EXHIBIT 10.76
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QLT INC.
AND
XENOVA LIMITED
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DEVELOPMENT AND COMMERCIALIZATION
AGREEMENT
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION........................................................................................1
1.1 Definitions.....................................................................................1
1.2 Other Definitions..............................................................................10
ARTICLE 2 - PRODUCT DEVELOPMENT..................................................................................10
2.1 Program Commencement...........................................................................10
2.2 Development Committee..........................................................................10
ARTICLE 3 - CMC, MANUFACTURING AND SUPPLY........................................................................12
3.1 Overview.......................................................................................12
3.2 Development Supply.............................................................................12
3.3 Commercial Supply in the Territory.............................................................12
3.4 Xenova Retains All Other Manufacturing Rights..................................................13
3.5 Transfer of Technology.........................................................................13
3.6 Manufacturing Quality..........................................................................13
3.7 Manufacturing Co-Operation.....................................................................14
3.8 Equivalency of Finished Product................................................................16
3.9 Reciprocal Right of Inspection.................................................................16
3.10 Implementation of Recalls......................................................................16
3.11 Mutual Liability for Recall....................................................................17
3.12 Manufacture and Supply Agreement Requirements..................................................17
ARTICLE 4 - CLINICAL AND REGULATORY DEVELOPMENT..................................................................17
4.1 Grant of Rights................................................................................17
4.2 Initial Development in the Development Territory...............................................17
4.3 QLT's Contributions............................................................................18
4.4 Prior Program Commitments......................................................................18
4.5 Development Progress Reports...................................................................18
4.6 Regulatory Responsibility in the Territory.....................................................19
4.7 Regulatory Responsibility in Europe............................................................19
4.7A Xenova and QLT Review of Regulatory Filings....................................................20
4.8 Adverse Event Reporting........................................................................21
4.9 Personnel......................................................................................21
4.10 Xenova Contribution............................................................................21
ARTICLE 5 - COMMERCIALIZATION AND MARKETING......................................................................22
5.1 Grant of Rights................................................................................22
5.2 Commercialization Diligence....................................................................22
5.3 Marketing Diligence............................................................................22
5.4 Arbitration Rights Alternative not Cumulative..................................................24
5.5 Commercialization by Xenova....................................................................24
ARTICLE 6 - ACTIVITIES, NON-COMPETITION, GLOBAL FRANCHISE AND FURTHER OPPORTUNITIES..............................24
6.1 Xenova Activities..............................................................................24
6.2 Xenova Activities in the ODD Field in the Territory............................................24
6.3 No Other Xenova Activities during the First Year...............................................25
6.4 Reciprocal Non-Compete.........................................................................25
6.5 Global Franchise...............................................................................25
6.6 Notice and Discussion of Other Opportunities...................................................25
6.7 Cross-Over Use and Cross-Pricing Protection....................................................25
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6.8 Consequences of Arbitration....................................................................26
ARTICLE 7 - CONFIDENTIALITY AND USE OF INFORMATION...............................................................26
7.1 Ownership of Confidential Information..........................................................26
7.2 Obligation of Confidentiality..................................................................26
7.3 Xenova Use of QLT Program Information..........................................................27
7.4 QLT Use of Xenova Program Information..........................................................27
7.5 Third Party Access.............................................................................27
7.6 No Use of QLT Program Information for ODD......................................................28
7.7 Publications...................................................................................28
7.8 Acknowledgement of Prior Disclosures...........................................................29
7.9 Return of Confidential Information.............................................................29
ARTICLE 8 - INTELLECTUAL PROPERTY; ADDITIONAL TECHNOLOGY; LICENSES...............................................29
8.1 Ownership of Intellectual Property.............................................................29
8.2 Ownership of Program Information...............................................................30
8.3 Additional Technology..........................................................................30
8.4 License to QLT.................................................................................31
8.5 License to Xenova..............................................................................33
8.6 Grants of Xenova Intellectual Property.........................................................34
ARTICLE 9 - MILESTONE PAYMENTS...................................................................................34
9.1 Upfront Payment................................................................................34
9.2 Milestone Payments.............................................................................34
9.3 Currency of Payment............................................................................35
ARTICLE 10 - ROYALTIES...........................................................................................35
10.1 Royalties......................................................................................35
10.2 Exclusions from Royalties......................................................................35
10.3 Third Party License Fees and Royalties.........................................................36
10.4 Adjustment of Royalties........................................................................36
10.5 Royalty Payments Upon Termination..............................................................36
10.6 Compensation for Use of Program Information....................................................36
ARTICLE 11 - PAYMENT TERMS.......................................................................................37
11.1 Payment of Royalties...........................................................................37
11.2 Currency for Royalty Payments..................................................................37
11.3 Currency Transfer Restrictions.................................................................37
11.4 Taxes..........................................................................................37
11.5 Sales and Payment Reports......................................................................38
11.6 Net Proceeds Reports...........................................................................38
11.7 Accounts and Audit.............................................................................38
11.8 Confidentiality of Reports.....................................................................39
ARTICLE 12 - REPRESENTATIONS, WARRANTIES AND COVENANTS...........................................................39
12.1 Xenova's Representations, Warranties and Covenants.............................................39
12.2 QLT's Representations, Warranties and Covenants................................................40
ARTICLE 13 - PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT.....................................................41
13.1 Xenova Patents - Prosecution and Maintenance...................................................41
13.2 QLT Patents - Prosecution and Maintenance......................................................42
13.3 Patentable Improvements........................................................................42
13.4 Xenova Patents - Infringement..................................................................42
13.5 QLT Patents - Infringement.....................................................................43
13.6 Third Party Claims of Infringement.............................................................43
13.7 Infringement of Third Party Patents............................................................44
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ARTICLE 14 - TRADEMARKS..........................................................................................44
14.1 Product Trademarks.............................................................................44
14.2 Use of Trademarks..............................................................................45
ARTICLE 15 - INDEMNITY AND LIMITATIONS OF LIABILITY..............................................................45
15.1 Mutual Indemnification.........................................................................45
15.2 Product Liability Indemnity....................................................................45
15.3 Indemnification Procedure......................................................................46
15.4 No Consequential Damages.......................................................................46
ARTICLE 16 - TERM AND TERMINATION................................................................................46
16.1 Termination....................................................................................46
16.2 Expiration.....................................................................................47
16.3 Early Termination by QLT.......................................................................47
16.4 Early Termination by Xenova....................................................................48
16.5 Termination on Bankruptcy......................................................................48
16.6 Effect of Termination..........................................................................48
16.7 Xenova License in the Case of Certain Early Terminations.......................................49
16.8 QLT License in the Case of Certain Early Terminations..........................................50
16.9 Survival.......................................................................................50
ARTICLE 17 - MISCELLANEOUS PROVISIONS............................................................................51
17.1 Governing Law..................................................................................51
17.2 Expedited Arbitration..........................................................................51
17.3 Traditional Arbitration........................................................................52
17.4 Amendment......................................................................................52
17.5 Assignment.....................................................................................52
17.6 Compliance with Laws...........................................................................53
17.7 Entire Agreement...............................................................................53
17.8 Exhibits.......................................................................................53
17.9 Force Majeure..................................................................................53
17.10 Further Assurances.............................................................................53
17.11 Headings.......................................................................................53
17.12 Injunction.....................................................................................53
17.13 Inurement......................................................................................54
17.14 Notice.........................................................................................54
17.15 Press Releases/Publicity.......................................................................54
17.16 Relationship of Parties........................................................................55
17.17 Rights and Remedies............................................................................55
17.18 Severability...................................................................................55
17.19 Waiver.........................................................................................55
17.20 Wording........................................................................................56
17.21 Third Party Rights.............................................................................56
EXHIBIT 1.1(p) DESCRIPTION OF XR9576
EXHIBIT 1.1(q) DRUG SPECIFICATION
EXHIBIT 1.1(CCC) SUMMARY OF PROGRAM ACTIVITIES
EXHIBIT 1.1(HHH) REGISTRATION PACKAGE
EXHIBIT 1.1(WWW) LIST OF XENOVA PATENTS
EXHIBIT 12.1(c) ISSUES RELATING TO XENOVA PATENTS
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
THIS DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (this "AGREEMENT") is entered
into with effect from the 13th day of August, 2001 (the "EFFECTIVE DATE")
BETWEEN:
QLT INC., a company incorporated under the laws of the
Province of British Columbia, Canada and having an office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
(hereinafter referred to as "QLT")
OF THE FIRST PART
AND:
XENOVA LIMITED incorporated under the laws of England and
Wales, United Kingdom and having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter referred to as "XENOVA")
OF THE SECOND PART
Recitals
A. QLT and Xenova have executed a Confidentiality Agreement dated April 20, 2001
(the "CONFIDENTIALITY AGREEMENT");
B. QLT and Xenova have executed an interim Development and Commercialization
Agreement dated August 13, 2001 setting out their respective obligations for the
development, manufacturing and commercialization of a product incorporating
Xenova's XR9576 compound (the "INTERIM AGREEMENT");
C. The Interim Agreement provides for the negotiation, settlement and execution
of a more comprehensive "Definitive Agreement" consistent with the terms set out
in the Interim Agreement and setting out such additional terms, conditions and
other provisions or amendments, as may be settled by the parties and relating
(among other matters) to the parties' respective obligations for the continued
development, manufacturing and commercialization of a product or products
incorporating Xenova's XR9576 compound; and
D. This Agreement will be the "Definitive Agreement" referred to in the Interim
Agreement, which the parties have negotiated and now desire to settle and
execute on the terms and conditions set out herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements set out
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, the following terms will have the respective
meanings set forth below:
(a) "ACT" shall mean the United States Food, Drug and Cosmetic Act, as
amended from time to time, and regulations promulgated thereunder.
(b) "ACTIVE PHARMACEUTICAL INGREDIENT" shall mean a substance or compound
that is incorporated in a pharmaceutical product as a therapeutically
active compound (ingredient).
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(c) "ADDITIONAL TECHNOLOGY" shall have the meaning set out in Section
8.3(a).
(d) "AFFILIATE" shall mean any corporation or other entity that directly,
or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the designated party, but
only so long as such relationship exists. For purposes of this
definition, "control" means ownership of at least 50% of the shares of
stock entitled to vote for directors in the case of a corporation and
at least 50% of the interests in profits in the case of a business
entity other than a corporation.
(e) "ASSERTING PARTY" shall have the meaning set out in Section 17.2(a).
(f) "AVAILABLE XENOVA INDEPENDENT PROGRAM INFORMATION" shall mean Xenova
Independent Program Information that would reasonably be expected to
enable QLT to increase the Net Sales obtained from commercialization of
the Drug or Product inside the Field inside the Territory except,
subject to Section 7.5, Xenova Independent Program Information that
Xenova is restricted from making available to QLT by the terms of any
agreement with a Third Party.
