*Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
200.83 and 240.24b-2
DEVELOPMENT AND LICENSE AGREEMENT
between
MERCK & CO., INC.
and
ISIS PHARMACEUTICALS, INC.
DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT is effective as the date of the last party to sign this
Agreement (the "Effective Date") between MERCK & CO., INC., a corporation
organized and existing under the laws of the State of New Jersey ("MERCK") and
ISIS PHARMACEUTICALS, INC. a corporation organized and existing under the laws
of the State of Delaware ("ISIS").
RECITALS:
WHEREAS, ▇▇▇▇ has rights in and to ISIS Know-How and ISIS Patent Rights
(as the foregoing are hereinafter defined); and,
WHEREAS, MERCK and ISIS desire to enter into an agreement to develop
Compound (as hereinafter defined) upon the terms and conditions set forth
herein; and,
WHEREAS, MERCK desires to obtain licenses under the ISIS Patent Rights
and ISIS Know-How, and the technical assistance of ISIS for the purpose of
preparing and manufacturing Compound and Product, upon the terms and conditions
set forth herein, and ISIS desires to grant such licenses and such assistance to
MERCK.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following
terms, whether used in the singular or plural, shall have the respective
meanings set forth below:
1.1 "Affiliate" shall mean (i) any corporation or business entity of
which fifty percent (50%) or more of the securities or other ownership
interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or
indirectly, by MERCK or ISIS; or (ii) any corporation or business entity
which, directly or indirectly, owns, controls or holds fifty percent
(50%) (or the maximum ownership interest permitted by law) or more of the
securities or other ownership interests representing the equity, the
voting stock or, if applicable, the general partnership interest, of
MERCK or ISIS; or (iii) any corporation or business entity of which fifty
percent (50%) or more of the securities or other ownership interests
representing the equity, the voting stock or general partnership interest
are owned, controlled or held, directly or indirectly, by a corporation
or business entity described in (i) or (ii).
1.2 "Calendar Quarter" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 and
December 31.
1.3 "Calendar Year" shall mean each successive period of twelve (12) months
commencing on January 1 and ending on December 31.
1.4 "Clinical Development Program" shall mean the clinical development
activities undertaken by MERCK as set forth in Article II herein
1
1.5 "Clinical Supply Agreement" shall mean the Clinical Supply Agreement
entered into by the parties on the Effective Date in the form attached
hereto as Schedule 1.
1.6 "Combination Product" shall mean a Product which includes one or more
pharmaceutically active ingredients other than Compound in combination
with Compound. All references to Product in this Agreement shall be
deemed to include Combination Product.
1.7 "Compound" shall mean ISIS compounds ISIS 113715 and [ * ] that, as of
the Effective Date and during the term of this Agreement, i) incorporate
ISIS Core Technology and ii) target the genetic sequence of PTP-1B
thereby reducing expression of PTP-1B protein in humans or animals.
1.8 "Compound Improvement" shall mean any and all enhancements, whether or
not patentable, in the Compound. Compound Improvement shall include
without limitation pharmaceutical formulations and dosage forms for
administration discovered or invented solely or jointly by employees of
MERCK, or acquired by MERCK, during the term of this Agreement. Compound
Improvement shall not include pharmaceutical formulations or dosage forms
for administration discovered or invented solely by employees of ISIS, or
acquired by ISIS, during the term of this Agreement.
1.9 "Core Technology Improvement" shall mean any and all enhancements,
whether or not patentable, in the ISIS Core Technology arising during the
term of this Agreement.
1.10 "Field" shall mean the use of Compound and Product for any and all
purposes.
1.11 "First Commercial Sale" shall mean, with respect to any Product, the
first sale for end use or consumption of such Product in a country after
all required approvals, including marketing and pricing approvals, have
been granted by the governing Regulatory Authority of such country.
1.12 "FTE" shall mean the equivalent of a full-time scientist's work time over
a twelve-month period (including normal vacations, sick days and
holidays). The portion of an FTE year devoted by a scientist to the
Preclinical Development Program, Technology Transfer, Clinical Supply
Agreement, or any other activities under this Agreement which the parties
may agree will be undertaken by ISIS on an FTE basis, shall be determined
by dividing the number of days during any twelve-month period devoted by
such employee to the Preclinical Development Program, Technology
Transfer, Clinical Supply Agreement, or any other activities under this
Agreement which the parties may agree will be undertaken by ISIS on an
FTE basis, by the total number of working days during such twelve-month
period (including normal vacations, sick days and holidays).
1.13 "Information" shall mean any and all information and data, including
without limitation all scientific, preclinical, clinical, regulatory,
manufacturing, marketing, financial and commercial information and data,
whether communicated in writing or orally or by any other method, which
is provided by one party to the other party in connection with this
Agreement.
1.14 "ISIS Core Technology" shall mean technology owned or acquired by ISIS as
of the Effective Date which claims, covers or relates to linkages and
sugar units in an antisense oligonucleotide, wherein such linkages
include phosphorothioate linkages and such sugar units include a
combination of deoxy sugar units and 2'-O- (2-methoxy- ethyl)- (MOE-)
modified sugar units with natural and methyl substituted heterocycle
bases ("MOE Gapmer Technology"). ISIS Core Technology also includes
technology owned or acquired by ISIS as of the Effective Date which
claims, covers or relates to the cellular mechanisms of action by which
▇▇▇
*Confidential Treatment Requested 2
Gapmer Technology antisense oligonucleotides exert their effect. ISIS
Core Technology does not include any target gene specific technology.
1.15 "ISIS Know-How" shall mean any and all information and materials
including without limitation, Compound, Compound Improvements, ISIS
Manufacturing Technology, ISIS Core Technology, Manufacturing Technology
Improvements, Core Technology Improvements, processes, methods,
protocols, formulas, preclinical, manufacturing and other data,
discoveries, inventions, know-how and trade secrets, patentable or
otherwise, which during the term of this Agreement (i) are in the
possession or control of ISIS or an ISIS Affiliate, (ii) are not
generally known and (iii) are necessary or useful to MERCK in the Field
including without limitation the development, manufacture, marketing, use
or sale of Compound or Product.
1.16 "ISIS Patent Rights" shall mean any and all patents and patent
applications in the Territory (which for the purposes of this Agreement
shall be deemed to include certificates of invention and applications for
certificates of invention) which during the term of this Agreement are
owned by ISIS or to which ISIS through license or otherwise acquires
rights which (a) claim, cover or relate to Compound and/or Product
including without limitation those patents and patent applications which
(i) are Compound patents and patent applications listed on Schedule 1.16
(a) (i); or (ii) are ISIS Core Technology patents and patent applications
listed on Schedule 1.16 (a) (ii) (to the extent that such ISIS Core
Technology patents and patent applications are necessary or useful to
Merck in the Field) and patents and patent applications which claim,
cover or relate to Core Technology Improvements (to the extent that such
Core Technology Improvement patents and patent applications are necessary
to Merck to practice effectively in the Field) ; or iii) are ISIS
Manufacturing Technology patents and patent applications listed on
Schedule 1.16 (a) (iii) (to the extent that such ISIS Manufacturing
Technology patents and patent applications are necessary or useful to
Merck in the Field) and patents and patent applications which claim,
cover or relate to Manufacturing Technology Improvements, to the extent
that such Manufacturing Technology Improvement patents and patent
applications are necessary or useful to Merck in the Field; or (b) are
divisions, continuations, continuations-in-part, reissues, renewals,
extensions, supplementary protection certificates, and the like of any of
the foregoing patents and patent applications and foreign equivalents
thereof.
1.17 "ISIS Manufacturing Technology" shall mean any and all scientific
and technical data and information including without limitation formulas,
methods, techniques, protocols, and processes owned or acquired by ISIS
or an ISIS Affiliate by license or otherwise as of the Effective Date
which are necessary or useful to MERCK in the preparation, formulation,
analysis, manufacturing or delivery of Compound and/or Product for the
purpose of carrying out or implementing the manufacturing process defined
generally as the process steps set forth in master batch records for the
Compound ISIS 113715[ * ] including reasonable variants and extensions of
process steps thereof.
1.18 "Major Market" shall mean any one of the following countries: United
States, Japan, the United Kingdom, France, Germany, Italy or Spain.
1.19 "Manufacturing Technology Improvement" shall mean any and all
enhancements, whether or not patentable, in the ISIS Manufacturing
Technology arising during the term of this Agreement.
1.20 "Marketing Application" shall mean a New Drug Application (NDA),
Worldwide Marketing Authorization (WMA), or Marketing Application
Authorization (MAA) or similar application or submission for marketing
authorization of a Product filed with a Regulatory Authority including
without limitation the FDA.
1.21 "Net Sales" shall mean the gross invoice price of Product sold by MERCK,
its Affiliates or sublicensees (which term does not include distributors)
to the first independent third party after deducting, if not previously
deducted, in the amount invoiced:
3
(a) trade and quantity discounts other than early pay cash
discounts;
(b) returns, rebate, chargebacks and other allowances;
(c) retroactive price reductions;
(d) sales commissions paid to third party distributors;
(e) a fixed amount equal to [ * ] of the amount invoiced to cover bad
debt, sales or excise taxes, early payment cash discounts,
transportation and insurance charges, custom duties, and other
governmental charges;
(f) the standard inventory cost of devices or delivery systems used
for dispensing or administering Product.
With respect to sales of Combination Products, Net Sales shall be
calculated on the basis of the invoice price of Product containing the
same strength of Compound sold without other active ingredients. In the
event that Product is sold only as a Combination Product, Net Sales shall
be calculated on the basis of the invoice price of the Combination
Product multiplied by a fraction, the numerator of which shall be the
inventory cost of Compound in the Product and the denominator of which
shall be the inventory cost of all of the active ingredients in the
Combination Product. Inventory cost shall be determined in accordance
with MERCK's regular accounting methods, consistently applied. The
deductions set forth in paragraphs (a) through (f) above will be applied
in calculating Net Sales for a Combination Product. In the event that
Product is sold only as a Combination Product and either party reasonably
believes that the calculation set forth in this Paragraph does not fairly
reflect the value of the Product relative to the other active ingredients
in the Combination Product, the parties shall negotiate, in good faith,
other means of calculating Net Sales with respect to Combination
Products.
