sublicensee which shall be maintained in accordance
with GAAP.
In the event the Drug Product is sold in a country as part of a
Combination Product, the Net Sales of the Drug Product, for the purposes of
determining royalty payments, shall be determined by multiplying the Net Sales
(as defined above in this Section) of the Combination Product by the fraction,
A/(A+B) where A is the average sale price of the Drug Product for the reporting
period when sold separately in finished form and B is the average sale price of
the other product(s) sold separately in finished form; provided that, ***
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In the event a Combination Product contains a Drug Product and a "Drug
Product" as defined in the Collaboration Agreement (which, for purposes of this
Section 1.37 shall be deemed a Drug Product hereunder), Net Sales of each Drug
Product in the Combination Product shall be separately calculated as follows:
(i) if both Drug Products are sold separately in finished form, the Net Sales
for each Drug Product in the Combination Product shall be separately calculated
by multiplying the Net Sales of the Combination Product by the fraction A/A+B
where A is the average sale price of the particular Drug Product for which Net
Sales is being determined and B is the average sale price of the other Drug
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1.38 "OPTION AGREEMENT" shall mean that certain Option and Wholesale
Purchase Agreement of even date herewith between Ligand and Lilly.
1.39 "PHASE II CLINICAL TRIALS" shall mean small scale human clinical
trials conducted by Lilly or any Lilly Affiliate in subjects to collect
preliminary data regarding efficacy of the Drug Product in the particular
medical condition for which it is being studied, as well as to obtain some
indication of the dosage regimen required.
1.40 "PHASE III CLINICAL TRIALS" shall mean large scale human clinical
trials conducted by Lilly or any Lilly Affiliate in subjects and intended to
generate data concerning the safety and efficacy of a Drug Product in the
particular medical condition for which it is being studied sufficient to support
registration of the Drug Product with drug regulatory authorities.
1.41 "PHASE III ENROLLMENT" shall mean the enrollment and treatment of
the first subject in Phase III Clinical Trials of a Drug Product.
1.42 "PROTOCOLS" shall have the meaning set forth in Section 3.3 of this
Agreement.
1.43 "OPTION TERRITORY" shall have the meaning set forth in Section 4.4
of this Agreement.
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1.44 "OPTION NOTICE" shall have the meaning set forth in Section 4.4 of
this Agreement.
1.45 "REGULATORY APPROVAL" shall mean all authorizations by the
appropriate governmental entity or entities necessary for commercial sale of a
Drug Product (including exports) in a jurisdiction in which Lilly or any Lilly
Affiliate elects to market the Drug Product including, without limitation,
approval of labeling, price, reimbursement and manufacturing.
1.46 "RESEARCH PROGRAM" shall mean those activities with respect to
Targretin that occur prior to the earlier of December 15, 1998 or the filing of
an IND with respect to a Drug Product.
1.47 "ROYALTY TERM" shall mean, with respect to a Drug Product in each
country, (a) if the manufacture, use, import, offer for sale or sale of the Drug
Product in such country is Covered by a Joint Patent, Lilly Patent or Ligand
Patent, the period of time equal to ***
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1.48 "STEERING COMMITTEE" shall mean the committee described in Section
2.2 of this Agreement.
1.49 "SUBLICENSEE" shall mean (a) a Third Party to which Lilly or any
Lilly Affiliate has licensed the right to sell a Drug Product or (b) a Third
Party to which Lilly or any Lilly Affiliate has granted the exclusive right to
promote and distribute a Drug Product in the United States, Japan, the United
Kingdom, France, Germany, Spain or Italy under an arrangement substantially
different from wholesale distributor arrangements typically employed in such
countries.
1.50 "SYSTEMIC ADMINISTRATION" shall mean administration of a
pharmaceutical composition by any approved means with the purpose of obtaining
pharmacological activity after the pharmaceutical composition reaches the
systemic circulation.
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1.51 "TARGRETIN" shall mean
4-[1-(3,5,5,8,8,-pentamethyl-5,6,7,8-tetrahydro-2-
naphthalenyl)-1-ethenyl]-benzoic acid, ***
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1.52 "TECHNICAL OPERATING PLAN" shall mean the Research and Development
Technical Operating Plan as revised from time to time.
1.53 "THIRD PARTY" shall mean any entity which is not a party or
Affiliate of any party to this Agreement.
1.54 "VALID CLAIM" shall mean any claim (a) issued in an unexpired
patent which has not been held unenforceable, unpatentable or invalid by a
decision of a court or other governmental agency of competent jurisdiction
following exhaustion of all possible appeal processes, and which has not been
admitted to be invalid or unenforceable through reissue, reexamination or
disclaimer, or (b) of a pending patent application, so long as such patent
application is being diligently prosecuted.
ARTICLE 2
RESEARCH SCOPE AND GOVERNANCE
2.1 PURPOSE AND SCOPE. The parties desire to collaborate in a Research
Program and a Development Program to develop and commercialize Drug Product for
use in the Field. Subject to the terms described herein, both Ligand and Lilly
shall use their respective commercially reasonable efforts to achieve the goals
set forth in this Agreement. Promptly after the Effective Date, Ligand will
submit a draft Technical Operating Plan, covering the general subjects set forth
on Schedule 2.1. The parties will promptly after submission by Ligand finalize
the Technical Operating Plan. The governance provisions described herein shall
relate to the conduct of the Research Program and the Development Program. Lilly
shall be solely responsible for governance of the Commercialization Program. The
Technical Operating Plan is intended as a work plan summarizing the present
plans regarding key activities with respect to Drug Products. It is subject to
amendment from time to time by the committees described below. Notwithstanding
anything in the Technical Operating Plan to the contrary, the rights of the
parties with respect to Drug Products shall be governed in all respects by the
terms of this Agreement.
2.2 STEERING COMMITTEE.
(a) The Research Program and the Development Program shall be conducted
under the overall direction of the Steering Committee comprised of four (4)
members, with two (2) appointed by Ligand and two (2) appointed by Lilly. The
Steering
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Committee established by this Agreement shall be the same committee as the
Steering Committee established by the Collaboration Agreement. All actions of
the Steering Committee with respect to the activities contemplated by this
Agreement shall be governed by the terms of this Agreement. The initial members
of the Steering Committee shall be: (a) for Ligand, ▇. ▇▇▇▇▇▇▇▇ and A.
Negro-Vilar, and (b) for Lilly, ▇. ▇▇▇▇▇▇ and ▇. ▇▇▇▇. *** Either party may
change its representative on the Steering Committee at any time by prior written
notice to the other party. The party hosting the meeting of the Steering
Committee shall prepare and deliver to the other party one week prior to the
meeting the agenda for the meeting. The party hosting the meeting of the
Steering Committee shall prepare and deliver to the other party within ten (10)
days after the date of such meeting, minutes of the meeting that set forth all
decisions of the Steering Committee relating to the Research Program and the
Development Program in form and content reasonably acceptable to the other
party. Minutes shall be deemed approved unless any member of the Steering
Committee objects to the accuracy of such minutes in writing to the other party
within ten (10) business days of receipt. If a party objects to the minutes and
the objection is not resolved, the objection will be deemed a dispute and
resolved pursuant to Section 2.6.
(b) The purpose of the Steering Committee shall be to make key
strategy, policy and resource decisions regarding the Research Program and the
Development Program and to carry out its other responsibilities described in
this Agreement. The Steering Committee shall meet at least once in each Calendar
Quarter, at such times and places as are agreed to by Ligand and Lilly,
alternating between San Diego and Indianapolis, or such other locations as the
members of the Steering Committee shall agree. Meetings of the Steering
Committee may be attended by such other directors, officers and employees of
each party as such party deems necessary, and by such consultants and
non-employee agents of each party as the members of the Steering Committee may
from time to time agree, but only members of the Steering Committee shall have
the right to vote at such meetings. The Steering Committee, by unanimous
consent, shall have the authority to amend or waive compliance with the
provisions of this Agreement relating to the scheduling and conduct of the
meetings of all committees established pursuant to this Agreement. Any dispute
regarding any such amendment or waiver shall not be subject to the dispute
resolution provisions of Section 2.6.
2.3 ALLIANCE DIRECTORS COMMITTEE.
(a) Promptly after the Effective Date, Lilly and Ligand each
shall appoint one of their respective employees (each an "Alliance Director") to
coordinate the execution of the Research Program and the Development Program.
The Alliance Directors shall be the primary contacts between the parties with
respect to the Research Program and the Development Program. Either party may
change its designee as the Alliance Director upon prior written notice to the
other party.
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(b) Promptly after the Effective Date, Lilly and Ligand each
shall appoint an Alliance Directors Committee to assist the Alliance Directors
in the implementation and execution of the Research Program and the Development
Program. The Alliance Directors Committee shall consist of both Alliance
Directors and two (2) additional voting members, one (1) appointed by Ligand and
one (1) appointed by Lilly. Meetings of the Alliance Directors Committee may be
attended by Joint Program Committee representatives, as well as consultants and
other agents of Ligand and Lilly as are deemed necessary by the Alliance
Directors, but only members of the Alliance Directors Committee shall have the
right to vote at such meetings. The Alliance Directors Committee shall report to
the Steering Committee which shall have the right to review, accept, reject or
modify all actions of the Alliance Directors Committee. Either party may change
its members of the Alliance Directors Committee upon prior written notice to the
other party.
(c) ***
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Alliance Directors Committee shall prepare and deliver to the other party one
week prior to the meeting the agenda for the meeting. The party hosting the
meeting of the Alliance Directors Committee shall prepare and deliver to the
other party within ten (10) days after the date of such meeting, minutes of the
meeting that set forth all decisions of the Alliance Directors Committee
relating to the Research Program and the Development Program in form and content
reasonably acceptable to the other party. Minutes shall be deemed approved
unless any member of the Alliance Directors Committee objects to the accuracy of
such minutes in writing to the other party within ten (10) business days of
receipt. If a party objects to the minutes and the objection is not resolved,
the objection will be deemed a dispute and resolved pursuant to Section 2.6.
(d) The Alliance Directors Committee shall be responsible for the
execution of the Research Program and the Development Program and direction of
the Joint Program Committee. It may appoint such other committees or working
groups, with such duties and memberships, as it deems appropriate. The Alliance
Directors Committee shall have such additional duties and responsibilities as
are given to it by the Steering Committee and shall meet with such frequency as
is necessary to complete its duties and as may otherwise be required by the
Steering Committee.