(g) "BUSINESS DAY" shall mean any day other than a day which is a Saturday,
Sunday or a statutory holiday in the Province of British Columbia,
Canada or in England, United Kingdom.
(h) "COMMERCIAL LAUNCH" shall mean the first sale of the Finished Product
in the Field in a country or regulatory jurisdiction in the Territory
by or on behalf of QLT or an Affiliate or sub-licensee of QLT after
obtaining all required Regulatory Approvals in such country or
regulatory jurisdiction.
(i) "CONFIDENTIAL INFORMATION" shall mean:
(i) in the case of Xenova, all Information disclosed by Xenova to
QLT concerning the Drug and/or Product, or the use or
manufacture thereof, that is:
(A) owned by or licensed to Xenova prior to the Effective
Date, or
(B) developed by Xenova after the Effective Date outside
the Program and without reference to or use of any
Program Information or QLT Confidential Information;
and
(ii) in the case of QLT, all Information disclosed by QLT to Xenova
concerning the Drug and/or Product, or the use or manufacture
thereof, or otherwise useful to the Program, that is:
(A) owned by or licensed to QLT prior to the Effective
Date, or
(B) developed by QLT after the Effective Date outside the
Program and without reference to or use of any
Program Information or Xenova Confidential
Information;
provided that "Confidential Information" will not include any
Information that:
(iii) is Program Information;
(iv) is in the public domain at the time of disclosure or
subsequently enters the public domain without fault on the
part of the receiving party;
(v) is known by the receiving party from its own sources, as
evidenced by the receiving party's written records made prior
to the disclosure by the disclosing party ; or
(vi) after disclosure, can be demonstrated by the receiving party
by written record to have been subsequently provided to the
receiving party by a Third Party if and for as long as the
receiving party has no reason to believe the Third Party is
under any obligation to keep such information confidential.
A combination of features will not be deemed within the foregoing
exceptions merely because individual features are in the public domain
or in the possession of the receiving party unless the combination
itself is in the public domain or in the possession of the receiving
party.
(j) "CONFIDENTIALITY AGREEMENT" shall have the meaning ascribed thereto in
Recital A.
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(k) "CROSS-OVER USE" shall mean the use or sale in the Territory of a
compound, in whatever form, by Xenova (or by an Affiliate, licensee or
sub-licensee of Xenova or by a Third Party contracting with Xenova or
an Affiliate of Xenova) that can reasonably be seen as competing
directly and in a commercially significant way with the use or sale of
the Product within the Field in the Territory.
(l) "CROSS-PRICING RISK" shall mean the use or sale in the Territory of a
compound that incorporates the Drug, in whatever form, that is owned,
controlled or licensed by Xenova or by an Affiliate of Xenova, that has
the same or substantially the same chemical structure, or similar
performance characteristics, to the Product so that the compound could
reasonably be considered to be substituted in medical practice and
subject to commercially significant competitive pricing in relation to
the Product.
(m) "CTX" shall mean a Notice under the Medicines (Exemption from Licences)
(Clinical Trials) Order 1995 (S.I. 1995/2808) pursuant to the rules and
policies of the Medicines Control Agency.
(n) "DEVELOPMENT COMMITTEE" shall mean the committee constituted by the
parties in accordance with Section 2.2.
(o) "DEVELOPMENT TERRITORY" shall mean the Territory and Europe, subject to
amendment in accordance with Section 4.2(b) following completion of the
Initial Development.
(p) "DRUG" will mean Xenova's proprietary active pharmaceutical compound
currently known as XR9576 (having the chemical structure attached
hereto as EXHIBIT 1.1(p)) in its pure form (free base form and any
pharmaceutically acceptable salt form) and any formulations thereof or
improvements thereto.
(q) "DRUG SPECIFICATION" shall mean the specifications for the Drug and/or
Product attached hereto as EXHIBIT 1.1(q), as may be revised from time
to time by QLT as part of the regulatory process with the approval of
applicable regulatory authorities.
(r) "EMEA" shall mean the European Medicines Evaluation Agency or any
successor agency thereof.
(s) "EUROPE" will mean the United Kingdom, Ireland, Germany, France, Italy,
Belgium, The Netherlands, Luxembourg, Liechtenstein, Monaco,
Switzerland, Austria, Spain, Portugal, Greece, Cyprus, Malta, Norway,
Sweden, Denmark, Finland, Greenland, Iceland, Andorra, Vatican City,
San Marino and any other countries that join the European Union during
the Term, and any successor states or countries thereto.
(t) "EXISTING XENOVA PROGRAM INFORMATION" shall mean any Information
generated, developed or owned by, or licensed to, Xenova as of the
Effective Date that (i) relates to the Drug and/or Product or (ii) is
necessary or useful to the Program.
(u) "FDA" shall mean the United States Food and Drug Administration or any
successor agency thereof.
(v) "FIELD" will mean any human therapeutic, diagnostic or prophylactic use
of the Drug in oncology, including oral uses thereof, but excluding the
ODD Field; provided that if, within [*]after the Effective Date, Xenova
does not complete a bona fide agreement with a Third Party that grants
rights to that Third Party to develop and commercialize the Drug in the
ODD Field in the Territory, then the Field shall include the ODD Field.
(w) "FINISHED PRODUCT" shall mean the Product, whether alone or in
combination with one or more other Active Pharmaceutical Ingredient(s),
that has undergone all stages of production, including packaging in its
final container and labeling, in accordance with GMPs, for commercial
distribution to Third Parties.
(x) "FIRST LINE INDICATION" shall mean Regulatory Approval by the FDA in
the United States of America for the use of Product as a single agent
or in combination with a chemotherapeutic agent for the treatment of
patients who have not received prior cancer chemotherapy.
(y) "GAAP" shall mean, in the case of accounting to be undertaken by QLT,
those accounting principles that are recognized as being generally
accepted in Canada from time to time as set
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forth by the Accounting Standards Board of the Canadian Institute of
Chartered Accountants and, in the case of accounting to be undertaken
by Xenova, those accounting principles that are recognized as being
Generally Accepted Accounting Principles in the United Kingdom from
time to time.
(z) "GMPS" shall mean the current Good Manufacturing Practices as defined
from time to time by the Act and the applicable FDA regulations,
policies or guidelines in effect for the manufacture, handling,
testing, storage and control of pharmaceutical materials as applied to
"finished products" in the United States of America and the
corresponding requirements of each applicable jurisdiction in the
Territory for which QLT informs Xenova from time to time that the
Product is to be marketed and sold in such jurisdiction.
(aa) "GLPS" shall mean the current Good Laboratory Practices as defined by
the Act and the applicable FDA regulations, policies or guidelines in
effect for the manufacture, handling, testing, storage and control of
pharmaceutical materials in the United States of America and the
corresponding requirements of each applicable jurisdiction in the
Territory for which QLT informs Xenova from time to time that the
Product is to be marketed and sold in such jurisdiction.
(bb) "ICH" shall mean the International Conference on Harmonization of
Technical Requirements for Registration of Pharmaceuticals for Human
Use.
(cc) "ICH GUIDELINES" shall mean the guidelines established by the ICH in
effect from time to time.
(dd) "IMPROVEMENTS" shall mean, in relation to any Intellectual Property,
any and all improvements, enhancements, modifications, revisions,
adaptations and derivative works (whether complete or incomplete), of,
to, in or based upon such Intellectual Property.
(ee) "IND" shall mean an Investigational New Drug Application under 21
C.F.R. Part 312 pursuant to the rules and policies of the FDA.
(ff) "INFORMATION", for the purposes of this Agreement, shall mean
scientific, medical, clinical, toxicological, regulatory, marketing,
financial and commercial information or data developed or acquired by a
party, including, without limitation, information that forms part of,
or otherwise relates to, any of the following, namely: the Intellectual
Property, methodologies, techniques, formulations, compositions,
compounds, processes, research, specifications, data, technical
information, instructions, manuals, papers, financial information,
market research, marketing reports and any other information provided
by either Party under this Agreement, manufacturing and commercial
strategies, programs, devices, and all analyses, compilations, data,
studies, reports or other documents prepared or derived therefrom.
(gg) "INITIAL DEVELOPMENT" shall have the meaning set out in Section 4.2.
(hh) "INTELLECTUAL PROPERTY" shall mean any and all rights arising under or
by virtue of technology, inventions, discoveries, Improvements,
Patents, copyrights, copyright applications, industrial designs,
industrial design applications, trademarks, trademark applications,
mask works, and rights in respect of Know-How, whether or not patented
or copyrighted or registered or protected, or capable of such
registration or protection.
(ii) "INTERIM AGREEMENT" shall have the meaning ascribed thereto in Recital
B.
(jj) "INTERIM AGREEMENT EFFECTIVE DATE" shall mean August 13, 2001.
(kk) "KNOW-HOW" shall mean any and all data, instructions, processes,
formulae, concepts, ideas, trade secrets, and other information (in
written or other tangible form) including, without limitation, any
chemical, pharmacological, toxicological, clinical, assay, control and
manufacturing data, information relating to biological materials,
manufacturing or related technology, analytical methodology, chemical
and quality control procedures, protocols, techniques, improvements and
results of experimentation and testing.
(ll) "MANUFACTURING AND SUPPLY REQUIREMENTS" shall have the meaning set out
in Section 3.12;
(mm) "MARKETING DEFAULT" shall have the meaning set out in Section 5.3(b).
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(nn) "MARKETING DEFAULT NOTICE" shall have the meaning set out in Section
5.3(c).
(oo) "MARKETING PLAN" shall mean an annual written marketing plan delivered
by QLT to Xenova on March 31 of each year and setting out, for the 12
month periods preceding and following the date thereof all activities
undertaken or proposed to be undertaken by QLT to bring the Product to
market, to market the Product and maximize the distribution and sale of
the Product in the Field in the Territory, as amended by QLT from time
to time in accordance with this Agreement.
(pp) "NDA" means a complete New Drug Application and all supplements thereto
filed with the FDA including all documents, data, and other information
which are necessary for, or included in, FDA approval to market a new
drug in the United States of America, as more fully defined in 21
C.F.R. Part 314.5 et seq ;
(qq) "NET PROCEEDS" shall mean, without duplication, all revenues, receipts,
monies and the fair market value of all other consideration received or
collected, directly or indirectly, by Xenova, or any Affiliate, from
end users or any independent Third Parties as consideration for the
commercialization and sale of the Product in the Field outside the
Territory or, as applicable, the ODD Product in the Territory, provided
however that "Net Proceeds" shall not include, without duplication:
(i) bona fide milestone payments, license and sublicense fees or
equity investments received or collected by Xenova or any
Affiliate of Xenova from any sub-licensee or other Third
Party, in exchange for rights to exploit and commercialize the
Product or the ODD Product, or
(ii) any revenues, receipts or monies received by Xenova, or any
Affiliate of Xenova, on account of (as applicable):
(A) research, development or manufacturing expenses,
including a commercially reasonable research,
development or manufacturing profit ▇▇▇▇ up,
(B) bona fide commercially reasonable marketing and
distribution expenses, and
(C) other bona fide Third Party expenses and financial
obligations of Xenova, or any Affiliate of Xenova,
attributable to the research, development, commercialization
and/or sale of the Product or the ODD Product.