1.22 "Phase I Clinical Trial" shall mean the first clinical trial in
humans in any country including without limitation the first clinical
trial in humans that is intended to evaluate the safety, tolerability,
pharmacological and/or pharmocokinetic effect of a Compound in human
subjects or that would otherwise satisfy the requirements of 21 CFR
312.21(a) or its foreign equivalent.
1.23 "Phase II Clinical Trial" shall mean a human clinical trial in any
country that is intended to evaluate the effectiveness of a Compound for
a particular indication or indications in human subjects with the disease
or indication under study or that would otherwise satisfy the
requirements of 21 CFR 312.21(b) or its foreign equivalent. Specifically,
a Phase II (a) Clinical Trial shall mean a clinical trial which is the
first assessment of efficacy in the target population (and specifically
does not include a clinical trial in which the sole endpoints relate to
safety or drug interaction), and a Phase II (b) Clinical Trial shall mean
a clinical trial which is a definitive dose-ranging study.
1.24 "Phase III Clinical Trial" shall mean a pivotal human clinical trial
in any country the results of which could be used to establish safety and
efficacy of a Compound as a basis for a Marketing Application or that
would otherwise satisfy the requirements of 21 CFR 312.21(c) or its
foreign equivalent.
1.25 "Preclinical Development Program" shall mean the preclinical
development activities undertaken by MERCK and/or by ISIS, at the
direction of MERCK, as set forth in Article II herein and Schedule 2.2
attached hereto as may be amended by the parties from time to time.
1.26 "Product" shall mean preparation(s) in final form for sale by
prescription, over-the-counter or any other method for any and all uses
in the Field which contain Compound including without limitation any
Combination Product.
*Confidential Treatment Requested 4
1.27 "Regulatory Authority" shall mean any applicable government
regulatory authority involved in granting approvals for the marketing,
and/or pricing of a Product in the Territory, including without
limitation, in the United States, the Food and Drug Administration
("FDA"), and any successor government authority having substantially the
same function, and foreign equivalents thereof.
1.28 "Technology Transfer" shall have the meaning set forth in Section
7.2.1 herein.
1.29 "Territory" shall mean all of the countries in the world, and their
territories and possessions.
1.30 "Valid Patent Claim" shall mean a claim of an issued and unexpired
patent included within the ISIS Patent Rights listed on Schedule 1.16 (a)
(i) hereto, which has not been revoked or held unenforceable or invalid
by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or not appealed within the time allowed for
appeal, and which has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise.
ARTICLE II
PRECLINICAL AND CLINICAL DEVELOPMENT PROGRAM
2.1 GENERAL. ISIS and MERCK shall undertake the Preclinical Development
Program activities and MERCK shall undertake the Clinical Development
activities upon the terms and conditions set forth in this Agreement.
2.2.1 CONDUCT OF PRECLINICAL DEVELOPMENT PROGRAM. a) The activities to
be undertaken by ISIS and MERCK in the course of the Preclinical
Development Program shall be at the direction of MERCK, and are set
forth in Schedule 2.2. Promptly after the Effective Date, the parties
will jointly develop a more detailed Schedule 2.2 relating to the
activities, timeline, and budget agreed to in writing by the parties
for the Preclinical Development Program, such amended Schedule 2.2 to
be attached hereto and made a part of this Agreement. Schedule 2.2 may
further be amended from time to time upon prior mutual written
agreement of the parties. ISIS and MERCK shall conduct the Preclinical
Development Program in a good scientific manner, and in compliance in
all material respects with all requirements of applicable laws, rules
and regulations to achieve the objectives efficiently and
expeditiously. ISIS and MERCK shall proceed diligently with the work
set out in Schedule 2.2 using good faith efforts to provide sufficient
time, effort, equipment, facilities and skilled personnel to accomplish
the objectives set forth in Schedule 2.2.
(b) In no event shall ISIS be entitled to utilize the services of any
third party to carry out its obligation under the Preclinical
Development Program without the prior written approval of MERCK. ISIS
and MERCK hereby acknowledge that MERCK has approved the use by ISIS of
third parties listed in the attached Schedule 2.2.1 (b) for the purpose
of carrying out certain ISIS' obligations under the Preclinical
Development Program as indicated in Schedule 2.2.1 (b). Notwithstanding
such approval by MERCK for the use of third parties as set forth
herein, ISIS shall remain fully liable for the performance of ISIS'
obligations under the Preclinical Development Program. Further, where
▇▇▇▇ is permitted hereunder to utilize third parties to carry out
ISIS's obligations under the Preclinical Development Program, ISIS
hereby warrants that the terms of any and all agreements with such
third parties applicable to activities under the Preclinical
Development Program, including without limitation terms relating to
confidentiality, record keeping and inspection, inventions and
licensing shall be consistent with the terms of this Agreement between
ISIS and MERCK. ISIS shall, at MERCK's request, provide MERCK with a
copy of any such third party agreements. MERCK shall be entitled (but
shall not be obligated), at its discretion, to assume ISIS' rights and
responsibilities under such third party agreements applicable to
activities under the Preclinical Research Program.
5
2.2.2 USE OF PRECLINICAL DEVELOPMENT PROGRAM FUNDING. ISIS shall apply the
Preclinical Development Program funding it receives from MERCK under
this Agreement solely to carry out its obligations under Schedule 2.2
in accordance with the terms of this Agreement and the budget
established by the parties.
2.2.3 PRECLINICAL DEVELOPMENT PROGRAM PROJECT LEADERS. Each party shall
appoint one (1) project leader who shall be the primary contact between
the parties with respect to the Preclinical Development Program and who
shall each have appropriate technical credentials, experience and
knowledge, and ongoing familiarity with the Preclinical Development
Program ("Project Leader"). The Preclinical Development Program shall
be conducted under the direction of the Project Leaders. The parties
may seek the advice of additional representatives or consultants from
time to time, by mutual consent of the parties. In the event that the
Project Leaders cannot or do not, after good faith efforts, reach
agreement on an issue, the resolution and/or course of conduct shall be
determined by MERCK, in its sole discretion, provided that ISIS shall
not be required, without its prior written consent, to carry out any
additional work not included in Schedule 2.2, as may be amended by the
parties.
2.2.4 MEETINGS. The Project Leaders shall meet at least once each month with
the location for such meetings alternating between ISIS and MERCK
facilities (or such other locations as is determined by the parties).
Alternatively, the Project Leaders may meet by means of teleconference,
videoconference or other similar communications equipment. The Project
Leaders shall confer regarding the status of the Preclinical
Development Program, review relevant data, consider and advise on any
technical issues that arise, consider issues of priority, and review
and advise on any budgetary and economic matters relating to the
Preclinical Development Program.
2.2.5 PRECLINICAL DEVELOPMENT PROGRAM RESULTS AND INVENTIONS. ISIS
shall promptly disclose to MERCK the development, making, conception or
reduction to practice of all data, information, discoveries, and
inventions, patentable or not, arising from the Preclinical Development
Program. All such data, information, discoveries, and inventions
including without limitations Compound Improvements, patentable or not,
arising from the Preclinical Development Program shall be the sole and
exclusive property of MERCK, subject to the provisions of Sections 3.4
and 7.2.6 with regard to Core Technology Improvements and Manufacturing
Technology Improvements, respectively. MERCK shall promptly disclose to
ISIS, prior to filing the relevant patent application, all Core
Technology Improvements and Manufacturing Technology Improvements
arising from the Preclinical Development Program which shall be subject
to the license granted to ISIS hereunder in accordance with the
requirements of Sections 3.4 and 7.2.6, respectively, in the event that
such Core Technology Improvements or Manufacturing Technology
Improvements become patented Core Technology Improvements or patented
Manufacturing Technology Improvements.
2.2.6 RECORDS. ISIS shall maintain records, in sufficient detail and in good
scientific manner appropriate for patent and regulatory purposes, which
shall (a) fully and properly reflect all work done and results achieved
in the performance of the Preclinical Development Program, and (b)
permit ISIS to provide the CMC Items listed and attached hereto as
Schedule 2.2.6 as required by MERCK.
2.2.7 COPIES AND INSPECTION OF RECORDS. MERCK shall have the right,
during normal business hours and upon reasonable notice, to inspect and
copy all such records of ISIS referred to in Section 2.2.6 including
without limitation the CMC Items listed on Schedule 2.2.6 and all
preclinical information and data necessary or useful for MERCK for the
purposes of filing with Regulatory Authorities hereunder. MERCK shall
maintain such records and the information disclosed therein in
confidence in accordance with Section 4.1. MERCK shall have the right
to arrange for its employees and/or consultants involved in the
activities contemplated hereunder to visit the offices and laboratories
of ISIS and its third party contractors listed in Schedule 2.2.1 (b)
during normal business hours and upon reasonable notice, and to discuss
the Preclinical Development Program work and its results in detail with
the technical personnel and consultants of ISIS.
2.2.8 QUARTERLY REPORTS. Within thirty (30) days following the end of
each Calendar Quarter during the Preclinical Development Program, ISIS
shall provide to MERCK, upon MERCK's request, a written progress report
which shall describe the work performed to date on the Preclinical
Development Program, evaluate the work performed in relation to the
goals of the Preclinical Development Program and provide such other
information required by the Preclinical Development Program or
reasonably requested by
6
MERCK relating to the progress of the goals or performance of the
Preclinical Development Program ("Quarterly Report"). Upon request,
ISIS shall provide copies of the records described in Section 2.2.6
above. Further, ISIS shall provide the CMC Items listed in Schedule
2.2.6 in accordance with the timeline to be agreed to by the parties.