2.4 JOINT PROGRAM COMMITTEE. Promptly after the Effective Date, Ligand
and Lilly through the Alliance Directors Committee shall appoint the Joint
Program Committee. The Joint Program Committee will be responsible for the day
to day implementation of the Research Program and the Development Program. The
Joint Program Committee shall consist of six (6) voting members, two (2)
appointed by Ligand and four (4) appointed by Lilly. Decisions of the committee
shall be made by majority vote with a quorum for any meeting consisting of all
six members, provided, however, that if the Joint Program Committee is unable to
act because of a lack of a quorum, either Lilly or Ligand may call a new meeting
pursuant to five (5) days written notice at which a quorum shall consist of four
(4) members.
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Meetings of the Joint Program Committee may be attended by such other directors,
officers and employees of each party as such party deems necessary, and by such
consultants and non-employee agents of each party as the members of the Joint
Research Committee may from time to time agree, but only members of the
committee shall be entitled to vote. This committee shall report to the Alliance
Directors Committee which shall have the right to review, accept, reject or
modify all actions of the Committee subject to the dispute resolution mechanism
set forth in Section 2.6. Any failure of the Alliance Directors Committee to
review, accept, reject or modify actions of the Joint Program Committee may be
treated as a dispute by the written request of a party and be resolved pursuant
to Section 2.6. Either party may change its representatives on the Joint Program
Committee upon written notice to the other party. The party hosting the meeting
of the Joint Program Committee shall prepare and deliver to the other party one
week prior to the meeting the agenda for the meeting. The party hosting the
meeting of the Joint Program Committee shall prepare and deliver to the other
party within ten (10) days after the date of such meeting, minutes of the
meeting that set forth all decisions of the Joint Program Committee relating to
the Research Program and the Development Program in form and content reasonably
acceptable to the other party. Minutes shall be deemed approved unless any
member of the Joint Program Committee objects to the accuracy of such minutes in
writing to the other party within ten (10) business days of receipt.
2.5 STAFFING AND FUNDING. Lilly shall pay to Ligand such research funds
with respect to Drug Product, as are provided in the Collaboration Agreement.
Lilly shall pay Ligand for costs incurred by Ligand in association with the
performance of the preclinical activities required for the development of the
Drug Products, as provided in Section 3.3. The resource requirements for the
Research Program and the Development Program shall be determined by the Joint
Program Committee and approved by the Alliance Directors Committee. Each party
shall provide with respect to the Research Program and the Development Program
such accounting, research and other information as is required of such party
pursuant to the Collaboration Agreement. For reimbursement by Lilly to Ligand of
costs associated with the Research Program and the Development Program, Lilly
shall have such audit and review rights as are provided in the Collaboration
Agreement. Staffing levels and credentials for personnel provided by Ligand
shall be as set forth in the Collaboration Agreement.
2.6 DISPUTE RESOLUTION. Any dispute arising from the Joint Program
Committee shall first be presented to the Alliance Directors Committee for
resolution. Any dispute arising from the Alliance Directors Committee shall be
presented to the Steering Committee for resolution. Any disputes arising from
the Steering Committee shall be presented to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or his successor as
Chief Executive Officer of Ligand on behalf of Ligand, and August ▇. ▇▇▇▇▇▇▇▇ or
his successor as Chief Scientific Officer of Lilly on behalf of Lilly. These
executives shall confer and consider each party's view and shall attempt in good
faith to resolve such disagreements between themselves. If the executives cannot
promptly resolve such disagreements and if such disagreements relate to the
conduct of or decisions made as a part of the Development Program or the
Commercialization Program, for example,
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disagreements regarding the initiation and termination of preclinical tests and
clinical trials, the matter shall be decided by August ▇. ▇▇▇▇▇▇▇▇ or his
successor as Chief Scientific Officer of Lilly. If the dispute relates to the
Research Program, the executives shall establish a mechanism to resolve the
disagreement promptly and efficiently, without waiving any rights which either
party may have under this Agreement, by law or otherwise. Any action requiring
Steering Committee approval shall be subject to the dispute resolution
provisions of this Section 2.6.
2.7 STAFF AVAILABILITY. Each party shall make its employees,
consultants, subcontractors and investigative sites engaged in the Research
Program and the Development Program or serving on any committee available upon
reasonable notice during normal business hours at their respective places of
employment to consult with the other party on issues arising during the Research
Program and the Development Program and in connection with any request from any
regulatory agency, including regulatory, scientific, technical and clinical
testing issues.
2.8 FACILITY VISITS. Representatives of Lilly and Ligand may, upon
reasonable notice during normal business hours, (a) visit the facilities where
the Research Program and the Development Program are being conducted and use
commercially reasonable efforts to obtain permission to visit facilities where
Targretin or Drug Product are or will be manufactured and tested, (b) consult
informally, during such visits and by telephone, with personnel for the other
party performing work on the Research Program and the Development Program, and
(c) with the other party's prior approval, which approval shall not be
unreasonably withheld, visit (i) the sites of any experiments or tests being
conducted by such party in connection with the Research Program and the
Development Program, but only to the extent in each case such experiments or
tests relate to Drug Products, and (ii) any manufacturing facility where
Targretin or Drug Product are being manufactured. On such visits, an employee of
the party conducting the research or development shall accompany the employee(s)
of the visiting party. If requested by the other party, Ligand and Lilly shall
cause appropriate individuals working on the Research Program and the
Development Program to be available for meetings at times and places reasonably
convenient to the party responding to such request.
ARTICLE 3
CLINICAL DEVELOPMENT PROGRAM
3.1 DEVELOPMENT PLAN. The Joint Program Committee or its designee shall
prepare and oversee an overall development plan (the "Development Plan") for the
Drug Product which shall describe the proposed toxicology studies, clinical
trials, regulatory plans, and other key elements of the development work
necessary for completion of development activities through completion of Phase
II Clinical Trials. In developing such plan, the Joint
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Program Committee shall take into account Lilly's requirements for the
Commercialization Program. To be effective, the Development Plan shall be
reviewed by the Alliance Directors Committee and shall be subject to review and
approval by the Steering Committee prior to its implementation. Progress towards
the goals of the plan shall be reviewed by the Steering Committee on a
semi-annual basis. Lilly shall be responsible for the conduct of the Development
Program and Ligand shall provide reasonable consultation and advice. The
Development Plan is intended as a work plan for the development activities with
respect to Drug Products and may be amended from time to time by the appropriate
committee. Notwithstanding anything in the Development Plan to the contrary, the
rights of the parties with respect to Drug Products shall be governed in all
respects by the terms of this Agreement.
3.2 REGULATORY APPROVALS. The parties shall use commercially reasonable
efforts consistent with their respective responsibilities hereunder to obtain
all necessary Regulatory Approvals. Except where Regulatory Approvals for the
Drug Product are legally required to be in Ligand's name, Lilly shall have the
sole right to obtain Regulatory Approvals for the Drug Product, which shall be
in Lilly's name, and Lilly shall own all submissions in connection therewith.
All formulary or marketing approvals for the Drug Product shall also be obtained
by and in the name of Lilly. Notwithstanding anything to the contrary herein,
Lilly shall handle all matters with drug regulatory agencies concerning Drug
Products and shall be the sole contact with such agencies. Nothing in this
Section 3.2 shall constitute a limitation on Ligand's right to seek, obtain or
own regulatory, marketing or formulary approvals for any product outside the
Field.
3.3 DEVELOPMENT COSTS. Lilly shall pay all costs incurred by Ligand
after the Effective Date in the Development Program (including those costs
related to Regulatory Approvals), except that (a) Ligand shall pay all costs
incurred in connection with the completion of clinical protocols L1069DM-01, and
pre-clinical protocols 97-2520, 97-3346, 97-7068, 97-7065 and all other clinical
and pre-clinical protocols ongoing as of the Effective Date in the Field (the
"Protocols"), except for such costs, if any, related to changes in the Protocols
requested by Lilly in writing and approved by the Joint Program Committee or the
Lilly Alliance Director as an expense to by paid by Lilly, and (b) Ligand shall
pay its own costs of providing reasonable consultation and advice to Lilly. The
costs to be paid by Lilly shall include all costs incurred by Ligand after the
Effective Date in connection with preclinical activities required by the
Development Program, except to the extent such services are paid for by
"Research Funds" as contemplated by and defined in the Collaboration Agreement.
Lilly shall pay Ligand for all expenses incurred pursuant to this Section 3.3
and which are not otherwise paid for with the Research Funds as contemplated by
and defined in the Collaboration Agreement as follows: Ligand will be paid for
all Ligand employees at the rate of *** for each Scientific Person Year (as
defined in the Collaboration Agreement) and all third party costs at Ligand's
costs. Ligand shall permit Lilly to review Ligand's records of the hours worked
by Ligand employees and the third party costs incurred by Ligand for the purpose
of verifying the costs to be paid by Lilly pursuant to this Section 3.3.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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ARTICLE 4
COMMERCIALIZATION
4.1 COMMERCIALIZATION. All decisions regarding the Commercialization
Program, including without limitation pricing and terms of sale and assignment
of Ligand personnel allocated under Section 3.1 of the Collaboration Agreement
with respect to the Drug Product, shall be determined by Lilly, in its sole
discretion; provided, however, that Ligand's participation in the
Commercialization Program shall be approved by the Steering Committee, subject
to the dispute resolution provisions of Section 2.6, and in no event shall such
Ligand participation be disruptive of Ligand programs not funded by Lilly.
4.2 MARKETING PARTNERS FOR DRUG PRODUCT. Lilly shall have the right to
appoint one or more Lilly Affiliates and one or more Third Party marketing
partners to promote, co-promote, distribute, market or co-market any Drug
Product in any country of the world where such an arrangement would be
beneficial for pricing approvals or overall market share. In the event Lilly
elects to appoint a marketing partner, Lilly shall have the right to supply the
Drug Product to such partner at such prices as Lilly shall determine. With the
consent of Ligand, which consent will not be unreasonably withheld, Lilly may,
in connection with the appointment of a marketing partner, assign to such
partner some or all of Lilly's obligations under the Development Program with
respect to one or more countries, provided that such assignment shall not
release Lilly from any obligations it may have under this Agreement.
4.3 COMMERCIAL DILIGENCE. Lilly shall use commercially reasonable
efforts to obtain Regulatory Approval for and to market, sell and distribute
Drug Products in all countries of the world.
