1
EXHIBIT 10.6
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
COLLABORATION AGREEMENT
by and between
Millennium BioTherapeutics, Inc.
and
▇▇▇ ▇▇▇▇▇ and Company
May 28, 1997
2
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS..........................................................1
Section 1.1. General................................................1
Section 1.2. "Affiliate"............................................1
Section 1.3. "Antibody".............................................1
Section 1.4. "Antisense Drug".......................................2
Section 1.5. "Confidential Information of a Party"..................2
Section 1.6. "COPS".................................................2
Section 1.7. "Derivative"...........................................3
Section 1.8. "Diagnostic Product"...................................3
Section 1.9. "DOJ"..................................................3
Section 1.10. "Existing TANGO Technology"............................3
Section 1.11. "Field"................................................3
Section 1.12. "First Commercial Sale"................................3
Section 1.13. "First License Maintenance Fee"........................3
Section 1.14. "FTC"..................................................3
Section 1.15. "FTE"..................................................3
Section 1.16. "Gene Therapy Drug"....................................4
Section 1.17. "HSR Act"..............................................4
Section 1.18. "HSR Filing"...........................................4
Section 1.19. "IND"..................................................4
Section 1.20. "Joint Management Team"................................4
Section 1.21. "Know-How".............................................4
Section 1.22. "Level I Qualified Protein"............................4
Section 1.23. "Level II Qualified Protein"...........................4
Section 1.24. "Level III Qualified Protein"..........................5
Section 1.25. "License Agreement"....................................5
Section 1.26. "Lilly Accessible Program Clone".......................5
Section 1.27. "Lilly Contributed Know-How"...........................5
Section 1.28. "Lilly Contributed Know-How Patent Right"..............5
Section 1.29. "Lilly Corresponding Drug".............................6
Section 1.30. "Lilly Program Manager"................................6
Section 1.31. "Lilly Selected Protein"...............................6
Section 1.32. "Lilly Small Molecule Drug"............................6
Section 1.33. "Major Market Countries"...............................6
Section 1.34. "MBI Accessible Program Clone".........................6
Section 1.35. "MBI Contributed Know-How".............................6
Section 1.36. "MBI Contributed Know-How Patent Right"................7
Section 1.37. "MBI Discovery Program"................................7
Section 1.38. "MBI Program Know-How".................................7
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Section 1.39. "MBI Program Know-How Patent Right".....................7
Section 1.40. "MBI Program Methodology"...............................7
Section 1.41. "MBI Program Methodology Patent Right"..................7
Section 1.42. "MBI Selected Protein"..................................7
Section 1.43. "MBI Small Molecule Drug"...............................7
Section 1.44. "MBI Therapeutic Product"...............................7
Section 1.45. "Milestone Payment".....................................8
Section 1.46. "Net Sales".............................................8
Section 1.47. "Non-Pool Program Protein"..............................9
Section 1.48. "Party".................................................9
Section 1.49. "Patent Right"..........................................9
Section 1.50. "Peptido Mimetic".......................................9
Section 1.51. "Phase III Clinical Trials".............................9
Section 1.52. "Product"..............................................10
Section 1.53. "Program Clone"........................................10
Section 1.54. "Program Confidential Information".....................10
Section 1.55. "Program Director".....................................10
Section 1.56. "Program Plan".........................................10
Section 1.57. "Program Protein"......................................10
Section 1.58. "Protein"..............................................10
Section 1.59. "Protein License Fee"..................................10
Section 1.60. "PTAC Approval"........................................10
Section 1.61. "Second License Maintenance Fee".......................10
Section 1.62. "Selectable Pool"......................................11
Section 1.63. "Selection Date".......................................11
Section 1.64. "Small Molecule Drug"..................................11
Section 1.65. "Territory"............................................11
Section 1.66. "Therapeutic Product"..................................11
Section 1.67. "Valid Claim"..........................................11
ARTICLE II
MBI DISCOVERY PROGRAM................................................11
Section 2.1. The Program and Its Goals..............................11
Section 2.2. Program Term...........................................12
Section 2.3. Program Management.....................................12
Section 2.4. Program Staffing.......................................14
Section 2.5. Conduct of Program.....................................14
Section 2.6. Selection of Program Proteins by the Parties...........15
Section 2.7. Transfer of Biological Materials.......................22
Section 2.8. Exclusive Arrangement..................................23
ARTICLE III
COVENANTS AND GRANTS OF RIGHTS.......................................23
Section 3.1. Covenant Not to ▇▇▇....................................23
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Section 3.2. Licenses to Lilly......................................24
Section 3.3. Licenses to MBI........................................24
Section 3.4. ****************************...........................25
Section 3.5. Lilly's Option to Manufacture..........................27
Section 3.6. ****************************...........................28
ARTICLE IV
CONFIDENTIALITY......................................................30
Section 4.1. Confidential Information of a Party....................30
Section 4.2. Employee Obligations...................................31
Section 4.3. Disclosure of Program Confidential Information.........31
Section 4.4. Term...................................................31
ARTICLE V
PATENT OWNERSHIP AND PROTECTION......................................32
Section 5.1. Ownership..............................................32
Section 5.2. Review and Comment.....................................32
Section 5.3. Prosecution and Maintenance............................32
Section 5.4. Costs and Expenses.....................................32
ARTICLE VI
PAYMENTS.............................................................33
Section 6.1. Research Funds.........................................33
Section 6.2. Royalty Payments on Lilly Small Molecule Drugs.........34
Section 6.3. Royalty Payments on MBI Small Molecule Drugs...........34
ARTICLE VII
ACCOUNTING...........................................................35
Section 7.1. Royalty Reports........................................35
Section 7.2. Delivery of Royalty....................................35
Section 7.3. Audits.................................................35
Section 7.4. Exchange Rates.........................................35
Section 7.5. Withholding Taxes......................................36
Section 7.6. Reporting..............................................36
ARTICLE VIII
DURATION.............................................................36
ARTICLE IX
TERMINATION..........................................................36
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Section 9.1. Investment Termination Event...........................36
Section 9.2. Termination For Material Breach........................37
Section 9.3. Rights Upon Termination For Breach.....................37
Section 9.4. Residual Rights........................................40
ARTICLE X
PRODUCT LIABILITY INDEMNIFICATION....................................41
Section 10.1. Indemnification by Lilly...............................41
Section 10.2. Indemnification by MBI.................................42
ARTICLE XI
GOOD FAITH NEGOTIATION/DISPUTE RESOLUTION............................42
ARTICLE XII
GOVERNING LAW........................................................43
ARTICLE XIII
ASSIGNMENT...........................................................43
ARTICLE XIV
INSOLVENCY...........................................................43
ARTICLE XV
AMENDMENTS...........................................................43
ARTICLE XVI
NOTICES..............................................................44
ARTICLE XVII
FORCE MAJEURE........................................................45
ARTICLE XVIII
REPRESENTATIONS AND WARRANTIES.......................................45
Section 18.1. Representation of Authority...........................45
Section 18.2. Knowledge of Pending or Threatened Litigation.........45
Section 18.3. Employee Obligations..................................45
Article XIX
PUBLIC ANNOUNCEMENTS AND PUBLICATIONS................................46
Section 19.1. Press Releases and Announcements......................46
Section 19.2. Publications..........................................46
ARTICLE XX
ADDITIONAL AGREEMENT.................................................47
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Section 20.1. Independent Contractors................................47
Section 20.2. Consents Not Unreasonably Withheld.....................47
Section 20.3. No Strict Construction.................................47
Section 20.4. Headings...............................................47
Section 20.5. Severance of Clauses...................................48
Section 20.6. No Waiver..............................................48
Section 20.7. Counterparts...........................................48
EXHIBIT A PROGRAM PLAN
EXHIBIT B EXISTING TANGO TECHNOLOGY
EXHIBIT C PTAC APPROVAL INFORMATION
EXHIBIT D LICENSE AGREEMENT
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COLLABORATION AGREEMENT
This Agreement is effective as of May 28, 1997 ("the Effective Date"),
by and between Millennium BioTherapeutics, Inc. ("MBI"), a corporation organized
and existing under the laws of the State of Delaware and a subsidiary of
Millennium Pharmaceuticals, Inc. ("Millennium") and having its principal office
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ▇▇▇ ▇▇▇▇▇ and
Company ("Lilly"), a corporation organized and existing under the laws of the
State of Indiana and having its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, MBI is in the business of employing various discovery
methodologies to identify proteins with therapeutic utility;
WHEREAS, Lilly is in the business of discovering, developing and
marketing human therapeutics; and
WHEREAS, Lilly is interested in funding, and in collaborating with MBI
in the conduct of, a protein discovery program with the goal of identifying and
qualifying potential therapeutic proteins, small molecule targets and
diagnostics for further development and commercialization;
NOW, THEREFORE, MBI and Lilly agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. General. When used in this Agreement, each of the
following terms, whether used in the singular or plural, shall have the meanings
set forth in this Article.
Section 1.2. "Affiliate" means any corporation, company, partnership,
joint venture and/or firm which controls, is controlled by, or is under common
control with a Party. For purposes of this Section 1.2, "control" shall mean (a)
in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest with
the power to direct the management and policies of such non-corporate entities.
Section 1.3. "Antibody" means (a) a molecule comprising four (4)
polypeptide chains (two (2) identical light chains and two (2) identical heavy
chains) that are held together by disulfide bonds and form two (2) identical
antigen binding sites or (b) any combination, fragment or altered form of a
molecule(s) of the type described in (a) (e.g., single chain antibodies).
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Section 1.4. "Antisense Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which is complementary to a segment of DNA of a target gene or such target
gene's cognate RNA and which, upon delivery by any means, alters the
transcription, processing, elaboration, RNA expression or Protein production of
or by such target gene.
Section 1.5. "Confidential Information of a Party" means all materials,
Know-How or other information, including, without limitation, proprietary
information and materials (whether or not patentable) regarding a Party's
technology, products, business information or objectives, which is designated as
confidential in writing by the disclosing Party, whether by letter or by the use
of an appropriate stamp or legend, prior to or at the time any such material,
trade secret or other information is disclosed by the disclosing Party to the
other Party. Notwithstanding the foregoing to the contrary, materials, Know-How
or other information which is orally, electronically or visually disclosed by a
Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information of a Party if the disclosing
Party, within thirty (30) days after such disclosure, delivers to the other
Party a written document or documents describing the materials, Know-How or
other information and referencing the place and date of such oral, visual,
electronic or written disclosure and the names of the persons to whom such
disclosure was made, provided, however, that any technical information of a
Party disclosed at a meeting of the Joint Management Team shall constitute
Confidential Information of a Party unless otherwise specified. Confidential
Information of a Party does not include Program Confidential Information.
Section 1.6. "COPS" means the cost of products sold and, with respect
to a Product, consists of MBI's direct and allocated indirect manufacturing cost
of such Product plus any applicable royalties and third party costs. The
standard cost is computed annually and shall include:
(a) all material and labor cost directly related to the
manufacturing of such Product, including without limitation,
direct costs relating to packaging, quality assurance and
quality control; and
(b) allocated indirect cost for labor and materials used in
support of the manufacturing process; and
(c) allocated fixed and variable manufacturing overhead costs,
including but not limited to production and support and
depreciation of production facilities and equipment.
The standard cost for such Product shall be calculated using methodology
consistent with MBI's approach for its other product costs.
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Section 1.7. "Derivative" means (a) any fragment of a Protein or (b)
any altered form of a Protein or a fragment thereof, including, without
limitation, amino acid substitutions, additions, deletions and C- and N-terminal
fusions. Derivative does not mean a Peptido Mimetic.
Section 1.8. "Diagnostic Product" means any diagnostic product, in the
form of a device, compound, kit or service, with utility in the diagnosis,
prognosis, prediction or disease management of a disorder that (a) is developed
through the use of MBI Program Know-How or, subject to any limitations on the
use of such Know-How by Lilly, MBI Contributed Know-How and/or is covered by a
Valid Claim included in MBI Program Know-How Patent Rights or, subject to any
limitations on the use of such Patent Rights by Lilly, MBI Contributed Know-How
Patent Rights, (b) embodies, or operates through the detection of a Program
Clone or a Program Protein (or a Derivative thereof), and (c) will complement
the use of any therapeutic product under development or marketed by Lilly or a
development or marketing partner of Lilly (a "Lilly Corresponding Drug").
Section 1.9. "DOJ" means the Antitrust Division of the United States
Department of Justice.
Section 1.10. "Existing TANGO Technology" means the cDNA libraries,
genomic sub-libraries, signal peptide trap libraries (including the clones
derived from such libraries and the Proteins encoded therein) and the Proteins
set forth in Exhibit B and all associated data and information.
Section 1.11. "Field" means therapeutic and/or prophylactic application
in human health care of Proteins or Derivatives thereof.
Section 1.12. "First Commercial Sale" means, for each Product, the
first commercial sale in a country as part of a nationwide introduction by a
Party, its Affiliates or its permitted sublicensees, other than for clinical
trial purposes or compassionate use.
Section 1.13. "First License Maintenance Fee" shall have the meaning
set forth in Section 6.1(a) of the License Agreement.
Section 1.14. "FTC" means the United States Federal Trade Commission.
Section 1.15. "FTE" means a full time equivalent scientific person year
(consisting of a total of forty-seven (47) weeks or one thousand eight hundred
eighty (1,880) hours per year of scientific work on or directly related to the
MBI Discovery Program), carried out by an employee of MBI, of an Affiliate of
MBI or of Lilly, having at least a Bachelor Degree in a science. Scientific work
on or directly related to the MBI Discovery Program to be performed by an
employee of MBI, of an Affiliate of MBI or of Lilly can include, but is not
limited to, experimental laboratory work, recording and writing of results,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
reviewing literature and references, holding scientific discussions, managing
and leading scientific staff, development and application of tools related to
the MBI Discovery Program, and carrying out project management duties.
Section 1.16. "Gene Therapy Drug" means any drug or drug candidate,
excluding an Antisense Drug, which consists of nucleic acid or a functional
analog, derivative or homologue thereof and which, upon delivery by any means,
provides a gene product encoded therein which is expressed.
Section 1.17. "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976 (15 U.S.C. sec. 18a).
Section 1.18. "HSR Filing" means a filing by Lilly with the FTC and DOJ
of a Notification and Report Form (as that term is defined in the HSR Act) with
respect to a Lilly Selected Protein.
Section 1.19. "IND" means an Investigational New Drug Application filed
with the United States Food and Drug Administration or any equivalent filing
with the appropriate regulatory agency, or other committee whose approval is
required for the initiation of clinical trials, in a Major Market Country other
than the United States, or in Sweden, Denmark, Belgium, the Netherlands or such
other country as the Parties may agree upon.
Section 1.20. "Joint Management Team" means the joint management team,
as described in Section 2.3.