2.2.9 COMPLIANCE. ISIS hereby certifies that it has not and will not employ
or otherwise use in any capacity any person debarred under Section 21
USC 335(a) in performing any Preclinical Development Program
activities.
2.3.1 CLINICAL DEVELOPMENT PROGRAM. MERCK may, at its sole discretion,
undertake, and shall solely own the results of, the Clinical
Development Program. MERCK shall have the sole responsibility to make
any and all regulatory filings for Compound and Product in the
Territory as MERCK, in its sole discretion, deems appropriate, and
MERCK shall be the sole owner of all regulatory submissions and
government approvals therefor. Similarly, MERCK shall have and conduct
any and all communications and interactions with regulatory agencies
with respect to the Compound and Product, including without limitation
Regulatory Authorities, and other government authorities. ISIS shall
cooperate with MERCK in all of these activities whenever and to the
extent requested by MERCK, and shall supply MERCK with any and all
information necessary or useful to MERCK in preparing and filing
regulatory and other government submissions, and in obtaining
regulatory and other governmental approvals.
2.3.2 DEVELOPMENT AND COMMERCIALIZATION. MERCK shall use reasonable
efforts, consistent with the usual practice followed by MERCK in
pursuing the commercialization and marketing of its other similar
pharmaceutical products, at its own expense, to develop and
commercialize a Product on a commercially reasonable basis in such
countries in the Territory where in MERCK's opinion it is commercially
viable to do so.
2.3.3 EXCUSED PERFORMANCE. In addition to the provisions of Section
10.1 hereof, the obligations of MERCK with respect to any Product under
Section 2.3.2 are expressly conditioned upon the continuing absence of
any adverse condition or event relating to the safety or efficacy of
the Product, and the obligation of MERCK to develop or market any such
Product shall be delayed or suspended so long as in MERCK's opinion any
such condition or event exists. All judgments as to safety and efficacy
shall be made by MERCK in its sole discretion.
2.3.4 CLINICAL DEVELOPMENT PROGRAM RESULTS AND INVENTIONS. All data,
information, inventions and discoveries including without limitation
Compound Improvements, patentable or not, resulting from the Clinical
Development Program shall be the sole and exclusive property of MERCK,
subject to the provisions of Sections 3.4 and 7.2.6 with regard to Core
Technology Improvements and Manufacturing Technology Improvements,
respectively.
2.4 REPORTING REQUIREMENTS. ISIS and MERCK hereby agree to comply with the
reporting requirements set forth in Schedule 2.4 attached hereto, as
may be amended in writing by the parties from time to time. In the
event of changes to regulatory reporting requirements worldwide, each
party agrees to comply with revised notification requirements as
reasonably requested in writing by the other party. Notwithstanding the
foregoing, MERCK shall have the sole right to report to the Regulatory
Authorities any such information relating to the Compound or Product.
ARTICLE III
LICENSE; DISCLOSURE OF INFORMATION
3.1 LICENSE GRANT.
(a) ISIS hereby grants to MERCK an exclusive (exclusive even as to
ISIS), sublicensable, royalty-bearing license in the Territory to
practice under the ISIS Patent Rights and to utilize the ISIS
Know-How to develop, make, have made, use, sell, offer to sell and
import Compound and Product in the Field and to otherwise carry
out the activities contemplated by this Agreement.
7
(b) Notwithstanding the foregoing, in the case of ISIS Patent
Rights or ISIS Know-How consisting of Core Technology
Improvements, MERCK shall be granted an exclusive license to such
ISIS Patent Rights and ISIS Know-How in the Field to the extent
that such Core Technology Improvements are necessary for MERCK to
practice effectively in the Field, and, in the case of such Core
Technology Improvements acquired by ISIS from third party(ies)
during the term of this Agreement, where such third party rights
are sublicensable and MERCK has agreed with ISIS to comply with
all obligations relating to such sublicense by ISIS. Further, in
the case of ISIS Patent Rights or ISIS Know-How consisting of
Manufacturing Technology Improvements acquired by ISIS from third
party(ies) during the term of this Agreement, MERCK's shall be
granted an exclusive license to such ISIS Patent Rights and ISIS
Know-How in the Field where such third party rights are
sublicensable and MERCK has agreed with ISIS to comply with all
obligations relating to such sublicense by ISIS.
(c) ISIS shall retain the right to practice under the ISIS Patent
Rights and to utilize the ISIS Know-How licensed to MERCK
hereunder solely as necessary to carry out ISIS' obligations under
this Agreement.
(d) For clarification purposes, the parties hereby acknowledge that
MERCK shall have no liability or responsibility for, and ISIS
shall be fully liable and responsible for, any payments of any
kind whatsoever payable by ISIS to its third party licensors of
intellectual property licensed to MERCK by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
(e) In addition to the representations and warranties set forth in
this Agreement, ▇▇▇▇ ▇▇▇▇▇▇ agrees, with regard to the ISIS Patent
Rights licensed from third parties as set forth in Patent Schedule
1.16(a)(ii), to the following terms and conditions:
(i) ISIS warrants that it will take all actions reasonably
necessary to maintain the relevant third party licenses in
good standing as to the ISIS Patent Rights sublicensed to
MERCK under this Agreement; and
(ii) ISIS shall make all reasonable efforts to notify MERCK as
soon as practicable of any notice given or received by ISIS
to terminate such third party license(s), and, in the event
that such third party license(s) should be terminated for any
reason, make all reasonable efforts to obtain for MERCK the
right to directly license with the relevant ISIS' third party
licensor(s) for the rights sublicensed to MERCK hereunder as
of the Effective Date; and,
(iii) In the event that MERCK, due to termination of the relevant
license between ISIS and its third party licensor, enter
into a direct license with such third party licensor,
MERCK shall be entitled to deduct any payments payable by
MERCK to such third party licensor from payments due to ISIS
under this Agreement.
3.2 NON-EXCLUSIVE LICENSE GRANT. In the event the development, making,
having made, use, sale or import by MERCK, its Affiliates and/or
sublicensees of Compound (or Product, due to its incorporation of
Compound) would infringe during the term of this Agreement a claim of
issued letters patent which ISIS owns or has the rights to license and
which patents are not covered by the grant in Section 3.1, ISIS hereby
grants to MERCK, to the extent ISIS is legally able to do so, a
non-exclusive, royalty-free, sublicensable license in the Territory
under such issued letters patent solely for MERCK to develop, make,
have made, use, sell, offer for sale or import Compound and Product in
the Field in the Territory.
3.3 DISCLOSURE OF INFORMATION. During the term of this Agreement, ▇▇▇▇
shall promptly disclose to MERCK in English and in writing on an
ongoing basis all ISIS Know-How and other useful information not
previously disclosed.
3.4 CORE TECHNOLOGY IMPROVEMENTS. The entire right, title, and interest in
and to all Core Technology Improvements, patentable or not, developed
or invented solely by employees of ISIS during the term of this
Agreement shall be the sole and exclusive property of ISIS, subject to
the licenses granted to MERCK under this Agreement. The entire right,
title, and interest in and to all Core Technology Improvements,
patentable or not, developed or invented solely by employees of MERCK
during the term of this Agreement shall be the sole and exclusive
property of MERCK, and MERCK hereby grants to ISIS a
8
worldwide, non-exclusive, sublicensable, royalty-free license to any
such patented sole MERCK Core Technology Improvements solely for use
outside of the Field. The entire right, title, and interest in and to
all Core Technology Improvements, patentable or not, developed or
invented jointly by employees of ISIS and MERCK during the term of this
Agreement shall be the joint property of ISIS and MERCK, subject to the
licenses granted to MERCK under this Agreement. The parties shall
promptly disclose to each other the development, making, conception or
reduction to practice of all Core Technology Improvements.
3.5 COMPOUND IMPROVEMENTS. The entire right, title, and interest in and
to all Compound Improvements, patentable or not, developed or invented
solely or jointly by employees of ISIS and/or MERCK during the term of
this Agreement shall be the sole and exclusive property of MERCK. ISIS
shall promptly disclose to MERCK the development, making, conception or
reduction to practice of all Compound Improvements.
3.6 TARGET EXCLUSIVITY. ISIS hereby agrees that, until such time as the
approval of the first marketing application for a Compound in a Major
Market pursuant to this Agreement, ISIS will work exclusively (even as
to ISIS itself) with MERCK with regard to any and all activities for
the research, discovery, development and/or commercialization of
antisense compounds and products that target the genetic sequence of
PTP-1B.
ARTICLE IV
CONFIDENTIALITY AND PUBLICATION
4.1 NONDISCLOSURE OBLIGATION. All Information disclosed by one party to the
other party hereunder shall be maintained in confidence by the
receiving party and shall not be disclosed to a non-party or used for
any purpose except as set forth herein without the prior written
consent of the disclosing party, except to the extent that such
Information:
(a) is known by recipient at the time of its receipt, and not
through a prior disclosure by the disclosing party, as documented
by business records;
(b) is properly in the public domain;
(c) is subsequently disclosed to a receiving party by a third
party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing party;
(d) is developed by the receiving party independently of
Information received from the other party;
(e) is disclosed to governmental or other regulatory agencies by
either party in order to obtain patents or by MERCK to gain
approval to conduct clinical trials or to market Product, but
such disclosure may be only to the extent reasonably necessary to
obtain patents or authorizations;
(f) is deemed necessary by MERCK to be disclosed to MERCK
sublicensees, agents, consultants, Affiliates and/or other third
parties for the development, manufacturing and/or marketing of
the Product (or for such parties to determine their interest in
performing such activities) in accordance with this Agreement on
the condition that such third parties agree to be bound by the
confidentiality obligations contained this Agreement, PROVIDED
the term of confidentiality for such third parties shall be no
less than seven (7) years; or
(g) is required to be disclosed by law or court order, provided
that notice is promptly delivered to the other party in order to
provide an opportunity to challenge or limit the disclosure
obligations.