4.4 OPTION TO DISTRIBUTE LIGAND SYSTEMIC PRODUCTS. Lilly shall have the
exclusive option to distribute all Ligand Systemic Products in the United
States, the European Union as an entity and Japan (the "Option Territory") for
such period of time as Lilly shall have the inchoate or actual obligation to pay
Ligand a royalty on Net Sales of Drug Products. For such distribution services,
Ligand shall pay Lilly *** of net sales of Ligand Systemic Products, determined
in the same manner as Net Sales are calculated pursuant to Section 1.37,
substituting therein "Ligand" for "Lilly" wherever such term appears. Each party
shall provide written notice (the "Option Notice") to the other party no later
than seven (7) months prior to the date the first party estimates in good faith
that it will file an application for Regulatory Approval with respect to the
first Ligand Systemic Product, in the case of Ligand, or the first Drug Product,
in the case of Lilly, in any country in the Option Territory, informing the
other party of the estimated filing date for the application. Lilly shall then
have a period of thirty (30) days after the date of the Option Notice to
exercise its option under this Section 4.4 by delivering a written notice of
exercise to Ligand. The option provided hereunder may only be exercised in any
or all of the United States, the European Union as an entity and/or Japan and,
if Lilly exercises the option, not later than the filing of
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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an application for Regulatory Approval with respect to the first Drug Product in
any country in the Option Territory, Lilly and Ligand shall execute a written
distribution agreement providing for Lilly's distribution of Ligand Systemic
Products under terms substantially similar to those set forth in this Section
4.4 and Schedule 4.4.
4.5 TARGRETIN MANUFACTURE. If Lilly or any Lilly Affiliate is
manufacturing Targretin, Ligand shall have the right to purchase Targretin from
Lilly or the Lilly Affiliate pursuant to a written supply agreement in form
reasonably satisfactory to the parties, for use in Ligand Systemic Products and
Ligand Topical Products. During the Research Program and the Development
Program, Lilly will develop a manufacturing plan with the advice and
consultation of Ligand. In connection with clinical trials with respect to Drug
Products, Lilly anticipates purchasing, and shall have the right to purchase
through Ligand, Targretin from Ligand's current suppliers at the price charged
to Ligand by its current suppliers plus Ligand's direct order costs, including
all material and labor costs, whether direct or reasonably allocated, directly
related to Lilly's orders hereunder. Ligand will use commercially reasonable
efforts to cause its suppliers to permit quality assurance and quality control
inspections of their facilities and otherwise to cooperate with Lilly. Ligand
recognizes that Lilly does not intend to use any clinical material that does not
meet Lilly quality assurance/quality control standards; accordingly, Ligand will
not process any order from Lilly to Ligand's supplier that Ligand reasonably
believes would be filled with clinical material that does not meet such
standards and will promptly notify Lilly of its failure to process the order. In
the event that inadequate supply is available, the parties will agree upon an
equitable division of supply. Ligand shall take commercially reasonable efforts
to obtain supplies of Targretin for Lilly subject to Ligand's needs to conduct
development and commercialization activities outside the Field. For so long as
Lilly is purchasing Targretin from Ligand, Lilly shall provide Ligand with
rolling annual forecasts of its needs for Targretin on a quarterly basis.
4.6 TRADEMARKS. Lilly shall select one or more trademarks, not likely to
cause confusion, mistake or to deceive, with respect to Targretin or such other
marks as Ligand selects for the Ligand Systemic Products and/or the Ligand
Topical Products to be used in connection with the marketing of the Drug
Products. Such trademarks shall be owned solely by Lilly.
ARTICLE 5
ROYALTY AND MILESTONE PAYMENTS
5.1 ROYALTIES.
(a) Subject to the terms set forth in this Agreement (including, but not
limited to, Section 5.1(b) below) and during the Royalty Term, in partial
consideration for the licenses
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and services provided hereunder, Lilly shall pay Ligand the following royalties
based on worldwide aggregate Net Sales of each Drug Product during a Calendar
Year:
*** of Net Sales for that portion of Net Sales of the Drug
Product in such Calendar Year that are less than *** .
*** of Net Sales for that portion of Net Sales of the Drug
Product in such Calendar Year that equal or exceed *** but are
less than *** .
*** of Net Sales for that portion of Net Sales of the Drug
Product in such Calendar Year that equal or exceed *** but are
less than *** .
*** of Net Sales for that portion of Net Sales of the Drug
Product in such Calendar Year that equal or exceed *** .
Commencing January 1, 1999 and on January 1 of each year thereafter the
threshold and ceilings for the different royalty percentages will be increased
by *** over the levels in effect during the immediately preceding Calendar Year.
No royalty shall be paid on sales by Lilly or any Lilly Affiliate of Ligand
Systemic Products.
(b) In the event Ligand does not exercise the "Ligand Option" or gives
the "Rejection Notice" as provided in Section 1 of the Option Agreement and has
not previously exercised the "268/324 Royalty Option" under Section 6.1(b) of
the Collaboration Agreement, Ligand shall have the option to increase the
royalties payable on Targretin (the "Targretin Royalty Option") by *** of the
royalty rates provided in Section 5.1(a) above (e.g., the royalty for that
portion of Net Sales in such Calendar Year that are less than *** would be
increased from *** ). To exercise the Targretin Royalty Option, Ligand must
deliver written notice to Lilly within thirty (30) days after the first to occur
of (i) the date Ligand receives (A) the payment of the Phase III Enrollment
milestone for Compound 268 (as defined in the Collaboration Agreement) pursuant
to Section 7.2 of the Collaboration Agreement or (B) written notice from Lilly
acknowledging that the Phase III Enrollment milestone for Compound 268 has been
satisfied, (ii) the date Ligand receives (A) the payment of the Phase III
Enrollment milestone for Compound 324 (as defined in the Collaboration
Agreement) pursuant to Section 7.2 of the Collaboration Agreement or (B) written
notice from Lilly acknowledging that the Phase III Enrollment milestone for
Compound 324 has been satisfied or (iii) the date Ligand receives (A) the
payment of the first Phase III Enrollment milestone for Targretin pursuant to
Section 5.4 of this Agreement or (B) written notice from Lilly acknowledging
that the first Phase III Enrollment milestone for Targretin has been satisfied.
If Ligand does not deliver written notice within the required thirty (30) days,
the Targretin Royalty Option shall be deemed to have expired.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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5.2 ROYALTY PAYMENTS. Royalty payments under this Agreement shall be
made to the receiving party within seventy-five (75) days following the end of
each Calendar Quarter for which royalties are due.
5.3 ROYALTY TO LILLY. Subject to Section 6.5 of the Collaboration
Agreement, if Lilly and its Affiliates terminate development and
commercialization of all Drug Products under Section 10.4 after filing an IND or
an equivalent application in any Major Foreign Market with respect to a Drug
Product and, thereafter, Ligand manufactures, sells or causes to be manufactured
or sold the Drug Product, Ligand shall pay Lilly, during the Lilly Royalty Term,
a royalty on Net Sales of the Drug Product during each Calendar Year, calculated
as provided in Section 1.37, substituting therein "Ligand" for "Lilly" wherever
such term appears. The percentage of Net Sales to be paid by Ligand shall vary
in connection with the progress Lilly or any Lilly Affiliate shall have made
toward obtaining Marketing Approval of the Drug Product as follows:
(a) If Lilly or any Lilly Affiliate has not filed an IND or an
equivalent application in any Major Foreign Market with respect to the Drug
Product, Ligand shall *** of the Drug Product.
(b) If Lilly or any Lilly Affiliate has filed an IND or an
equivalent application in any Major Foreign Market but has not enrolled and
treated a patient in Phase III Clinical Trials with respect to the Drug Product,
Ligand shall *** of the Drug Product.
(c) If Lilly or any Lilly Affiliate has enrolled and treated a
patient in Phase III Clinical Trials but has not filed an NDA or an equivalent
application in any Major Foreign Market with respect to the Drug Product, Ligand
shall *** of the Drug Product.
(d) If Lilly or any Lilly Affiliate has filed an NDA or an
equivalent application in any Major Foreign Market with respect to the Drug
Product, Ligand shall *** of the Drug Product.
5.4 MILESTONE PAYMENTS. Provided that Lilly has not terminated this
Agreement under Section 10.3, upon achievement of any milestone event listed
below with respect to a Drug Product, Lilly shall pay a milestone fee to Ligand
on or before the seventy-fifth (75th) day following achievement of the milestone
as provided below:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Milestone
1 IND Acceptance (other than pursuant ***
to the Protocols)
2 Phase III Enrollment ***
3 NDA Acceptance ***
4 Marketing Approval ***
Notwithstanding the immediately preceding sentence, unless Lilly
terminates this Agreement as provided in Section 10.3 before IND
Acceptance,Lilly shall pay the IND Acceptance milestone amount within three (3)
Lilly working days after the earlier of: (i) IND Acceptance or (ii) December 15,
1998. The milestone payments set forth above will be paid only for the first
indication of the Drug Product to achieve the required status and no milestone
payment shall be made more than once with respect to any other formulations or
indications of the Drug Product. *** In the event that Phase II Clinical Trials
and Phase III Clinical Trials are combined or other doubts exist regarding the
achievement of the Phase III Clinical Trials milestone, the Steering Committee
or its designee shall determine the point in the trials at which the Phase III
milestone has been achieved. Notwithstanding the provisions of Section 2.6 of
this Agreement, in the event that the Steering Committee (i) is unable to agree
or (ii) is no longer in existence and no designee has been named, the
determination shall be made by the mutual agreement of the parties.
ARTICLE 6
LICENSES
6.1 LICENSES TO LILLY. Subject to the other provisions of this
Agreement, Ligand and its Affiliates hereby grant to Lilly and its Affiliates an
exclusive, worldwide license, even as to Ligand and its Affiliates, with the
right to grant sublicenses, under Ligand's and its Affiliates' interests in the
Joint Patents, Joint Technology, Ligand Patents and Ligand Technology to
develop, make, have made, use, have used, import, offer for sale, sell and have
sold Drug Products, including the right to sell Targretin to Sublicensees for
formulation as Drug Products. Ligand and its Affiliates shall retain all their
respective rights under Joint Patents, Joint Technology, Ligand Patents and
Ligand Technology not explicitly granted to Lilly and its Affiliates hereunder.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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6.2 LICENSES TO LIGAND.
(a) Subject to the other provisions of this Agreement, Lilly and
its Affiliates hereby grant to Ligand and its Affiliates an exclusive, worldwide
license, even as to Lilly and its Affiliates, with the right to grant
sublicenses, under Lilly's and its Affiliates' interests in the Joint Patents,
Joint Technology, Lilly Patents and Lilly Technology to make, have made, use,
have used, import, offer for sale, sell and have sold formulations of Targretin
for use outside the Field. Notwithstanding the above, neither Lilly nor its
Affiliates grant any license under this Section 6.2(a) under the Lilly Patents
or the Lilly Technology that was not actually used by Lilly or any of its
Affiliates in connection with the research, development or manufacture of
Targretin at any time prior to First Commercial Sale.