For greater clarity, it is the intention of the parties that:
(iii) in the event Xenova sublicenses to a Third Party the marketing
and distribution of the Product in any country outside the
Territory or the ODD Product in the Territory, then "Net
Proceeds" would comprise revenues received or collected by
Xenova in the nature of "running royalties", after deduction
(without duplication) of royalty obligations to Third Parties
with respect to the Product or the ODD Product and any other
Third Party expenditure directly related to unit sales of the
Product or the ODD Product;
(iv) in the event Xenova enters into a profit share collaboration
or similar arrangement with a Third Party in respect of the
marketing and distribution of the Product in any country
outside the Territory or the ODD Product in the Territory,
then "Net Proceeds" would comprise Xenova's share in the
profits from that profit share collaboration, after deduction
(without duplication, and to the extent not already deducted
in calculating Xenova's share in the profits) of royalty
obligations to Third Parties with respect to the Product or
ODD Product and any other Third Party expenditure directly
related to unit sales of the Product or ODD Product; and
(v) in the event Xenova directly markets and distributes the
Product in any country outside the Territory or the ODD
Product in the Territory, then "Net Proceeds" would also
include Net Sales, after deduction of bona fide commercially
reasonable marketing and distribution expenses and other bona
fide commercially reasonable Third Party expenses and
financial obligations of Xenova, or any Affiliate,
sub-licensee or sub-distributor of
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Xenova, attributable to the commercialization and sale of the
Product or ODD Product in that country after deduction
(without duplication) of royalty obligations to Third Parties
with respect to the Product or ODD Product and any other Third
Party expenditure directly related to unit sales of the
Product or ODD Product (including any royalties paid to the
Third Party in connection with such commercialization and
sale).
In any case, in the event that Xenova directly manufactures the Product
or the ODD Product, commercially reasonable manufacturing profits
attributable to the manufacturing of the Product or the ODD Product are
not intended to be included in "Net Proceeds".
(rr) "NET SALES" shall mean, in respect of either party, without
duplication, the invoiced sales price of Finished Products in the Field
in the Territory received by such party, its Affiliates, or
sub-licensees from end users or any independent Third Parties in bona
fide arm's length transactions exclusively for money or, where the sale
is not at arm's length or exclusively for money, the price that would
have been so invoiced if it had been at arm's length or exclusively for
money, as the case may be, less the following deductions:
(i) credits or allowances, if any, given or made for purchase
charge backs, price reductions, returns, rebates, rejections,
recalls or destruction of spoiled, damaged, out-dated,
returned or otherwise unacceptable Product (voluntarily made
or requested or made by an appropriate governmental agency,
subdivision or department), quantity, trade, early-settlement
and/or cash discounts, allowances and/or incentives on account
of or in relation to the invoiced sales price of Finished
Products;
(ii) any duty, tax, excise or governmental charge upon or measured
by the production, sale, transportation, delivery or use of
Finished Products related to or based upon sales of Finished
Products (including value added taxes);
(iii) transportation and handling charges or allowances (freight,
postage, shipping and insurance), if any, incurred on account
of or in relation to the invoiced sales price of Finished
Products and provided the amounts are separately charged on
the relevant invoice; and
(iv) allowances for bad debts and unpaid accounts in respect of the
sale of Finished Products;
provided that in no event will the total of these above-detailed
deductions in any calendar quarter during the Term be greater than:
(v) for any calendar quarter during the first year of sales, [*]of
the cumulative total of the invoiced sales prices for such
calendar quarter prior to deduction; and
(vi) for each subsequent calendar quarter during the Term of this
Agreement, [*] of the cumulative total of the invoiced sales
prices for such calendar quarter prior to deduction.
In the event that Finished Products are sold in a combination with
other Active Pharmaceutical Ingredient(s):
(vii) Net Sales, for purposes of royalty payments on the
combination, shall be calculated by multiplying the Net Sales
of that combination by the fraction A/B, where A is the gross
selling price of such Finished Product sold separately and B
is the gross selling price of the combination, and
(viii) in the event that no such separate sales of the Finished
Product are made by QLT, an Affiliate, sub-licensee and/or
sub-distributor, or there is no readily determinable market
price, Net Sales for royalty determination shall be calculated
by multiplying Net Sales of the combination by the fraction
C/(C+D) where C is the fully allocated cost of such
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Finished Product and D is the fully allocated cost of such
other Active Pharmaceutical Ingredient(s). *
(ss) "ODD" shall mean oral drug delivery. *
(tt) "ODD FIELD" shall mean the use of the Drug solely as an oral drug
delivery system in oncology in the Territory:
(i) [*]
(ii) [*]
(iii) [*]
(iv) [*]
The combined product, which meets each of the criteria as set out in
this Section 1.1(tt) is hereinafter referred to in this Agreement as
the "ODD PRODUCT".
(uu) "PATENT" shall mean:
(i) an issued patent or a patent application;
(ii) all continuations and continuation(s)-in-part to the issued
patent or patent application set out in clause (i);
(iii) all divisions, patents of addition, reissues, renewals and
extensions of any of the patent, patent application,
continuations and continuation(s)-in-part set out in clauses
(i) and (ii); and
(iv) all foreign counterparts of any of the foregoing.
(vv) "PERSON" shall mean and include any individual, corporation,
partnership, firm, joint venture, syndicate, association, trust,
government body, and any other form of entity or organization.
(ww) "PHASE I" shall mean that portion of the FDA submission and approval
process and that stage of clinical development which provides for the
first introduction into humans of a Drug and/or Product for the purpose
of determining human toxicity, metabolism, absorption, elimination and
other pharmacological action as more fully defined in 21 C.F.R. Part
312.21(a), and such equivalent regulations or standards of countries
outside the United States of America as may be applicable to activities
conducted hereunder.
(xx) "PHASE II" shall mean that portion of the FDA submission and approval
process and that stage of clinical development which provides for the
initial trials of a Drug and/or Product on a limited number of patients
for the purposes of determining dose and evaluating safety and
preliminary efficacy in the proposed therapeutic indication, as more
fully defined in 21 C.F.R. Part 312.21(b), and such equivalent
regulations or standards of countries outside the United States of
America as may be applicable to activities conducted hereunder.
(yy) "PHASE ILB" shall mean a Phase II small scale efficacy study on an
insufficient number of patients to support Regulatory Approvals in the
proposed therapeutic indication.
(zz) "PHASE III" shall mean that portion of the FDA submission and approval
process and that stage of clinical development which provides for
expanded trials of a Drug and/or Product on sufficient numbers of
patients to establish the safety and efficacy of a Drug and/or Product,
to support regulatory approval in the proposed therapeutic indication,
as more fully defined in 21 C.F.R. Part 312.21(c), and such equivalent
regulations or standards of countries outside the United States of
America as may be applicable to activities conducted hereunder.
- 8 -
(aaa) "PHASE IV" shall mean the stage of clinical development that includes
those post-marketing studies, usually not required as a condition for
approval, that may be conducted to delineate additional information
about the risks, benefits, and optimal use of a Drug and/or Product.
(bbb) "PRODUCT" shall mean any product for use in the Field in the Territory
which incorporates the Drug in any formulation or dosage form, and any
improvements to such product, including products having a different
strength (i.e., a different amount of active ingredient delivered in
the same dosage form), or having only cosmetic differences such as
size, colour, shape, etc., or similar non-therapeutic changes.
(ccc) "PROGRAM" shall mean all activities undertaken by the parties, whether
alone or together or through Third Parties for the development of the
Product in the Development Territory, in accordance with the terms and
conditions of the Interim Agreement and this Agreement, which shall
include the Initial Development and the regulatory, clinical testing
and other development activities summarized in EXHIBIT 1.1(CCC).
(ddd) "PROGRAM INFORMATION" shall mean:
(i) any Information generated, developed or acquired by or on
behalf of either party under or as a result of the Program;
(ii) any Available Xenova Independent Program Information;
(iii) any other Xenova Independent Program Information generated,
developed or acquired by or on behalf of Xenova with reference
to or use of:
(A) QLT's Confidential Information, or
(B) any Information referenced under clause (i) owned by
QLT; and
(iv) any Existing Xenova Program Information,
provided that, notwithstanding the foregoing, Program Information will
not include any trademarks.
(eee) "QLT PATENTS" shall mean any and all Patents developed or acquired by
or on behalf of QLT that are required for QLT to continue the Program
and under which Xenova would require a license or sub-license to
lawfully develop, make, have made, use, sell, have sold, offer for
sale, import or export the Drug and/or the Product for commercial sale:
(i) in the Field, outside the Territory; or
(ii) outside the Field, anywhere, world-wide;
as contemplated by and in accordance with the terms and conditions set
out in this Agreement.
(fff) "QLT'S PROGRAM INFORMATION" shall mean any Program Information
generated, developed or acquired by or on behalf of QLT under or as a
result of the Program.
(ggg) "RECALL" shall mean:
(i) any action by QLT, Xenova or any of their respective
Affiliates, to recover possession of the Drug, Product or
Finished Product shipped to Third Parties; or
(ii) any action by the FDA or any other applicable governmental or
regulatory agency in any jurisdiction, to detain or destroy
the Drug, Product or Finished Product or prevent release of
the Drug, Product or Finished Product.
"RECALLED" and "RECALLING" shall have comparable meanings.
(hhh) "REGISTRATION PACKAGE" shall mean:
(i) Modules 1-5 of the ICH M4 Common Technical Document submitted
to the FDA in respect of the Product, the Table of Contents
summary of which is attached as EXHIBIT 1.1(HHH) -
REGISTRATION PACKAGE for illustrative purposes; and
- 9 -
(ii) all data generated from the studies specified by the FDA
during Xenova's meeting with the FDA on 25 April, 2001 (which
studies are listed at the end of EXHIBIT 1.1(HHH) -
REGISTRATION PACKAGE), unless it is later determined that any
of the studies are no longer required or would not be required
by the FDA.
(iii) "REGULATORY APPROVAL" shall mean any and all approvals, licenses,
registrations or authorizations of any federal, state, provincial or
local regulatory agency, department, bureau or other governmental
entity, necessary for the manufacture, use, storage, import, export,
transport, marketing, distribution or sale of the Drug and/or the
Product in a country or regulatory jurisdiction.
(jjj) "SECOND LINE INDICATION" shall mean Regulatory Approval by the FDA in
the United States of America for the use of the Product as a single
agent or in combination with a chemotherapeutic agent for the treatment
of patients after failure of first line cancer chemotherapy.