4.2 PUBLICATION. MERCK shall be entitled to publish on the subject matter
of this Agreement, PROVIDED THAT, MERCK shall deliver to ISIS a copy of
any proposed publication or an outline of any oral disclosure involving
ISIS Manufacturing Technology or ISIS Core Technology at least sixty
(60) days prior to submission for publication or presentation, and ISIS
shall have the right to request a reasonable delay in such publication
or presentation in order to protect patentable information. If ISIS
requests a delay, MERCK shall delay submission or presentation for a
period of up to thirty (30) days after such planned submission date to
enable patent applications to be filed by ISIS in accordance with
Article VIII below.
9
Upon expiration of such thirty-day (30)period, MERCK shall be free to
proceed with the publication or presentation. Further, MERCK hereby
agrees to provide ISIS, for informational purposes only, with a copy of
any proposed MERCK publication involving the Compound once such
proposal has been submitted for publication. ISIS shall be permitted to
publish on matters relating to the Compound or Product during the term
of this Agreement including without limitation any ISIS Know-How only
upon the prior written approval of MERCK, which may be given at MERCK's
sole discretion. Notwithstanding the foregoing, MERCK acknowledges
that, prior to the Effective Date, ISIS and its third party research
collaborator(s) have generated data relating to the Compound that ISIS
is contractually required to permit such third party research
collaborator(s) to publish or present during the term of this
Agreement. ISIS agrees to provide MERCK, in advance of the proposed
publication or presentation, with copies of any such proposed
publication or presentation intended for publication or presentation
during the term of this Agreement, and ISIS warrants to MERCK that ISIS
shall not grant such third party collaborators any rights to publish or
present such data beyond the rights ISIS is contractually required to
grant such third parties as of the Effective Date, and in no case shall
▇▇▇▇ ▇▇▇▇▇ such third parties any rights to publish or present data
which could negatively impact Compound or Product.
4.3 PUBLICITY. No disclosure of the existence of, or the terms of, this
Agreement may be made by either party, and no party shall use the name,
trademark, trade name or logo of the other party or its employees in
any publicity, news release or disclosure relating to this Agreement,
or its subject matter, without the prior express written permission of
the other party, except as may be required by law.
ARTICLE V
PAYMENTS; ROYALTIES AND REPORTS
5.1 PROGRAM FUNDING. a) In consideration for ISIS' performance of certain
preclinical development activities in connection with the Compound as
of [ * ] such reimbursement to take place within thirty (30) days of
the Effective Date and upon receipt of invoice from ISIS. In
consideration for ISIS' performance of certain preclinical development
activities in connection with the Compound [ * ] for the performance of
such activities, such reimbursement to take place within thirty (30)
days of receipt of invoice from ISIS. [ * ]
b) In consideration for ISIS' performance of its obligations under the
Preclinical Development Program, upon the terms and conditions
contained herein, MERCK shall pay ISIS for such performance in
accordance with the requirements of Schedule 2.2. The FTE rate for
Preclinical Development Program work performed directly by ISIS shall
be [ * ] per FTE for any of the following activities undertaken
directly by ISIS pursuant to the Preclinical Development Program: drug
substance manufacturing; analytical chemistry; process chemistry;
formulation; raw material ordering and handling; quality control; or
manufacturing technology transfer. The FTE rate for Preclinical
Development Program work performed directly by ISIS shall be [ * ] per
FTE for any of the following activities undertaken pursuant to the
Preclinical Development Program: toxicology;
pharmocokinetics/metabolism; regulatory; clinical development and data
management. MERCK shall reimburse ISIS for payments to third parties
who have been approved by MERCK to conduct the Preclinical Development
Program activities hereunder. ISIS shall invoice MERCK [ * ] for the
amounts payable in accordance with Schedule 2.2. Payments under this
Section. 5.1 (b) shall be due thirty (30) days after receipt of each
invoice by MERCK. With each [ * ] invoice after the first [ * ] invoice
provided to MERCK under this Paragraph, ISIS will provide MERCK with
copies of third party invoices supporting the invoice amounts charged
to MERCK in the prior [ * ] invoice to MERCK, and ISIS will make any
adjustments for overpayment or underpayment therein. If one party is
owing the other party as result of such reconciliation process, the
owing party will issue a payment to the other party within thirty (30)
days. Total payments under this Section shall not exceed [ * ] without
the prior written approval of MERCK for performance of activities under
Schedule 2.2.
c) In connection with the Technology Transfer efforts by ISIS
hereunder, ISIS shall utilize [ * ] In consideration for ISIS'
performance of its obligations under the Technology Transfer, upon
the terms and conditions contained herein, MERCK shall pay ISIS
for such performance in accordance with the
*Confidential Treatment Requested 10
requirements of Article VII herein and Schedule 7. 2. ISIS shall
invoice MERCK, [ * ] for all activities performed in accordance
with Article VII and the Schedule 7.2. Such invoice shall itemize
the activities as set forth in Schedule 7.2. Merck will pay each
invoice within thirty (30) days after receipt of invoice and all
relevant documentation.
d) In consideration of ISIS' performance of CMC activities in
connection with the Compound as set forth in Schedule 2.2.6, and
other Compound-specific activities including without limitation
specifications development for in-process and release testing of
Compound and formulated Compound (including standards, stability
programs, and formulation development) and other activities
requested by MERCK in support of registration efforts and in
response to regulatory questions and regulatory inspections, where
the foregoing activities are required under this Agreement but
fall outside ISIS' activities pursuant to the Preclinical
Development Program, Technology Transfer and [ * ] MERCK shall
compensate ISIS for such performance at the FTE rate of [ * ] for
any of the following activities undertaken directly by ISIS:
analytical chemistry; process chemistry; formulation; drug
substance manufacturing, raw material ordering and handling; or
manufacturing technology transfer; and, at the FTE rate of [ * ]
for the following activities performed directly by ISIS under this
Paragraph (d): toxicology; pharmocokinetics/metabolism;
regulatory; clinical development and data management.
Further, where ISIS undertakes other activities such as analytical
methods development for raw materials, API, drug product testing
and release, and process development in connection with other
phosphorothioate 2' deoxyoligonucelotides and MOE Gapmer
Technology drugs which support the activities of ISIS with regard
to Compound as required pursuant to this Agreement, MERCK will
compensate ISIS [ * ] The FTE rate shall be [ * ] for any of the
following activities undertaken directly by ISIS pursuant to this
Section 5.1 (d): analytical chemistry; process chemistry;
formulation; drug substance manufacturing, raw material ordering
and handling; or manufacturing technology transfer. The FTE rate
shall be [ * ] per FTE for any of the following activities
undertaken by ISIS pursuant to this Section 5.1 (d); toxicology;
pharmocokinetics/metabolism; regulatory; clinical development and
data management.]
5.2 CONSIDERATION FOR RESEARCH FUNDING. [ * ]
5.3 MILESTONE PAYMENTS.
a) Subject to the terms and conditions of, and during the term of, this
Agreement, MERCK shall pay to ISIS [ * ] each, each such milestone
payable only once, upon satisfactory performance of the Preclinical
Development Program activities in accordance with the requirements of
Schedule 2.2 as Schedule 2.2 may be amended by mutual agreement of the
parties. The Preclinical Development milestones set forth in this
Section 5.3 (a) shall become payable [* ] Notwithstanding the
foregoing, in the event that MERCK provides ISIS with a notice of
Agreement termination in accordance with the terms of Article 9 herein
prior to any such anniversary date, any milestone payment for a
milestone achieved during [ * ] and MERCK shall have no obligation to
make any such milestone payment to ISIS.
b) Subject to the terms and conditions of, and during the term of, this
Agreement, MERCK shall pay to ISIS the following Development milestone
payments with respect to each Compound in development for diabetes,
each milestone payment to be made no more than once with respect to
such Compound:
(i) [ * ]
(ii) [ * ]
(iii) [ * ]
(iv) [ * ]
(v) [ * ]
*Confidential Treatment Requested 11
c) Subject to the terms and conditions of, and during the term of, this
Agreement, MERCK shall pay to ISIS the following Development milestone
payments with respect to each Compound for obesity, each milestone
payment to be made no more than once with respect to each such
Compound:
(i) [ * ]
(ii) [ * ]
(iii) [ * ]
MERCK shall notify ISIS in writing within thirty (30) days upon the
achievement of each Development milestone set forth in Sections 5.3 (b)
and (c), such notice to be accompanied by payment of the appropriate
milestone payment. The milestone payment shall be payable only upon the
initial achievement of such milestone and no amounts shall be due
hereunder for subsequent or repeated achievement of such milestone.
Should the development of a Compound for an indication be discontinued,
any Development milestone payment(s) previously paid hereunder for a
Compound for such indication shall not be payable by MERCK for any
other Compound developed by MERCK hereunder for the same indication. In
the event that MERCK achieves any Developmental Milestone set forth in
Sections 5.3 (b) or (c) without having achieved prior Developmental
Milestone(s) set forth in the relevant Section for the same indication,
Merck shall be obligated to pay all such prior Developmental Milestones
not previously paid, upon achievement of such subsequent Developmental
Milestone for the same indication.
ROYALTIES.
5.4.1 ROYALTIES PAYABLE BY MERCK. Subject to the terms and conditions
of, and during the term of, this Agreement, MERCK shall pay to ISIS
royalties in an amount equal to:
(a) [ * ] of the aggregate annual worldwide Net Sales of each
Product by MERCK, its Affiliates or sublicensees where such
aggregate annual worldwide Net Sales are less than [ * ] as set
forth below, provided the sale of the Product would, but for the
license hereunder, infringe a Valid Patent Claim in the country
of sale, or
(b) [ * ] of the aggregate annual worldwide Net Sales of each
Product by MERCK, its Affiliates or sublicensees where such
aggregate annual worldwide Net Sales are equal to or greater than
[ * ] as set forth below, provided the sale of the Product would,
but for the license hereunder, infringe a Valid Patent Claim in
the country of sale, or
(c) For Net Sales of Products by MERCK, its Affiliates or
sublicensees other than those covered by Subsection 5.4.1. (a) or
5.4.1 (b), the royalty rate shall be [ * ] but in no event shall
such royalty pursuant to this Subsection 5.4.1 (c) [ * ]
Royalties on each Product at the rate set forth above shall be
effective as of the date of First Commercial Sale of Product in a
country and shall continue until either (i) the expiration of the last
applicable patent on such Product in such country in the case of sales
under Subsection 5.4.1(a) and (b), [ * ] in the case of sales of
Product under Subsection 5.4.1(c) above. Notwithstanding the foregoing,
under Subsection (ii) of this Paragraph, [ * ] However, in no event
shall such pass through royalties be payable by Merck after such ISIS'
royalty obligations to such third party licensor(s) have terminated.