(b) In the event that Lilly terminates this Agreement pursuant to
Section 10.3 or terminates development and commercialization with respect to all
Drug Products pursuant to Section 10.4, the licenses granted under Section 6.1
to Lilly and its Affiliates shall terminate and Ligand shall have the right to
obtain from Lilly and its Affiliates an exclusive, worldwide license, even as to
Lilly and its Affiliates, with the right to grant sublicenses, under Lilly's and
its Affiliates' interests in the Joint Patents, Joint Technology, Lilly Patents
and Lilly Technology to develop, make, have made, use, have used, import, offer
for sale, sell and have sold Drug Products. Lilly shall provide written
notification of early termination of this Agreement under Section 10.3 or
termination of development and commercialization with respect to all Drug
Products under Section 10.4, as the case may be, and Ligand shall have ninety
(90) days from the receipt of such notification from Lilly to elect to obtain
the exclusive license referred to above in this Section 6.2(b). Such election
shall be made by written notification to Lilly. If Ligand elects to obtain such
an exclusive license, such license shall be granted upon receipt by Lilly of
Ligand's written election to obtain such license and shall be subject to the
royalty provisions of Section 5.3. Notwithstanding the above, neither Lilly nor
its Affiliates grant any license under this Section 6.2(b) under the Lilly
Patents or the Lilly Technology that was not actually used by Lilly or any of
its Affiliates in connection with the research, development or manufacture of
Targretin at any time prior to First Commercial Sale.
ARTICLE 7
INFORMATION AND REPORTS
7.1 INFORMATION DISCLOSURE. Promptly after the Effective Date, Ligand
shall disclose and make available to Lilly all Ligand Patents and Ligand
Technology relating to Targretin. During the Research Program and the
Development Program, Lilly and Ligand will disclose and make available to each
other promptly (and in any event as soon as it is generally available within
their respective organizations) the results of the work conducted in connection
with the Research Program and the Development Program, including without
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limitation all structural, preclinical, clinical, regulatory, and other
information known by Lilly or Ligand concerning Targretin and Drug Products.
Lilly shall own and maintain its database of clinical trial data and adverse
drug event information accumulated from all clinical trials of Drug Products for
which it was responsible. In the event that Lilly terminates this Agreement
pursuant to Section 10.3 or terminates development and commercialization with
respect to all Drug Products pursuant to Section 10.4, Lilly will permit Ligand,
at no cost to Ligand other than the direct costs of assembling, reproducing and
transmitting the data, to make copies of all material information described in
the immediately preceding sentence and use such information in connection with
Regulatory Approvals. Ligand shall own and maintain its database of clinical
trial data and adverse drug event information accumulated from all clinical
trials of Targretin outside the Field. Lilly and Ligand each shall have the
right, during normal business hours and upon reasonable notice, to inspect and
copy all records of the other party to the extent reasonably required for the
performance of its obligations under this Agreement (with the party owning the
records determining what is reasonably required). Each party shall treat the
records and the information of the other party contained therein as Confidential
Information and shall not use or disclose such records or information except to
the extent permitted by this Agreement.
7.2 COMPLAINTS. Each party shall maintain a record of all complaints it
receives with respect to Drug Products or any Ligand product containing
Targretin. Except as otherwise provided in Section 7.3, each party shall notify
the responsible party in reasonable detail of any complaint received by it and
within three (3) days after the event, and in any event in sufficient time to
allow the responsible party to comply with any and all regulatory requirements
imposed upon it in any country in which the Drug Product is being marketed.
7.3 ADVERSE EVENT REPORTING. Lilly and Ligand agree to provide each
other with all information necessary or desirable to comply with the laws and
regulations of governmental regulatory authorities with respect to Targretin and
Drug Products, as the case may be. In furtherance thereof, Lilly and Ligand
agree to develop appropriate adverse experience reporting procedures and to:
(a) provide to each other any significant information on
Targretin or any Drug Product from preclinical laboratory, animal toxicology and
pharmacology studies, as well as serious or unexpected adverse experience
reports from clinical trials and commercial experiences with Targretin or a Drug
Product.
(b) report to one another in such a manner and time so as to
enable each party to comply with all governmental laws and regulations in
countries for which Regulatory Approval is or will be sought.
7.4 USE OF INFORMATION. Information contained in reports made pursuant
to this Article 7 or otherwise communicated between the parties will be subject
to the confidentiality provisions of Article 9 below. Lilly may use any
information obtained by it (either by its
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own efforts or by disclosure from Ligand) pursuant to this Agreement for the
purposes of obtaining Regulatory Approval for Drug Products throughout the
world. Each party shall have the right to use the Confidential Information
disclosed by the other party without charge, but only to the extent necessary to
enable each party to carry out their respective roles defined in this Agreement.
7.5 PUBLICATIONS. During the term of the Research Program, Ligand and
Lilly each acknowledge the other party's interest in publishing certain
information gathered during the collaboration to obtain recognition within the
scientific community and to advance the state of scientific knowledge. Each
party also recognizes the mutual interest in obtaining valid patent protection
and protecting business interests. The Steering Committee, or its designee, will
establish procedures for review of publications that will address the process,
timing and criteria for decision while taking into account both Ligand's and
Lilly's policies for publication review and approval. The Steering Committee, or
its designee (the "Publication Subcommittee"), shall consider each such proposed
publication that arises during the term of the Research Program by reviewing an
advance draft of all written publications and an abstract of all oral
presentations, which shall be submitted not later than 45 days prior to the
first submission for publication in the case of written publications and 45 days
prior to submission of the abstract to the organizers of the forum at which the
oral presentation is to be made. If, within 30 days of receipt of the advance
copy of a party's proposed written publication or abstract of a proposed oral
presentation, the Steering Committee or its Publication Subcommittee informs
such party that its proposed publication or presentation could be expected to
have a material adverse effect on any Ligand Patents, Ligand Technology, Lilly
Patents, Lilly Technology, Joint Patents or Joint Technology developed or
acquired during the term of the Research Program, then such party shall delay
such proposed publication or presentation for a period of up to 90 days or, if
longer, a commercially reasonable period of time, to enable modifications to the
publication or presentation for patent, trade secret, or commercial reasons or
to allow for patent(s) preparation and filing of the information involved, if
such information pertains to a patentable invention. If any material changes are
made to the advance copy prior to publication or presentation, the final version
shall be submitted for review by the Steering Committee or the Publication
Subcommittee, which shall then have a period of 10 business days to review the
final version.
If, within 30 days of receipt of an advance copy or within 10 business
days of receipt of the final version of a party's proposed publication or
presentation, the Steering Committee or the Publication Subcommittee has failed
to act with respect to such party's proposed publication or presentation, then
such proposed publication or presentation shall be regarded as approved by the
Steering Committee and may be published or presented. The disclosure of
information that has been previously approved or is not Confidential Information
shall not require the review and approval of the Steering Committee under this
Section 7.5.
7.6 REGULATORY REPORTING. The parties acknowledge that either or both
parties will be required to submit information and file reports with various
governmental agencies in
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addition to those contemplated by the preceding sections. Without limiting the
generality of Article 3 above, the Joint Program Committee or its designee, with
the approval of the Steering Committee, shall establish procedures to be
followed by the parties which will facilitate the coordination of the parties in
complying with their respective regulatory obligations, and the parties agree to
cooperate with each other as necessary to allow each party to comply with its
regulatory obligations. Lilly shall coordinate all contacts with regulatory
agencies with respect to Drug Products, keeping Ligand appropriately advised of
such contacts. Each party shall consult with the other party before responding
to any inquiries from regulatory agencies regarding Targretin or the manufacture
thereof, provided however, each party may make such communication as required by
law.
7.7 SALES REPORTS.
(a) During the term of this Agreement and after First Commercial
Sale of a Drug Product in any country, Lilly shall furnish or cause to be
furnished to Ligand on a quarterly basis a written report or reports covering
each Calendar Quarter (each such Calendar Quarter being sometimes referred to
herein as a "reporting period") showing (i) the Net Sales of each Drug Product
in each country during the Royalty Term by Lilly, its Affiliates, Sublicensees
and assigns, and (ii) the royalties which shall have accrued under Article 5 in
respect of such sales and the basis for calculating those royalties. With
respect to sales of Drug Products invoiced in United States Dollars ("Dollars"),
the Net Sales amounts and the amounts due to Ligand hereunder shall be expressed
in Dollars.
With respect to sales of Drug Products invoiced in a currency
other than Dollars, the Net Sales shall be calculated using Lilly's then current
standard exchange rate methodology for the translation of foreign currency sales
into Dollars. Each quarterly report shall be accompanied by a listing of the
exchange rates used in calculating Net Sales covered by such quarterly report.
Lilly will at Ligand's reasonable request but not more frequently than once a
Calendar Quarter inform Ligand as to the specific exchange rate translation
methodology, if any, used for a particular country or countries. In the event
that any exchange rate translation methodology changes, Lilly will inform Ligand
of the change in the quarterly report next due.
Each quarterly report shall be due on the seventy-fifth (75th)
day following the close of each reporting period. Lilly shall keep accurate
records in sufficient detail to enable the amounts due hereunder to be
determined and to be verified by the independent public accountants described
hereunder. Lilly shall furnish annually to Ligand appropriate evidence of
payment of any tax or other amount required by applicable laws or regulations to
be deducted from any royalty payment, including any tax or withholding levied by
a foreign taxing authority in respect of the payment or accrual of any royalty.
(b) All payments shall be made in Dollars at the time of
quarterly reporting. If at any time legal restrictions prevent the prompt
remittance of any payments with respect to
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any country where Drug Products are sold, Lilly or its sublicensees or marketing
partners shall have the right and option to make such payments by depositing the
amount thereof in local currency to Ligand's account in a bank or depository in
such country.
Upon the written request of Ligand, at Ligand's expense and not more than once
in or in respect of any Calendar Year, ***
***
***
***
Upon the expiration of thirty-six (36) months following the end of any Calendar
Year, the calculation of amounts payable with respect to such fiscal year shall
be binding and conclusive upon Ligand, and Lilly and its sublicensees and
marketing partners shall be released from any liability or accountability with
respect to payments for such year. The report prepared by the independent public
accountant, a copy of which shall be sent or otherwise provided to Lilly by such
independent public accountant at the same time it is sent or otherwise provided
to Ligand, shall contain the conclusions of such independent public accountant
regarding the audit and will specify that the amounts paid to Ligand pursuant
thereto were correct or, if incorrect, the amount of any underpayment or
overpayment. If such independent public accountant's report shows any
underpayment, Lilly shall remit or shall cause its sublicensees or marketing
partners to remit to Ligand within thirty (30) days after Lilly's receipt of
such report, (i) the amount of such underpayment and (ii) if such underpayment
exceeds ten percent (10%) of the total amount owed for the Calendar Year then
being audited, the reasonable and necessary fees and expenses of such
independent public accountant performing the audit, subject to reasonable
substantiation thereof. Any overpayments shall be fully creditable against
amounts payable in subsequent payment periods. Ligand agrees that all
information delivered or subject to review under this Section 7.7 or under any
sublicensee or marketing agreement is Confidential Information and that Ligand
shall retain all such information in confidence.