Section 1.21. "Know-How" means any information, data, methods,
processes, technology, nucleic acid and Protein sequences and materials,
including biological materials such as cell lines, RNA, DNA, DNA fragments,
organisms, Proteins, polypeptides, plasmids and vectors and software, user's
manuals and guides.
Section 1.22. "Level I Qualified Protein" means a Protein encoded by a
Program Clone which, in the good faith judgment of the Joint Management Team,
either (a) has been confirmed to be ********************************************
and has been demonstrated**************************************************which
includes***********************************************************************)
or (b) is a *************************************
Section 1.23. "Level II Qualified Protein" means any Level I Qualified
Protein which (a) has had ********************************, and (b) either (i)
has been
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
********************************************************************************
********************************************************************************
and, based on such data, is determined in good faith by the Joint Management
Team to be a *********************************** or (ii) is otherwise approved
by the Joint Management Team as being a Level II Qualified Protein.
Section 1.24. "Level III Qualified Protein" means any Level II
Qualified Protein which (a) in the good faith judgment of the Joint Management
Team, (i) has been ***********************************************************
and (ii) has been***************************************************************
******************************************************************* and (iii) is
presumed to be******************************************************************
************************************************ or (b) is otherwise approved by
the Joint Management Team as being a Level III Qualified Protein.
Section 1.25. "License Agreement" means an agreement, in the form
attached as Exhibit D, to be entered into by the Parties that sets forth the
rights and obligations of Lilly and of MBI with respect to products derived from
a Lilly Selected Protein.
Section 1.26. "Lilly Accessible Program Clone" means (a) a Program
Clone that is not identified through the use of MBI Contributed Know-How, or (b)
a Program Clone that is identified through the use of MBI Contributed Know-How
and with respect to which either (i) MBI has not placed any limitation on
Lilly's use of such Program Clone for the identification or design of Lilly
Small Molecule Drugs or (ii) MBI has placed the limitation that Lilly shall not
have the right to use such Program Clone for the identification or design of
Lilly Small Molecule Drugs for a period of ****************** from the date on
which such Program Clone is identified and such ***************** period has
elapsed.
Section 1.27. "Lilly Contributed Know-How" means Know-How (a) which is
necessary or useful in order to discover, develop, make, use, sell or seek
approval to market Therapeutic Products, and (b) to which Lilly has the right to
grant licenses or sublicenses without violating the terms of any agreement with
a third party, and (c) which is in Lilly's possession on the Effective Date or
is developed or acquired by Lilly during the term, but not in the course, of the
MBI Discovery Program, and (d) which Lilly has elected to contribute to the MBI
Discovery Program through written notification to, and with the approval of, the
Joint Management Team, which notification shall include any limitations on the
use of such Know-How by MBI, provided, however, that if such Know-How is a
biological source for the identification of Program Clones, then the only
permitted limitation shall be that MBI shall not have the right to use any such
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Program Clone for the identification or design of MBI Small Molecule Drugs for a
period of ****************** from the date on which such Program Clone is
identified, and (e) which is not properly in the public domain.
Section 1.28. "Lilly Contributed Know-How Patent Right" means a Patent
Right that relates to Know-How that is or was at any time Lilly Contributed
Know-How.
Section 1.29. "Lilly Corresponding Drug" shall have the meaning set
forth in Section 1.8.
Section 1.30. "Lilly Program Manager" means the employee of Lilly
selected by Lilly to work on the MBI Discovery Program who shall report either
directly to the Program Director or to MBI's head of program management. The
Lilly Program Manager shall be involved in the day to day activities of the MBI
Discovery Program, including, for example, staff meetings, personnel decisions,
external research collaborations relating to the MBI Discovery Program, and work
directly with the Program Director in the management of all work being conducted
under the MBI Discovery Program.
Section 1.31. "Lilly Selected Protein" means a Program Protein selected
by Lilly for further pre-clinical development, clinical development, manufacture
and commercialization, pursuant to Section 2.6.
Section 1.32. "Lilly Small Molecule Drug" means a Small Molecule Drug
identified or designed by Lilly through the use of a Lilly Accessible Program
Clone and/or the Protein encoded therein.
Section 1.33. "Major Market Countries" means the United States, Canada,
Japan, the United Kingdom, Germany, France, Spain and Italy.
Section 1.34. "MBI Accessible Program Clone" means (a) a Program Clone
that is not identified through the use of Lilly Contributed Know-How, or (b) a
Program Clone that is identified through the use of Lilly Contributed Know-How
and with respect to which either (i) Lilly has not placed any limitation on
MBI's use of such Program Clone for the identification or design of MBI Small
Molecule Drugs or (ii) Lilly has placed the limitation that MBI shall not have
the right to use such Program Clone for the identification or design of MBI
Small Molecule Drugs for a period of ****************** from the date on which
such Program Clone is identified and such ****************** period has elapsed.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Section 1.35. "MBI Contributed Know-How" means Know-How (a) which is
necessary or useful in order to discover, develop, make, use, sell or seek
approval to market Therapeutic Products, and (b) to which MBI has the right to
grant licenses or sublicenses without violating the terms of any agreement with
a third party, and (c) which is in MBI's possession on the Effective Date or is
developed or acquired by MBI during the term, but not in the course, of the MBI
Discovery Program, and (d) which MBI has elected to contribute to the MBI
Discovery Program through written notification to, and with the approval of, the
Joint Management Team, which notification shall include any limitations on the
use of such Know-How by Lilly, provided, however, that if such Know-How is a
biological source for the identification of Program Clones, then the only
permitted limitation shall be that Lilly shall not have the right to use any
such Program Clone for the identification or design of Lilly Small Molecule
Drugs for a period of ****************** from the date on which such Program
Clone is identified, and (e) which is not properly in the public domain. MBI
Contributed Know-How does not include the Existing TANGO Technology.
Section 1.36. "MBI Contributed Know-How Patent Right" means a Patent
Right that relates to Know-How that is or was at any time MBI Contributed
Know-How.
Section 1.37. "MBI Discovery Program" means the therapeutic Protein
discovery program to be undertaken by MBI pursuant to this Agreement, with the
goal of identifying and qualifying potential therapeutic Proteins for further
pre-clinical development, clinical development, manufacturing and
commercialization, as described in greater detail in the Program Plan.
Section 1.38. "MBI Program Know-How" means (a) all Know-How included in
the Existing TANGO Technology that is not properly in the public domain, and (b)
all Know-How, exclusive of MBI Program Methodology, that (i) is developed in the
course of the MBI Discovery Program and (ii) is not properly in the public
domain.
Section 1.39. "MBI Program Know-How Patent Right" means a Patent Right
that relates to Know-How that is or was at any time MBI Program Know-How.
Section 1.40. "MBI Program Methodology" means any methods (including
without limitation bioinformatics tools, processes, protocols, assays, automated
and semi-automated techniques, molecular biology methods and other methods for
the discovery, production and/or characterization of Proteins), that (a) are
developed in the course of the MBI Discovery Program, including any improvements
in methods technology derived from, or based upon, any Lilly Contributed
Know-How and/or MBI Contributed Know-How and (b) are not properly in the public
domain.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Section 1.41. "MBI Program Methodology Patent Right" means a Patent
Right that relates to methods that are or were at any time included in MBI
Program Metholodogy.
Section 1.42. "MBI Selected Protein" means a Program Protein selected
by MBI for further pre-clinical development, clinical development, manufacture
and commercialization, pursuant to Section 2.6.
Section 1.43. "MBI Small Molecule Drug" means a Small Molecule Drug
identified or designed by MBI through the use of a MBI Accessible Program Clone
and/or the Protein encoded therein.
Section 1.44. "MBI Therapeutic Product" means a Therapeutic Product in
which the active ingredient is a MBI Selected Protein or a Derivative thereof.
Section 1.45. "Milestone Payment" means a payment made by Lilly to MBI,
pursuant to Section 6.2 of the License Agreement, upon the achievement of a
development milestone with respect to a therapeutic or prophylactic product in
which the active ingredient is a Lilly Selected Protein or a Derivative thereof.
Section 1.46. "Net Sales" means, with respect to a Product, the gross
amount invoiced by a Party, its Affiliates or sublicensees to unrelated third
parties for such Product, in the Territory, less:
(a) Trade, quantity and cash discounts actually allowed;
(b) Discounts, refunds, rebates, chargebacks, retroactive
price adjustments, and any other allowances which effectively reduce the net
selling price;
(c) Actual Product returns and allowances;
(d) That portion of the net selling price associated with the
cost of drug delivery systems;
(e) Any tax imposed on the production, sale, delivery or use
of the Product (excluding federal, state or local taxes based on income);
(f) Distribution expenses reasonably documented by the Party;
and
(g) Any other similar and customary deductions (as defined and
accepted by generally accepted accounting principles ("GAAP")), actually
incurred.
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Such amounts shall be determined from the books and records of the Party
maintained in accordance with GAAP, consistently applied.
In the event that the Product is sold as part of a Combination Product,
the Net Sales from the Combination Product, for the purposes of determining
royalty payments, shall be determined by multiplying the Net Sales of the
Combination Product (as defined in the standard Net Sales definition) by the
fraction, A/A+B where A is the average sale price of the Product when sold
separately in finished form and B is the average sale price of the other
product(s) sold separately in finished form.
In the event that the average sale price of the Product can be
determined but the average sale price of the other product(s) cannot be
determined, Net Sales for purposes of determining royalty payments shall be
calculated by multiplying the Net Sales of the Combination Product by the
fraction C/C+D where C is the selling party's average sales price of the Product
and D is the difference between the average selling price of the Combination
Product and the average selling price of the Product.
If the average sale price of the other product(s) can be determined but
the average price of the Product cannot be determined, Net Sales for purposes of
determining royalty payments shall be calculated by multiplying the Net Sales of
the Combination Product by the following formula: one (1) minus C/C+D where C is
the average selling price of the other product(s) and D is the difference
between the average selling price of the Combination Product and the average
selling price of the other product(s). In no event, however, shall the Net Sales
of the Product be less than fifty percent (50%) of the Net Sales of the
Combination Products.
In the event that the average sale price of both the Product and the
other product(s) in the Combination Product cannot be determined, the Net Sales
of the Product shall be deemed to be equal to fifty percent (50%) of the Net
Sales of the Combination Product. The Net Sales price for a Combination Product
shall be calculated once each calendar year and such price shall be used during
all applicable royalty reporting periods for the entire calendar year. When
determining the average sale price of a Product or product(s), the average sale
price shall be calculated using data arising from the twelve (12) months
preceding the calculation of the Net Sales price for the Combination Product. As
used above, the term "Combination Product" means any pharmaceutical product
which comprises the Product and other active compounds and/or ingredients.
Section 1.47. "Non-Pool Program Protein" means a Program Protein that
has not been placed in the Selectable Pool pursuant to Section 2.6(a).
Section 1.48. "Party" means Lilly or MBI; "Parties" means Lilly and
MBI.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Section 1.49. "Patent Right" means a patent or patent application and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions, Supplementary Protection Certificates and foreign counterparts
thereof that is owned or otherwise controlled by MBI or by Lilly.
Section 1.50. "Peptido Mimetic" means a*******************************
************************************************************************
************************************************************************
************************************************************************
************************************************************************
************************************
Section 1.51. "Phase III Clinical Trials" means large scale,
multicenter, human clinical trials conducted in patients and designed to
establish Product efficacy in the particular indication tested and required to
obtain approval of Product with health regulatory authorities.
Section 1.52. "Product" means any product sold by a Party, its
Affiliate or its sublicensee, pursuant to this Agreement.
Section 1.53. "Program Clone" means a clone (including the DNA sequence
information, whether partial or full-length, pertaining to the clone),
identified in the course of the MBI Discovery Program or included in the
Existing TANGO Technology, MBI Contributed Know-How or Lilly Contributed
Know-How.
Section 1.54. "Program Confidential Information" means all materials,
Know-How or other information, including, without limitation, proprietary
information and materials (whether or not patentable) that (a) are developed in
the course of the MBI Discovery Program and (b) are not properly in the public
domain.
Section 1.55. "Program Director" means the employee of MBI selected by
MBI to direct the MBI Discovery Program.
Section 1.56. "Program Plan" means the research and development plan,
attached to this Agreement as Exhibit A, that sets forth the goals and research
and development time lines for the MBI Discovery Program.
Section 1.57. "Program Protein" means any Level I Qualified Protein,
Level II Qualified Protein, or Level III Qualified Protein.
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Section 1.58. "Protein" means a high molecular weight (i.e., weighing
greater than 1000 daltons) polymer compound composed of a variety of amino acids
joined by peptide linkages, including allelic variants thereof and
post-translationally modified variants thereof (i.e., glycosylated Proteins).
For purposes of this Agreement, Protein does not include an Antibody.
Section 1.59. "Protein License Fee" shall have the meaning set forth in
Section 1.32 of the License Agreement.
Section 1.60. "PTAC Approval" means approval by Lilly's Project Team
Approval Committee, or any successor thereto, of a compound proposed for project
team status, following review of scientific and marketing information of the
type set forth in Exhibit C. With respect to any Lilly Selected Protein, the
process of PTAC Approval shall not differ substantially from that employed by
Lilly in evaluating any of its other candidate therapeutic and/or prophylactic
Proteins that are at a comparable stage in the development process and are of
comparable commercial potential.
Section 1.61. "Second License Maintenance Fee" shall have the meaning
set forth in Section 6.1(b) of the License Agreement.
Section 1.62. "Selectable Pool" means the pool of Program Proteins that
are available to be selected by a Party for further preclinical development,
clinical development, manufacture and commercialization, pursuant to Section
2.6.
Section 1.63. "Selection Date" means the date on which a Program
Protein is selected by a Party pursuant to Section 2.6.
Section 1.64. "Small Molecule Drug" means a therapeutic or prophylactic
product, the active ingredient of which is a synthetic small molecule (including
but not limited to a Peptido Mimetic), a natural product or a macromolecule that
(a) is identified in a screening assay on the basis of its interaction with a
biological target that has been identified through use of a Program Clone, or
(b) is designed or developed using medicinal chemistry, SAR or combinatorial
chemistry techniques to interact with a biological target that has been
identified through use of a Program Clone, provided, however, that a Small
Molecule Drug does not include any Therapeutic Product or any therapeutic and/or
prophylactic product in which the active ingredient is a Protein, an Antibody,
an Antisense Drug or a Gene Therapy Drug.
Section 1.65. "Territory" means all countries of the world.
Section 1.66. "Therapeutic Product" means a therapeutic and/or
prophylactic product in which the active ingredient is a Program Protein or a
Derivative thereof.
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Section 1.67. "Valid Claim" means any claim pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been admitted to be invalid or unenforceable through
reissue or disclaimer. If in any country there should be two or more such
decisions conflicting with respect to the validity of the same claim, the
decision of the higher or highest tribunal shall thereafter control; however,
should the tribunals be of equal rank, then the decision or decisions upholding
the claim shall prevail when the decisions are equal in number, and the majority
of decisions shall prevail when the conflicting decisions are unequal in number.