Royalty payments pursuant to Subsection 5.4.1 are subject to the
following conditions:
(x) that only one royalty shall be due with respect to the same
unit of Product;
(y) that no royalties shall be due upon the sale or other transfer
among MERCK, its Affiliates or sublicensees, but in such cases
the royalty shall be due and calculated upon MERCK's or its
Affiliate's or its sublicensee's Net Sales to the first
independent third party; and (z) no royalties shall accrue on the
disposition of Product in reasonable quantities by MERCK,
Affiliates or its sublicenses as samples (promotion or otherwise)
or as donations (for example, to non-profit institutions or
government agencies for a non-commercial purpose).
*Confidential Treatment Requested 12
In the event that MERCK sells Product for end use or consumption prior
to receiving all required approvals from the governing Regulatory
Authority of the country of sale, including without limitation for
compassionate use purposes, the first such sale for end use or
consumption of such Product in such country shall be deemed a First
Commercial Sale hereunder for the purpose of establishing the effective
date for the initiation of payment of royalties in such country as set
forth above, however, [ * ]set forth in Section (ii) above shall
commence upon the date of First Commercial Sale after all required
approvals have been granted, as set forth in Section 1.11 of this
Agreement.
[ * ]
5.4.2 ROYALTY PAYABLE UNDER MANAGED PHARMACEUTICAL CONTRACT. It is understood
by the parties that MERCK may sell Product to an independent third
party (such as a retailer or wholesaler) and may subsequently perform
services relating to Product and other products under a managed
pharmaceutical benefits contract or other similar contract. In such
cases, it is agreed by the parties that Net Sales shall be based on the
invoice price to such independent retailer or wholesaler, as set forth
in Section 1.21, notwithstanding that MERCK or its Affiliates may
receive compensation arising from the performance of such services.
5.4.3 CHANGE IN SALES PRACTICES. The parties acknowledge that during the term
of this Agreement, MERCK's sales practices for the marketing and
distribution of Product may change to the extent to which the
calculation of the payment for royalties on Net Sales may become
impractical or even impossible. In such event the parties agree to meet
and discuss in good faith new ways of compensating ISIS to the extent
currently contemplated under Section 5.4.1.
5.4.4 ROYALTIES FOR BULK FORMULATED COMPOUND. In those cases where MERCK
sells bulk formulated Compound, rather than Product in packaged form,
to an independent third party, the royalty obligations of this Article
V shall be applicable to the bulk formulated Compound.
5.4.5 COMPULSORY LICENSES. If a compulsory license is granted to a third
party with respect to Product in any country in the Territory with a
royalty rate lower than the royalty rate provided by Section 5.4.1.,
then the royalty rate to be paid by MERCK on Net Sales in that country
under Section 5.4.1 shall be reduced to the rate paid by the compulsory
licensee.
5.4.6 THIRD PARTY LICENSES. In the event that one or more patent
licenses from other third parties are required by MERCK, its Affiliates
and sublicensees to practice the ISIS Patent Rights or to utilize the
ISIS Know-How in order to develop, make, have made, use, import, offer
to sell or sell Compound (or Product, due to the incorporation of
Compound) (hereinafter "Third Party Patent Licenses"). [ * ] In the
event that MERCK acquires patent license(s) from third parties pursuant
to this Subsection 5.4.6, and such license(s) are both sublicensable,
and useful outside the Field, MERCK hereby grants ISIS a non-exclusive,
royalty-free sublicense under such patent license(s) solely for use
outside the Field, such sublicense to be subject to the obligations of
such third party license(s) to MERCK. ]
5.5 REPORTS; PAYMENT OF ROYALTY. During the term of the Agreement following
the First Commercial Sale of a Product, MERCK shall furnish to ISIS a [
* ] written report for the [ * ] showing the Net Sales of all Products
subject to royalty payments sold by MERCK, its Affiliates and its
sublicensees in the Territory during the reporting period and the
royalties payable under this Agreement. MERCK shall provide ISIS, for
ISIS' convenience, [ * ] Reports of actual information as required in
this Subsection 5.5 above shall be due on the [ * ] following the close
of each [ * ] Royalties shown to have accrued by each such [ * ]
royalty report shall be due and payable on the date such royalty report
is due [ * ] following the close of each [ * ] MERCK shall keep
complete and accurate records in sufficient detail to enable the
royalties payable hereunder to be determined.
5.6 AUDITS.
*Confidential Treatment Requested 13
(a) Upon the written request of ISIS and not more than once in
each Calendar Year, MERCK shall permit an independent certified
public accounting firm of nationally recognized standing selected
by ISIS and reasonably acceptable to MERCK, at ISIS's expense, to
have access during normal business hours to such of the records
of MERCK as may be necessary to verify the accuracy of the
royalty reports hereunder for any year ending not more than
twenty-four (24) months prior to the date of such request. Such
records shall consist of the Net Sales figure for each Product,
and the Coefficient for each Product, as reported on a quarterly
basis within MERCK's internal worldwide accounting system. The
accounting firm shall disclose to ISIS only whether the royalty
reports are correct or incorrect and the specific details
concerning any discrepancies. No other information shall be
provided to ISIS.
(b) If such accounting firm correctly concludes that additional
royalties were owed during such period, MERCK shall pay the
additional royalties within thirty (30) days of the date ISIS
delivers to MERCK such accounting firm's written report so
correctly concluding. The fees charged by such accounting firm
shall be paid by ISIS [ * ]
(c) MERCK shall include in each sublicense granted by it pursuant
to this Agreement a provision requiring the sublicensee to make
reports to MERCK, to keep and maintain records of sales made
pursuant to such sublicense and to grant access to such records
by ISIS's independent accountant to the same extent required of
MERCK under this Agreement.
(d) Upon the expiration of [ * ] months following the end of any
year, the calculation of royalties payable with respect to such
year shall be binding and conclusive upon ISIS, and MERCK and its
sublicensees shall be released from any liability or
accountability with respect to royalties for such year.
(e) ISIS shall treat all financial information subject to review
under this Section 5.6 or under any sublicense agreement as MERCK
Information in accordance with the confidentiality and non-use
provisions of this Agreement, and shall cause its accounting firm
to enter into an acceptable confidentiality agreement with MERCK
and its sublicensees obligating such accounting firms to retain
all such financial information in confidence pursuant to such
confidentiality and non-use provisions.
5.7 PAYMENT EXCHANGE RATE. All payments to be made by MERCK to ISIS under
this Agreement shall be made in United States dollars and may be paid
by check made to the order of ISIS or bank wire transfer in immediately
available funds to such bank account in the United States designated in
writing by ISIS from time to time. In the case of sales invoiced in a
foreign currency, exchange conversion of such sales into United States
dollars shall be made on a monthly basis and shall be made at the rate
of exchange utilized by MERCK in its worldwide accounting system
prevailing on the third to the last business day preceding the month in
which sales are recorded by MERCK.
5.8 INCOME TAX WITHHOLDING. If laws, rules or regulations require
withholding of income taxes or other taxes imposed upon payments set
forth in this Article V, MERCK shall make such withholding payments as
required and subtract such withholding payments from the payments set
forth in this Article V. MERCK shall submit appropriate proof of
payment of the withholding taxes to ISIS within a reasonable period of
time.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND INDEMNITY
6.1 REPRESENTATION AND WARRANTY. ISIS represents and warrants to MERCK
that, as of the date of this Agreement:
(a) to the best of ISIS' knowledge, the ISIS Patent Rights, ISIS
Core Technology, ISIS Manufacturing Technology and ISIS Know-How
are subsisting and are not invalid or unenforceable, in whole or
in part;
*Confidential Treatment Requested 14
(b) it has the full right, power and authority to enter into this
Agreement, to perform the Preclinical Development Program and
Technology Transfer, and to grant the licenses granted under
Article III hereof;
(c) it has not previously assigned, transferred, conveyed or
otherwise encumbered its right, title and interest in ISIS Patent
Rights, ISIS Core Technology, ISIS Manufacturing Technology or
ISIS Know-How in a manner that would interfere with ISIS' ability
to grant the licenses granted to MERCK under this Agreement;
(d) it is the sole and exclusive owner of the Compound and the
patent applications claiming Compound set forth in Schedule 1.16
(a) (i) herein, and has the rights in and to the ISIS Patent
Rights, ISIS Core Technology, ISIS Manufacturing Technology and
ISIS Know-How necessary and sufficient to grant to MERCK the
rights licensed to MERCK under this Agreement all of which are
free and clear of any liens, charges and encumbrances, and no
other person, corporate or other private entity, or governmental
entity or subdivision thereof, has or shall have any claim of
ownership with respect to the ISIS Patent Rights, ISIS Core
Technology, ISIS Manufacturing Technology and ISIS Know-How
licensed to MERCK under this Agreement that would interfere with
the licenses granted to MERCK under this Agreement, whatsoever;
(e) to the best of ISIS' knowledge, the licensed ISIS Patent
Rights, ISIS Core Technology, ISIS Manufacturing Technology and
ISIS Know-How and the development, manufacture, use, sale and
import of Compound and Product do not interfere with or infringe
any intellectual property rights owned or possessed by any third
party;
(f) there are no claims, judgments or settlements against or owed
by ISIS or pending or threatened claims or litigation relating to
the ISIS Patent Rights, ISIS Core Technology, ISIS Manufacturing
Technology or ISIS Know-How; and
(g) ISIS has disclosed to MERCK all reasonably relevant information
regarding ISIS Patent Rights, ISIS Manufacturing Technology,
ISIS Core Technology and ISIS Know-How licensed under this
Agreement, including all patent opinions obtained by ISIS
related thereto.