(kkk) "SERIOUS ADVERSE EVENT" shall mean any Adverse Event (as defined in
Section 4.8(a) that (at any dose):
(i) results in death;
(ii) is life-threatening (i.e., the patient was at risk of death at
the time of the event);
(iii) requires inpatient hospitalization or prolongation of existing
hospitalization;
(iv) results in persistent or significant disability/incapacity;
(v) results in congenital anomaly/birth defect; or
(vi) other medically significant events that may jeopardize the
patient or may require intervention to prevent one of the
outcomes listed in the definition above should be considered
serious. Examples of such events are intensive treatment for
allergic bronchospasm, blood dyscrasias or convulsions that do
not result in hospitalization, or development of drug
dependency or drug abuse.;
(lll) "SEIZURE" shall mean any action by the FDA or any other applicable
governmental or regulatory agency in any jurisdiction, to detain or
destroy the Drug, Product or Finished Product or prevent release of the
Drug, Product or Finished Product. "Seized" and "SEIZING" shall have
comparable meanings.
(mmm) "SPECIFIC ACTION" shall have the meaning set out in Section 5.2(c).
(nnn) "SPENDING CAP" shall have the meaning set out in Section 4.3.
(ooo) "TERM" shall have the meaning set out in Section 16.2(a).
(ppp) "TERRITORY" shall mean the ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇), ▇▇▇▇▇▇ and Mexico.
(qqq) "THIRD PARTY" shall mean any Person other than a party to this
Agreement or, where the context permits or requires, other than an
Affiliate of a party to this Agreement;
(rrr) "THIRD PARTY LICENSES" shall mean any agreement(s), whether written or
oral, to which Xenova is a party and under which Xenova is expressly
granted and obtains legal rights to use Intellectual Property of any
Person other than Xenova in the manner to be used by Xenova or QLT in
the development, manufacturing, marketing, supply and other
commercialization activities contemplated by this Agreement;
(sss) "US TERRITORIES" shall mean the territories and possessions of the
United States of America, including, the Commonwealth of Puerto Rico,
the territories of Guam, American Samoa, and the Virgin Islands, the
Trust Territory of the Pacific Islands, and the possessions of Midway
and Wake Islands;
(ttt) "VALID CLAIM" shall mean, with respect to each country in the
Territory:
(i) a claim of an issued, unexpired patent; or
- 10 -
(ii) a claim of a pending patent application for a patent, provided
the application has not been pending for more than [*],
that has not been, as applicable:
(iii) permanently revoked, held invalid, unpatentable or
unenforceable by a final decision of a court or governmental
agency of competent jurisdiction, which decision is
unappealable or was not appealed within the time allowed
therefor;
(iv) admitted in writing to be invalid or unenforceable by the
holder(s) by reissue, disclaimer or otherwise; or
(v) lost through an interference proceeding.
(uuu) "XENOVA INDEPENDENT PROGRAM" shall mean any studies or other activities
conducted by or on behalf of Xenova:
(i) in the Field, outside the Territory (subject to QLT's
exclusive development rights in the Development Territory
under Article 4, for as long as those rights continue); or
(ii) outside the Field, including in the field of ODD, anywhere,
world-wide;
relating to the Drug or the Product or the use or manufacture thereof,
provided that any such studies or other activities shall not be in
breach of the restrictions set out in Article 6 or the exclusivity of
any exclusive license granted by Xenova to QLT under this Agreement.
(vvv) "XENOVA INDEPENDENT PROGRAM INFORMATION" shall mean any Information
generated, developed or acquired by or on behalf of Xenova under or as
a result of a Xenova Independent Program.
(www) "XENOVA PATENTS" shall mean:
(i) all Patents listed in EXHIBIT 1.1(WWW); and
(ii) any and all Patents hereafter owned by or licensed to Xenova,
including any Patents to any Improvements to the Patents
listed in EXHIBIT 1.1(WWW), under which QLT would require a
license or sub-license to lawfully develop, make, have made,
use, sell, have sold, offer for sale, import or export (from
one part of the Territory to another) the Drug and/or the
Product for commercial sale in the Field in the Territory (and
the Development Territory for as long as QLT's development
rights under Article 4 continue), as contemplated by and in
accordance with the terms and conditions set out in this
Agreement.
(xxx) "XENOVA'S PROGRAM INFORMATION" shall mean any Program Information that
is not QLT Program Information.
1.2 OTHER DEFINITIONS
Any words defined elsewhere in this Agreement shall have the meaning assigned
thereto.
ARTICLE 2 - PRODUCT DEVELOPMENT
2.1 PROGRAM COMMENCEMENT
The parties acknowledge and agree that, following execution of the Interim
Agreement, the parties commenced the Program in accordance with the terms and
conditions of the Interim Agreement and, upon execution of this Agreement, they
shall continue the Program in accordance with the terms and conditions of this
Agreement.
2.2 DEVELOPMENT COMMITTEE
(a) Establishment. The parties acknowledge that they have, in accordance
with the terms and conditions of the Interim Agreement, established and
shall continue under this Agreement, a Development Committee.
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(b) Mandate. The Development Committee shall have authority over the
following areas:
(i) promoting the pooling of expertise and information exchange by
the parties with respect to the development of the Drug and
the Product under the Program (including the work conducted by
Xenova as contemplated in Section 4.4);
(ii) overview of QLT's strategies for clinical, regulatory and
manufacturing issues within the Development Territory,
including the selection of primary and alternative Third Party
contract manufacturers;
(iii) receiving overviews of Xenova's strategies for clinical,
regulatory and manufacturing issues within Europe and the rest
of the world, including overviews of the selection of primary
and alternative Third Party contract manufacturers [*];
(iv) receiving reports of marketing matters from QLT in respect of
the Territory and from Xenova in respect of Europe and the
rest of the world [*] and
(v) consideration of and making of decisions on any other material
matters set out in this Agreement that the parties agree shall
be referred to the Development Committee for determination.
(c) Number of Members. The Development Committee shall consist of an equal
number of members appointed by each party. Each member shall have the
appropriate background and expertise to contribute to the Development
Committee. Each party may change its members on the Development
Committee from time to time.
(d) Chair and Secretary. Unless the parties otherwise agree, QLT shall
appoint the chair of the Development Committee from among its members
on the Development Committee and Xenova shall appoint the secretary of
the Development Committee from among its members on the Development
Committee. The Chairman and Secretary shall not have any additional or
casting vote.
(e) Meetings. The Development Committee shall meet at a minimum 4 times per
calendar year, at least once in person and otherwise by videoconference
or telephone conference, provided that the parties may, upon mutual
agreement of the Parties following completion of the Initial
Development, dissolve the Development Committee or reduce the number of
meetings held per calendar year.
(f) Voting. Each member of the Development Committee shall have one vote.
In the event of a tie vote, either party may refer the matter to their
respective Chief Executive Officers for resolution. Notwithstanding the
foregoing, the representatives of QLT shall collectively have one
additional tie-breaking or casting vote with respect to:
(i) all matters relating to any clinical studies and/or
development activities (including regulatory and manufacturing
activities) for the Drug and the Product in the Field in the
Development Territory, but only until completion of the
Initial Development, or thereafter in the Territory; and
(ii) all matters relating to any commercialization activities for
the Product in the Field in the Territory, except in the event
that Xenova has exercised its rights (if any) under Section
5.3(d)).
When QLT wishes to exercise the tie-breaking or casting vote in respect
of the matters set out in clauses (i) and (ii), QLT shall first refer
the matter to the Chief Executive Officers of each party for
resolution. Failing resolution, QLT's tie-breaking or casting vote
shall be exercised by the Chief Executive Officer of QLT (or another
Executive Officer of QLT as his or her designee), irrespective of
whether that Executive Officer is a regular member of the Development
Committee. With respect to any other matters for which the Development
Committee has a tie vote, such deadlock shall be referred for
resolution in accordance with Sections 17.2 or 17.3, as applicable.
- 12 -
While the general mandate of the Development Committee to promote,
review, receive and consider matters shall continue for the Term of
this Agreement, its powers shall be limited as follows:
(iii) [*];
(A) (iv) [*].
(g) Sub-Committees. The Development Committee may, from time to time in its
discretion, form sub-committees (standing or ad hoc) to consider and/or
to provide guidance and oversight on specific development matters (for
example, the Development Committee will set up a European development
sub-committee to consider the European aspects of the Program).
ARTICLE 3 - CMC, MANUFACTURING AND SUPPLY
3.1 OVERVIEW
In connection with the rights and licenses granted by Xenova to QLT under this
Agreement, Xenova will transfer or otherwise make available to QLT the Drug, the
Product and all Information as are and to the extent necessary or useful for QLT
to carry out its activities as contemplated by this Article 3.
3.2 DEVELOPMENT SUPPLY
Subject to and in accordance with the provisions of this Agreement (including
Section 8.4), Xenova hereby grants to QLT the exclusive right and QLT shall have
the responsibility to manufacture and supply, at QLT's cost, the Drug and the
Product (with the right to sub-contract the manufacture and supply to QLT of
Drug and Product) for development of the Drug and the Product in the Field in
the Development Territory, on the terms and conditions set out in this
Agreement. For greater certainty, the parties agree that QLT may manufacture or
have manufactured the Drug and the Product at any location, world-wide, provided
that all such quantities of the Drug and the Product shall be used solely for
development activities in the Field in the Territory and for Initial Development
activities in the Field in Europe. In connection with the foregoing grant of
rights, the parties acknowledge and agree as follows:
(a) Drug. Xenova has transferred or will complete the transfer, as the case
may be, to QLT of approximately [*] of the Drug in its possession or
control, including quantities of the Drug ordered from [*] but not
released as of the Effective Date. Xenova will supply such quantities
of the Drug to QLT at no charge to QLT.
(b) Product. Xenova has transferred or will complete the transfer, as the
case may be, to QLT of at least [*] of the Product in its possession or
control, including quantities of the Product ordered from [*] but not
released as of the Effective Date, and any other ampoules of the
Product not required for Xenova's activities under the Program or for
any Xenova Independent Program. Xenova will supply such quantities of
the Product to QLT at no charge to QLT.
3.3 COMMERCIAL SUPPLY IN THE TERRITORY
(a) Subject to and in accordance with the provisions of this Agreement,
including Section 8.4 and Xenova's rights under Section 5.3(d), Xenova
hereby grants to QLT the exclusive right and QLT shall have the
responsibility to manufacture and supply the Drug and/or the Product
(with the right to sub-contract the manufacture and supply to QLT of
the Drug and the Product) for commercialization and sale of the Drug
and/or Product in the Field in the Territory, on the terms and
conditions set out in this Agreement.
(b) Subject to the terms and conditions in this Agreement, Xenova agrees
that it will not, and will not grant to any Person any rights to
conduct any activity that is and remains exclusively licensed to QLT
under this Agreement.