ARTICLE II
MBI DISCOVERY PROGRAM
Section 2.1. The Program and Its Goals. MBI hereby agrees to undertake
the MBI Discovery Program under the terms and conditions set forth in this
Agreement. Lilly shall provide MBI with research funding to support, in part,
the activities undertaken by MBI in the course of the MBI Discovery Program
pursuant to Section 6.1, and may participate in the conduct of such program to
the extent permitted under Section 2.4. The goals of the MBI Discovery Program
are (a) to identify and characterize Level I Qualified Proteins employing
various discovery methodologies, including without limitation secreted protein
trapping, genomic cluster mapping and EST sequencing, (b) to identify the
therapeutic utility of Program Proteins employing various methodologies,
including without limitation transcription expression profiling, animal disease
recovery modeling and use of transgenic and knock out models, and (c) to qualify
selected Program Proteins for further development by the Parties as Therapeutic
Products. The activities to be undertaken by MBI, and by Lilly to the extent
permitted under Section 2.4, in the course of the MBI Discovery Program are set
forth in detail in the Program Plan, which plan is subject to review and
modification by the Joint Management Team.
Section 2.2. Program Term. The MBI Discovery Program shall commence on
the Effective Date and shall terminate on the fifth anniversary of the Effective
Date unless terminated earlier pursuant to this Section 2.2, Section 9.1 or
Section 9.2.
(a) Termination by Lilly. Lilly may terminate the MBI
Discovery Program on the third anniversary of the Effective Date or on the
fourth anniversary of the Effective Date upon at least one hundred twenty (120)
days prior written notice to MBI.
(b) Termination Following a Change of Control. Either Party
may terminate the MBI Discovery Program upon at least thirty (30) days prior
written notice to the other Party if at any time during the term of the MBI
Discovery Program the
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majority control of the other Party is acquired by any pharmaceutical or other
health care company.
Section 2.3. Program Management
(a) Joint Management Team. As soon as practicable after the
Effective Date, the Parties shall establish a Joint Management Team, consisting
of three (3) representatives designated by Lilly and three (3) representatives
designated by MBI. Each Party shall make its initial designation of its
representation not later than thirty (30) days after the Effective Date. Each
Party shall cause its representatives to attend the meetings of the Joint
Management Team. If a representative of a Party is unable to attend a meeting,
such Party may designate an alternate to attend such meeting in place of the
missing representative. In addition, each Party may at its discretion invite
nonvoting employees, consultants or scientific advisors to attend the meetings
of the Joint Management Team. The Joint Management Team shall meet no less
frequently than once each calendar quarter, and shall meet at such other times
as deemed appropriate by the Joint Management Team. Each Party may change any
one or more of its representatives to the Joint Management Team at any time upon
notice to the other Party. The location of the Joint Management Team meetings
shall alternate between Massachusetts and Indiana, or as otherwise mutually
agreed.
(b) Joint Management Team Responsibilities. The Joint
Management Team shall be responsible for coordinating and reviewing the
activities of the Parties under this Agreement, including without limitation the
MBI Discovery Program. Without intending to limit the generality of the
foregoing, the Joint Management Team shall (i) allocate the resources and
personnel committed to the MBI Discovery Program, (ii) assess the progress of
the MBI Discovery Program and, if necessary, modify the Program Plan in order to
maximize the likelihood that the goals of the MBI Discovery Program will be
achieved, (iii) determine whether any Protein encoded by a Program Clone has
achieved the status of a Program Protein (i.e., has achieved the status of a
Level I Qualified Protein, a Level II Qualified Protein or a Level III Qualified
Protein (and therefore should be placed in the Selectable Pool)), (iv) comply
with the reporting obligations set forth in Sections 2.3(c) and 2.6(b), (v)
oversee and manage the Selection Process (as that term is defined in Section
2.6), (vi) determine whether Know-How which MBI or Lilly has elected to
contribute to the MBI Discovery Program shall be included in the MBI Discovery
Program as MBI Contributed Know-How or Lilly Contributed Know-How, as the case
may be, and (vii) review and approve all third party agreements, or parts
thereof, relating exclusively to the MBI Discovery Program. The Joint Management
Team shall be informed of the specific individuals who will work on the MBI
Discovery Program. The Joint Management Team shall also attempt to settle any
disputes that may arise between the Parties.
(c) Joint Management Team Reporting Obligations. During the
term of the MBI Discovery Program, the Joint Management Team shall provide the
Parties
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
with a list of the following items no less frequently than once per month or at
such other frequency as determined by the Joint Management Team:
(i) the Program Clones, including the available DNA
sequence information corresponding to such clones, and any other
information relating to a Program Clone that encodes a Program Protein;
and
(ii) the Program Proteins that have not been selected
by either Party for further development, manufacture and
commercialization pursuant to Section 2.6.
The Joint Management Team shall provide the Parties with the final version of
the foregoing list within thirty (30) days following the conclusion of the MBI
Discovery Program. In addition, the Joint Management Team shall provide each
Party with Quarterly Reviews (as that term is defined in Section 2.6), pursuant
to its reporting obligation set forth in Section 2.6
(d) Joint Management Team Decisions. The affirmative vote of
*** *************** of the members of the Joint Management Team shall be
required to take any action. Any member of the Joint Management Team who is not
present at any meeting either in person or by a designated alternate may appoint
another representative or alternate as his proxy to act on his behalf on all
matters coming to a vote. The Joint Management Team may conduct meetings by
telephone or video conference. If the Joint Management Team is unable to reach a
****************** or greater vote on any issue, it shall refer that issue to
Lilly's Vice President of Research Technologies and Proteins and the President
of MBI for resolution.
Section 2.4. Program Staffing.
(a) Program FTEs. MBI shall commit a minimum of
****************** FTEs per year to the conduct of the MBI Discovery Program,
provided that Lilly acknowledges that there will be a reasonable initial hiring
ramp-up period before MBI reaches the ******************-FTE level. MBI shall
use its best efforts to ramp-up to the ****************** FTE level as soon as
possible after the Effective Date. By decision of the Joint Management Team the
number of FTEs committed to the MBI Discovery Program may be increased or
decreased from the ******************-FTE level. Lilly shall have the option of
placing employees of Lilly at MBI in order to participate in the conduct of the
MBI Discovery Program as FTEs (which employees of Lilly shall be fully committed
to the MBI Discovery Program), and thereby reduce its research funding
obligations as set forth in Section 6.1, provided that (i) each such Lilly
employee shall be reasonably
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
acceptable to MBI and (ii) in no event shall the number of FTEs that are Lilly
employees exceed ****************** of the total number of FTEs committed to the
MBI Discovery Program. During the term of the MBI Discovery Program, MBI shall
submit to Lilly a quarterly report stating the name of each employee working as
a FTE in the MBI Discovery Program and the number of hours that each such
employee spent on the MBI Discovery Program.
(b) Program Director. The Parties acknowledge and agree that
the initial Program Director shall be ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, an employee of MBI. In
the event that Dr. Gearing leaves the position of Program Director for any
reason, a successor shall be selected by MBI, provided, however, that Lilly must
approve such successor, which approval shall not be unreasonably withheld.
Section 2.5. Conduct of Program. The research and development
activities to be undertaken in the course of the MBI Discovery Program shall be
conducted at MBI under the direction of the Program Director, with the
assistance of the Lilly Program Manager. Each of the FTEs committed to the MBI
Discovery Program shall take direction from the Program Director. MBI shall use
reasonable efforts in achieving the goals of the MBI Discovery Program, as set
forth in the Program Plan. In addition, MBI shall use reasonable efforts to
carry out all work done in connection with the MBI Discovery Program in
compliance with any federal, state or local laws, regulations and guidelines
governing the conduct of such work. All animals involved in the MBI Discovery
Program shall be provided humane care and treatment in accordance with generally
acceptable current veterinary practices. Notwithstanding the foregoing, MBI's
obligations as set forth in this Section 2.5 shall extend only to the activities
of FTEs who are employees of MBI or of an Affiliate of MBI. To the extent that
Lilly employees participate in the conduct of the MBI Discovery Program pursuant
to Section 2.4, Lilly shall use reasonable efforts to insure that its employees
comply with the obligations set forth in this Section 2.5.
Section 2.6. Selection of Program Proteins by the Parties. During the
term of the MBI Discovery Program, each Party shall have the right to select
Program Proteins from the Selectable Pool for further preclinical development,
clinical development, manufacture and commercialization by such Party (the
"Selection Process"). The Selection Process shall operate as follows:
(a) The Selectable Pool. A Program Protein shall enter the
Selectable Pool at the time that it is determined by the Joint Management Team
that such Program Protein meets the criteria for qualification as a Level III
Qualified Protein.
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(b) Quarterly Reviews. Within thirty (30) days following the
first business day of each calendar quarter during the term of the MBI Discovery
Program and within thirty (30) days following the conclusion of the MBI
Discovery Program, the Joint Management Team shall provide each Party with a
summary of the information available with respect to any Program Protein in the
Selectable Pool, including information relating to the status of MBI Program
Know-How Patent Rights, MBI Contributed Know-How Patent Rights and Lilly
Contributed Know-How Patent Rights with respect to such Program Proteins (the
"Quarterly Review"). The purpose of the Quarterly Review is to supply each Party
with the information necessary to enable such Party to make a determination as
to whether any of the Program Proteins in the Selectable Pool shall be selected
by such Party for further preclinical development, clinical development and
commercialization. At Lilly's request, MBI shall allow Lilly to review the
patent application prosecution history files of the MBI Program Know-How Patent
Rights and MBI Contributed Know-How Patent Rights relating to the Program
Proteins eligible for selection by Lilly at the Quarterly Selection Meeting (as
that term is defined in Section 2.6(c)(i)) or the Final Selection Meeting (as
that term is defined in Section 2.6(c)(ii)), at least two (2) weeks before such
Quarterly Selection Meeting or Final Selection Meeting, as the case may be. At
MBI's request, Lilly shall allow MBI to review the patent application
prosecution history files of the Lilly Contributed Know-How Patent Rights
relating to the Program Proteins eligible for selection by MBI at the Quarterly
Selection Meeting or the Final Selection Meeting, at least two (2) weeks before
such Quarterly Selection Meeting or Final Selection Meeting, as the case may be.
(c) Selection of Program Proteins.
(i) Quarterly Selection Meetings. Beginning in the
first calendar quarter during the term of the MBI Discovery Program in which the
most recent Quarterly Review indicates that the Selectable Pool contains at
least one Program Protein (the "Initial Quarter") and, thereafter, in each
subsequent calendar quarter during the term of the MBI Discovery Program
(including the last calendar quarter of the MBI Discovery Program) in which the
Selectable Pool contains at least one Program Protein, the Parties shall have
the opportunity to make their selections of Program Proteins in the Selectable
Pool for further development, manufacture and commercialization. The selection
of Program Proteins in the Selectable Pool shall be made by the Parties, through
their designated representatives on the Joint Management Team, at a meeting of
the Joint Management Team scheduled within thirty (30) days after receipt by the
Parties of a Quarterly Review (the "Quarterly Selection Meetings"). The Joint
Management Team shall provide each Party with any additional information
regarding Program Proteins in the Selectable Pool that is developed in the
course of the MBI Discovery Program after the receipt by the Parties of the
Quarterly Review and before the next
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Quarterly Selection Meeting. Lilly shall have the right to make the first
selection in the Initial Quarter and, thereafter, the right to select first in
the subsequent calendar quarters in which the Selectable Pool contains at least
one Program Protein shall alternate between the Parties. Each Party shall have
the right to select up to ******* Program Proteins from the Selectable Pool each
calendar quarter (the "Quarterly Selection Limit"), provided, however, that the
Quarterly Selection Limit may be waived on a case-by-case basis by mutual
agreement of the Parties, permitting one or both of the Parties, as the case may
be, to select more than ******* Program Proteins from the Selectable Pool at a
Quarterly Selection Meeting (where each such additional selection shall be
deemed to be an "Additional Quarterly Selection"). In the event that a Party
with the right to select at a Quarterly Selection Meeting elects not to make a
selection, despite the presence of at least one Program Protein in the
Selectable Pool, such Party shall forfeit such right to select, and the other
Party shall have the right to make the next selection at such Quarterly
Selection Meeting.
(ii) Final Selection Meeting. Subject to the provisions
of Section 9.2, the Parties shall hold a final meeting, if necessary, for the
purpose of selecting any Program Proteins that remain in the Selectable Pool
following the Quarterly Selection Meeting for the final calendar quarter of the
MBI Discovery Program (the "Final Selection Meeting"), within sixty (60) days
following the conclusion of the MBI Discovery Program. At the Final Selection
Meeting, the Parties shall make as many alternating selections as is necessary
to have selected all of the Program Proteins remaining in the Selectable Pool
(i.e., each Party shall have the right to select up to ***** percent ***** of
the Level III Qualified Proteins remaining in the Selectable Pool). In addition,
the Parties shall make as many alternating selections at the Final Selection
Meeting as is necessary for Lilly to have selected up to the percentages of the
Non-Pool Program Proteins that are indicated in the following table:
Percentage of Non-Pool
Duration of MBI Discovery Type of Non-Pool Program Program Proteins
Program Protein Selectable by Lilly
Three Years or less Level II Qualified Protein ***
Level I Qualified Protein ***
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Greater than Three Years Level II Qualified Protein ***
up to Four Years
Level I Qualified Protein ***
Greater than Four Years up Level II Qualified Protein ***
to Five Years
Level I Qualified Protein ***
The Party that was not entitled to make the first selection at the last
Quarterly Selection Meeting prior to the termination of the MBI Discovery
Program shall have the right to make the first selection at the Final Selection
Meeting.
(d) Rights and Obligations with Respect to Selected Program
Proteins.
(i) MBI Selected Proteins.
(A) General. Each Program Protein selected by
MBI pursuant to this Section 2.6 shall be deemed to be a MBI Selected Protein,
as of its Selection Date. MBI shall have the right to further develop,
manufacture and commercialize each MBI Selected Protein pursuant to the terms
and conditions of this Agreement.
(B) Diligence Obligations.