7.8 STATUS REPORTS. At any time after the committees referred to in
Article 2 cease to exist, Lilly shall, upon request, and not more frequently
than semi-annually, provide to Ligand a written report summarizing the
activities of Lilly with respect to the Drug Products, the contents of
such report to be as set forth on Schedule 7-8.
ARTICLE 8
INTELLECTUAL PROPERTY
8.1 PATENTABLE INVENTIONS AND TECHNOLOGY.
(a) OWNERSHIP. Lilly will disclose to Ligand all Lilly Technology
and Joint Technology and Ligand will disclose to Lilly all Ligand Technology and
Joint Technology to the extent developed or acquired during the Research Program
and the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Development Program promptly after the disclosing party recognizes the
significance thereof unless the same shall have been developed as part of a
collaboration with a Third Party, the terms of which prohibit disclosure to the
other party. All Ligand Patents and Ligand Technology shall be owned by Ligand,
all Lilly Patents and Lilly Technology shall be owned by Lilly and all Joint
Patents and Joint Technology shall be owned jointly by Ligand and Lilly,
inventorship to be determined in accordance with U.S. laws of inventorship,
where applicable.
(b) PATENT PROSECUTION. Ligand shall be responsible for
preparing, filing, prosecuting, maintaining and taking such other actions as are
reasonably necessary or appropriate with respect to the Ligand Patents and any
patentable inventions encompassed by Ligand Technology. Lilly shall be
responsible for preparing, filing, prosecuting, maintaining and taking such
other actions as are reasonably necessary or appropriate with respect to the
Lilly Patents, Joint Patents and any patentable inventions based on or arising
from Lilly Technology or Joint Technology. Each party will consult the other
party with respect to its choice of external patent counsel and will keep that
party continuously informed of all material developments relating to the
preparation, filing, prosecution and maintenance of patents and patent
applications covered by this Agreement. Each party shall endeavor in good faith
to coordinate its efforts with those of the other party to minimize or avoid
interference with the prosecution of the other party's patent applications. To
the extent practicable, each party shall provide the Steering Committee or its
designee with a copy of any patent application which first discloses any
specific Lilly Technology, Ligand Technology or Joint Technology, prior to
filing the first of such applications in any jurisdiction, for review and
comment by such committee or its designee.
(c) COSTS. Subject to the provisions of subsection (d) below, the
party initially responsible for all costs incurred in the preparation, filing,
prosecution and maintenance of a patent pursuant to Section 8.1(b) shall bear
all costs incurred in the preparation, filing, prosecution and maintenance of
such patents; provided, however, that Ligand shall pay *** of all reasonable
external expenses incurred by Lilly while prosecuting and maintaining Joint
Patents. External expenses will include patent office fees and taxes in
connection with the filing, prosecution and maintenance of any patent or patent
application and the fees of any outside patent attorneys or agents in connection
with the ex parte preparation, filing, prosecution and maintenance thereof. The
allocation of such expenses will occur on an annual basis at the end of each
Calendar Year, at which time Lilly will provide Ligand with an itemized list of
external expenses denominated in Dollars incurred during the previous annual
period in prosecuting and maintaining Joint Patents and Ligand will reimburse
Lilly's expenses within sixty (60) days of the date of receipt of this itemized
list.
(d) DISCONTINUANCE OF PATENT PROSECUTION. The party initially
responsible for preparation, filing, prosecution and maintenance of a particular
Lilly Patent, Ligand Patent or Joint Patent (the "Initial Responsible Party")
shall give thirty (30) days advance notice (the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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"Discontinuance Election") to the other party of any intention or decision to
cease preparation, filing, prosecution and maintenance of that patent (a
"Discontinued Patent"); provided, however, that abandonment of a patent
application in favor of a continuation or continuation-in-part thereof shall not
constitute discontinuance of the parent application. In such case, the other
party may elect at its sole discretion to continue preparation, filing and
prosecution or maintenance of the Discontinued Patent at its sole expense
subject to the prior rights of Third Parties. The party so continuing shall own
any such patent or patent application and patents maturing therefrom, subject to
the prior rights of Third Parties, and the Initial Responsible Party shall
execute such documents and perform such acts as may be reasonably necessary for
the other party to file or to continue prosecution or maintenance, including
assigning ownership of such patents and patent applications to the party
electing to continue. Discontinuance may be on a country-by-country basis or for
a patent application or patent series in total. In the event that Lilly
exercises its Discontinuance Election with respect to a Discontinued Patent in a
particular country, Lilly's license under Section 6.1 with respect to that
Discontinued Patent shall terminate with respect to such country.
8.2 INFRINGEMENT CLAIMS BY THIRD PARTIES.
(a) In the case of any claim of infringement of a patent owned by
a Third Party based upon the making, having made, using, having used, importing,
offering for sale, selling or having sold Targretin in a Drug Product, and the
patent Covers Targretin per se, or the use of Targretin per se in the treatment
of diabetes mellitus, obesity, insulin resistance, dyslipidemia, and
cardiovascular disorders associated with diabetes mellitus or insulin
resistance, (i) Lilly shall have the right to obtain a license from the Third
Party and credit *** of any royalty payable to the Third Party against the
royalty payable to Ligand, but in no event will Ligand's royalty each year be
reduced by more than *** , or (ii) if Lilly and/or Ligand is sued for
infringement by such Third Party, Lilly shall control and defend or settle the
action at its expense and shall pay any damages or other monetary awards
resulting therefrom, and Lilly shall be entitled to credit *** of such monetary
award against the royalties payable to Ligand, but in no event will Ligand's
royalty each year be reduced by more than *** .
(b) If a claim of infringement is made against Lilly and/or
Ligand by a Third Party and that claim is based upon a claim of infringement for
use of an assay system or biological material used in an assay system (for
example, the co-transfection assay or a gene or protein used therein) which is
Ligand Technology and the claim of infringement is not based on a patent claim
which covers a compound or its method of use or any other separately patented
technology, then (i) Lilly shall have the right to obtain a license from the
Third Party and credit *** of any royalty payable to the Third Party against the
royalty payable to Ligand arising from the infringing use, but in no event will
Ligand's royalty each year be reduced by more than *** , or (ii) if Lilly and/or
Ligand is sued for infringement by such Third Party, Ligand shall control and
defend or settle the action and Ligand and Lilly shall share equally all
expenses of the action and any damages or
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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other monetary award resulting therefrom. Lilly shall have the right to approve
any settlement of any such action, which approval will not be unreasonably
withheld.
(c) If a claim of infringement is made against Lilly by a Third
Party based upon a claim of patent infringement not arising under (a) or (b)
above, Lilly shall have the obligation to control and defend or settle the claim
at its sole expense (including the payment of any damages, attorneys' fees or
other monetary awards).
8.3 INFRINGEMENT CLAIMS AGAINST THIRD PARTIES.
(a) Ligand and Lilly each agree to take commercially reasonable
actions to protect their respective Patents and Technology from infringement and
from unauthorized possession or use.
(b) If any Ligand Patent, Ligand Technology, Lilly Patent, Lilly
Technology, Joint Patent or Joint Technology is infringed or misappropriated, as
the case may be, by a Third Party, the party to this Agreement first having
knowledge of such infringement or misappropriation, or knowledge of a reasonable
probability of such infringement or misappropriation, shall promptly notify the
other in writing. The notice shall set forth the facts of such infringement or
misappropriation in reasonable detail. Subject to the rights of Third Parties,
the owner of the Patent or Technology shall have the primary right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to infringement or misappropriation of such Patent or Technology by a
Third Party using its own counsel and the other party shall have the right, to
be represented in such action by its own counsel. The Steering Committee shall
determine, or if the Steering Committee is no longer in existence, the parties
shall mutually determine, which party shall have the primary responsibility to
institute, prosecute, and control any action or proceeding with respect to
infringement or misappropriation of Joint Patents or Joint Technology and the
other party shall have the right to be represented by its counsel. The costs and
expenses of all suits brought by the party having the primary right or
responsibility to institute, prosecute, and control such action or prosecution
(including the costs and expenses of the other party and its separate counsel,
if any, should the other party elect to participate in such action or
proceeding) shall be paid *** by Lilly and *** by Ligand and all damages or
other monetary awards recovered therein remaining after the pro rata
reimbursement of such costs and expenses shall be split (i) *** to Lilly and
(ii) *** to Ligand. If the party having the primary right or responsibility to
institute, prosecute, and control such action or prosecution fails to do so
within a period of one hundred twenty (120) days after receiving notice of the
infringement, the other party, subject to the prior rights of any Third Party,
shall have the right to bring and control any such action by counsel of its own
choice, and the other shall not have the right to participate in such action or
proceeding except that such party may be joined as a party plaintiff and, in
case of joining, such party agrees to give the other party reasonable assistance
and authority to file and to prosecute such suit. All costs and expenses
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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of any suit brought by the party not having the primary right or responsibility
to institute, prosecute and control such action or prosecution (including the
costs and expenses incurred by the other party in providing reasonable
assistance to the party initiating the action or proceeding) shall be paid, and
all damages or other monetary awards recovered therein shall be retained, by the
party initiating the action or proceeding. No settlement or consent judgment or
other voluntary final disposition of a suit under this Section 8.3 may be
entered into without the joint consent of Ligand and Lilly (which consent shall
not be unreasonably withheld).