- 13 -
3.4 XENOVA RETAINS ALL OTHER MANUFACTURING RIGHTS
Except as granted to QLT under this Article 3, Xenova will retain all rights to
manufacture and supply the Drug and/or the Product. For greater certainty, the
parties agree that Xenova may manufacture or have manufactured the Drug and/or
the Product at any location, world-wide, provided that all such quantities of
the Drug and the Product shall be used solely for commercialization and sale by
Xenova, its affiliates and its licensee(s):
(a) in the Field outside the Territory; or
(b) outside the Field, anywhere, world-wide.
3.5 TRANSFER OF TECHNOLOGY
In order to ensure a smooth and efficient transfer from Xenova to QLT of
responsibility for the manufacture and supply of the Drug and the Product for
Initial Development, for further development under the Program in the Field in
the Development Territory and commercial sale of the Drug and the Product in the
Field in the Territory, the parties acknowledge and agree as follows:
(a) Safety. Xenova has provided to QLT copies of the Material Safety Data
Sheets for the Drug and the Product and has provided QLT with all other
relevant information available and known to Xenova concerning the
safety, handling, use, disposal and environmental effects of the Drug
and the Product or as may be necessary or useful to conduct the
Program.
(b) Manufacturing Information. Xenova will provide to QLT all Information
relating to the manufacture, testing and supply of the Drug and the
Product reasonably necessary or useful for QLT to assume conduct of the
manufacturing activities contemplated by this Article 3, including,
without limitation, copies of:
(i) all specifications and formulations for the Drug and the
Product in addition to the Drug Specification;
(ii) all manufacturing instructions, protocols and procedures for
the manufacture and processing of the Drug and the Product,
including any test data, development reports and master batch
records,
(iii) all test data, analytical reports, protocols and procedures
for raw material testing, in-process testing, release testing
and any other analytical testing required for the manufacture
and processing of the Drug and the Product, and
(iv) all validation reports (if any) in support of the
qualification and validation of facilities to GMPs for the
manufacture and processing of the Drug and the Product,
including reports relating to installation qualification,
operational qualification, process validation, sterilization
validation and cleaning validation.
(c) Samples. Xenova shall provide to QLT manufacturing batch samples of the
Drug and the Product provided to it by its manufacturing contractors
(if available) and samples of all reference standards reasonably
necessary for QLT to assume conduct of the manufacturing activities
contemplated by this Article 3.
3.6 MANUFACTURING QUALITY
(a) Except for the development activities to be conducted under the
Program, the sharing of Program Information under this Agreement, and
the provision of the development supply of the Drug and/or Product by
Xenova to QLT in accordance with Section 3.2, QLT and Xenova will each
be responsible for the qualification and validation of their respective
Drug and/or Product manufacturers' facilities to GMPs for the
manufacture and processing of the Drug and/or the Product.
(b) Each party shall use commercially reasonable efforts to ensure that any
Person with whom it contracts for the manufacture and processing of the
Drug and/or the Product for clinical or commercial use shall undertake
to comply with the following requirements:
- 14 -
(i) all manufacturing and processing activities shall be conducted
in a competent fashion and in accordance with GMPs, any
quality system agreement executed by the parties, the
applicable specification and the applicable validation
protocol or master batch record, as the case may be;
(ii) all manufacturing facilities, equipment, utilities and systems
used for the manufacture and processing of the Drug and/or the
Product shall comply with GMPs or GLPs, as applicable,
including installation qualification and operational
qualification requirements, requirements for environmental
monitoring in manufacturing areas and requirements relating to
the conveyance of bulk materials within such facilities;
(iii) all analytical work shall be performed in a manner and in a
laboratory which complies with GMPs and all related testing
procedures and equipment shall be validated prior to use;
(iv) all personnel furnished to perform the work shall be qualified
to perform the tasks and functions which they are assigned;
(v) all Drug and/or Product manufactured or processed shall
satisfy the applicable specification as at the date of
delivery;
(vi) all Finished Product manufactured or processed, and any other
batch of the Product designated in advance as a batch to be
used as clinical or commercial supplies, shall be
merchantable, free from defects and shall not be adulterated
or misbranded within the meaning of the Act, or any equivalent
legislation in any jurisdiction in which the Finished Product
is to be marketed and sold;
(vii) all Drug and/or Product manufactured or processed shall be
delivered free and clear of any security interests, liens,
claims, pledges or encumbrances of any kind or nature;
(viii) all transportation and storage of raw materials, Drug and
Product shall be performed in compliance with GMPs and in
accordance with the applicable specification, any applicable
quality system agreement and applicable shipping instructions;
(ix) all manufacturing and processing activities, including waste
disposal, shall be performed in accordance with applicable
United States of America and other foreign federal, state,
provincial and local laws, regulations and bylaws, including,
without limitation, all environmental laws;
(x) all applicable licenses, permits, certificates, authorizations
or approvals from all applicable United States of America and
other foreign federal, state, provincial, local and other
authorities necessary to conduct its business and manufacture,
package, label, ship, export, import and deliver the Drug
and/or the Product shall have been obtained and shall be
maintained in full force and effect;
(xi) appropriate records and reports shall be recorded and
maintained and shall be accurate and complete in all material
respects; and
(xii) no Intellectual Property of any Third Party shall be used in
the manufacture and processing of the Drug and/or the Product,
except with prior written consent of such Third Party.
3.7 MANUFACTURING CO-OPERATION
(a) QLT and Xenova acknowledge and agree that, notwithstanding their
respective rights and responsibilities under this Agreement, they
desire to minimize unnecessary costs and time delays in their
respective development and commercialization activities world-wide,
particularly manufacturing and supply aspects including the
qualification and validation of facilities for the manufacture and
processing of the Drug and the Product.
(b) In connection with the foregoing, the parties agree that [*]:
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(i) the manufacturing facility and its equipment, utilities and
systems used for the manufacture and processing of the Drug
and/or the Product shall comply with GMPs or GLPs, as
applicable, including installation qualification and
operational qualification requirements, requirements for
environmental monitoring in manufacturing areas and
requirements relating to the conveyance of bulk materials
within such facilities, for the jurisdictions where the Drug
and/or Product is to be marketed and sold;
(ii) the manufacturing facility has obtained and maintains in full
force and effect all applicable licenses, permits,
certificates, authorizations or approvals from all applicable
United States of America and other foreign federal, state,
provincial, local and other authorities necessary to conduct
its business and manufacture, package, label, ship, export,
import and deliver the Drug and/or the Product;
(iii) the manufacturing facility has the capability to manufacture
and process the Drug and/or the Product in a competent fashion
and in accordance with GMPs, any quality system agreement
executed by the parties, the applicable specification and the
applicable validation protocol or master batch record, as the
case may be;
(iv) the manufacturing facility has the production capacity to
manufacture and process the Drug and/or the Product in
accordance with the appointing party's projected forecasts for
the supply of the Drug and/or the Product; and
(v) the manufacturing facility has the capability to manufacture
and process the Drug and/or the Product at a similar or better
quality or upon similar or better commercial terms than an
alternate site identified by the appointing party.
(c) [*]Xenova shall provide an introduction for QLT to [*] so that QLT may
establish its own working relationship and enter into appropriate
agreements with [*] for the development, manufacture and supply of the
Drug and/or the Product for QLT for development of the Drug and/or the
Product in the Field in the Development Territory and for QLT for
commercialization of the Drug and/or the Product in the Field in the
Territory.
(d) Xenova and QLT agree that they will use commercially reasonable efforts
to ensure that the manufacturing processes, in-process analytical
methods, release analytical methods and specifications used in the
manufacture and processing of the Drug and the Product by or for QLT
and those used in the manufacture and processing of the Drug and the
Product by or for Xenova are as similar as possible.
(e) Xenova and QLT agree to co-operate fully to ensure that all inspections
and audits by regulatory authorities of each party's manufacturing
facilities used in the manufacture and processing of the Drug and/or
the Product are conducted as required and that appropriate support is
provided by the parties for investigations and implementations of
Recalls.
(f) In the event that [*] relating to the subject matter of this Agreement,
and in the event that QLT's (or QLT [*]) [*] is in material breach of
its Manufacture and Supply Requirements, Xenova may deliver written
notice to QLT (or QLT's [*]) of a curable material breach of the
Manufacturing and Supply Requirements by QLT's (or QLT's [*]) [*], in
which case QLT or QLT's [*] shall have a period of 6 months to ensure
that the [*]:
(i) cures the material breach within the 6 month period; or
(ii) if the breach is not capable of cure within the 6 month cure
period, to diligently commence pursuing a cure within one
month following such notice and continue to diligently pursue
the cure to completion within a reasonable period,
to [*]. If the [*] fails to cure the material breach with the 6 month
cure period or such longer reasonable period, or if the material breach
of the Manufacturing and Supply Requirements by QLT's (or QLT's [*])[*]
is one that, by its nature, is incurable, Xenova may, in its sole
discretion:
[*]
* material has been omitted and filed separately with the Commission
- 16 -
If the parties are in dispute over whether Xenova is entitled to
exercise either of the rights stated in Sections 3.73.7(f)(i)or
3.73.7(f)(i), either party may refer the dispute to expedited
arbitration under Section 17.2.
3.8 EQUIVALENCY OF FINISHED PRODUCT
(a) QLT and Xenova will use commercially reasonable efforts to ensure that
the Finished Product manufactured and used for:
(i) Initial Development in the Development Territory (by QLT and/or
its Third Party contractors);
(i) commercial supply in Europe (by Xenova and/or its Third Party
contractors); and
(ii) commercial supply in the Territory (by QLT and/or its Third
Party contractors),
is manufactured using the same method and meets the same Drug
Specifications, provided that neither party will be required to utilize
more than commercially reasonable efforts to effect a change in the
Drug Specifications once implemented by that party or that would
require the destruction or non-use of Finished Product that has already
been manufactured.
3.9 RECIPROCAL RIGHT OF INSPECTION
Each of Xenova and QLT shall have the right, on reasonable written notice to the
other, to conduct periodic inspections of the other party's records and
manufacturing facilities, as follows:
(a) Manufacturing Facilities. Each party may, no more than once per
calendar year (unless there exist ongoing manufacturing problems,
sterility failures, recalls or other similar events, in which case such
inspections may take place on a more frequent basis), itself, or
through its representatives, audit and inspect that portion of the
manufacturing facilities used by or for the other party in the
manufacture and processing of the Drug and the Product, including, to
the extent possible with the other party's assistance, the
manufacturing facilities of the other party's Third Party manufacturers
of the Drug and/or the Product.
(b) Records. Each party may itself, or through its representatives, audit,
review and make such copies of records and documents relating to the
manufacture and processing of the Drug and the Product as reasonably
necessary for the purpose of assessing the other party's compliance
with GMPs and its contractual obligations regarding the manufacture and
processing of the Drug and the Product, including, to the extent
possible with the other party's assistance, any records and documents
maintained at the offices and manufacturing facilities of the other
party's Third Party manufacturers of the Drug and/or the Product or
their representatives.