(1) MBI Obligations. MBI shall be
obligated, with respect to each MBI Selected Protein selected pursuant to
Section 2.6(c)(i), to either:
(a) (i) use commercially
reasonable efforts to generate experimental results in normal animals and/or
animal models of disease demonstrating the therapeutic potential of such MBI
Selected Protein within ****************** of its Selection Date (the "First
Diligence Deadline"), with Lilly having the right to receive evidence from MBI
upon request by Lilly of such diligence at *********** and at ******************
after such Selection Date; and
(ii) file an IND with
respect to a MBI Therapeutic Product based on such MBI Selected Protein within
************** following
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
the Selection Date of such MBI Selected Protein (the "Second Diligence
Deadline") or demonstrate to Lilly's reasonable satisfaction that such an IND
will be filed within *************** following the Second Diligence Deadline; or
(b) prior to the First Diligence
Deadline or the Second Diligence Deadline, as applicable, enter into a
sublicense agreement with respect to the development and commercialization of a
MBI Therapeutic Product based on such MBI Selected Protein in the United States
or Japan or at least ************************ Major Market Countries that are
not the United States or Japan, which agreement shall obligate MBI's sublicensee
to use commercially reasonable efforts to seek regulatory approval of, market
and sell such MBI Therapeutic Product in the United States or Japan or at least
************************ Major Market Countries that are not the United States
or Japan.
(2) MBI Failure of Diligence. In the
event that MBI fails to meet its diligence obligations pursuant to Section
2.6(d)(i)(B)(1) and MBI has not entered into an agreement with Lilly with
respect to the commercialization of a MBI Therapeutic Product based on such MBI
Selected Protein, pursuant to Section 3.4, prior to the First Diligence Deadline
or the Second Diligence Deadline, as applicable (a "MBI Failure of Diligence"),
then (1) if such MBI Failure of Diligence occurs during the term of the MBI
Discovery Program, MBI's rights to further develop, manufacture and
commercialize such MBI Selected Protein shall terminate and such Program Protein
shall, at Lilly's election, either be returned to the Selectable Pool or be
deemed to be a Lilly Selected Protein, or (2) if such MBI Failure of Diligence
occurs after the termination of the MBI Discovery Program, MBI's rights to
further develop, manufacture and commercialize such MBI Selected Protein shall
terminate and such Program Protein shall be deemed to be a Lilly Selected
Protein. A MBI Failure of Diligence shall not be considered a material breach of
this Agreement by MBI for purposes of Section 9.2.
(3) MBI Selected Proteins Deemed To Be
Lilly Selected Proteins. With respect to any Program Protein that is deemed to
be a Lilly Selected Protein as a result of a MBI Failure of Diligence that
occurs during the first ***************** period following the selection of such
Program Protein by MBI, the Parties shall enter into a license agreement
covering such Lilly Selected Protein, which license agreement shall conform
substantially with the License Agreement, except that the provisions regarding
the Protein License Fee set forth in Section 6.1 of the License Agreement shall
not apply, and the provision regarding diligence set forth in Section 5 of the
License Agreement shall not apply. With respect to any Program Protein that is
deemed to be a Lilly Selected Protein as a result of a MBI Failure of Diligence
that occurs during the second ***************** period following the selection
of such Program
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Protein by MBI, the Parties shall enter into a license agreement covering such
Lilly Selected Protein, which license agreement shall conform substantially with
the License Agreement, except that the provisions regarding the Protein License
Fee set forth in Section 6.1 of the License Agreement shall not apply, the
provision regarding diligence set forth in Section 5 of the License Agreement
shall not apply, and Lilly's milestone payment obligations set forth in Section
6.2 of the License Agreement and royalty payment obligations set forth in
Section 6.3 of the License Agreement shall continue, provided, however, that the
amounts of the milestone and royalty payments shall be ***************** of the
amounts set forth in the License Agreement. With respect to any Program Protein
that is deemed to be a Lilly Selected Protein as a result of a MBI Failure of
Diligence that occurs after the second anniversary of the selection of such
Program Protein by MBI, the Parties shall enter into a license agreement
covering such Lilly Selected Protein, which license agreement shall conform
substantially with the License Agreement, except that the provisions regarding
the Protein License Fee set forth in Section 6.1 of the License Agreement shall
not apply, the provision regarding diligence set forth in Section 5 of the
License Agreement shall not apply, and Lilly's milestone payment obligations set
forth in Section 6.2 of the License Agreement and royalty payment obligations
set forth in Section 6.3 of the License Agreement shall continue, provided,
however, that the amounts of the milestone and royalty payments shall be
***************** of the amounts set forth in the License Agreement.
(ii) Lilly Selected Proteins.
(A) Lilly Rights and Obligations.
(1) General. Each Program Protein
selected by Lilly pursuant to this Section 2.6 shall be deemed to be a Lilly
Selected Protein as of its Selection Date.
(2) Program Proteins Selected at
Quarterly Selection Meetings.
(a) With respect to each Lilly
Selected Protein that is selected pursuant to Section 2.6(c)(i) (i.e., during a
Quarterly Selection Meeting) and is not an Additional Quarterly Selection, Lilly
shall execute a License Agreement within ***************** following the
Selection Date of such Lilly Selected Protein, provided, however, that in the
event that Lilly makes an HSR Filing with respect to such Lilly Selected Protein
and neither the FTC nor DOJ challenges the exclusive license to such Lilly
Selected Protein to be granted under the License Agreement (an "HSR Clearance"),
then Lilly shall execute the License Agreement with respect to such Lilly
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Selected Protein within ***************** following the date on which Lilly is
made aware of the HSR Clearance.
(b) With respect to each Lilly
Selected Protein that is an Additional Quarterly Selection, Lilly shall enter
into a license agreement which shall conform substantially with the License
Agreement, except that the provisions regarding the Protein License Fee set
forth in Section 6.1 of the License Agreement shall not apply. Such license
agreement shall be executed within ***************** following the Selection
Date of such Lilly Selected Protein.
(3) Level III Qualified Proteins Selected
at Final Selection Meeting. With respect to any Lilly Selected Proteins that are
Level III Qualified Proteins and are selected pursuant to Section 2.6(c)(ii)
(i.e., during the Final Selection Meeting), the Parties shall enter into a
single license agreement covering all such Lilly Selected Proteins, which
license agreement shall conform substantially with the License Agreement, except
that the provisions regarding the Protein License Fee set forth in Section 6.1
of the License Agreement shall not apply, except with respect to the *********
of such Lilly Selected Proteins to receive PTAC Approval and the provision
regarding diligence set forth in Section 5 of the License Agreement shall not
apply.
(4) Level II Qualified Proteins Selected
at Final Selection Meeting. With respect to any Lilly Selected Proteins that are
Level II Qualified Proteins and are selected pursuant to Section 2.6(c)(ii), the
Parties shall enter into a single license agreement covering all such Lilly
Selected Proteins, which license agreement shall conform substantially with the
License Agreement, except that the provisions regarding the Protein License Fee
set forth in Section 6.1 of the License Agreement shall not apply, the provision
regarding diligence set forth in Section 5 of the License Agreement shall not
apply, and Lilly's milestone payment obligations set forth in Section 6.2 of the
License Agreement and royalty payment obligations set forth in Section 6.3 of
the License Agreement shall continue, provided, however, that the amounts of the
milestone and royalty payments shall be ******* to (a) ***************** of the
amounts set forth in the License Agreement, in the event that the duration of
the MBI Discovery Program is *****************, (b) ***************** of the
amounts set forth in the License Agreement, in the event that the duration of
the MBI Discovery Program is greater than ***************** but does not exceed
*****************, or (c) ***************** of the amounts set forth in the
License Agreement, in the event that the duration of the MBI Discovery Program
exceeds *****************.
(5) Level I Qualified Proteins Selected
at Final Selection Meeting. With respect to any Lilly Selected Proteins that are
Level I Qualified
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Proteins and are selected pursuant to Section 2.6(c)(ii), the Parties shall
enter into a single license agreement covering all such Lilly Selected Proteins,
which license agreement shall conform substantially with the License Agreement,
except that the provisions regarding the Protein License Fee set forth in
Section 6.1 of the License Agreement shall not apply, the provision regarding
diligence set forth in Section 5 of the License Agreement shall not apply, and
Lilly's milestone payment obligations set forth in Section 6.2 of the License
Agreement and royalty payment obligations set forth in Section 6.3 of the
License Agreement shall continue, provided, however, that the amounts of the
milestone and royalty payments shall be ******* to (a)
*************************************** of the amounts set forth in the License
Agreement, in the event that the duration of the MBI Discovery Program is
greater than ***************** but does not exceed *****************, or (b)
***************** of the amounts set forth in the License Agreement, in the
event that the duration of the MBI Discovery Program exceeds *****************.
(B) Compensatory Selections. With respect to any
Lilly Selected Protein referred to in Section 2.6(d)(ii)(A)(2)(a) that is the
subject of an HSR Filing made during the MBI Discovery Program, Lilly shall have
the right to return such Lilly Selected Protein to the Selectable Pool (a
"Released Lilly Selected Protein") and to make a Compensatory Selection (as that
term is defined below) upon the earlier to occur of (1) the receipt by Lilly of
notification that the FTC and/or DOJ intend to challenge the grant of an
exclusive license that is the subject of such HSR Filing and (2) the receipt by
Lilly of a Request for Additional Information (as that term is defined in the
HSR Act) with respect to such HSR Filing. A "Compensatory Selection" is a
selection by Lilly of a Program Protein in the Selectable Pool that is to
replace a Released Lilly Selected Protein. A Compensatory Selection shall (a) be
made at the Quarterly Selection Meeting or the Final Selection Meeting, as the
case may be, that immediately follows the return by Lilly of a Released Lilly
Selected Protein to the Selectable Pool (the "Next Selection Meeting"), and (b)
be made in accordance with the following procedure:
(i) The rank order of a Released
Lilly Selected Protein shall be determined by its position in the order of
selections of Program Proteins made by the Parties at the Quarterly Selection
Meeting at which such Released Lilly Selected Protein was chosen. For example,
if the Released Lilly Selected Protein was the third selection made at a
Quarterly Selection Meeting, the rank order of such Protein shall be third.
(ii) At the Next Selection
Meeting, Lilly shall make its Compensatory Selection at the position in the
order of selections of Program Proteins that corresponds to the rank order of
the Released Lilly Selected Protein. Subsequent permitted selections by the
Parties shall be made as if the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Compensatory Selection had not occurred. For example, if the rank order
of the Released Lilly Selected Protein is third and the Next Selection
Meeting is a Quarterly Selection Meeting (at which each Party shall
have the right to select two (2) Program Proteins from the Selectable
Pool), then each of the Parties shall make one selection prior to
Lilly's making the Compensatory Selection at the third position in the
order of selections. The Party that would have selected third absent
the Compensatory Selection shall then make its selection, followed by
the final permitted selection by the other Party.
A Compensatory Selection that is the first selection at a Quarterly Selection
Meeting shall have no effect in determining which Party is to select first at
the next Quarterly Selection Meeting or at the Final Selection Meeting, as the
case may be.
(C) Credits with Respect to Lilly Selected
Proteins. For each Lilly Selected Protein that (1) is the subject of a License
Agreement, (2) with respect to which Lilly has paid to MBI the First License
Maintenance Fee, and (3) with respect to which Lilly has elected to discontinue
its development efforts by not paying to MBI the Second License Maintenance Fee,
Lilly shall receive a credit of ************************************************
which may be applied to any Protein License Fee and/or Milestone Payment payable
by Lilly to MBI with respect to any Lilly Selected Protein for which such
payments are due. Notwithstanding the foregoing (i) Lilly may not accumulate
more than six (6) such credits for a total of *****************
********************************** during the ***************** of the MBI
Discovery Program, more than two (2) such credits for a total of
*************************** during the ***************** of the MBI Discovery
Program and more than one (1) such credit for a total of
*********************************** during the ***************** of the MBI
Discovery Program, (ii) Lilly shall not have the right to apply any such credits
to any Protein License Fee and/or Milestone Payment payable by Lilly to MBI
prior to the *********** anniversary of the Effective Date, and (iii) in no
event shall the application of any such credits reduce a Protein License Fee or
Milestone Payment by greater than ***************** of the amount that would be
payable to MBI in the absence of any reductions permitted under this Agreement
or the License Agreement.
(iii) Return of Selected Program Proteins to the
Selectable Pool. Nothing set forth in this Section 2.6 shall preclude a Party
that has continued to fulfill its diligence obligations with respect to a
Program Protein that such Party had selected pursuant to Section 2.6(c) from
electing to return such Program Protein to the Selectable Pool during the term
of the MBI Discovery Program and, thereby, terminating such Party's rights to
develop, manufacture and commercialize such Program Protein, unless
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such Program Protein is again selected by such Party during a subsequent
Quarterly Selection Meeting or the Final Selection Meeting.
Section 2.7. Transfer of Biological Materials.
(a) Program Clones. MBI shall promptly provide Lilly with all
Lilly Accessible Program Clones and related biological materials requested by
Lilly in writing for use in the discovery, development and commercialization of
Lilly Small Molecule Drugs pursuant to Section 3.2(b) (the "Program Clone
Biological Materials"). The Program Clone Biological Materials shall include,
without limitation, cDNA clones and genomic clones, provided, however, that,
with respect to Lilly Accessible Program Clones that are identified through the
use of Lilly Contributed Know-How, Program Clone Biological Materials shall
include related cDNA libraries and genomic sublibraries. The costs associated
with the transfer of such Program Clone Biological Materials shall be borne by
Lilly. Notwithstanding the foregoing, Millennium need not provide Lilly with any
Program Clone Biological Materials included in MBI Contributed Know-How that MBI
is under no obligation to provide to Lilly pursuant to restrictions attached by
MBI to such MBI Contributed Know-How and approved by the Joint Management Team.
(b) Selected Program Proteins. Each Party shall provide the
other with any biological materials in such Party's possession that (1) relate
to a Program Protein selected by the other Party pursuant to Section 2.6 and (2)
are generated in the course of the MBI Discovery Program or are contributed to
the MBI Discovery Program as MBI Contributed Know-How or Lilly Contributed
Know-How, as the case may be, (the "Available Selected Protein Biological
Materials"), within (10) business days following the selection of such Program
Protein. The Available Selected Protein Biological Materials shall include,
without limitation, recombinant Protein preparations, cDNA expression constructs
and cell lines expressing recombinant Proteins. The costs associated with the
transfer of such Available Selected Protein Biological Materials shall be borne
by the Party receiving such materials. Notwithstanding the foregoing, a Party
need not provide the other with any Available Selected Protein Biological
Materials included in MBI Contributed Know-How or Lilly Contributed Know-How, as
the case may be, that such Party is under no obligation to provide to the other
pursuant to restrictions attached by MBI or Lilly, as the case may be, to such
MBI Contributed Know-How or Lilly Contributed Know-How and approved by the Joint
Management Team.
Section 2.8. Exclusive Arrangement. During the term of the MBI
Discovery Program, MBI agrees that it shall not participate, in collaboration
with a commercial third party, in a broad-based therapeutic Protein discovery
program that has as its goals the identification of Proteins with therapeutic
utility, whereby MBI employs discovery methodologies such as secreted Protein
trapping, genomic cluster mapping and EST sequencing. For purposes of clarity,
MBI shall not be precluded from participating, either alone or in collaboration
with a commercial third party, in the characterization of the potential
therapeutic utility of gene sequences (and the Proteins encoded therein)
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wherein such sequences are provided by third parties (e.g., academic
laboratories and commercial providers of DNA sequence databases (such as Incyte,
GenSet and Genetic Institute's Discoverease Program)).