8.4 NOTICE OF CERTIFICATION. Ligand and Lilly each shall immediately
give notice to the other of any certification filed under the U.S. Drug Price
Competition and Patent Term Restoration Act of 1984 claiming that a Joint
Patent, a Ligand Patent or a Lilly Patent is invalid or that any infringement
will not arise from the manufacture, use or sale of any Drug Product by a Third
Party. If Ligand decides not to bring infringement proceedings against the
entity making such a certification with respect to a Ligand Patent, Ligand shall
give notice to Lilly of its decision not to bring suit within twenty-one (21)
days after receipt of notice of such certification. Lilly may then, but is not
required to, bring suit against the party that filed the certification. If Lilly
decides not to bring infringement proceedings against the entity making such a
certification with respect to a Joint Patent or a Lilly Patent, Lilly shall give
notice to Ligand of its decision not to bring suit within twenty-one (21) days
after receipt of notice of such certification. Ligand may then, but is not
required to, bring suit against the party that filed the certification. Any suit
by Lilly or Ligand may be in the name of Lilly or in the name of Ligand, or
jointly by Lilly and Ligand, as may be required by law. For this purpose, the
party not bringing suit shall execute such legal papers necessary for the
prosecution of such suit as may be reasonably requested by the party bringing
suit.
8.5 PATENT TERM EXTENSIONS. The parties shall cooperate with each other
in gaining patent term extensions and/or supplementary protection certificates
wherever applicable to patents Covering Drug Products and for products which
Ligand has rights to market outside the Field. The party first eligible to seek
extension of such patent shall have the right to do so; provided, that if in any
country the first party has an option to extend the patent term for only one of
several products, the first party will consult with the other party before
making the election. If more than one patent is eligible for extension, the
Steering Committee shall agree upon a strategy that will maximize patent
protection for Drug Products and for products which Ligand has rights to market
outside the Field. All filings for such extensions and certificates shall be
made by the party to whom the patent is assigned, provided, however, that in the
event that the party to whom the patent is assigned elects not to file for an
extension or supplementary protection certificate, such party shall (i) inform
the other party of its intention not to file and (ii) grant the other party the
right to file for such extension or certificate.
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ARTICLE 9
CONFIDENTIALITY AND NONDISCLOSURE
9.1 CONFIDENTIALITY. Unless otherwise set forth in this Agreement, for a
period from the Effective Date until five (5) years following the later of: (a)
the termination of this Agreement or (b) if Lilly or one or more of its
Affiliates is marketing a Drug Product, the date on which Lilly and its
Affiliates cease to market any Drug Product, each party and its respective
Affiliates shall maintain in confidence all Confidential Information, and shall
not, except as contemplated by this Agreement, disclose Confidential Information
or use Confidential Information for its benefit or the benefit of others,
without the consent of the disclosing party (the "Disclosing Party"). Documents
made available to the receiving party (the "Receiving Party") shall remain the
property of the Disclosing Party and shall be returned upon written request of
the Disclosing Party, except that one copy of all such information may be
retained for legal archival purposes by the Receiving Party.
9.2 AUTHORIZED DISCLOSURE. Each party may disclose Confidential
Information for the purpose of making various regulatory filings and complying
with applicable governmental regulations, and to sublicensees (potential and
actual), marketing partners (potential and actual), consultants and others
having a need to know for the purposes of development, manufacture or marketing
of Targretin or Drug Products pursuant to this Agreement, provided that such
sublicensees, marketing partners, consultants and others shall also agree to
appropriate and comparable confidentiality and non-use provisions. In addition,
each party shall be entitled to disclose Confidential Information to the extent
required by applicable law, orders of courts, regulatory authorities or similar
bodies having jurisdiction over the party ("Legal Process"). The Receiving Party
shall promptly notify the Disclosing Party of any request or demand by Legal
Process for disclosure of Confidential Information. With respect to any
disclosure of Confidential Information, including the text of this Agreement,
for the purpose of complying with applicable government regulations, the
disclosing party shall give the other party an opportunity to review and comment
upon the extent of any such disclosure of Confidential Information prior to
disclosure.
9.3 NONDISCLOSURE OF AGREEMENT. Neither party shall disclose any
information about this Agreement without the prior written consent of the other.
Consent shall not be required, however, for (a) disclosures to tax or other
governmental authorities or to potential or actual sublicensees, or marketing
partners to the extent required or contemplated by this Agreement, provided,
that in connection with such disclosure, each party agrees to use its
commercially reasonable efforts to secure confidential treatment of such
information, (b) disclosures of information for which consent has previously
been obtained or (c) information which has previously been publicly disclosed.
Each party shall have the further right to disclose the terms of this Agreement
as required by applicable law, including the rules and
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regulations promulgated by the Securities and Exchange Commission, and to
disclose such information to shareholders or potential investors as is customary
for publicly-held companies. Any copy of this Agreement to be filed with the
Securities and Exchange Commission shall be redacted to the satisfaction of both
parties; provided, in the event that the Securities and Exchange Commission
objects to the redaction of any portion of the Agreement after the initial
submission, the filing party shall inform the other party of the objections and
shall in good faith respond to the objections in an effort to limit the
disclosure required by the Securities and Exchange Agreement, but in any event
the filing party shall be free to include any portions of the Agreement it deems
necessary to respond to the objections in any future filings. Without limiting
the generality of the foregoing and except in the circumstance where a party's
outside counsel advises the party that immediate disclosure is required, in the
event that a Receiving Party intends to disclose Confidential Information as
permitted under this Article 9, such a party will provide to the Disclosing
Party a copy of the information to be disclosed and an opportunity to comment
thereon prior to such disclosure, and, to the extent practicable, consult with
the other on the necessity for the disclosure and the text of the proposed
release within a reasonable time in advance of the proposed disclosure. Without
limiting the generality of this Section 9.3, Ligand may allow Allergan, Inc.
("Allergan") to review a copy of this Agreement, for the sole purpose of
complying with Ligand's obligation to Allergan under that certain Amended and
Restated Technology Cross License Agreement, dated as of September 24, 1997,
among Allergan, Ligand and Allergan Ligand Retinoid Therapeutics, Inc. Any copy
of this Agreement disclosed under this Article 9 shall be redacted to the
satisfaction of both parties.
9.4 SURVIVAL. The confidentiality obligations of this Article 9 shall
survive the termination or expiration of the Agreement.
9.5 PRESS RELEASES. Press releases or other public communication by
either party relating to the collaboration contemplated by this Agreement shall
be approved in advance by the other party, except for those communications
required by law, disclosures of information for which consent has previously
been obtained or information which has been previously disclosed, or as
otherwise set forth in this Agreement.
ARTICLE 10
TERM AND TERMINATION OF AGREEMENT
10.1 TERM. This Agreement shall become effective on the Effective Date
and shall continue in effect, unless terminated earlier as described hereunder
or by mutual written agreement of the parties, until the later of either: (1)
the expiration of the last to expire Lilly Patent, Ligand Patent or Joint Patent
Covering a Drug Product; (2) in the event that Lilly or any Lilly Affiliate is
developing or marketing a Drug Product in accordance with the terms of this
Agreement but there is no issued Lilly Patent, Ligand Patent or Joint Patent
Covering a
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Drug Product, then *** from the date of the most recent First Commercial Sale
with respect to a Drug Product, if any; or (3) the expiration of the last
applicable Data Exclusivity Period with respect to a Drug Product.
10.2 TERMINATION FOR MATERIAL BREACH. Either party shall have the right
to terminate this Agreement after ninety (90) days written notice to the other
in the event the other is in material breach of this Agreement, unless the other
party cures the breach before the expiration of such period of time. Such notice
shall set forth in reasonable detail the specifics of the breach. In the event
of termination under this Section 10.2 by Lilly, all licenses granted under this
Agreement to Lilly and its Affiliates shall not be affected and shall continue
in full force and effect, and Lilly and its Affiliates shall have the right to
exercise all such licenses (subject to all payment and other surviving
obligations as set forth in Section 10.6). All licenses granted under this
Agreement to Ligand and its Affiliates shall automatically terminate upon such
termination by Lilly. In the event of termination under this Section 10.2 by
Ligand, all licenses granted under this Agreement to Ligand and its Affiliates
shall not be affected and shall continue in full force and effect, and Ligand
and its Affiliates shall have the right to exercise all such licenses (subject
to all payment and other surviving obligations as set forth in Section 10.6).
All licenses granted under this Agreement to Lilly and its Affiliates shall
automatically terminate upon such termination by Ligand. Notwithstanding the
foregoing, Lilly shall be permitted to distribute and sell all supplies of Drug
Products in its inventory at the time of termination until such supplies are
exhausted.
10.3 EARLY TERMINATION. At any time on or before December 15, 1998,
Lilly shall have the right to terminate this Agreement upon written notice to
Ligand if Lilly determines, for any reason, that it does not wish to proceed
with development of any Drug Product. In the event Lilly terminates the
Agreement under this Section 10.3, Lilly's and its Affiliates' license
(including any royalty obligations related thereto) granted under Section 6.1
shall terminate. The rights granted Ligand and its Affiliates under Section 6.2
shall survive any early termination of this Agreement by Lilly under this
Section 10.3.
10.4 TERMINATION OF DEVELOPMENT FOR FAILURE TO MEET GOALS. Ligand
acknowledges that the development and commercialization of Drug Products is an
inherently uncertain process, and that there can be no assurance either that
Drug Products can be successfully developed or that the potential commercial
rewards available for the commercialization of Drug Products, when weighed
against the costs and uncertainties involved and compared to Lilly's other
commercial opportunities, will be sufficient to justify Lilly's continued
efforts to develop and/or commercialize Drug Products. After December 15, 1998,
if Lilly in good faith concludes that further efforts under this Agreement would
not be in the best interests of Lilly, or if Lilly's Portfolio Management
Committee or its successor decides to cease work on the Drug Product, Lilly
shall so notify Ligand, and the parties shall then promptly meet to explore
whether any steps may be taken that would lead Lilly to conclude that further
efforts would be justified. In the event the parties are unable to agree to
continue efforts within ninety (90) days of Lilly's notice to Ligand provided
for above, Lilly
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Confidential Treatment and filed separately with the Commission.
34
shall be entitled to terminate further development or commercialization of a
Drug Product upon written notice to Ligand and Lilly's and its Affiliates'
license (including any royalty obligations related thereto) granted under
Section 6.1 with respect to such Drug Product shall terminate. The rights
granted Ligand and its Affiliates under Section 6.2 shall survive any early
termination of development or commercialization by Lilly under this Section
10.4.
10.5 TERMINATION UPON INSOLVENCY. This Agreement may be terminated by
either party upon notice to the other should the other party:
(a) consent to the appointment of a receiver or a general
assignment for the benefit of creditors, or
(b) file or consent to the filing of a petition under any
bankruptcy or insolvency law or have any such petition filed against it which
has not been stayed within 60 days of such filing.