Any audit, inspection or review under this section shall be conducted during
regular business hours at a time and date mutually agreeable between the
parties. Each party shall provide the other party with reasonable co-operation
in carrying out any inspections or audits conducted pursuant to this Section
3.9.
3.10 IMPLEMENTATION OF RECALLS
(a) If either party has grounds to implement a Recall, the party
recommending such Recall shall immediately notify the other party in
writing of such grounds and identify those batches of Product that may
be affected.
(b) QLT and its designees shall have the sole responsibility to implement
any Recall of any Drug and/or Product manufactured and processed by or
for QLT or any Drug and/or Product sold in the Field in the Territory.
Xenova shall provide QLT and its designees with reasonable co-operation
and take such other actions in connection therewith as QLT and its
designees may reasonably request in implementing any Recall of the Drug
and/or the Product by QLT and responding to any Seizure of the Drug
and/or the Product in the Field in the Territory.
- 17 -
(c) Xenova and its designees shall have the sole responsibility to
implement any Recall of any Drug and/or Product manufactured and
processed by or for Xenova or any Drug and/or Product sold in the Field
outside the Territory or outside the Field world-wide. QLT shall
provide Xenova and its designees with reasonable co-operation and take
such other actions in connection therewith as Xenova and its designees
may reasonably request in implementing any Recall of the Drug and/or
the Product by Xenova and responding to any Seizure of the Drug and/or
the Product in the Field outside the Territory or outside the Field
worldwide.
3.11 MUTUAL LIABILITY FOR RECALL
In the event of a Recall, Seizure or other similar governmental action with
respect to the Drug and/or the Product arising from breach of this Agreement by
either party, the breaching party shall reimburse or credit the non-breaching
party, at the option of the non-breaching party, for reasonable out of pocket
expenses expended by the non-breaching party and its designees as a result of
the Recall or Seizure, except as otherwise specifically set out in this
Agreement.
3.12 MANUFACTURE AND SUPPLY AGREEMENT REQUIREMENTS
Each of Xenova and QLT shall include, in agreements with Third Parties for the
manufacture and processing of the Drug and/or the Product, terms and conditions
that:
[*](collectively, the "MANUFACTURING AND SUPPLY REQUIREMENTS").
ARTICLE 4 - CLINICAL AND REGULATORY DEVELOPMENT
4.1 GRANT OF RIGHTS
Except for Drug and Product provided by Xenova to QLT under Section 3.2, Xenova
hereby grants to QLT the exclusive right and QLT shall have the responsibility
to conduct (without the right to sub-license but with the right to sub-contract)
at QLT's cost, all clinical studies and other development activities for the
Drug and/or the Product in the Field in the Territory and (for as long as QLT is
responsible for Initial Development) in Europe, on and subject to the terms and
conditions set out in this Agreement (including Sections 5.2 and 8.4).
From time to time during the period in which QLT is responsible for Initial
Development, Xenova may request that [*]. Xenova may proceed with such studies
and/or activities if the same have been expressly approved in advance as
evidenced by a written resolution of the Development Committee.
4.2 INITIAL DEVELOPMENT IN THE DEVELOPMENT TERRITORY
(a) QLT will be responsible for conducting, at its cost, clinical and other
studies for the development of the Drug and/or the Product in the Field
in the Development Territory. In particular, QLT will work diligently
and utilize sound and reasonable scientific, business and medical
practice and judgement to:
(i) conduct the Program in accordance with the development plan
set out in EXHIBIT 1.1(CCC);
(ii) file with the FDA an NDA for the Product in the Field in the
United States of America in a timely manner; and
(iii) deliver to Xenova the Registration Package for use by Xenova
in support of its registration of the Product in Europe;
(collectively, the "INITIAL DEVELOPMENT").
(b) The Initial Development shall be considered completed upon the earlier
to occur of:
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(i) QLT spending an amount equal to the Spending Cap on the
Initial Development and declining to spend any further amounts
thereon; or
(ii) the later of:
(A) delivery by QLT to Xenova of the Registration Package
as set out above; or
(B) receipt by QLT of the first NDA approval for the
Product in the Field;
whereupon:
(iii) Europe will be excluded from the geographic scope of the
Development Territory and QLT's rights and obligations with
respect to Initial Development in Europe only shall cease;
Notwithstanding the foregoing, QLT shall have the right to
continue to conduct all clinical studies and other development
activities for the Drug and/or Product in the Field in Europe
which have been approved by the Development Committee; and
(iv) QLT will have no further obligations to Xenova with respect to
development of the Product in the Field in Europe, except for
the assistance provisions set out in Section 4.7 and elsewhere
in this Agreement.
4.3 QLT'S CONTRIBUTIONS
Xenova acknowledges and agrees that in no event will QLT, in performing its
obligations under this Agreement, be obligated to expend in excess of [*] (the
"SPENDING CAP") on the Initial Development. In the event that QLT, in conducting
the Initial Development, expends or anticipates expending an amount that exceeds
the Spending Cap, the parties will reasonably discuss in good faith, having
regard to the contributions of each party, some form of cut-back in the Program
in order to maintain Initial Development costs within the Spending Cap, which
may include resource re-allocation, alterations in the development exclusivity
provisions for Europe, cost sharing or other arrangements for the continuation
of the Program. This provision will not be subject to (expedited or traditional)
arbitration in the event that the parties do not in good faith come to any
resolution hereunder and, in such case, Section 4.2(b) will apply.
4.4 PRIOR PROGRAM COMMITMENTS
Xenova shall be responsible for and shall satisfy all obligations, liabilities
and commitments pertaining to the development of the Drug and/or Product
accruing prior to the Effective Date. In addition, Xenova shall be responsible,
at its own cost, to complete the following contractually-committed activities
which are ongoing as of the Effective Date:
(a) complete the ongoing clinical studies and non-clinical studies
(including completion of the study reports therefor) set out in EXHIBIT
1.1(HHH) except the Phase IIb study being conducted at MD ▇▇▇▇▇▇▇▇
Medical Centre; and
(b) [*]
The parties acknowledge that they have discussed ongoing responsibility for
ongoing stability and analytical studies for the Drug and/or the Product at [*],
and have determined that [*].
4.5 DEVELOPMENT PROGRESS REPORTS
Notwithstanding any reports prepared by the Development Committee during the
Term, each party will deliver to the other party annual progress reports
regarding such party's research and development activities relating to the Drug
and/or the Product, which shall include:
(a) a summary of such party's research and development activities during
the preceding calendar year and its anticipated activities in the
forthcoming calendar year; and
(b) in the case of the report to be delivered by QLT to Xenova only, until
completion of the Initial Development pursuant to Section 4.2(b), a
summary of such party's proposed budgets for such research and
development activities, as they become available.
* material has been omitted and filed separately with the Commission
- 19 -
In the case of the summary to be provided by Xenova to QLT under clause (a),
subject to Section 7.5, Xenova may limit its disclosure where such disclosure is
[*].
4.6 REGULATORY RESPONSIBILITY IN THE TERRITORY
(a) Grant of Rights. Xenova hereby grants to QLT, for the Term, the
exclusive right (to the exclusion of Xenova and all other Persons) and
QLT shall have the responsibility, at QLT's cost, to conduct (whether
itself or through one or more sub-contractors) all regulatory
activities for the development and commercialization in the Field in
the Territory of the Drug and/or the Product, including the submission
of applications for Regulatory Approvals for the development and
commercialization of the Drug and/or the Product in the Field in the
Territory, the qualification and validation of facilities for the
manufacture and processing of the Drug and/or the Product for
commercialization and sale in the Field in the Territory, and all
communication with the FDA and other regulatory authorities regarding
such applications and other regulatory filings for the development,
commercialization and sale of the Drug and/or the Product in the Field
in the Territory, on and subject to the terms and conditions set out in
this Agreement (including Sections 3.4 and 8.4).
(b) Transfer. Xenova will, at its cost, work to provide the following as
soon as practicable:
(i) the assignment and transfer to QLT of all regulatory
applications, filings and correspondence for the Drug and/or
the Product in the Field in the Territory, including any IND
in the United States of America; and
(ii) access to QLT to all regulatory applications, filings and
correspondence for the Drug and/or the Product outside the
Field in the Territory, including any IND in the United States
of America.
QLT will co-operate with Xenova in such matters, as reasonably
required, at QLT's expense.
(c) Quality Module Section. QLT will prepare, in consultation with Xenova,
Module 3 of the ICH M4 Common Technical Document of an NDA filing in
support of Regulatory Approvals for the Drug and/or the Product in the
Field in the Territory and the qualification and validation of
facilities to GMPs for the manufacture and processing of the Drug
and/or the Product.
QLT will retain ownership of all regulatory applications and filings
for the Drug and/or the Product in the Field in the Territory after
completion of development of the Product in the Field in the Territory.
(d) Xenova Observer Role. During the Term, Xenova shall have the right to
participate, at Xenova's cost, as an observer:
(i) in any material meetings to be held between QLT (or its
Affiliate or sub-licensee) and the FDA or any other regulatory
authorities in the Territory relating to any Regulatory
Approvals for the Drug and/or the Product in the Field,
(ii) in any regulatory inspections at manufacturing, clinical and
testing sites for the Drug and/or the Product;
to the extent that QLT is not restricted from providing such access by
the applicable regulatory authorities or by the terms of any licence
granted by QLT in respect of the Territory.
(e) Correspondence. Each party will promptly (and in any event within [*])
provide the other party with copies of all material correspondence from
or to the FDA and any other regulatory authorities in the Territory
concerning the Drug and/or the Product.
4.7 REGULATORY RESPONSIBILITY IN EUROPE
(a) Responsibility. Xenova shall retain, at Xenova's cost, the exclusive
right and responsibility to conduct (whether itself or through one or
more sub-contractors, licensees or other Third Parties) all regulatory
activities for the development and commercialization of the Drug and
the Product in the Field in Europe, including the submission of
applications for Regulatory Approvals for the
- 20 -
Drug and the Product in the Field in Europe, the qualification and
validation of facilities for the manufacture and processing of the Drug
and/or the Product and all communication with the EMEA and other
regulatory authorities regarding such applications and other regulatory
filings, on the terms and conditions set out in this Agreement.
(b) QLT Assistance. Notwithstanding Xenova's responsibilities set out in
Section 4.7(a), QLT agrees that it will, during the Term:
(i) cooperate with and assist Xenova or its licensee by reviewing
the regulatory filings prepared by Xenova or its licensee for
the Drug and/or the Product in the Field in Europe, at QLT's
cost (provided that these costs are not unreasonable);
(ii) at the request of Xenova, and on reasonable notice,
participate with Xenova in any meetings with the EMEA or other
European regulatory authorities relating to any Regulatory
Approvals for the Drug and/or the Product in the Field, at
Xenova's cost; and
(iii) provide to Xenova any letters of authorization required to
facilitate Xenova's or its licensee's use of or access to any
clinical study data and other data generated by or on behalf
of QLT for the Drug and/or the Product in the Field for use in
supporting any applications for Regulatory Approvals for the
Drug and/or the Product in the Field in Europe.