ARTICLE III
COVENANTS AND GRANTS OF RIGHTS
Section 3.1. Covenant Not to ▇▇▇. MBI hereby agrees that it shall not
at any time in the future assert or authorize any third party to assert or seek
to obtain any recovery with respect to any legal or equitable cause of action,
claim, defense, offset, counterclaim, cross-claim or pleading of any sort
whatsoever, participate in any proceeding or action, or make any allegations
against Lilly that the practice, in accordance with the terms and conditions of
this Agreement, of MBI Contributed Know-How, MBI Program Know-How or MBI Program
Methodology by any Lilly employee who assists in the discovery, researching
and/or development of Program Proteins in (but only in) the course of the MBI
Discovery Program pursuant to Section 2.4 infringes, misappropriates or
otherwise violates any MBI Contributed Know-How, MBI Program Know-How or MBI
Program Methodology and/or MBI Contributed Know-How Patent Rights, MBI Program
Know-How Patent Rights or MBI Program Methodology Patent Rights.
Section 3.2. Licenses to Lilly.
(a) Research License. Subject to the terms and conditions of
this Agreement, MBI hereby grants to Lilly a non-exclusive, non-royalty bearing
license, under MBI Program Methodology Patent Rights and MBI Program
Methodology, to utilize MBI Program Methodology, in the Territory, for research
purposes only; such license shall not include the right to grant sublicenses.
(b) Product License. Subject to the terms and conditions of
this Agreement, MBI hereby grants to Lilly a non-exclusive, royalty bearing
license, under MBI Program Know-How Patent Rights, MBI Contributed Know-How
Patent Rights, MBI Program Methodology Patent Rights, MBI Program Know-How, MBI
Contributed Know-How and MBI Program Methodology, to use Lilly Accessible
Program Clones and Proteins encoded therein in order to discover, research,
develop, make, import, use, offer to sell and sell Lilly Small Molecule Drugs in
the Territory; such license shall include the right to grant sublicenses.
Section 3.3. Licenses to MBI.
(a) Research License. Subject to the terms and conditions of
this Agreement, Lilly hereby grants to MBI (and to any Affiliate of MBI whose
employee(s) participate in the conduct of the MBI Discovery Program as FTEs, but
only to the extent
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
necessary to permit such participation), a non-exclusive, non-royalty bearing
license, under Lilly Contributed Know-How Patent Rights and Lilly Contributed
Know-How, to utilize Lilly Contributed Know-How in order to discover, research
and/or develop Program Proteins in the course of the MBI Discovery Program; such
license shall not include the right to grant sublicenses.
(b) Product License.
(i) Subject to the terms and conditions of this
Agreement, Lilly hereby grants to MBI an exclusive, non-royalty bearing license,
under Lilly Contributed Know-How Patent Rights and Lilly Contributed Know-How,
to develop, make, import, use, offer to sell and sell MBI Therapeutic Products
in the Territory; such license shall include the right to grant sublicenses on
prior notice to Lilly, **********
********************************************************************
********************************************************************.
(ii) Subject to the terms and conditions of this
Agreement, Lilly hereby grants to MBI a non-exclusive royalty bearing license,
under Lilly Contributed Know-How Patent Rights and Lilly Contributed Know-How,
to use MBI Accessible Program Clones and Proteins encoded therein in order to
discover, research, develop, make, import, use, offer to sell include the right
to grant sublicenses. The Parties acknowledge and agree that MBI shall have the
right, on prior written notice to Lilly, to assign all of MBI's rights and
obligations with respect to MBI Small Molecule Drugs under this Agreement to any
of MBI's Affiliates, including Millennium, and to any Millennium Affiliate (as
that term is defined in Section 1.2 with respect to a Party but redefined for
the purposes of this Section 3.3(b)(ii) with respect to Millennium).
Section 3.4. ***************** MBI hereby grants to Lilly**************
regarding any MBI Therapeutic Product that MBI has elected to commercialize in
the Field in collaboration with another party (the "*****************"). The
***************** with respect to a MBI Therapeutic Product shall terminate upon
the earlier of the initiation of Phase III Clinical Trials for such MBI
Therapeutic Product or ***************** from the date of the termination of the
MBI Discovery Program. The ***************** shall operate as follows:
(a) MBI shall promptly notify Lilly in writing (the "MBI
Notification") of its intention to seek a collaborator for the commercialization
of a MBI Therapeutic Product and shall provide a detailed written description of
such Product.
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(b) Lilly shall notify MBI within thirty (30) days of its
receipt of the MBI Notification (the "Lilly Response Period"), indicating its
interest, if any, in initiating discussions regarding a collaboration with MBI
with respect to the commercialization of such MBI Therapeutic Product.
(c) In the event that Lilly notifies MBI prior to the
termination of the Lilly Response Period that it has an interest in
collaborating with MBI in the commercialization of such MBI Therapeutic Product
(a "Lilly Expression of Interest"), then the Parties shall negotiate in good
faith reasonable terms that are intended to form the basis of a final agreement,
based upon the anticipated contributions of the Parties to the commercialization
of such Product, for a period of up to ninety (90) days from the date of MBI's
receipt of the Lilly Expression of Interest. Notwithstanding the foregoing, in
the event that Lilly requests a sample of such MBI Therapeutic Product from MBI
for evaluation when providing MBI with the Lilly Expression of Interest, (i) MBI
shall provide to Lilly a sufficient amount of such MBI Therapeutic Product, if
available, to allow Lilly to conduct such evaluation, but in no event shall MBI
be required to provide more than reasonable experimental quantities of such
sample that are consistent with the amounts utilized by MBI for similar
evaluations, and (ii) the ninety (90) day period specified in this Section
3.4(c) shall begin upon Lilly's receipt of such sample. Lilly hereby agrees to
promptly provide MBI with any results obtained by Lilly in evaluating a sample
of such MBI Therapeutic Product, which results shall not be disclosed to any
third party, without the written consent of Lilly, for the period commencing on
the date of the receipt of such results and ending on the date on which the
Lilly Right of First Negotiation with respect to such MBI Therapeutic Product
has terminated and is not revivable pursuant to Section 3.4(e).
(d) In the event that (i) Lilly fails to notify MBI prior to
the termination of the Lilly Response Period, or (ii) Lilly notifies MBI prior
to the termination of the Lilly Response Period that it has no interest in
collaborating with MBI in the commercialization of such MBI Therapeutic Product,
or (iii) the Parties fail to reach agreement on the terms that are intended to
form the basis of a final agreement within the ninety (90) day period specified
in Section 3.4(c), or (iv) the Parties fail to reach a final agreement within
sixty (60) days following the date on which the Parties reach agreement on the
terms that are intended to form the basis of a final agreement, then MBI shall
be free to enter into a collaboration with a third party with respect to the
commercialization of such MBI Therapeutic Product, provided, however, that MBI
shall not, without Lilly's prior written consent, enter into a collaboration
with any third party with respect to the commercialization of such MBI
Therapeutic Product pursuant to an agreement, the terms and conditions of which
are, on the whole, less than ten percent (10%) more favorable to MBI than the
most favorable terms and conditions offered by Lilly in any negotiation with MBI
regarding such Product. MBI shall disclose the terms of any such proposed third
party agreement to Lilly, and in the event that Lilly disputes that such terms
meet the requirements of the preceding sentence, then an independent third party
with the requisite expertise, selected by the Parties, shall make such
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
determination. The expense of such independent third party shall be shared
equally by the Parties. Both Parties recognize that in evaluating the
favorability to MBI of the terms and conditions of such third party agreement,
numerous factors may be taken into account and given appropriate weight,
including without limitation, the amount of upfront payments, the amount and
timing of subsequent payments, the royalty rate(s), the definition of territory,
the purchase and pricing of equity, the identity, experience and market position
of the other party in the relevant markets, and the contribution of patent or
other intellectual property rights material to the commercial success of MBI.
Moreover, Lilly agrees that MBI is entitled to assign reasonable value to
co-marketing, co-promotion, manufacturing or patent rights or other
consideration that MBI receives in return for the rights granted by MBI.
(e) In the event that Lilly provides MBI with a timely offer
of terms, pursuant to Section 3.4(c), with respect to a collaboration with MBI
in the commercialization of a MBI Therapeutic Product (the "Lilly Offered
Terms"), but MBI does not enter into an agreement with Lilly or any third party
with respect to the commercialization of such MBI Therapeutic Product pursuant
to the provisions of this Section 3.4 within twelve (12) months of the receipt
by MBI of the Lilly Offered Terms, then, at any time prior to the earlier of the
initiation of Phase III Clinical Trials for such MBI Therapeutic Product or the
****** anniversary of the date of the termination of the MBI Discovery Program,
the ***************** with respect to such MBI Therapeutic Product shall be
revived.
(f) Nothing in this Section 3.4 shall prevent MBI from
discussing a collaboration to commercialize a MBI Therapeutic Product with a
third party during the term of the *****************, provided, however, that
MBI shall not discuss any such collaboration with a third party prior to the
conclusion of the ***************** following the receipt by Lilly of the MBI
Notification, unless discussion of such a collaboration is initiated by a third
party. If, during the term of the *****************, discussion of such a
collaboration is initiated by a third party and MBI intends to seriously
consider such a collaboration, MBI shall provide Lilly with a MBI Notification
with respect to such MBI Therapeutic Product within thirty (30) days of MBI's
decision to seriously consider such a collaboration. In such instance, MBI shall
have the right to continue its discussions with such third party, but shall be
bound by its other obligations under the ***************** as set forth in this
Section 3.4.
Section 3.5. Lilly's Option to Manufacture. MBI hereby grants to Lilly
an option to manufacture any MBI Therapeutic Product that MBI or a sublicensee
of MBI with rights to such Product has elected to have manufactured by another
party (the "Lilly Option to Manufacture"). The Lilly Option to Manufacture with
respect to a MBI
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Therapeutic Product shall terminate upon the earlier of the initiation of Phase
III Clinical Trials for such MBI Therapeutic Product or ***************** from
the date of the termination of the MBI Discovery Program. The Lilly Option to
Manufacture shall operate as follows:
(a) MBI or its sublicensee shall promptly notify Lilly in
writing (the "Notification Regarding Manufacture") of its intention to seek a
supplier to manufacture an MBI Therapeutic Product and shall provide Lilly with
available detailed written descriptions of such Product, including but not
limited to, all analytical, purification, formulation, safety, and environmental
information relating thereto.
(b) Lilly shall respond to MBI or its sublicensee within
thirty (30) days of its receipt of the Notification Regarding Manufacture (the
"Manufacture Response Period"), indicating its interest, if any, in
manufacturing such MBI Therapeutic Product for MBI or its sublicensee.
(c) In the event that Lilly notifies MBI or its sublicensee
prior to the termination of the Manufacture Response Period that it has an
interest in manufacturing such MBI Therapeutic Product for MBI or its
sublicensee (an "Expression of Interest in Manufacturing"), then Lilly shall
have up to one hundred twenty (120) days from the date of its receipt of the
Notification Regarding Manufacturing to extend an offer to MBI or its
sublicensee that sets forth the terms and conditions under which Lilly would
manufacture such Product (the "Lilly Terms for Manufacturing").
(d) In the event that (i) Lilly fails to respond to MBI or
its sublicensee prior to the termination of the Manufacture Response Period, or
(ii) Lilly notifies MBI or its sublicensee prior to the termination of the
Manufacture Response Period that it has no interest in manufacturing such MBI
Therapeutic Product, or (iii) Lilly fails to provide MBI or its sublicensee with
the Lilly Terms for Manufacturing within the one hundred twenty (120) day period
specified in Section 3.5(c), or (iv) Lilly and MBI or its sublicensee fail to
reach a final agreement within sixty (60) days following the receipt by MBI or
its sublicensee of the Lilly Terms for Manufacturing, then MBI or its
sublicensee shall be free to enter into an agreement with any third party with
respect to the manufacture of such MBI Therapeutic Product, provided, however,
that if (x) Lilly provides MBI or its sublicensee with an Expression of Interest
in Manufacturing with respect to such MBI Therapeutic Product prior to the
termination of the Manufacture Response Period and (y) Lilly provides MBI or its
sublicensee with the Lilly Terms for Manufacturing with respect to such MBI
Therapeutic Product within the one hundred twenty (120) day period specified in
Section 3.5(c), but (z) Lilly and MBI or its sublicensee fail to reach final
agreement within sixty (60) days following the receipt by
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
MBI or its sublicensee of such Lilly Terms for Manufacturing, then MBI or its
sublicensee shall not, without Lilly's prior written consent, enter into an
agreement with a third party with respect to the manufacture of such MBI
Therapeutic Product unless, within sixty (60) days following the receipt by
Lilly of a description of the terms of any such proposed third party agreement,
Lilly fails to enter into an agreement with MBI or its sublicensee on the same
terms as those in the proposed third party agreement or on terms more favorable
to MBI or its sublicensee.
(e) Nothing in this Section 3.5 shall prevent MBI or its
sublicensee from discussing a collaboration to manufacture an MBI Therapeutic
Product with a third party during the term of the Lilly Option to Manufacture.
Section 3.6. ***************** During the period commencing on the
Effective Date and ending on the ***************** anniversary of the
termination of the MBI Discovery Program, **********************************
Products as follows:
(a) ***************** or its development partner an *****************
**********************************(provided that MBI is made aware of the Lilly
Corresponding Drug at least ***************** in advance of the date on which
this ********************************** as specified in this paragraph) which
are not being developed by MBI, a MBI Affiliate or a commercial partner of MBI.
With respect to each *************************, this ***************** shall
become ***************** after the commencement of Phase III Clinical Trials in
a Major Market Country for the Lilly Corresponding Drug, in the event that MBI,
a MBI Affiliate or its commercial partner has not earlier submitted the
pertinent regulatory approval package for said ***************** to the United
States Food and Drug Administration (or its equivalent in any Major Market
Country) for marketing approval or, if relevant, is not capable of providing, or
is unwilling to provide, diagnostic services. **********************************
***************** and the Parties shall negotiate the specific terms of such an
agreement in good faith. ***************** set forth in this Section 3.6(a),****
********************************************************************************
************************ shall be ***************** by the *********************
********************************************************************************
***********. *******************************************************************
*************
When ***************** are ***************** shall thereafter *****************
on MBI's Net Sales of the ***************** in the Territory for a period of
***************** years following the First Commercial Sale of such
*****************, subject to a reduction in the royalty rate, in the event that
the COPS on a ***************** exceeds ***************** of Net Sales of such
Product in a country, by an amount (the "Reduction Amount") determined in
accordance with the following formula:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Reduction Amount = **********************************
***************** plus the number of third parties, if any,
from whom MBI has obtained a license in order to sell such
***************** in such country (wherein such third party
license contains a royalty reduction provision and MBI's
royalty obligation to such third party is reduced pursuant to
such provision under the circumstances contemplated by this
paragraph that warrant a reduction in the royalty payable by
MBI to Lilly);
provided, however, that in no event shall the royalty rate be reduced below
*****************. The royalty payment obligations set forth in Sections 6.3(c)
and 6.3(d) and the accounting obligations set forth in Article VII with respect
to a MBI Small Molecule Drug shall also apply to MBI with respect to any
***************** sold by MBI, its Affiliates or sublicensees upon which a
royalty payment is due Lilly pursuant to this Section 3.6(a), in which case all
references to MBI Small Molecule Drug shall mean *****************.