10.6 ACCRUED RIGHTS, SURVIVING OBLIGATIONS, RESIDUAL RIGHTS. Upon
expiration or early termination of this Agreement, except as provided herein to
the contrary, all rights and obligations of the parties shall cease, except as
follows:
(a) obligations to pay royalties and other sums accruing
hereunder up to the date of termination;
(b) the right to complete the manufacture and sale of Drug
Products, which qualify as "work in process" under GAAP or which are in stock at
the date of termination, and the obligation to pay royalties on Net Sales of
such Drug Products;
(c) the obligations to pay milestones and royalties with respect
to Drug Products;
(d) all provisions regarding confidentiality shall continue in
full force and effect;
(e) obligations for record-keeping and accounting reports for so
long as Drug Products are sold, plus three (3) years. At such time after
termination of this Agreement when sales or other dispositions of Drug Products
have ceased, Lilly or Ligand, as the case may be, shall render a final report
along with any royalty payment due;
(f) the parties rights to inspect books and records as described
in Article 7;
(g) in the event that Lilly terminates this Agreement pursuant to
Section 10.3, the obligation to provide information to Ligand pursuant to
Section 7.1;
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(h) the obligations of defense and indemnity as described in
Article 11;
(i) any cause of action or claim of a party accrued or to accrue
because of any breach or default by the other party hereunder (subject to
applicable statutes of limitation);
(j) in the event of expiration of this Agreement under Section
10.1, Lilly shall have a fully paid-up, perpetual license to the rights granted
pursuant to Section 6.1 solely with respect to the unpatented Ligand Technology,
and Ligand shall have a fully paid-up, perpetual license to the rights granted
pursuant to Section 6.2 solely with respect to the unpatented Lilly Technology;
and
(k) all other terms, provisions, representations, rights and
obligations contained in this Agreement that by their sense and content are
intended to survive.
ARTICLE 11
INDEMNITY
11.1 CLAIMS. Each party hereby agrees to indemnify, defend and hold
harmless the other party and its Affiliates, and their respective officers,
directors, agents and employees from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or losses, including reasonable
attorneys' fees and other costs of defense other than claims for patent
infringement (which shall be resolved pursuant to Article 8) ("Claims"), (a)
resulting directly or indirectly from the manufacture, use, handling, storage,
sale or other disposition of Targretin or Drug Products by the indemnifying
party, its Affiliates, agents or Sublicensees (other than a party hereunder),
but only to the extent such Claims do not result from the negligence or
intentional misconduct of the party seeking indemnification, or (b) resulting
directly from a breach of any representation or warranty of the indemnifying
party contained in Article 12 of this Agreement.
11.2 DEFENSE. Any entity entitled to indemnification under this Article
11 shall give prompt written notice to the indemnifying party of any Claims with
respect to which it seeks indemnification, and the indemnifying party shall have
the option to assume the defense of such Claims with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed by the
indemnifying party with counsel so selected, the indemnifying party will not be
obligated to pay the fees and expenses of any separate counsel retained by the
indemnified party with respect to such Claims. Except with the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld, the indemnifying party may not enter into any settlement of such
litigation unless such settlement includes an unqualified release of the
indemnified party.
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11.3 INSURANCE. Ligand and Lilly shall each have and maintain such type
and amounts of liability insurance covering the manufacture, supply, use and
sale of Targretin and Drug Products as is normal and customary in the
pharmaceutical industry generally for parties similarly situated, and will upon
request provide the other party with a copy of its policies of insurance in that
regard, along with any amendments and revisions thereto.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as of the
Effective Date as follows:
12.1 CORPORATE EXISTENCE AND POWER. Such party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, and (b) has full corporate power and authority and the
legal right to own and operate its property and assets and to carry on its
business as it is now being conducted and is contemplated in this Agreement.
12.2 AUTHORIZATION. Such party (a) has the corporate power and authority
and the legal right to enter into the Agreement and perform its obligations
hereunder, and (b) has taken all necessary corporate action on its part required
to authorize the execution and delivery of the Agreement and the performance of
its obligations hereunder. The Agreement has been duly executed and delivered on
behalf of such party and constitutes a legal, valid, binding obligation of such
party and is enforceable against it in accordance with its terms subject to the
effects of bankruptcy, insolvency or other laws of general application affecting
the enforcement of creditor rights and judicial principles affecting the
availability of specific performance and general principles of equity whether
enforceability is considered a proceeding at law or equity.
12.3 ABSENCE OF LITIGATION. Such party is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such party's activities related to this Agreement have violated, or that by
conducting the activities as contemplated herein such party would violate, any
of the intellectual property rights of any other person.
12.4 CONSENTS. All necessary consents, approvals and authorizations of
all governmental authorities and other persons or entities required to be
obtained by such party in connection with the Agreement have been obtained.
12.5 NO CONFLICT. The execution and delivery of the Agreement and the
performance of such party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable law or regulation or any provision of
articles of incorporation or
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bylaws of such party in any material way, and (b) do not conflict with, violate
or breach or constitute a default or require any consent under, any contractual
obligation or court or administrative order by which such party is bound.
12.6 PATENTS. Except as such party has otherwise advised the other party
in writing, such party represents and warrants to the other that, to the best of
its knowledge, it has sufficient legal and/or beneficial title and ownership
under its intellectual property rights necessary for it to fulfill its
obligations under this Agreement and that it is not aware of any communication
alleging that it has violated or by conducting its business as contemplated by
this Agreement would violate any of the intellectual property rights of any
other person. As used herein, "intellectual property rights" means all patent
rights, copyrights, trademarks, trade secret rights, chemical and biological
material rights and know-how rights necessary or useful to make, use, import,
offer for sale or sell Targretin and/or Drug Products.
12.7 PRIOR DATA. Ligand represents and warrants to Lilly that it has
made (or will make) available to Lilly (to the extent the same exists and is
material to assessing the commercial, medical, clinical or regulatory potential
of Targretin) all toxicology studies, clinical data, manufacturing process data
and other information in its possession regarding Targretin that would be
reportable to the FDA under 21 C.F.R. 200 et. seq., and that to the best of its
knowledge, such data and information is accurate and complete and is what it
purports to be. Lilly represents and warrants to Ligand that it will make
available to Ligand (to the extent the same exists and is material to assessing
the commercial, medical, clinical or regulatory potential of Targretin) all
toxicology studies, clinical data, manufacturing process data and other
information in its possession regarding Targretin that would be reportable to
the FDA under 21 C.F.R. 200 et. seq., and that to the best of its knowledge,
such data and information will be accurate and complete and what it purports to
be.
12.8 NO DEBARMENT. Such party will comply at all times with the
provisions of the Generic Drug Enforcement Act of 1992 and will upon request
certify in writing to the other that none of it, its employees, or any person
providing services to such party in connection with the collaboration
contemplated by this Agreement have been debarred under the provisions of such
Act.
12.9 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Ligand hereby agrees to
use its commercially reasonable efforts to comply with the terms and conditions
of those certain license agreements set forth in Schedule 12.9. In addition,
Ligand hereby agrees to timely pay all royalty and milestone payments required
to be paid under those certain license agreements set forth in Schedule 12.9
during the Research Program Term and thereafter only as necessary to ▇▇▇▇▇ ▇▇▇▇▇
the licenses granted pursuant to Section 6.1. Ligand hereby represents and
warrants to Lilly that to Ligand's knowledge, there is no material unauthorized
use, infringement or misappropriation of the Ligand Patents Covering Targretin.
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ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW. The Agreement shall be governed by the laws of the
State of Indiana, without regard to Indiana choice of law provisions.
13.2 DISPUTE RESOLUTION PROCESS. In the event of any dispute relating to
this Agreement or the collaborative effort contemplated hereby, the parties
shall, prior to instituting any lawsuit, arbitration or other dispute resolution
process on account of such dispute, follow the procedures for dispute resolution
set forth in Section 2.6 of this Agreement if such dispute relates to the
conduct of or decisions made as part of the Research Program or the Development
Program. In the event of any dispute relating to or arising from this Agreement
which a party does not believe is covered by Section 2.6 and prior to
instituting any litigation with respect thereto, the dispute shall be presented
to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or his successor as Chief Executive Officer of Ligand on
behalf of Ligand, and August ▇. ▇▇▇▇▇▇▇▇ or his successor as chief scientific
officer of Lilly on behalf of Lilly; provided, however, that this provision
shall not prevent either party from seeking a preliminary injunction or other
equitable relief in the event such party believes it will suffer irreparable
harm. These executives shall confer and consider each party's view and shall
attempt in good faith to resolve the dispute between themselves or, if they are
unable to so resolve the dispute, to establish a mechanism to resolve the
dispute promptly and efficiently. In the event said executives are unable to
resolve such dispute or agree upon a mechanism to resolve such dispute within
thirty (30) days, either party shall be entitled to institute litigation and
seek such remedies as may be available.
13.3 NOTICES. All notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed given, upon receipt, if mailed
by registered or certified mail (return receipt requested), postage prepaid, or
sent by overnight delivery (receipt verified) to the address below, or given
personally or transmitted by facsimile to the number indicated below (with
confirmation).
To Lilly:
▇▇▇ ▇▇▇▇▇ and Company
Lilly ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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To Ligand:
Ligand Pharmaceuticals Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may, by written notice to the others, designate a new address or fax
number to which notices to the party giving the notice shall thereafter be
mailed or faxed.
13.4 FORCE MAJEURE. If either party's performance hereunder is affected
by any extraordinary, unexpected and unavoidable event such as acts of God,
floods, fires, riots, war, accidents, labor disturbances, breakdown of plant or
equipment, lack or failure of transportation facilities, unavailability of
equipment, sources of supply or labor, raw materials, power or supplies,
infectious diseases of animals, or by the reason of any law, order,
proclamation, regulation, ordinance, demand or requirement of the relevant
government or any sub-division, authority or representative thereof, or by
reason of any other cause whatsoever (provided that in all such cases the party
claiming relief on account of such event can demonstrate that such event was
extraordinary, unexpected and unavoidable by the exercise of reasonable care)
("Force Majeure") it shall as soon as reasonably practicable notify the other
party of the nature and extent thereof and take all reasonable steps to overcome
the Force Majeure and to minimize the loss occasioned to that other party.
Neither party shall be deemed to lose any rights under this Agreement or be in
breach of this Agreement or otherwise be liable to the other party by reason of
any delay in performance or nonperformance of any of its obligations hereunder,
except with respect to payment obligations, to the extent that such delay and
nonperformance is due to any Force Majeure of which it has notified the other
party and the time for performance of that obligation shall be extended
accordingly.
13.5 WITHHOLDING TAXES. If either party is required by the United States
government or other authorities to withhold any tax on the amounts payable by
that party to the other party under this Agreement, that party shall be allowed
to do so, and shall in such case remit payments to the other party net of such
withheld amount, provided that the withholding party furnishes the other party
with reasonable evidence of such withholding payment in electronic or written
form as soon as practicable after such withholding in order that the other party
may use the withholding tax paid as a tax credit.