6.2 INDEMNITY. a) ISIS shall indemnify, defend and hold MERCK and its
Affiliates, and their respective directors, officers, employees and
agents harmless against any and all losses, costs, liabilities and
expenses (including reasonable attorneys' fees), actions, suits,
claims, demands and prosecution that may be brought or instituted to
the extent based upon or arising out of i) the negligence or willful
misconduct of ISIS under this Agreement, or ii) the material breach by
ISIS of any warranty, representation or obligation of ISIS under this
Agreement.
b) MERCK shall indemnify, defend and hold ISIS and its Affiliates, and
their respective directors, officers, employees and agents harmless
against any and all losses, costs, liabilities and expenses (including
reasonable attorneys' fees), actions, suits, claims, demands and
prosecution that may be brought or instituted to the extent based upon
or arising out of i) the negligence or willful misconduct of MERCK
under this Agreement, ii) the material breach by MERCK of any warranty,
representation or obligation of MERCK under this Agreement, or iii) the
use, manufacture or sale by MERCK of Compound or Product.
ARTICLE VII
CLINICAL SUPPLY AND TECHNOLOGY TRANSFER
7.1 CLINICAL SUPPLY. ISIS hereby agrees to supply MERCK with its worldwide
requirements for API, Intermediate Compound, Placebo and Clinical
Product (as the foregoing terms are defined in the Clinical Supply
Agreement) in accordance with the terms of the Clinical Supply
Agreement. In the event that ISIS does not have sufficient
manufacturing capacity to meet MERCK's requirements in accordance with
the terms of the Clinical Supply Agreement, ISIS may use a third party
toll manufacturer to manufacture all or part of MERCK's requirements,
upon the prior written approval of MERCK. MERCK shall supply its own
requirements for Compound and Products for development and
commercialization on a worldwide
15
basis upon completion of the Technology Transfer in accordance with the
terms of this Agreement. Concurrently with the execution of this
Agreement, the parties shall execute the Clinical Supply Agreement
attached hereto as Schedule 1.5.
7.2.1 TECHNOLOGY TRANSFER. Commencing with the Effective Date and for a
time period thereafter to be determined by the Committee (the
"Technology Transfer Term") and in accordance with the terms and
conditions set forth in this Agreement, ISIS promptly shall (a)
disclose to and transfer to MERCK all of the ISIS Know-How and ISIS
Technology including the items listed in Schedule 7.2 and those items
more fully detailed in the Technology Transfer Work Plan to be agreed
to by the parties within thirty (30) days after the Effective Date and
(b) provide to MERCK the training and support described in Schedule 7.2
and the Technology Transfer Work Plan and elsewhere in this Agreement
to enable MERCK to efficiently and economically optimize use of the
ISIS Know-How, ISIS Technology and ISIS Patent Rights, in the
formulation, development, registration, manufacture, marketing and sale
of Compound and Product in the Field (the "Technology Transfer"). ISIS
shall perform the Technology Transfer in accordance with the Procedures
established by the Committee in accordance with Section 7.2.3. The
parties shall cooperate so that the Technology Transfer may be
completed as expeditiously as possible.
7.2.2 TECHNOLOGY TRANSFER COMMITTEE. The Technology Transfer shall be
coordinated and implemented under the supervision of a joint committee
(the "Committee") comprised of an agreed number of employees appointed
by the parties having appropriate technical credentials, experience and
knowledge and co-chaired by an employee of each party. The advice of
additional employees or consultants of either party may by mutual
consent of the parties be obtained. Decisions of the Committee shall be
made by unanimous decision of the two-co-chairs; provided however, in
the event that the co-chairs do not, after good faith efforts, reach
agreement on an issue, the resolution and/or course of conduct in issue
shall be determined in good faith by the Executive Vice President,
Science and Technology, and President of MERCK Research Laboratories,
and the Executive Vice President of ISIS; provided, however, in the
event that they do not, after good faith efforts, reach agreement on an
issue, the issue shall be submitted to arbitration pursuant to Section
10.6. Throughout the entire Technology Transfer Term, the Committee
shall meet at least once each month in person or by teleconference,
videoconference or by other mutually acceptable means. The Committee
shall establish the Procedures, confer regarding the status of the
Technology Transfer and compliance with the Procedures, review relevant
data and results achieved, consider and advise on any technical issues
that arise, consider issues of priority, and review and advise on any
matters relating to the Technology Transfer referred to the Committee.
7.2.3 PROCEDURES FOR TECHNOLOGY TRANSFER. Promptly after the Effective
Date, the Committee shall commence to monitor compliance with the
procedures set forth in Schedule 7.2 and the Technology Transfer Work
Plan which shall detail the procedures for the prompt and efficient
Technology Transfer, and shall describe the events necessary to
accomplish the Technology Transfer and detail the training and support
to be provided by ISIS during the Technology Transfer (the
"Procedures"). The Procedures shall be designed to ensure, and shall be
refined by the Committee as necessary to ensure, MERCK's optimal use of
the ISIS Know-How, ISIS Technology and ISIS Patent Rights in
developing, manufacturing and commercializing Compound and Product, all
in accordance with the terms of this Agreement.
7.2.4 TRAINING AND SUPPORT. The training and support to be provided by
ISIS to MERCK throughout the Technology Transfer Term shall include
without limitation training and support in a mutually acceptable MERCK
facility in all of the methods necessary to practice the ISIS Know-How,
ISIS Technology and ISIS Patent Rights in the development,
manufacturing and commercialization of Compound and Product, and this
shall include without limitation (a) demonstration and training during
the installation, operational and performance qualifications of the
technology, (b) technical support for the operational startup of
manufacturing equipment, and (c) demonstration of the manufacturing
processes. In addition, a reasonable number of employees of MERCK and
its Affiliates shall be entitled to visit ISIS facilities including
without limitation pilot and commercial scale facilities and testing
laboratories to observe relevant processes in operation. Moreover, ISIS
shall provide technical consultation on an as-needed basis following
NDA approval of Product for a time period to be established by the
Committee. ISIS also shall be available, if requested, for consultation
during any regulatory inspection or to assist in responding to
regulatory questions that may occur during Product registration
activities.
16
7.2.5 RECORDS. ISIS shall maintain records, in sufficient detail and in
good scientific manner appropriate for patent, regulatory and
manufacturing purposes, which shall fully and properly reflect all of
the work done and the progress achieved in the performance of the
Technology Transfer (the "Records"). The Records at all times shall be
available to the Committee and Merck shall have the right, during
normal business hours and upon reasonable notice, to inspect and copy
all such Records. MERCK also shall have the right to arrange for its
employees and/or consultants to visit ISIS at its offices and
laboratories and other facilities during normal business hours on
reasonable notice concerning or in furtherance of the Technology
Transfer and/or to discuss the progress of the Technology Transfer and
its results in detail with the technical personnel and consultants of
ISIS.
7.2.6 MANUFACTURING TECHNOLOGY IMPROVEMENTS. The entire right, title,
and interest in and to all Manufacturing Technology Improvements,
patentable or not, developed or invented solely by employees of ISIS
during the term of this Agreement shall be the sole and exclusive
property of ISIS, subject to the licenses granted to MERCK under this
Agreement. The entire right, title, and interest in and to all
Manufacturing Technology Improvements, patentable or not, developed or
invented solely by employees of MERCK during the term of this Agreement
shall be the sole and exclusive property of MERCK, and MERCK hereby
grants to ISIS a worldwide, non-exclusive, sublicensable, royalty-free
license to any such patented sole MERCK Manufacturing Technology
Improvements solely for use outside of the Field. The entire right,
title, and interest in and to all Manufacturing Technology
Improvements, patentable or not, developed or invented jointly by
employees of ISIS and MERCK during the term of this Agreement shall be
the joint property of ISIS and MERCK, subject to the licenses granted
to MERCK under this Agreement. The parties shall promptly disclose to
each other the development, making, conception or reduction to practice
of all Manufacturing Technology Improvements.
ARTICLE VIII
PATENT PROVISIONS
8.1 FILING, PROSECUTION AND MAINTENANCE OF PATENTS. ISIS and MERCK hereby
agree that, during the term of this Agreement, the ISIS Patent Rights
which claim, cover or relate to the Compound in the Territory shall, at
MERCK's expense, be filed, prosecuted and maintained by independent
patent legal counsel chosen by MERCK and reasonably acceptable to ISIS.
Such independent counsel shall keep ISIS and MERCK advised of the
status of the actual and prospective patent filings and upon the
request of the party(ies), shall provide advance copies of any papers
related to the filing, prosecution and maintenance. The parties shall
consult as to patent filings by such independent counsel which shall be
subject to the prior mutual agreement of the parties. ISIS agrees to
file, prosecute and maintain in the Territory the ISIS Patent Rights
which claim, cover or relate to Core Technology, Core Technology
Improvements, Manufacturing Technology or Manufacturing Technology
Improvements owned in whole or in part by ISIS and licensed to MERCK
under this Agreement. ISIS shall keep MERCK advised of the status of
the actual and prospective patent filings on a semi-annual basis and
upon the request of MERCK, provide copies of any papers related to the
filing, prosecution and maintenance of such patent filings. MERCK shall
have the exclusive right during the term of this Agreement to file,
prosecute and maintain, in the Territory, patent applications that
claim, cover or relate to Compound Improvements. With respect to all
filings hereunder, the filing party shall be responsible for payment
for all costs and expenses related to such filings.
8.2 ISIS PATENT RIGHTS PATENT SCHEDULES. ISIS hereby agrees to provide
MERCK with updated patent schedules in a timeframe agreed to by the
parties.