(b) The Parties acknowledge and agree that promotion by Lilly
of a ***************** may advantageously affect the sales of a Lilly
Corresponding Drug. Therefore, MBI grants Lilly an option to co-promote those
***************** then being promoted by MBI, a MBI Affiliate or a commercial
partner of MBI, where Lilly has a Lilly Corresponding Drug on the market or in
development. The ***************** shall not be promoted under the Lilly label
but shall be promoted under the label of MBI, a MBI Affiliate or a commercial
partner of MBI. MBI shall review the position of Lilly and the Parties shall
negotiate in good faith a co-promotion agreement with respect to such
******************. MBI shall pay Lilly a three percent (3%) royalty on the Net
Sales of the ************ in those countries where Lilly co-promotes the
***************** ********************************** of Lilly's co-promotional
costs, whichever is lower; provided, however, that (i) in the event that the
COPS on a ***************** *********************************** of Net Sales of
such Product in a country, the royalty rate is subject to a reduction by an
amount equal to the Reduction Amount, provided, further, that in no event shall
the royalty rate be reduced below *****************, and (ii) no royalty shall
be payable pursuant to this Section 3.6(b) if Lilly is receiving royalty
payments pursuant to Section 3.6(a). The royalty payment obligations set forth
in Sections 6.3(c) and 6.3(d) and the accounting obligations set forth in
Article VII with respect to a MBI Small Molecule Drug shall also apply to MBI
with respect to any ****************** sold by MBI, its Affiliates or
sublicensees upon which a royalty payment is due Lilly pursuant to this Section
3.6(b), in which case all references to MBI Small Molecule Drug shall mean
******************. MBI shall also supply Lilly with a
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
reasonable quantity of samples of the ****************** per year to aid Lilly
in its co-promotion efforts, at MBI's, its Affiliate's or its partner's standard
cost ***************** for such ******************.
(c) The Parties acknowledge and agree that MBI shall have the
right, on prior written notice to Lilly, to assign all of MBI's rights and
obligations with respect to ***************** under this Agreement to any of
MBI's Affiliates, including Millennium, and to any Millennium Affiliate (as that
term is defined in Section 1.2 with respect to a Party but redefined for the
purposes of this Section 3.6(c) with respect to Millennium).
ARTICLE IV
CONFIDENTIALITY
Section 4.1. Confidential Information of a Party. Except as provided
for in this Agreement, all Confidential Information of a Party disclosed by one
Party to the other during the term of this Agreement shall not be used by the
receiving Party except in connection with the MBI Discovery Program or the
identification, selection, preparation, development, manufacture or sale of
Products, shall be maintained in confidence by the receiving Party, and shall
not be disclosed by the receiving Party to any other person, firm, or agency,
governmental or private, without the prior written consent of the disclosing
Party, except to the extent that the Confidential Information of a Party:
(a) is known by or in possession of the receiving Party at
the time of its receipt as documented in contemporaneous written records; or
(b) is properly in the public domain; or
(c) is subsequently disclosed to the receiving Party without
obligation of confidentiality by a third party who may lawfully do so; or
(d) is required to be disclosed to governmental agencies in
order to gain approval to sell Products; or
(e) is necessary to be disclosed to agents, consultants,
Affiliates and/or other third parties for the research and development and/or
marketing of Products, under this Agreement, which entities first agree to be
bound by the confidentiality obligations contained in this Agreement; or
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(f) is independently developed by the receiving Party without
the benefit of the disclosure of the disclosing Party, as evidenced by
contemporaneous written documentation of the receiving Party.
Section 4.2. Employee Obligations. MBI and Lilly each agree that it
shall provide the Confidential Information of a Party received from the other
Party only to FTEs and to its employees, consultants and advisors who have a
need to know and have an obligation to treat such information and materials as
confidential. On a regular basis, MBI and Lilly each agree to explicitly counsel
its consultants and advisors of the implications arising from such obligations.
Section 4.3. Disclosure of Program Confidential Information. MBI and
Lilly agree that (a) each shall inform the Joint Management Team of the type and
scope of Program Confidential Information that either Party plans to disclose to
a third party prior to such disclosure and (b) MBI shall inform the Joint
Management Team of the type and scope of Program Confidential Information that
MBI plans to disclose to Millennium prior to such disclosure. Any such
disclosure shall be made (a) in the exercise of the disclosing Party's rights
under this Agreement and/or (b) with respect to a publication that is permitted
pursuant to the terms of Section 19.2 and/or (c) in relation to the financing of
a Party and/or (d) under the condition that the receiving third party or
Millennium, as the case may be, maintain such Program Confidential Information
in confidence. Each Party agrees to protect the Program Confidential Information
from unauthorized use in the Field.
Section 4.4. Term. All obligations of confidentiality and nonuse
imposed under this Article IV shall expire ten (10) years following termination
of the MBI Discovery Program.
ARTICLE V
PATENT OWNERSHIP AND PROTECTION
Section 5.1. Ownership. MBI shall own all inventions made within the
course of the MBI Discovery Program. If, in the course of the MBI Discovery
Program, an invention is made solely by an employee of an Affiliate of MBI or
jointly by an employee of an Affiliate of MBI and an employee of MBI and/or of
Lilly, then such Affiliate of MBI shall assign its entire right to and interest
in such invention to MBI. If, in the course of the MBI Discovery Program, an
invention is made solely by an employee of Lilly or jointly by an employee of
Lilly and an employee of MBI and/or of an Affiliate of MBI, then Lilly shall
assign its entire right to and interest in such invention to MBI. Lilly shall
own all inventions made by its employees during the term, but not in the course,
of the MBI Discovery Program.
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Section 5.2. Review and Comment. MBI shall provide the Joint Management
Team with a copy of any patent application which first discloses any MBI
Contributed Know-How that relates to a Program Protein or any MBI Program
Know-How prior to filing the first of such applications in any jurisdiction, if
possible, for review and comment by the Joint Management Team or its designees.
If such patent application cannot be provided to the Joint Management Team prior
to filing, such patent application shall be provided to the Joint Management
Team within fifteen (15) days following such filing, provided, however, that any
patent application relating to the Existing Tango Technology filed prior to the
Effective Date shall be provided to the Joint Management Team within thirty (30)
days following the Effective Date. The Joint Management Team and/or its
designees shall maintain any such patent application in confidence, pursuant to
Article IV.
Section 5.3. Prosecution and Maintenance. MBI agrees to prosecute and
maintain the MBI Contributed Know-How Patent Rights that relate to a Program
Protein and the MBI Program Patent Rights and to prosecute any interference
proceedings with respect to such Patent Rights. MBI shall give notice to Lilly
of any decision to cease such prosecution and maintenance and, in such case,
Lilly shall have the right at its sole discretion and expense to continue such
prosecution or maintenance. If Lilly continues prosecution or maintenance, MBI
shall execute such documents and perform such acts as may be reasonably
necessary for Lilly to continue such prosecution or maintenance.
Section 5.4. Costs and Expenses. Except as provided in any License
Agreement, Lilly shall have no obligation to reimburse MBI for any costs
associated with filing, prosecuting, maintaining and extending any MBI Program
Know-How Patent Rights.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
ARTICLE VI
PAYMENTS
Section 6.1. Research Funds.
(a) Signing Payment. Within twenty (20) business days
following the Effective Date, Lilly shall pay to MBI a signing payment of
$1,419,257 (the "Estimated Signing Payment"). Within thirty (30) business days
following the Effective Date, MBI shall provide Lilly with a written statement
setting forth the exact amount of the signing payment to be paid by Lilly, and
MBI shall reimburse Lilly for any amount overpaid by Lilly in making the
Estimated Signing Payment or ▇▇▇▇ ▇▇▇▇▇ for any amount underpaid by Lilly in
making the Estimated Signing Payment.
(b) Future Payments. In support of research and development
to be conducted by MBI in the course of the MBI Discovery Program pursuant to
this Agreement, Lilly shall make the following payments to MBI:
(i) Lilly shall pay to MBI an amount equal to
***************** of the FTE expenses incurred by MBI in the conduct of the MBI
Discovery Program up to a maximum of ***************** of the expenses
associated with a total personnel commitment of ***************** FTEs,
provided, however, that if the number of FTEs is projected by MBI to be less
than ***************** for any calendar quarter or portion thereof, then MBI
shall so inform Lilly for the purpose of calculating the funding payment to be
made by Lilly to MBI pursuant to this Section 6.1(b) for such calendar quarter
or portion thereof. The full-time equivalent rate shall be *****************
************************ per FTE from the Effective Date to December 31, 1997
(the "FTE Rate"). On each January 1 thereafter, the FTE Rate shall be increased
by an amount equal to the percentage increase, if any, in the United States
Consumer Price Index For All Urban Consumers, Urban Wage Earners and Clerical
Workers (or any comparable successor index thereto) (the "CPI") from the
immediately preceding calendar year. In the event that, pursuant to Section 2.4,
the Joint Management Team elects to increase or decrease the number of FTEs
committed to the MBI Discovery Program, then Lilly shall pay to MBI the base
rate of ********************************** for each FTE funded by Lilly, subject
to any adjustment as set forth above. Notwithstanding the foregoing, Lilly may
reduce its research funding obligations under this Section 6.1(b)(i) by
exercising its option to commit employees of Lilly to the conduct of the MBI
Discovery Program, pursuant to Section 2.4. In such event, for each FTE that
Lilly contributes to the MBI Discovery Program, Lilly shall pay to MBI, in lieu
of the payment of the full FTE Rate, (A) the amount of *****************,
subject to increases based on increases in the CPI, for each such FTE who has a
Ph.D., M.D., D.V.M. or equivalent graduate degree and has
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
more than eight (8) years of post-doctoral experience, provided, however, that
the foregoing requirements as to graduate degree and/or years of post-doctoral
experience may be waived by mutual agreement of the Parties, and (B) the amount
of ********** ************************, subject to increases based on increases
in the CPI, for each such FTE who does not have the experience set forth in
subsection (A) of this sentence.
(ii) Within twenty (20) business days following the
Effective Date, Lilly shall pay to MBI the amount of FTE funding due MBI
pursuant to Section 6.1(b)(i) for the period from the Effective Date through
June 30, 1997. Within five (5) business days following the first day of each
subsequent calendar quarter, Lilly shall pay to MBI the amount due MBI pursuant
to Section 6.1(b)(i) for the upcoming calendar quarter. Within thirty (30) days
following the completion of each calendar quarter, MBI shall provide Lilly with
a written statement setting forth the actual numbers of FTEs provided and the
funds expended during such calendar quarter, and shall provide Lilly with a
credit for any amounts overpaid by Lilly or ▇▇▇▇ ▇▇▇▇▇ for any amounts underpaid
by Lilly during such calendar quarter. Within thirty (30) days following the
completion of the final calendar quarter or portion thereof of the MBI Discovery
Program, MBI shall provide Lilly with a written statement of the funds expended
during such calendar quarter or portion thereof, and shall reimburse Lilly for
any amounts overpaid by Lilly or ▇▇▇▇ ▇▇▇▇▇ for any amounts underpaid by Lilly
during such calendar quarter or portion thereof.
Section 6.2. Royalty Payments on Lilly Small Molecule Drugs.
(a) Royalty Rates. Lilly shall pay to MBI a royalty of
***************** on the Net Sales of each Lilly Small Molecule Drug.
(b) Length of Royalty Payments. The royalties payable under
Section 6.2(a) shall be paid on a country-by-country basis from the date of
First Commercial Sale of each Lilly Small Molecule Drug in a particular country
until ***************** after such First Commercial Sale in such country.
(c) Sales To Affiliate. Sales of a Lilly Small Molecule Drug
between Lilly and its Affiliates, or its permitted sublicensees, or among such
Affiliates and permitted sublicensees, shall not be subject to a royalty
obligation, but in such cases the royalty shall be calculated upon Lilly's or
its Affiliates' or sublicensees' Net Sales to an independent third party.
(d) Royalties Payable Only Once. The obligation to pay
royalties under this Agreement is imposed only once with respect to the same
unit of Lilly Small
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Molecule Drug. Except as specifically provided in this Agreement, it is
understood and agreed that there shall be no deductions from the royalties
payable hereunder.
Section 6.3. Royalty Payments on MBI Small Molecule Drugs.
(a) Royalty Rates. MBI shall pay to Lilly a royalty of
***************** on the Net Sales of each MBI Small Molecule Drug.
(b) Length of Royalty Payments. The royalties payable under
Section 6.3(a) shall be paid on a country-by-country basis from the date of
First Commercial Sale of each MBI Small Molecule Drug in a particular country
until ***************** after such First Commercial Sale in such country.
(c) Sales to Affiliate. Sales of a MBI Small Molecule Drug
between MBI and its Affiliates, or its permitted sublicensees, or among such
Affiliates and permitted sublicensees, shall not be subject to a royalty
obligation, but in such cases the royalty shall be calculated upon MBI's or its
Affiliates' or sublicensees' Net Sales to an independent third party.
(d) Royalties Payable Only Once. The obligation to pay
royalties under this Agreement is imposed only once with respect to the same
unit of MBI Small Molecule Drug. Except as specifically provided in this
Agreement, it is understood and agreed that there shall be no deductions from
the royalties payable hereunder.
ARTICLE VII
ACCOUNTING
Section 7.1. Royalty Reports. Each Party shall deliver to the other
Party within sixty (60) days after the end of each calendar quarter a written
accounting of such Party's and its Affiliates' and sublicensees' sales and other
consideration received subject to royalty payment due to the other Party for
such quarter. Such quarterly reports shall indicate the Net Sales of Lilly Small
Molecule Drugs or MBI Small Molecule Drugs, as the case may be, on a
country-by-country basis.
Section 7.2. Delivery of Royalty. When a Party delivers the accounting
under Section 7.1, such Party shall also deliver all royalty payments due for
the calendar quarter.