13.6 ENTIRE AGREEMENT. This Agreement, its exhibits and schedules, the
Confidentiality Agreements between Ligand and Lilly dated September 30, 1996,
January 23, 1997 and May 8, 1997, the Collaboration Agreement, the Option
Agreement and the Stock Purchase Agreement between Ligand and Lilly of even date
herewith sets forth the entire agreement and understanding of the parties
relating to the subject matter contained herein and merges all prior discussions
and agreements between them. No party shall be bound by any
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representation other than as expressly stated in this Agreement, or by a written
amendment to this Agreement signed by authorized representatives of both
parties. No termination of the Collaboration Agreement shall terminate this
Agreement. Any terms of the Collaboration Agreement referred to in this
Agreement shall be deemed incorporated herein by reference and shall survive any
termination of the Collaboration Agreement.
13.7 NON-WAIVER. The failure of a party in any one or more instances to
insist upon strict performance of any of the terms and conditions of this
Agreement shall not be construed as a waiver or relinquishment, to any extent,
of the right to assert or rely upon any such terms or conditions on any future
occasion.
13.8 DISCLAIMER OF AGENCY. This Agreement shall not constitute any party
the legal representative or agent of another, nor shall any party have the right
or authority to assume, create, or incur any Third Party liability or obligation
of any kind, express or implied, against or in the name of or on behalf of
another except as expressly set forth in this Agreement.
13.9 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to be effectuated.
13.10 ASSIGNMENT. Lilly may discharge any obligations and exercise any
right hereunder through an Affiliate although Lilly shall remain ultimately
responsible for the proper discharge of all obligations hereunder
notwithstanding any assignment or delegation to any such Affiliate. References
to Lilly shall include any Affiliate of Lilly to whom such an assignment or
delegation has been made in accordance with this Agreement. Except as provided
in this Section 13.10, or otherwise expressly provided in this Agreement,
neither Lilly nor Ligand shall delegate duties of performance or assign, in
whole or in part, rights or obligations under this Agreement without the prior
written consent of the other party, not to be unreasonably withheld, and any
attempted delegation or assignment without such written consent shall be of no
force or effect. Without such written consent, either Ligand or Lilly may assign
the Agreement and its rights and obligations hereunder in connection with the
transfer or sale of all or substantially all of its business, or in the event of
its merger or consolidation or change in control or similar transaction. This
Agreement shall be binding upon the permitted successors and assigns of the
parties.
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13.11 HEADINGS. The headings contained in this Agreement have been added
for convenience only and shall not be construed as limiting or defining the
content of said sections or paragraphs.
13.12 LIMITATION OF LIABILITY. No party shall be liable to another for
indirect, incidental, consequential or special damages, including but not
limited to lost profits, arising from or relating to any breach of this
Agreement, regardless of any notice of the possibility of such damages. Nothing
in this Section is intended to limit or restrict the indemnification rights or
obligations of any party.
13.13 INTERPRETATION. This Agreement has been jointly prepared by the
parties and their respective legal counsel and ambiguities shall not be strictly
construed against either party.
13.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
13.15 COMPLIANCE WITH LAWS. Each party shall, and shall cause its
respective Affiliates to, comply in all material respects with all federal,
state, local and foreign laws, statutes, rules and regulations applicable to the
parties and their respective activities under this Agreement.
13.16 FURTHER ACTIONS. Each party agrees to execute, acknowledge, and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
▇▇▇ ▇▇▇▇▇ AND COMPANY
By: /s/ August ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
August ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
[SIGNATURE PAGE TO DEVELOPMENT AND LICENSE AGREEMENT]
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SCHEDULE 2.1
TECHNICAL OPERATING PLAN
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Schedule 4.4
This Schedule sets forth the material terms of the distribution
agreement to be executed by Ligand and Lilly in the event that Lilly properly
exercises its option to distribute all Ligand Systemic Products under Section
4.4 of the Agreement. Capitalized terms used but not defined herein will have
the meaning given to them in the Agreement.
1. Ligand shall appoint Lilly as its exclusive distributor of the Ligand
Systemic Products for that portion of the Option Territory for which Lilly
exercises the Option (the "Lilly Territory").
2. Lilly shall use its commercially reasonable efforts to distribute,
sell and book sales of the Ligand Systemic Products in all countries in the
Lilly Territory. Ligand reserves the exclusive right to sell the Ligand Systemic
Products to Lilly and to market and promote but not to sell or distribute the
Ligand Systemic Products in the Lilly Territory. Lilly shall not distribute or
sell the Ligand Systemic Products to any person or entity located or taking
delivery outside the Lilly Territory or that Lilly has reason to believe plans
to use or sell the Ligand Systemic Products outside the Lilly Territory.
3. Lilly shall establish the price for and distribute, sell and book
sales of the Ligand Systemic Products. Lilly shall purchase from Ligand the
Ligand Systemic Products at a price equal to *** of the sales price established
by Lilly. For orders of the Ligand Systemic Products for the initial commercial
sales of the Ligand Systemic Products, and for any subsequent periods in which
actual Net Sales may subsequently vary from the prices of the Ligand Systemic
Products estimated by Lilly or in effect when the Ligand Systemic Products are
ordered or shipped under the distribution agreement, the purchase price and Net
Sales amount for purposes of the distribution agreement shall be based upon
Lilly's good faith estimate of the Net Sales for the applicable purchase order
or period. Subsequently, the actual purchase price paid shall be adjusted on a
semiannual basis based upon the most recently available Net Sales information.
Lilly shall adjust the purchase price for the Ligand Systemic Products as
necessary to reflect actual Net Sales of the Ligand Systemic Products. Any
amount due Ligand on account of such adjustments shall be paid by check or wire
transfer within fifteen (15) days of the completion of such calculation.
4. Lilly shall drop ship the Ligand Systemic Products to the location
specified by Ligand in its orders and ▇▇▇▇ on a Ligand invoice the third party
identified by Ligand. Lilly shall also provide to Ligand no later than
seventy-five (75) days after the end of each Calendar Quarter a report showing
the sales of the Ligand Systemic Products in each country in the Lilly Territory
during the Calendar Quarter and Lilly's inventory of Ligand Systemic Products by
item and package size as of the end of the Calendar Quarter certified to be
accurate by an officer of Lilly.
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5. Ligand shall provide to Lilly no later than forty-five (45) days
prior to the beginning of each Calendar Quarter a forecast of what Ligand
anticipates Lilly's sales of Ligand Systemic Products will be for the Calendar
Quarter. Lilly and Ligand shall agree on what is an adequate inventory of the
Ligand Systemic Products and Lilly shall purchase from Ligand sufficient
quantities to supply demand for the Ligand Systemic Products and maintain an
adequate inventory. Lilly shall have the right to return any Ligand Systemic
Products that (a) are not in conformance with the specifications or (b) when
shipped have an expiry date of less than sixty (60) days from the date of
shipment.
6. Lilly shall purchase all of its requirements of Ligand Systemic
Products from Ligand and shall pay for the Ligand Systemic Products in full
within thirty (30) days of the date of Ligand's invoice. Lilly shall not be
entitled to manufacture or have manufactured the Ligand Systemic Products. Lilly
shall be entitled to appoint sub-distributors that are part of Lilly's normal
distribution network solely for physical distribution of the Ligand Systemic
Products. Lilly shall not be entitled to otherwise appoint sub-distributors,
other than Lilly Affiliates without first obtaining Ligand's written consent,
which consent will not be unreasonably withheld.
7. Lilly shall indemnify and hold Ligand harmless from any and all
claims based upon (a) Lilly's activities in connection with, or the death or
bodily injury or property damage resulting from, Lilly's handling, storage,
distribution or sale of the Ligand Systemic Products (including product
liability claims but excluding any claims resulting from Ligand's manufacture,
marketing or promotion of the Ligand Systemic Products) or (b) Lilly's
negligence or willful misconduct or material breach of the distribution
agreement, except in the case of (a) or (b) to the extent the claims result from
Ligand's negligence or willful misconduct or material breach of the distribution
agreement. Ligand shall indemnify and hold Lilly harmless from any and all
claims based upon (a) Ligand's manufacture, marketing or promotion of the Ligand
Systemic Products (including product liability claims but only to the extent the
claims result from Ligand's manufacture, marketing or promotion of the Ligand
Systemic Products), (b) Ligand's activities relating to the Ligand Systemic
Products outside the Lilly Territory or (c) Ligand's negligence or willful
misconduct or material breach of the distribution agreement, except in the case
of (a), (b) or (c) to the extent the claims result from Lilly's negligence or
willful misconduct or material breach of the distribution agreement.
8. Ligand shall be responsible for the coordination of all recall
activities with respect to the Ligand Systemic Products and shall pay all costs
of any recall.
9. The distribution agreement shall be terminable by either party after
60 days written notice in the event of an uncured material breach by the other
party. The distribution agreement shall also terminate automatically in the
event Lilly terminates all research, development and commercialization with
respect to Targretin.
10. Neither party shall be permitted to assign its rights under the
distribution agreement without first obtaining the prior written consent of the
other party, except in connection with the sale of all or substantially all of a
party's assets, whether by merger or otherwise.
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11. The distribution agreement shall contain such other standard terms
for the distribution of the Ligand Systemic Products in the Lilly Territory as
the parties may mutually agree, which terms shall be consistent with the terms
contained in the Option Agreement.
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SCHEDULE 7.8
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Schedule 12.9
1. The Settlement Agreement, License and Mutual General Release between
La Jolla Cancer Research Foundation, SelectRA Pharmaceutical Inc., Allergan
Ligand, and Allergan Ligand Retinoid Therapeutics, Inc., effective August 23,
1995.
2. The Amended and Restated Technology Cross License Agreement among
Allergan, Inc., Ligand Pharmaceuticals Inc. and Allergan Ligand Retinoid
Therapeutics, Inc., effective September 24, 1997.
3. The license agreement between Salk Institute for Biological Studies
and Ligand Pharmaceuticals Inc., effective October 20, 1988, and as amended on
September 15, 1989, December 1, 1989 and October 20, 1990.
4. The agreements between Insitut Pasteur de Lille and Ligand
Pharmaceuticals Inc., effective March 1, 1995 and December 1, 1995.
5. The agreement between Rockefeller and Ligand Pharmaceuticals Inc.,
effective November 14, 1991.
6. The agreement between Baylor College of Medicine and Ligand
Pharmaceuticals Inc., effective March 9, 1992 and September 1, 1992.