8.3 INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE. Either party
shall, within ten (10) days of learning of such event, inform the other
party of any request for, or filing or declaration of, any
interference, opposition, or reexamination relating to ISIS Patent
Rights in the Field. MERCK and ISIS shall thereafter consult and
cooperate fully to determine a course of action with respect to any
such proceeding subject to the following:
(a) Any interference, opposition, reissue, or reexamination
proceeding relating to ISIS Patent Rights which claim, cover or
relate to Compound in the Territory shall be conducted at MERCK's
expense by independent patent legal counsel chosen by MERCK and
reasonably acceptable to
17
ISIS. MERCK and ISIS will cooperate fully and will provide each
other and the independent patent legal counsel with any
information or assistance that any party may reasonably request.
Outside patent legal counsel shall keep MERCK and ISIS informed
of developments in any such action or proceeding. Decisions on
whether to initiate such a proceeding and the course of action in
such proceeding, including settlement negotiations and terms,
shall be made by mutual agreement of ISIS and MERCK.
(b) Any interference, opposition, reissue, or reexamination
proceeding relating to ISIS Patent Rights which claim, cover or
relate to the Core Technology, Core Technology Improvements,
Manufacturing Technology or Manufacturing Technology Improvements
in the Territory, shall be conducted by ISIS at ISIS' expense. To
the extent that such interference, opposition, reissue, or
reexamination proceeding materially impacts MERCK's rights within
the Field, MERCK and ISIS will cooperate fully and will provide
each other with any information or assistance that either may
reasonably request. ISIS shall keep MERCK informed of
developments in any such action or proceeding, including, to the
extent permissible, the status of any settlement negotiations and
the terms of any offer related thereto, except that ISIS must
obtain MERCK's consent to any settlement terms which affect
MERCK's freedom to operate in the Field under the licenses
granted to MERCK under this Agreement.
8.4 ENFORCEMENT AND DEFENSE.
(a) ISIS shall give MERCK notice of (i) any infringement of ISIS
Patent Rights in the Field, or (ii) any misappropriation or misuse
of ISIS Know-How in the Field, that may come to ISIS's attention.
MERCK and ISIS shall thereafter consult and cooperate fully to
determine a course of action, including without limitation the
commencement of legal action by either or both MERCK and ISIS, to
terminate any infringement of ISIS Patent Rights or any
misappropriation or misuse of ISIS Know-How in the Field. However,
ISIS, upon notice to MERCK, shall have the first right to initiate
and prosecute such legal action at its own expense and in the name
of ISIS and MERCK, or to control the defense of any declaratory
judgment action relating to ISIS Patent Rights or ISIS Know-How in
the Field. ISIS shall promptly inform MERCK if it elects not to
exercise such first right and MERCK shall thereafter have the right
to either initiate and prosecute such action or to control the
defense of such declaratory judgment action in the name of MERCK
and, if necessary, ISIS.
(b) In the event that ISIS elects not to initiate and prosecute an
action as provided in paragraph (a), and MERCK elects to do so, the
costs of any agreed-upon course of action to terminate infringement
of ISIS Patent Rights or misappropriation or misuse of ISIS
Know-How, including the costs of any legal action commenced or the
defense of any declaratory judgment, shall be shared equally by
ISIS and MERCK, except that the cost of any such action related
solely to the Compound shall be borne by MERCK.
(c) For any action to terminate any infringement of ISIS Patent
Rights or any misappropriation or misuse of ISIS Know-How, in the
event that MERCK is unable to initiate or prosecute such action
solely in its own name, ▇▇▇▇ will join such action voluntarily and
will execute and cause its Affiliates to execute all documents
necessary for MERCK to initiate litigation to prosecute and
maintain such action. In connection with any action, MERCK and ISIS
will cooperate fully and will provide each other with any
information or assistance that either may reasonably request. Each
party shall keep the other informed of developments in any action
or proceeding, including, to the extent permissible by law, the
status of any settlement negotiations and the terms of any offer
related thereto.
(d) Any recovery obtained by either or both MERCK and ISIS in
connection with or as a result of any action contemplated by this
section, whether by settlement or otherwise, shall be shared in
order as follows:
(i) the party which initiated and prosecuted the action shall
recoup all of its costs and expenses incurred in connection
with the action;
(ii) the other party shall then, to the extent possible, recover
its costs and expenses incurred in connection with the
action; and
18
(iii)the amount of any recovery remaining shall then be allocated
between the parties on a PRO RATA basis under which ISIS shall
receive a proportion based on the royalties it lost and
MERCK shall receive a proportion based on its lost profits.
(e) ISIS shall inform MERCK of any certification regarding any ISIS
Patent Rights it has received pursuant to either 21 U.S.C.
Sections 355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or under Canada's
Patented medicines (Notice of Compliance) Regulations Article 5 and
shall provide MERCK with a copy of such certification within five
(5) days of receipt. ISIS's and MERCK's rights with respect to the
initiation and prosecution of any legal action as a result of such
certification or any recovery obtained as a result of such legal
action shall be as defined in paragraphs (a)-(d) hereof; provided,
however, that ISIS shall exercise its first right to initiate and
prosecute any action and shall inform MERCK of such decision within
ten (10) days of receipt of the certification, after which time
MERCK shall have the right to initiate and prosecute such action.
8.5 CERTIFICATION UNDER DRUG PRICE COMPETITION AND PATENT RESTORATION ACT.
ISIS and MERCK each shall immediately give notice to the other of any
certification of which they become aware filed under the United States
"Drug Price Competition and Patent Term Restoration Act of 1984"
claiming that ISIS Patent Rights covering Compound or Product are
invalid or that infringement will not arise from the manufacture, use
or sale of Compound(s) or Product(s) by a third party. If ISIS or MERCK
(depending on which party is defending the ISIS Patent Rights) decides
not to bring infringement proceedings against the entity making such a
certification, such party shall give notice to the other party of its
decision not to bring suit within twenty-one (21) days after receipt of
notice of such certification. The party receiving such notice may then,
but is not required to, bring suit against the party that filed the
certification. Any suit by MERCK or ISIS shall either be in the name of
MERCK or in the name of ISIS, or jointly by MERCK and ISIS. 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.
8.6 ABANDONMENT. ISIS shall promptly give notice to MERCK of the grant,
lapse, revocation, surrender, invalidation or abandonment of any ISIS
Patent Rights licensed to MERCK for which ISIS is responsible for the
filing, prosecution and maintenance.
8.7 PATENT TERM RESTORATION. The parties hereto shall cooperate with each
other in obtaining patent term restoration or supplemental protection
certificates or their equivalents in any country in the Territory where
applicable to ISIS Patent Rights. In the event that elections with
respect to obtaining such patent term restoration are to be made, MERCK
shall have the right to make the election and ▇▇▇▇ agrees to abide by
such election.
ARTICLE IX
TERM AND TERMINATION
9.1 TERM AND EXPIRATION. This Agreement shall be effective as of the
Effective Date and unless terminated earlier pursuant to Sections 9.2
or 9.3 below, the term of this Agreement shall continue in effect until
expiration of all royalty obligations hereunder. Upon expiration of
this Agreement due to expiration of all royalty obligations hereunder,
MERCK's licenses pursuant to Section 3.1 and 3.2 shall become fully
paid-up, perpetual licenses.
9.2 TERMINATION BY MERCK. a) Notwithstanding anything contained herein to
the contrary, MERCK shall have the right to terminate this Agreement at
any time in its sole discretion a) during the Preclinical Development
Program by giving thirty (30) days advanced written notice to ISIS, and
b) thereafter by giving ▇▇▇▇▇▇ (90) days advance written notice to
ISIS. b) In the event of such termination by MERCK, the rights and
obligations hereunder, including any payment obligations not due and
owing as of the termination date, shall terminate, subject to the
provisions of Section 9.4 herein, provided that MERCK shall be
obligated to pay all non-cancelable commitments to undertake
Preclinical Development Program studies in accordance with Schedule 2.2
and the terms of this Agreement, and all other non-cancelable Agreement
commitments undertaken by ISIS in accordance with the terms of this
Agreement, where such non-cancelable commitments exist as of the date
of notice of termination is provided by MERCK. c) In the
19
event that MERCK terminates this Agreement pursuant to this Section
9.2 after the commencement of Clinical Development studies by MERCK for
reasons other than safety, and ISIS notifies MERCK within ninety (90)
days after such termination that ISIS wishes to commercialize the
Compound, the parties hereof agree to enter into negotiations for a
commercially reasonable arrangement to permit ISIS to undertake
development and commercialization of the Compound utilizing summaries
of Clinical Development Program data developed by MERCK under this
Agreement. [ * ]
9.3 TERMINATION.
9.3.1 TERMINATION FOR CAUSE. This Agreement may be terminated by notice by
either party at any time during the term of this Agreement:
(a) if the other party is in breach of its material obligations
hereunder by causes and reasons within its control and has not
cured such breach within ninety (90) days after notice requesting
cure of the breach; providing, however, that in the event of a
good faith dispute with respect to the existence of a material
breach, the ninety (90) day cure period shall be stayed until
such time as the dispute is resolved pursuant to Subsection 10.6
hereof; and
(b) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of
a substantial portion of the assets for the benefit of creditors
by the other party; PROVIDED, HOWEVER, in the case of any
involuntary bankruptcy proceeding such right to terminate shall
only become effective if the party consents to the involuntary
bankruptcy or such proceeding is not dismissed within ninety (90)
days after the filing thereof.
9.3.2 EFFECT OF TERMINATION FOR CAUSE ON LICENSE.
(a) In the event MERCK terminates this Agreement under Section
9.3.1(a), MERCK's licenses pursuant to Sections 3.1 and 3.2 shall
become perpetual licenses. It is understood that in the event
MERCK contends it suffers damages as a result of the breach,
MERCK may place a portion of the payments to be made by MERCK
pursuant to Article 5 that would reasonably cover MERCK's alleged
damages into an interest-bearing escrow account pending
resolution of any dispute between the parties relating to the
material breach or termination of the agreement, including a
dispute over damages, pursuant to paragraph 10.6. In the event
that ISIS terminates this Agreement under Section 9.3.1(a),
MERCK's licenses pursuant to Sections 3.1 and 3.2 shall terminate
as of such termination date.