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Section 7.3. Audits. Both Parties shall keep accurate records in
sufficient detail to enable the amounts due to be determined. Within the term of
this Agreement and within one year after its termination, each Party shall, not
more than once each year, have the right at its expense to have the other
Party's independent certified public accountants inspect the other Party's
records for any of the two preceding years for the purpose of determining the
accuracy of royalty payments. The independent certified accountants shall keep
confidential any information obtained during such inspection and shall report
only the amounts of royalties due and payable. If a Party has underpaid a
royalty amount under this Agreement, such Party shall promptly pay the
appropriate amount to the other Party. If a Party has underpaid a royalty amount
due under this Agreement by more than five percent (5%), such Party shall also
reimburse the other Party for the cost of such audit.
Section 7.4. Exchange Rates. All payments to be made under this
Agreement shall be made in United States dollars. In the case of sales outside
the United States, the rate of exchange to be used in computing the amount of
currency equivalent in United States dollars shall be determined using the
paying Party's then current standard exchange rate methodology, which
methodology shall be in conformity with generally accepted accounting
principles.
Section 7.5. Withholding Taxes. Neither Party shall have liability for
any income taxes levied against the other Party on account of royalties paid
pursuant to this Agreement. If laws or regulations require that any such taxes
be withheld by the paying Party, such paying Party shall deduct such taxes from
the payment due the other Party, pay the taxes so withheld to the proper taxing
authority, and send proof of payment to the other Party within thirty (30) days
following such payment. If the other Party desires to obtain a refund of any
taxes so withheld and paid to a taxing authority, upon request the paying Party
shall cooperate in the pursuit of such refund.
Section 7.6. Reporting. To enable Lilly to comply with applicable
United States Federal tax laws and regulations, MBI, if requested by Lilly,
shall report to Lilly within ninety (90) days after the close of each calendar
year the amount of the FTE expenses that were expended on research activities
during such calendar year in the United States. To assist in the completion of
the required statement, Lilly shall, at the request of MBI, endeavor to provide
MBI with a summary of the payments made to MBI during the applicable calendar
year.
ARTICLE VIII
DURATION
This Agreement becomes effective as of the Effective Date, may be
terminated as set forth in Article IX hereof, and otherwise remains in effect
until the expiration of the term of Lilly's and MBI's obligations to pay
royalties.
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ARTICLE IX
TERMINATION
Section 9.1. Investment Termination Event. Upon the occurrence of an
Investment Termination Event (as that term is defined below), MBI may terminate
this Agreement by providing Lilly with thirty (30) days written notice of such
termination, such notice to be provided within three (3) months after the
occurrence of such Investment Termination Event. As used herein, the term
"Investment Termination Event" means the failure by Lilly to purchase 2,000,000
shares of Series B Convertible Preferred Stock of MBI at a price of $10.00 per
share pursuant to the Series B Preferred Stock Purchase Agreement dated as of
May 28, 1997 (the "Series B Agreement") on or before July 31, 1997 (the "Cutoff
Date"), provided that (a) the Parties may extend the Cutoff Date by mutual
agreement, and (b) the Cutoff Date shall automatically be extended if, as of the
Cutoff Date, one or more conditions set forth in Section 6 (other than Section
6.11 or 6.12 or any other conditions set forth in Section 6 to the extent
relating to the matters set forth in Section 6.11 or 6.12) of the Series B
Agreement shall not have been satisfied or waived by Lilly, such extension to
continue until such date as all such conditions shall have been satisfied or
waived by Lilly. Upon any termination pursuant to this Section 9.1, (a) all
rights and obligations of the Parties shall cease except as set forth in Section
9.4 and (b) MBI shall reimburse Lilly for any payments made by Lilly to MBI
pursuant to Section 6.1 prior to such termination.
Section 9.2. Termination For Material Breach. Upon any material breach
under this Agreement by either Party (the "Breaching Party"), the other Party
(the "Non-Breaching Party") may terminate this Agreement by ninety (90) days'
written notice to the Breaching Party, specifying the material breach, default
or other defect. The termination becomes effective at the end of the ninety (90)
day period unless the Breaching Party cures the breach during the ninety (90)
day period. The Parties will use best efforts to work together to cure any
breach.
Section 9.3. Rights Upon Termination For Breach.
(a) General. If the Non-Breaching Party terminates this
Agreement under Section 9.2 following material breach by the Breaching Party,
the Breaching Party shall return to the Non-Breaching Party all of the
Non-Breaching Party's Confidential Information of a Party and all materials
received from the Non-Breaching Party during the Agreement, and the Breaching
Party shall cease all use of the Non-Breaching Party's Confidential Information
of a Party and materials received from the Non-Breaching Party for any purpose,
except that the Breaching Party may (1) keep a copy of all documents for record
keeping purposes only and (2) keep and use any Confidential Information of a
Party and materials received from the Non-Breaching Party that are necessary for
the Breaching Party to exercise those of its rights and fulfill those of its
obligations that survive the termination of this Agreement.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
(b) MBI as Breaching Party. In the event that the Breaching
Party is MBI, then upon termination of this Agreement by Lilly:
(i) MBI's covenant not to ▇▇▇ set forth in Section 3.1
shall continue in effect and be deemed to be perpetual,
(ii) the licenses granted by MBI to Lilly pursuant to
Sections 3.2(a) and (b) shall be deemed to be perpetual and the license granted
pursuant to Section 3.2(a) shall be deemed to be fully-paid up,
(iii) the license granted by Lilly to MBI pursuant to
Section 3.3(a) shall terminate,
(iv) the license granted by Lilly to MBI pursuant to
Section 3.3(b)(i) shall terminate, except to the extent necessary for MBI to
develop and commercialize MBI Therapeutic Products in which the active
ingredient is a MBI Selected Protein that was selected pursuant to Section
2.6(c)(i) prior to such termination of the Agreement by Lilly or a Derivative
thereof,
(v) the license granted by Lilly to MBI pursuant to
Section 3.3(b)(ii) shall terminate, except to the extent necessary for MBI to
use Program Clones that were deemed to be MBI Accessible Program Clones prior to
the date of such termination of this Agreement by Lilly and Proteins encoded
therein to discover, develop and commercialize MBI Small Molecule Drugs,
(vi) the ***************************granted by MBI to
Lilly pursuant to Section 3.4, the Lilly Option to Manufacture granted by MBI to
Lilly pursuant to Section 3.5 and the options with respect to *****************
granted by MBI to Lilly pursuant to Section 3.6 shall continue in effect,
(vii) Lilly's royalty payment obligations set forth in
Section 6.2 with respect to Lilly Small Molecule Drugs shall continue, provided,
however, that the amounts of the royalty payments shall be decreased to reflect
the nature of MBI's breach and the damages caused thereby by amounts to be
agreed upon by the Parties or, if the Parties are unable to reach agreement, by
an independent third party with the requisite expertise selected by the Parties,
the expense of which shall be borne by MBI,
(viii) MBI's royalty payment obligations set forth in
Section 6.3 with respect to MBI Small Molecule Drugs shall continue, provided,
however, that the amounts of the royalty payments shall be increased to reflect
the nature of MBI's breach
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
and the damages caused thereby by amounts to be agreed upon by the Parties or,
if the Parties are unable to reach agreement, by an independent third party with
the requisite expertise selected by the Parties, the expense of which shall be
borne by MBI,
(ix) MBI's obligation to reimburse Lilly for any costs
(plus interest) incurred by Lilly in the development of a **************
pursuant to Section 3.6 and MBI's royalty payment obligations, if any, with
respect to each such ************** pursuant to Section 3.6 shall continue,
provided, however, that the amounts of the royalty payments shall be increased
to reflect the nature of MBI's breach and the damages caused thereby by amounts
to be agreed upon by the Parties or if the Parties are unable to reach
agreement, by an independent third party with the requisite expertise selected
by the Parties, the expense of which shall be borne by MBI,
(x) all Program Proteins in the Selectable Pool on the
date of such termination of this Agreement by Lilly shall be deemed to be Lilly
Selected Proteins and the Parties shall enter into a single license agreement
that covers all such Lilly Selected Proteins, which license agreement shall
conform substantially with the License Agreement, except that (A) the provisions
regarding the Protein License Fee set forth in Section 6.1 of the License
Agreement shall not apply, (B) the provision regarding diligence set forth in
Section 5 of the License Agreement shall not apply, and (C) Lilly's milestone
payment obligations set forth in Section 6.2 of the License Agreement and
royalty payment obligations set forth in Section 6.3 of the License Agreement
shall continue, provided, however, that the amounts of the milestone and royalty
payments shall be decreased to reflect the nature of MBI's breach and the
damages caused thereby by amounts to be agreed upon by the Parties or, if the
Parties are unable to reach agreement, by an independent third party with the
requisite expertise selected by the Parties, the expense of which shall be borne
by MBI, and
(xi) ***************** of the Non-Pool Program
Proteins, selected by Lilly within forty-five (45) days following the date of
such termination of this Agreement by Lilly, shall be deemed to be Lilly
Selected Proteins and the Parties shall enter into a single license agreement
that covers all such Lilly Selected Proteins, which license agreement shall
conform substantially with the License Agreement, except that (A) the provisions
regarding the Protein License Fee set forth in Section 6.1 of the License
Agreement shall not apply, (B) the provision regarding diligence set forth in
Section 5 of the License Agreement shall not apply, and (C) Lilly's milestone
payment obligations set forth in Section 6.2 of the License Agreement and
royalty payment obligations set forth in Section 6.3 of the License Agreement
shall continue, provided, however, that the amounts of the milestone and royalty
payments shall be decreased to reflect the stage of development of such Lilly
Selected Proteins and the nature of MBI's breach and the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
damages caused thereby by amounts to be agreed upon by the Parties or, if the
Parties are unable to reach agreement, by an independent third party with the
requisite expertise selected by the Parties, the expense of which shall be borne
by MBI.
(c) Lilly as Breaching Party. In the event that the Breaching
Party is Lilly, then upon termination of this Agreement by MBI:
(i) MBI's covenant not to ▇▇▇ set forth in Section 3.1
shall continue in effect and be deemed to be perpetual,
(ii) the license granted by MBI to Lilly pursuant to
Section 3.2(a) shall terminate,
(iii) the license granted by MBI to Lilly pursuant to
Section 3.2(b) shall terminate, except to the extent necessary for Lilly to use
Program Clones that were deemed to be Lilly Accessible Program Clones prior to
the date of such termination of this Agreement by MBI and Proteins encoded
therein to discover, develop and commercialize Lilly Small Molecule Drugs,
(iv) the license granted by Lilly to MBI pursuant to
Section 3.3(a) shall terminate,
(v) the licenses granted by Lilly to MBI pursuant to
Sections 3.3(b)(i) and 3.3(b)(ii) shall be deemed to be perpetual and the
license granted pursuant to Section 3.3(b)(i) shall be deemed to be fully
paid-up,
(vi) *********************** granted by MBI to Lilly
pursuant to Section 3.4, the Lilly Option to Manufacture granted by MBI to Lilly
pursuant to Section 3.5 and the options with respect to *****************
granted by MBI to Lilly pursuant to Section 3.6 shall terminate,
(vii) Lilly shall pay to Millennium an amount equal to
Lilly's share of the FTE expenses that would be incurred by MBI, but for the
termination of this Agreement, in the conduct of the MBI Discovery Program for
the ****** **** ***** period commencing on the date of such termination,
(viii) Lilly's royalty payment obligations set forth in
Section 6.2 with respect to Lilly Small Molecule Drugs shall continue, provided,
however, that the amounts of the royalty payments shall be increased to reflect
the nature of Lilly's breach and the damages caused thereby by amounts to be
agreed upon by the Parties or, if the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
Parties are unable to reach agreement, by an independent third party with the
requisite expertise selected by the Parties, the expense of which shall be borne
by Lilly,
(ix) MBI's royalty payment obligations set forth in
Section 6.3 with respect to MBI Small Molecule Drugs shall continue, provided,
however, that the amounts of the royalty payments shall be decreased to reflect
the nature of Lilly's breach and the damages caused thereby by amounts to be
agreed upon by the Parties or, if the Parties are unable to reach agreement, by
an independent third party with the requisite expertise selected by the Parties,
the expense of which shall be borne by Lilly,
(x) MBI's obligation to reimburse Lilly for any costs
(plus interest) incurred by Lilly in the development of a *****************
pursuant to Section 3.6 and MBI's royalty payment obligations, if any, with
respect to each such ************ pursuant to Section 3.6 shall continue,
provided, however, that the amounts of the royalty payments shall be decreased
to reflect the nature of Lilly's breach and the damages caused thereby by
amounts to be agreed upon by the Parties or if the Parties are unable to reach
agreement, by an independent third party with the requisite expertise selected
by the Parties, the expense of which shall be borne by Lilly, and
(xi) MBI shall retain all rights to all Non-Pool
Program Proteins and all Program Proteins in the Selectable Pool on the date of
such termination of this Agreement by MBI, with no obligations to Lilly with
respect to such Program Proteins.
Section 9.4. Residual Rights. Upon expiration or early termination of
this Agreement, all rights and obligations of the Parties shall cease, except as
follows:
(a) Each of the Product licenses set forth in Sections 3.2(b)
and 3.3.(b) shall survive and shall be deemed to be perpetual and fully paid up,
provided that (i) this Agreement has not been terminated pursuant to Section
9.1, and (ii) such license has not been terminated pursuant to Section 9.3 and
all payment and other obligations with respect to such license have been
fulfilled;
(b) The obligations to pay royalties and other sums accruing
hereunder up to the date of termination shall survive, provided that this
Agreement has not been terminated pursuant to Section 9.1;
(c) The obligations of confidentiality set forth in Article IV
shall survive for the period stated therein;
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(d) The obligations for record keeping and accounting reports
set forth in Article VII shall survive for so long as Products are sold. At such
time after termination of this Agreement when sales or other dispositions of
Products have ceased, the Party selling such Product shall render a final report
along with any royalty payment due;
(e) MBI's and Lilly's rights to inspect books and records as
described in Article VII shall survive;
(f) The obligations of defense and indemnity set forth in
Article X shall survive;
(g) Any cause of action or claim of MBI or Lilly accrued or
to accrue because of any breach or default by the other Party hereunder shall
survive; and
(h) All other terms, provisions, representations, rights and
obligations contained in this Agreement that are intended to survive as
specifically set forth elsewhere in this Agreement shall survive.