(c) Access to European Filings. In order for QLT to conduct the Initial
Development in Europe pursuant to Section 4.2, Xenova hereby grants to
QLT such access to Xenova's regulatory applications and filings in the
Field in Europe for the Drug and the Product, including the equivalent
of the United States of America IND, as may be reasonable and necessary
or useful for QLT to conduct the Initial Development as contemplated by
Section 4.2.
(d) QLT Observer Role. In the event that Xenova does not request QLT's
participation under Section 4.7(b)(ii), QLT shall have the right to
participate, at QLT's cost, as an observer:
(i) in any material meetings to be held between Xenova and the
EMEA or any other regulatory authorities in Europe relating to
any Regulatory Approvals for the Drug and/or the Product in
the Field,
(ii) in any regulatory inspections at manufacturing, clinical and
testing sites for the Drug and/or the Product in Europe;
to the extent that Xenova is not restricted from providing such access
by the applicable regulatory authorities in Europe or by the terms of
any licence granted by Xenova in Europe.
(e) Correspondence. Each party will promptly provide the other party with
copies of all material correspondence from or to the EMEA or any other
regulatory authorities in Europe concerning the Drug and/or the
Product. The Parties do not anticipate that it will be necessary for
QLT to be in direct contact with the EMEA in relation to the Drug
and/or Product under applicable laws and regulations or in response to
any request of the EMEA and QLT shall not do so without Xenova's prior
written consent, such consent not to be unreasonably withheld or
delayed.
4.7A XENOVA AND QLT REVIEW OF REGULATORY FILINGS
Each Party ("PROVIDER") will promptly provide to the other Party ("RECEIVER")
copies of each draft and final copies of any of the following documents that it
may intend to file for the Drug and/or Product in the Development Territory.
(i) [*]
(ii) [*]
The Receiver shall provide its comments to the Provider within [*] after receipt
of any drafts thereof, unless the Provider agrees to extend that time thereof.
QLT and Xenova acknowledge that the [*] shall be used in support of Regulatory
Approvals for the Drug and/or Product in the Field in both Europe and the
Territory and QLT will consider incorporating the
* material has been omitted and filed separately with the Commission
- 21 -
comments of Xenova in that document where they are determined by QLT to be
appropriate and reasonable. However, QLT shall have no obligation to incorporate
Xenova's comments. In addition, Xenova shall have no obligation to incorporate
QLT's comments in any additional documents submitted by Xenova or its licensees
in support of Regulatory Approvals for the Drug and/or Product in the Field in
Europe.
4.8 ADVERSE EVENT REPORTING
(a) Definitions. For the purposes of this Section 4.8 "ADVERSE EVENT" shall
mean any unfavourable and unintended sign (including an abnormal
laboratory finding), symptom or disease associated with the
administration of a medicinal product whether or not considered related
to the Drug and/or Product.
(b) Reporting. During the Term, each party shall, and shall use
commercially reasonable efforts to cause its respective licensees and
sub-licensees to, promptly notify the other party as soon as
practicable (subject to the following provisions of this paragraph (b))
of:
(i) any information that it obtains or develops regarding the
efficacy or safety of the Drug and/or the Product, that is
required for, and which shall be made available for, the
annual update of the IND or CTX or any periodic post marketing
safety reporting which is required to be made to the
applicable regulatory authorities with whom the IND, CTX or
Marketing Application is filed;
(ii) any findings associated with the use of the Drug and/or the
Product that may suggest significant hazards, significant
contraindications, significant side effects or significant
precautions pertinent to the safety of the Drug and/or the
Product;
(iii) any information concerning any Adverse Event.
Upon receipt of any such findings or information, each party shall
provide the other party with reasonable cooperation to help the other
party investigate the Adverse Events. The parties agree to exchange
Adverse Event reports in a manner and time frame that will allow either
party to comply with regulatory reporting requirements, including any
requirements of the Act and regulations promulgated thereunder (and, if
applicable, the ICH Guidelines), and to pursue an ongoing safety review
of the Drug and/or the Product. The parties will agree in writing upon
standard operating procedures for the reporting of Adverse Events to
regulatory authorities and to each other, which standard operating
procedures shall include the [*].
(c) Third Party Reporting. Each party also agrees that if it contracts with
a Third Party for research to be performed by such Third Party on the
Drug and/or Product, that party agrees to require such Third Party to
report to the contracting party the information set forth in clauses
(b)(i) through (b)(ii) above, and such contracting party shall provide
this information to the other party.
(d) Information Confidential. Except as otherwise required by the
provisions of this Agreement or as required by law or regulation, each
party to hold all information disclosed to it under this Section 4.8 as
Confidential Information under Article 7 and neither party may use the
information received from the other without the consent of the
disclosing party.
4.9 PERSONNEL
In connection with the Program, each of Xenova and QLT will make available
appropriate scientific, clinical, regulatory, manufacturing, engineering,
executive and other personnel to perform their respective activities under the
Program.
4.10 XENOVA CONTRIBUTION
(a) As its contribution to the cost of the Program, Xenova shall [*].
(b) In the event that this Agreement is terminated due to Xenova's breach
under Section 16.3(d) or Xenova's default under Section 16.5 prior to
Xenova [*].
* material has been omitted and filed separately with the Commission
- 22 -
ARTICLE 5 - COMMERCIALIZATION AND MARKETING
5.1 GRANT OF RIGHTS
Xenova hereby grants to QLT the exclusive right and QLT shall have the
responsibility, at QLT's cost, for the commercialization, marketing and sale of
the Drug and/or the Product in the Field in the Territory, on and subject to the
terms and conditions set out in this Agreement (including Section 8.4).
5.2 COMMERCIALIZATION DILIGENCE
(a) General Statement. QLT shall work diligently and utilize sound and
reasonable scientific, business and medical practice and judgement in
the commercialization, marketing and sale of the Product to maximize
the overall commercial potential of the Product in the Field in the
Territory as a whole, subject to Section 5.2(b).
(b) Clarification. For greater certainty, Xenova acknowledges and agrees
that QLT will not be obligated under Section 5.2(a) to make application
for Regulatory Approvals for the Drug or the Product or seek Commercial
Launch of the Product in [*], if doing so would have an adverse effect
on the maximization of Net Sales in the Territory as a whole. If the
parties disagree whether the making of application(s) for Regulatory
Approvals for the Drug or the Product or Commercial Launch of the
Product in [*] would have an adverse effect on the maximization of Net
Sales in the Territory as a whole, either party may refer the dispute
to expedited arbitration under Section 17.2. If, under Section 17.2, an
arbitrator determines that the making of application(s) or Regulatory
Approvals for the Drug or the Product or Commercial Launch of the
Product in [*] would not adversely affect the maximization of Net Sales
in the Territory as a whole, QLT shall:
(i) promptly make application for Regulatory Approvals for the
Drug and the Product in such countr(ies), if not already
pending; and
(ii) achieve Commercial Launch of the Product in such countr(ies)
within [*].
If QLT fails to achieve Commercial Launch of the Product in [*]within
the [*] period set out in Section 5.2(b)(ii), Xenova may, within [*]
period, by written notice delivered to QLT immediately delete the
countr(ies) from the Territory and this Agreement shall be deemed to be
amended accordingly. QLT's rights and obligations in respect of any
countr(ies) deleted from the Territory shall be governed by Section
16.7, except that no royalty shall be payable under Section 16.7(f) .
(c) Review of Commercialization Activities. If, at any time during the
Term, Xenova reasonably believes that QLT has without legitimate reason
failed to discharge its obligations under Section 5.2(a), Xenova may
refer the following questions to expedited arbitration under Section
17.2:
(i) whether QLT has discharged its obligations under Section
5.2(a); and
(ii) if QLT has not discharged its obligations under Section
5.2(a), what specific action would be required to achieve
compliance with its obligations under Section 5.2(a)
("SPECIFIC ACTION").
If, under Section 17.2, an arbitrator determines that that QLT has
failed to discharge its obligations under Section 5.2(a) and provides
QLT with Specific Action, QLT shall have a cure period of [*] following
the arbitral decision during which to take the Specific Action. If QLT
fails to take the Specific Action within the [*] cure period, Xenova
may, by written notice delivered to QLT within [*] following the
expiration of the [*] cure period, immediately terminate this
Agreement. Termination by Xenova under this Section 5.2(c) shall be
deemed to be termination by Xenova for material breach by QLT under
Section 16.4, provided that QLT shall not have any further opportunity
to cure or commence the cure of such breach as described in that
Section 16.4 and no royalty shall be payable under Section 16.7(f).
5.3 MARKETING DILIGENCE
(a) Marketing Plans. Without limiting the generality of Section 5.2, QLT
shall provide to Xenova at least annually an updated Marketing Plan on
or before [*] of each year during the Term,
* material has been omitted and filed separately with the Commission
- 23 -
commencing in the year [*]. QLT may, in its sole discretion, from time
to time and at any time update and amend the then current Marketing
Plan (including amendments to the Marketing Plan made by separate
memoranda or reports identifying changes made by QLT to the Marketing
Plan) using sound and reasonable scientific, business, medical and
marketing practice and judgement, taking into account the commercial
prospects for the sale of the Finished Product in those countries where
QLT has achieved or is intending to achieve Commercial Launch. Xenova
may provide written comments to QLT regarding the Marketing Plan,
provided that any such comments or lack thereof, or the receipt of the
Marketing Plan, shall not be taken as Xenova's acquiescence as to the
sufficiency of the activities set out therein or as a waiver of QLT's
obligations under Section 5.2 nor will QLT be under any obligation to
incorporate such comments.
(b) Definition of Marketing Default. For the purposes of this Section 5.3,
a "MARKETING DEFAULT" by QLT in the marketing of the Product in the
Field in the Territory shall mean:
(i) [*], provided that there has not been a significant change in
oncology marketing practices in the pharmaceutical industry in
the Territory, the failure of QLT or its permitted
sub-licensees to promptly commence and actively pursue:
(A) [*] promptly after the receipt of the [*] data from
the [*];
(B) [*] promptly after the first [*];
(C) [*] promptly after the [*]; and
(ii) [*], provided that there has not been a significant change in
oncology marketing practices in the pharmaceutical industry in
the Territory, the occurrence of any of the following events:
(A) the failure of QLT or its permitted sub-licensees to
[*] following the receipt of the [*];
(B) the failure of QLT to [*];
(C) the failure of QLT to [*] provided for in the [*],
within the [*] set out therefor in the[*] ; or
(D) subject to the outcome of expedited arbitration under
Section 5.3(c), if any, Xenova otherwise reasonably
considers that QLT has not worked diligently and
utilized sound and reasonable scientific, business
and medical practice and judgement in its marketing
of the Finished Product in the Field as appropriate
in the Territory.