(b) In the event this Agreement is terminated by MERCK under
Section 9.3.1(b) or due to the rejection of this Agreement by or
on behalf of ISIS under Section 365 of the United States
Bankruptcy Code (the "Code"), all licenses and rights to licenses
granted under or pursuant to this Agreement by ISIS to MERCK are,
and shall otherwise be deemed to be, for purposes of Section
365(n) of the Code, licenses of rights to "intellectual property"
as defined under Section 101(35A) of the Code. The parties agree
that MERCK, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and
elections under the Code, and that upon commencement of a
bankruptcy proceeding by or against ISIS under the Code, MERCK
shall be entitled to a complete duplicate of or complete access
to (as MERCK deems appropriate), any such intellectual property
and all embodiments of such intellectual property. Such
intellectual property and all embodiments thereof shall be
promptly delivered to MERCK (i) upon any such commencement of a
bankruptcy proceeding upon written request therefore by MERCK,
unless ISIS elects to continue to perform all of its obligations
under this Agreement or (ii) if not delivered under (i) above,
upon the rejection of this Agreement by or on behalf of ISIS upon
written request therefore by MERCK. Where MERCK does retain and
is able to fully exercise all licenses and rights to licenses
granted under this Agreement, MERCK's payment obligations to ISIS
for milestones and royalties in accordance with Section 5.3
and/or Section 5.4 of this Agreement in connection with such
exercise by MERCK of MERCK's licenses hereunder shall continue in
effect.
*Confidential Treatment Requested 20
The foregoing is without prejudice to any rights MERCK may
have arising under the Code or other applicable law.
9.4 EFFECT OF EXPIRATION OR TERMINATION. (a) Expiration or termination of
the Agreement shall not relieve the parties of any obligation accruing
prior to such expiration or termination, Sections 2.2.5, 2.2.6, 2.2.7,
2.3.4, 3.1 (d), 3.4, 3.5, 7.2.5, 7.2.6, 9.1, 9.2, 9.3.2, 9.4, 10.4,
10.5 and 10.6 shall survive expiration or termination of the Agreement,
the provisions of Article IV shall survive the termination or
expiration of the Agreement and shall continue in effect for ten (10)
years thereafter, and the provisions of 2.4 and Schedule 2.4 shall
continue in effect in accordance with the application timetable set
forth therein. Any expiration or early termination of this Agreement
shall be without prejudice to the rights of either party against the
other accrued or accruing under this Agreement prior to termination,
including the obligation to pay royalties for Product or Compound sold
prior to such termination.
(b) Upon any termination of this Agreement by MERCK pursuant to
Subsection 9.2, or by ISIS pursuant to Subsection 9.3.1, MERCK shall be
entitled, during the twelve (12) months following the termination date,
to finish any work-in-progress and to sell any inventory of Compound
and Product which remains on hand.
ARTICLE X
MISCELLANEOUS
10.1 FORCE MAJEURE. Neither party shall be held liable or responsible to the
other party nor be deemed to have defaulted under or breached the
Agreement for failure or delay in fulfilling or performing any term of
the Agreement when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected party including
without limitation embargoes, war, acts of war (whether war be declared
or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, or acts of God. The affected party shall
notify the other party of such force majeure circumstances as soon as
reasonably practical and shall make every reasonable effort to mitigate
the effects of such force majeure circumstances.
10.2 ASSIGNMENT. This Agreement shall inure to the benefit and be binding
upon each party, its successors and assigns. The Agreement may not be
assigned or otherwise transferred, nor, except as expressly provided
hereunder, may any right or obligations hereunder be assigned or
transferred by either party without the prior written consent of the
other party; PROVIDED, HOWEVER, that MERCK may, without such consent,
assign the Agreement and its rights and obligations hereunder to an
Affiliate or in connection with the transfer or sale of all or
substantially all of its assets related to the Product or the business,
or in the event of its merger or consolidation or change in control or
similar transaction, and PROVIDED, HOWEVER, that ISIS may, without such
consent, assign the Agreement and its rights and obligations hereunder
in connection with the transfer or sale of all or substantially all of
its assets, or in the event of its merger or consolidation or change in
control or similar transaction. Any permitted assignee shall assume all
obligations of its assignor under the Agreement. Any attempted
assignment not in accordance with this Section 10.2 shall be void.
10.3 SEVERABILITY. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby, unless the absence of the invalidated provision(s)
adversely affect the substantive rights of the parties. The parties
shall in such an instance use their best efforts to replace the
invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, implement the
purposes of this Agreement.
10.4 NOTICES. All notices which are required or permitted hereunder shall be
in writing and sufficient if delivered personally, sent by facsimile
(and promptly confirmed by personal delivery, registered or
21
certified mail or overnight courier), sent by nationally-recognized
overnight courier or sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to ISIS, to: ISIS Pharmaceuticals, Inc.
Carlsbad Research Center
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to MERCK, to: Merck & Co., Inc.
One Merck Drive
P.O. Box 100
Whitehouse Station, NJ 08889-0100
Attention: Vice President,
Corporate Development and Licensing
with a copy to: Attention: Office of the Secretary
or to such other address as the party to whom notice is to be given may
have furnished to the other party in writing in accordance herewith.
Any such notice shall be deemed to have been given when delivered if
personally delivered or sent by telecopier on a business day, on the
business day after dispatch if sent by nationally-recognized overnight
courier and on the third business day following the date of mailing if
sent by mail.
10.5 APPLICABLE LAW. The Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey without
reference to any rules of conflict of laws or renvoi.
10.6 DISPUTE RESOLUTION. The parties shall negotiate in good faith and use
reasonable efforts to settle any dispute, controversy or claim arising
from or related to this Agreement or the breach thereof. If the parties
do not fully settle, and a party wishes to pursue the matter, each such
dispute, controversy or claim that is not an "Excluded Claim" shall be
finally resolved by binding arbitration in accordance with the
Commercial Arbitration Rules and Supplementary Procedures for Large
Complex Disputes of the American Arbitration Association ("AAA"), and
judgment on the arbitration award may be entered in any court having
jurisdiction thereof. The arbitration shall be conducted by a panel of
three persons experienced in the pharmaceutical business: within 30
days after initiation of arbitration, each party shall select one
person to act as arbitrator and the two party-selected arbitrators
shall select a third arbitrator within 30 days of their appointment. If
the arbitrators selected by the parties are unable or fail to agree
upon the third arbitrator, the third arbitrator shall be appointed by
the AAA. The place of arbitration shall be Denver, Colorado. Either
party may apply to the arbitrators for interim injunctive relief until
the arbitration award is rendered or the controversy is otherwise
resolved. Either party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or
provisional relief necessary to protect the rights or property of that
party pending the arbitration award. The arbitrators shall have no
authority to award punitive or any other type of damages not measured
by a party's compensatory damages. Each party shall bear its own costs
and expenses and attorneys' fees and an equal share of the arbitrators'
and any administrative fees of arbitration. Except to the extent
necessary to confirm an award or as may be required by law, neither a
party nor an arbitrator may disclose the existence, content, or results
of an arbitration without the prior written consent of both parties. In
no event
22
shall an arbitration be initiated after the date when commencement of a
legal or equitable proceeding based on the dispute, controversy or
claim would be barred by the applicable New York statute of
limitations. As used in this Section, the term "Excluded Claim" shall
mean a dispute, controversy or claim that concerns (a) the validity or
infringement of a patent, trademark or copyright; or (b) any antitrust,
anti-monopoly or competition law or regulation, whether or not
statutory.
10.7 ENTIRE AGREEMENT. This Agreement and the Clinical Supply Agreement
contain the entire understanding of the parties with respect to the
license, development and commercialization of Compound and Product. All
express or implied agreements and understandings, either oral or
written, heretofore made by the parties on the same subject matter are
expressly superseded by this Agreement. The Agreement may be amended,
or any term hereof modified, only by a written instrument duly executed
by both parties hereto.
10.8 HEADINGS. The captions to the several Articles and Sections hereof are
not a part of the Agreement, but are merely a convenience to assist in
locating and reading the several Articles and Sections hereof.
10.9 INDEPENDENT CONTRACTORS. It is expressly agreed that ISIS and MERCK
shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or
agency. Neither ISIS nor MERCK shall have the authority to make any
statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior consent
of the other party.
10.10 WAIVER. The waiver by either party hereto of any right hereunder, or
the failure to perform, or a breach by the other party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.
10.11 COUNTERPARTS. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.12 WAIVER OF RULE OF CONSTRUCTION. Each party has had the opportunity to
consult with counsel in connection with the review, drafting and
negotiation of this Agreement. Accordingly, the rule of construction
that any ambiguity in this Agreement shall be construed against the
drafting party shall not apply.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date(s) set forth below.
Merck & Co., Inc. Isis Pharmaceuticals, Inc.
BY:______________________ BY:____________________________
TITLE: __________________ TITLE: ________________________
DATE: ___________________ DATE: _________________________
23
SCHEDULE 1.5
[ * ]
*Confidential Treatment Requested 24
ISIS PATENT RIGHTS
SCHEDULE 1.16 (a)(i)
[ * ]
and 1.16 (a)(ii)
[ * ]
and 1.16 (a)(iii)
[ * ]
*Confidential Treatment Requested 25
SCHEDULE 2.2
[ * ]
*Confidential Treatment Requested 26
SCHEDULE 2.2.1 (b)
[ * ]
*Confidential Treatment Requested 27
SCHEDULE 2.2.6
[ * ]
*Confidential Treatment Requested 28
SCHEDULE 2.4
[ * ]
*Confidential Treatment Requested 29
SCHEDULE 7.2
[ * ]
*Confidential Treatment Requested 30