ARTICLE X
PRODUCT LIABILITY INDEMNIFICATION
Section 10.1. Indemnification by Lilly. Lilly agrees to defend MBI at
Lilly's cost and expense, and will indemnify and hold MBI and its directors,
officers, employees and agents (the "MBI Indemnified Parties") harmless from and
against any losses, costs, damages, fees or expenses arising out of (a) any
claim relating to personal injury from the development, manufacture, use, sale
or other disposition of any Lilly Small Molecule Drug, and (b) any claim arising
out of a failure by Lilly to manufacture any MBI Therapeutic Product, pursuant
to the rights granted in Section 3.5, in conformity with specifications agreed
upon by the Parties. In the event of any such claim against the MBI Indemnified
Parties by any party, MBI shall promptly notify Lilly in writing of the claim
and Lilly shall manage and control, at its sole expense, the defense of the
claim and its settlement. The MBI Indemnified Parties shall cooperate with Lilly
and may, at their option and expense, be represented in any such action or
proceeding. Lilly shall not be liable for any litigation costs or expenses
incurred by the MBI Indemnified Parties without Lilly's prior written
authorization. In addition, Lilly shall not be responsible for the
indemnification of any MBI Indemnified Party arising from any negligent or
intentional acts by such party.
Section 10.2. Indemnification by MBI. MBI agrees to defend Lilly at
MBI's cost and expense, and will indemnify and hold Lilly and its directors,
officers, employees and agents (the "Lilly Indemnified Parties") harmless from
and against any losses, costs,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
damages, fees or expenses arising out of (a) any claim relating to personal
injury from the development, manufacture, use, sale or other disposition of any
MBI Small Molecule Drug, (b) any claim relating to personal injury from the
development, manufacture, use, sale or other disposition of any MBI Therapeutic
Product, provided that such claim does not arise out of a failure by Lilly to
manufacture such MBI Therapeutic Product, pursuant to the rights granted in
Section 3.5, in conformity with specifications agreed upon by the Parties or (c)
any claim relating to personal injury from the development, manufacture, use,
sale or other disposition of any ************ sold by MBI, its Affiliates or its
sublicensees, provided that such claim does not arise out of any action taken by
Lilly or its development partner in the development and/or promotion of such
************ pursuant to Section 3.6. In the event of any such claim against the
Lilly Indemnified Parties by any party, Lilly shall promptly notify MBI in
writing of the claim and MBI shall manage and control, at its sole expense, the
defense of the claim and its settlement. The Lilly Indemnified Parties shall
cooperate with MBI and may, at their option and expense, be represented in any
such action or proceeding. MBI shall not be liable for any litigation costs or
expenses incurred by the Lilly Indemnified Parties without MBI's prior written
authorization. In addition, MBI shall not be responsible for the indemnification
of any Lilly Indemnified Party arising from any negligent or intentional acts by
such party.
ARTICLE XI
GOOD FAITH NEGOTIATION/DISPUTE RESOLUTION
Any controversy, claim, or dispute arising out of or relating to this
Agreement shall be settled if possible through good faith negotiations between
the Parties. Only if such efforts are not successful shall such dispute be
resolved by arbitration (if agreed by the Parties) or litigation.
ARTICLE XII
GOVERNING LAW
This Agreement shall be construed and the respective rights of the
Parties hereto determined according to the substantive laws of the State of
Delaware notwithstanding the provisions governing conflict of laws under such
Delaware law to the contrary, except matters of intellectual property law which
shall be determined in accordance with the national intellectual property laws
relevant to the intellectual property in question.
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ARTICLE XIII
ASSIGNMENT
Neither Party may assign this Agreement in whole or in part without the
consent of the other, except if such assignment occurs in connection with the
sale or transfer of all or substantially all of the business and assets of MBI
or Lilly to which the subject matter of this Agreement pertains. Notwithstanding
the foregoing, either Party may assign this Agreement in whole or in part to an
Affiliate of such Party, provided, however, that, except as specifically set
forth in this Agreement, MBI may not assign this Agreement in whole or in part
to Millennium unless MBI ceases business operations.
ARTICLE XIV
INSOLVENCY
All rights and licenses granted under or pursuant to any section of
this Agreement are, and shall otherwise be, deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101 (35A) of the Bankruptcy Code. The Parties
shall retain and may fully exercise all of their respective rights and elections
under the Bankruptcy Code.
ARTICLE XV
AMENDMENTS
This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof, and supersedes all previous
arrangement with respect to the subject matter hereof, whether written or oral.
Any amendment or modification to this Agreement shall be made in writing signed
by both Parties.
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ARTICLE XVI
NOTICES
Notices to MBI shall be addressed to:
Millennium BioTherapeutics, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Attention: Legal Department
Notices to Lilly shall be addressed to:
▇▇▇ ▇▇▇▇▇ and Company, Inc.
Lilly ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice-President, Research Technologies and Proteins
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Attention: General Counsel
Either Party may change its address by giving notice to the other Party
in the manner herein provided. Any notice required or provided for by the terms
of this Agreement shall be in writing and shall be (a) sent by registered or
certified mail, return receipt requested, postage prepaid, (b) sent via a
reputable overnight courier service, or (c) sent by facsimile transmission, in
each case properly addressed in accordance with the paragraph above. The
effective date of notice shall be the actual date of receipt by the Party
receiving the same.
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ARTICLE XVII
FORCE MAJEURE
No failure or omission by the Parties hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from any cause or causes beyond the
control of the Parties, including, but not limited to, the following: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.
ARTICLE XVIII
REPRESENTATIONS AND WARRANTIES
Section 18.1. Representation of Authority. MBI and Lilly each
represents and warrants to the other that as of the Effective Date it has full
right, power and authority to enter into this Agreement, including the right to
grant the licenses and sublicenses granted under Article III hereof.
Section 18.2. Knowledge of Pending or Threatened Litigation. Each Party
represents and warrants to the other that as of the Effective Date it is not
aware of any pending or threatened litigation (and has not received any
communication) which alleges that such Party's activities in the Field to date
have violated, or by conducting its business as currently proposed under the MBI
Discovery Program contemplated herein would violate, any of the intellectual
property rights of any other person. To the best of each Party's knowledge as of
the Effective Date, such Party's activities have not violated, or by conducting
its business as currently proposed under the MBI Discovery Program contemplated
herein would not violate, any of the intellectual property rights of any other
person. To the best of each Party's knowledge as of the Effective Date, there is
no material unauthorized use, infringement or misappropriation of any of its
intellectual property rights licensed hereunder to the other Party.
Section 18.3. Employee Obligations. Each Party represents and warrants
that all of its employees, officers, and consultants have executed agreements or
have existing obligations under law requiring, in the case of employees and
officers, assignment to such Party of all inventions made during the course of
and as the result of their association with such Party and obligating the
individual to maintain as confidential Program Confidential Information and such
Party's Confidential Information of a Party as well as confidential information
of any party other than such Party which such Party may receive, to the extent
required to support such Party's obligations under this Agreement. MBI
represents and warrants that any employee of an Affiliate of MBI who
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participates in the conduct of the MBI Discovery Program shall have executed
agreements or have existing obligations under law requiring assignment to such
Affiliate of MBI of all inventions made by such employee in the course of the
MBI Discovery Program and obligating such individual to maintain as confidential
Program Confidential Information and both Parties' Confidential Information of a
Party.
ARTICLE XIX
PUBLIC ANNOUNCEMENTS AND PUBLICATIONS
Section 19.1. Press Releases and Announcements. Any announcements or
similar publicity with respect to the execution of this Agreement shall be
agreed between the Parties in advance of such announcement. Both Parties
understand that this Agreement is likely to be of significant interest to
investors, analysts and others, and MBI and Lilly therefore may make such public
announcements with respect thereto. The Parties agree that any such announcement
will not contain confidential business or technical information and, if
disclosure of confidential business or technical information is required by law
or regulation, will make reasonable efforts to minimize such disclosure and
obtain confidential treatment for any such information which is disclosed to a
governmental agency or group. Each Party agrees to provide to the other Party a
copy of any public announcement as soon as reasonably practicable under the
circumstances prior to its scheduled release. Except under extraordinary
circumstances, each Party shall provide the other with an advance copy of any
press release at least five (5) business days prior to the scheduled disclosure.
Each Party shall have the right to expeditiously review and recommend changes to
any announcement regarding this Agreement or any studies carried out under this
Agreement. Except as otherwise required by law, the Party whose press release
has been reviewed shall remove any information the reviewing Party reasonably
deems to be inappropriate for disclosure. Except as set forth in Article XIX of
the License Agreement, MBI shall not have the right to make any announcement or
similar publicity in regard to a Lilly Small Molecule Drug or Lilly Selected
Protein without the express written approval of Lilly. Lilly shall not have the
right to make any announcement or similar publicity in regard to a MBI Small
Molecule Drug or MBI Therapeutic Product without the express written approval of
MBI.
Section 19.2. Publications. The Parties acknowledge and agree that
scientific lead time is a key element of the value of the research to be
performed under this Agreement. The Parties also acknowledge and agree that the
ability to publish selected results of the research to be performed under this
Agreement is essential for the recruitment and retention of scientific talent by
the Parties. In order to ensure that scientific publications are strictly
monitored to prevent any adverse effect of premature publication, the Joint
Management Team shall establish a procedure for publication review and approval
and each Party shall first submit to the Joint Management Team an early draft of
all such publications, whether they are to be presented orally or in written
form, at least sixty (60) days prior to submission for publication. The Joint
Management
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Team shall review each such proposed publication in order to avoid the
unauthorized disclosure of any Confidential Information of a Party and to
preserve the patentability of inventions arising from the research performed in
the course of the MBI Discovery Program. If, within thirty (30) days following
receipt of an advance copy of a Party's proposed publication, the Joint
Management Team informs such Party that its proposed publication contains the
other Party's Confidential Information of a Party, then such Party shall delete
such Confidential Information of a Party from its proposed publication. If,
within thirty (30) days following receipt of an advance copy of a Party's
proposed publication, the Joint Management Team informs such Party that its
proposed publication contains Program Confidential Information, the publication
of which could be expected to have a material adverse effect on any MBI Program
Know-How Patent Rights or MBI Program Know-How, then such Party shall at the
election of the Joint Management Team, either (1) delete such Program
Confidential Information from such Party's proposed publication or (2) delay
such proposed publication sufficiently long to permit the timely preparation and
filing of a patent application(s) on the information involved. If, within forty
five (45) days following receipt of an advance copy of a Party's proposed
publication, the Joint Management Team fails to approve of such Party's proposed
publication, then such proposed publication shall be regarded as denied by the
Joint Management Team and shall not be published.
ARTICLE XX
ADDITIONAL AGREEMENTS
Section 20.1. Independent Contractors. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either Lilly or MBI to act as agent for the other. Members of
the Joint Management Team shall be, and shall remain, employees of MBI or Lilly,
as the case may be. Neither Party shall incur any liability for any act or
failure to act by members of the Joint Management Team who are employees of the
other Party.
Section 20.2. Consents Not Unreasonably Withheld. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld, and whenever
in this Agreement provisions are made for one Party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
Section 20.3. No Strict Construction. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
Section 20.4. Headings. The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
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Section 20.5. Severance of Clauses. Each Party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
Section 20.6. No Waiver. The waiver of a breach hereunder may be
effected only by a writing signed by the waiving Party and shall not constitute
a waiver of any other breach.
Section 20.7. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
such together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement is executed this 28th day of May,
1997, to be effective as of the Effective Date.
▇▇▇ ▇▇▇▇▇ COMPANY, INC. MILLENNIUM BIOTHERAPEUTICS, INC.
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------- -------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Ph.D.
Executive Vice President
---------------------------------
Title
May 28, 1997 May 28, 1997
--------------------------------- -------------------------------------
Date Date
Millennium hereby agrees to (a) guarantee the obligations of MBI under
this Agreement for the term of the MBI Discovery Program, and (b) to transfer
and/or license such of its assets and to make available such of its personnel,
facilities, technology, equipment and other resources as are necessary to enable
MBI to fulfill MBI's obligations under this Agreement.
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Business Officer
----------------------------
Title
5/28/97
----------------------------
Date
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EXHIBIT A
PROGRAM PLAN
Exhibit A contains Confidential Materials which have been deleted and
filed separately with the Securities and Exchange Commission.
60
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
EXHIBIT B
EXISTING TANGO TECHNOLOGY
cDNA LIBRARIES
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
***** *********************
61
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
*********************
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
********** ***********
62
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
*****************************
*** ***********
*** ***********
*** ***********
*** ***********
*** ***********
*** ***********
*** ***********
*** ***********
TANGO PROTEIN CANDIDATES
*****
*********** also known as********** is a novel ******************************,
originally isolated by ****************************** in the
************************************************************ have been
*************** of the *************** has been ******************************
have been *************** in which the *************** has been ***************
was recently published as ***************. Our own data is in press at Nature.
*****
********** also known as ************************** is a novel ***************
of the ***************. Originally isolated by**********************************
have since been *************** to completion. ******************************
have been ***************.
63
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
We have demonstrated ****************************************** and differential
effects of ********************************************* in the
****************************** close to the ***************
*****
************************** was isolated ****************************************
since derived. ********************************************* is a member of the
***************
*****
********* is a member of the ***************. Originally isolated by************
***************************************************************************
****************************** have been built for****************************
*****
**************************** originally isolated as an ************************
********************************************************************** have been
****************************** are being made.
*****
****************************** was originally isolated by ***************
************************************** in the ****************************** has
been isolated and a *********************************************
*****
****************************** was originally isolated by ***************
*************************************************************************** and
exists in ****************************** is in ******** to test for the presence
of ***************. As such, ****************************** will be useful to
*************** and, as ****************************** have been made.
Preliminary results suggest that ********************************************
*****
************************ was originally isolated by****************************
are involved in early *************** is in the process of full ***************
*****
************************************************************ was isolated from a
****************************** although ****************************************
are being isolated.
*****
64
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
********************************************* was isolated by ***************
********************************************************************************
** are being isolated.
*****
********************************************* was isolated by ***************
************************************** might therefore by useful in treatment of
*************************** in the *********************************************
*****
*************************************************************************** is a
*************************** of the ****************************** the ability to
********************************************* is currently being prepared.
*****
******************************************* and was isolated by ***************
********************************************************************************
***************** is being derived.
65
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omission.
EXHIBIT C
PTAC APPROVAL INFORMATION
I. Purpose: Approve or reject new compounds, including therapeutic
Proteins, proposed for project team status following review of
available scientific and marketing data.
II. Required Information for Project Team Approval
- Rationale for therapy
- Chemistry
- Manufacturing
- Patent considerations
- Pharmacology
- Toxicology
- Clinical strategy
- Marketing assessment
PROJECT TEAM APPROVAL COMMITTEE (PTAC) INFORMATION
I. Manufacturing: Data should include enough information to demonstrate
that a viable route for the production of the compound for clinical
testing and marketing has been established.
II. Patents: Information to determine patentability of the candidate
compound on a worldwide basis.
III. Pharmacology: Preclinical pharmacology ******************************
demonstrating potential utility in a therapeutic area. This data should
include dose response information.
IV. A.D.M.E.: *************** need to be shown they are bioavailable
through a *************** Data should include a correlation between
*********************************************
V. Toxicology: Preliminary toxicology should generally include
**************************************************