(c) Marketing Default Notice. If, at any time during the Term, Xenova
reasonably considers that QLT has without legitimate reason committed a
Marketing Default, Xenova may provide written notice thereof to QLT
stating that it wishes to exercise the co-promotion and manufacturing
rights set out in Section 5.3(d) (the "MARKETING DEFAULT NOTICE"). If
there is any disagreement between the parties as to whether QLT has
committed a Marketing Default, either party may refer the question to
expedited arbitration under Section 17.2. Subject to the outcome of
expedited arbitration hereunder, if any, Xenova may assume the
co-promotion and manufacturing rights more specifically set out in
Section 5.3(d).
(d) Consequences of Marketing Default. In the event that QLT has committed
an uncured Marketing Default, subject to confirmation by expedited
arbitration, if any, Xenova shall have the right, either alone or
through any licensees or sub-contractors, to:
(i) co-promote and sell, [*], the Product in the Field in the
Territory with QLT; and
(ii) manufacture and supply the Drug and the Product for sale of
the Product in the Field in the Territory;
provided that the parties agree that if Xenova exercises its rights
hereunder, they will reasonably negotiate revised financial terms under
this Agreement, including, without limitation, the assignment of duties
and the allocation of costs for Xenova's co-promotion and manufacturing
* material has been omitted and filed separately with the Commission
- 24 -
activities, revisions to the amount of royalties payable by QLT and the
allocation of costs and revenues. If the parties are not able to reach
agreement on the revised financial terms within 45 days after the later
of the delivery of the Marketing Default Notice by Xenova to QLT and
the confirmation by expedited arbitration of the occurrence of a
Marketing Default by QLT, if any, the matter shall immediately be
submitted to expedited arbitration under Section 17.2.
(e) Sole Remedy. Xenova's sole remedy for any Marketing Default by QLT in
respect of which Xenova has served a Marketing Default Notice on QLT,
shall be limited to the exercise of the co-promotion and manufacturing
rights set out in Section 5.3(d).
5.4 ARBITRATION RIGHTS ALTERNATIVE NOT CUMULATIVE
Notwithstanding Section 17.17, the parties acknowledge and agree that the right
to refer a claim to arbitration under Sections 5.2 and 5.3 shall be alternative
and not cumulative with respect to the same or substantially the same set of
facts or circumstances, but not any subsequent occurrence of such facts and
circumstances.
5.5 COMMERCIALIZATION BY XENOVA
(a) General. Xenova shall work diligently and utilize sound and reasonable
scientific, business and medical practice and judgement in:
(i) the commercialization of the Product in the Field as
appropriate outside the Territory; and
(ii) the commercialization of the ODD Product in the ODD Field as
appropriate in the Territory.
(b) Sub-License Revenues. Xenova agrees that in establishing any
relationships for the marketing and distribution of the Product in the
Field in any country outside the Territory or the marketing and
distribution of the ODD Product in the ODD Field world-wide, whether
alone or through any licensees or sub-contractors, it will not use
unusual efforts in structuring such marketing and distribution
relationships in ways that are uncommon to the pharmaceutical industry
and that would have the effect of reducing Xenova's Net Proceeds or
reducing or avoiding post-commercialization payments due and payable to
QLT under this Agreement.
ARTICLE 6 - ACTIVITIES, NON-COMPETITION, GLOBAL FRANCHISE AND FURTHER
OPPORTUNITIES
6.1 XENOVA ACTIVITIES
The parties acknowledge that, subject to the provisions and restrictions set out
in this Article 6, contemporaneously with the Program Xenova may enter into
agreements with Third Parties in respect of any Xenova Independent Program and
may be conducting activities (provided that Xenova complies with its obligations
under this Agreement applicable to such activities) relating to:
(a) development and/or commercialization of the Drug outside the Field,
anywhere, world-wide;
(b) development of the Drug inside the Field and outside the Development
Territory; or
(c) commercialization of the Drug inside the Field and outside the
Territory.
6.2 XENOVA ACTIVITIES IN THE [*] IN THE TERRITORY
Xenova will not, and will ensure that its Affiliates do not, whether directly or
indirectly, undertake any development or commercialization activities with
respect to the Drug in the [*] in the Territory, except as permitted under this
Agreement; provided that the restriction set out in this Section 6.2 shall not
apply to development and commercialization activities undertaken by Xenova or
its Affiliates with respect to the [*].
* material has been omitted and filed separately with the Commission
- 25 -
6.3 NO OTHER XENOVA ACTIVITIES DURING THE [*]
For the purpose of protecting the development of the Drug and/or the Product in
the Field in the Development Territory, Xenova agrees that for a period of
[*]after the Effective Date, Xenova will not, and will ensure that its
Affiliates and licensees do not, without the prior written consent of QLT, such
consent not to be unreasonably withheld or delayed, either alone or in
partnership or in conjunction with any Person, whether as principal, agent,
employee, director, officer or shareholder or in any capacity or manner, whether
directly or indirectly, participate in any [*]development activities [*] with
respect to:
(a) the Drug and/or the Product for use in the [*] outside the [*]; and/or
(b) the Drug and/or the Product for use outside the [*], provided that the
restrictions set out in this Section 6.3(b) shall not apply to
development activities in the ODD Field, anywhere, world-wide, or any
ODD activities outside the Field.
6.4 RECIPROCAL NON-COMPETE
During the Term, each of QLT and Xenova will not, and will ensure that their
respective Affiliates do not, either alone or in partnership or in conjunction
with any Person, whether as principal, agent, employee, director, officer or
shareholder or in any capacity or manner whatsoever, whether directly or
indirectly, participate in any material development or commercialization
activities in the Territory with respect to any [*]for use in oncology, other
than the Drug or the Product.
6.5 GLOBAL FRANCHISE
The parties acknowledge that in the development and commercialization of the
Product in the Field in their respective territories, the parties will endeavour
to maximize the overall global potential of the Product in the Field and will
endeavour to ensure that any licenses, sub-licenses or other contracts with any
Person entered into by the parties with respect to the Drug and/or the Product
in the Field will also have this same goal of maximization of the overall global
franchise for the Product in the Field.
6.6 NOTICE AND DISCUSSION OF OTHER OPPORTUNITIES
If Xenova intends at any time after the Effective Date to develop the Drug
and/or the Product outside the Field, either alone or in partnership or in
conjunction with any Person, it will give written notice of this intention to
QLT and discuss with QLT the possibility of a relationship with QLT for this
additional development and use of the Drug or the Product.
6.7 CROSS-OVER USE AND CROSS-PRICING PROTECTION
Except as set out in Section 6.3 and this Section 6.7, and subject to compliance
with Section 6.6, Xenova shall be free to pursue development and
commercialization opportunities for the Drug and/or the Product outside the
Field, either alone or in partnership or in conjunction with any Person, and
including through licensees or sub-licensees ("XENOVA PARTNER"), it being
intended that any such development and commercialization shall not result in or
otherwise cause Cross-Over Use or Cross-Pricing Risk. Xenova agrees that it
shall be a term of any such agreement with the Xenova Partner that the Xenova
Partner will comply with the provisions of this Section 6.7. Where either party
in good faith believes that any such development and commercialization
opportunity, whether actual or proposed, has resulted in or caused, or could
reasonably be expected to result in or cause, Cross-Over Use or Cross-Pricing
Risk, the parties agree to enter into discussions aimed at preventing or
otherwise mitigating, in a mutually-acceptable manner, the risk of any
Cross-Over Use or Cross-Pricing Risk resulting from the development and
commercialization opportunity. If the parties disagree as to whether there
exists any actual or potential Cross-Over Use or Cross Pricing Risk, or they
disagree on the measures required to prevent or otherwise mitigate the risk of
Cross-Over Use or Cross-Pricing Risk, then:
(a) [*]
(b) [*]
* material has been omitted and filed separately with the Commission
- 26 -
6.8 CONSEQUENCES OF ARBITRATION
If any arbitral decision under Section 6.7(a) includes a determination that the
additional development and commercialization opportunity does result in or
cause, or could reasonably be expected to result in or cause, Cross-Over Use or
Cross-Pricing Risk, as the case may be, Xenova shall not, and shall cause any
Person with whom Xenova Partners not to, commence or cease pursuing or not
pursue, as the case may be, the additional development and commercialization
opportunity that is the subject of the arbitration.
ARTICLE 7 - CONFIDENTIALITY AND USE OF INFORMATION
7.1 OWNERSHIP OF CONFIDENTIAL INFORMATION
(a) All Confidential Information disclosed by one party to the other shall
remain the property of the disclosing party.
(b) In the event that a court or other legal or administrative tribunal,
directly or through an appointed master, trustee or receiver, assumes
partial or complete control over the assets of a party to this
Agreement based on the insolvency or bankruptcy of the party, the
bankrupt or insolvent party shall promptly notify the court, other
tribunal or appointee:
(i) that Confidential Information received from the other party
under this Agreement remains the property of the other party;
and
(ii) of the confidentiality obligations under this Agreement.
In addition, the bankrupt or insolvent party shall, to the extent
permitted by law, take all steps necessary or desirable to maintain the
confidentiality of the other party's Confidential Information and to
ensure that the court, other tribunal or appointee maintains the
information in confidence in accordance with the terms of this
Agreement.
7.2 OBLIGATION OF CONFIDENTIALITY
Except as otherwise agreed in writing by Xenova and QLT, each party will, for
the Term and for 10 years after its expiration or termination for any reason, in
respect of all Confidential Information of the other party and all Program
Information owned by the other party:
(a) maintain such Confidential Information and Program Information in
strict confidence and not to disclose any portion of such Confidential
Information or Program Information to any Person, without the prior
written consent of the disclosing party, other than to its legal
counsel, accountants, employees and consultants who are bound by
obligations of confidentiality and non-use in connection therewith at
least as stringent as those set forth in this Agreement, provided that
each party shall remain responsible for the actions, uses and
disclosures of its legal counsel, accountants, employees and
consultants; and
(b) not use such Confidential Information or Program Information for any
purpose other than the development and/or commercialization of the Drug
and/or the Product (including performance of the Program) under this
Agreement, or as otherwise permitted under this Agreement, without the
prior written consent of the disclosing party; and
(c) take reasonable measures to assure that no unauthorized use or
disclosure is made by others to whom access to such Confidential
Information and Program Information is granted.
Nothing herein shall be construed as preventing either party from disclosing any
Confidential Information or Program Information:
(d) Required for Regulatory Filings. to government agencies where such
information is required to be included in regulatory filings permitted
under the terms of this Agreement;
(e) Under Confidentiality. to its Affiliates or to Third Parties for
consulting, development, clinical and analytical testing,
manufacturing, marketing, distribution and other purposes for the
development and commercialization of the Product under this Agreement,
including such activities under the
- 27 -
Program, provided that such Affiliate or Third Party has undertaken in
writing an obligation of confidentiality and non-use with respect to
the Confidential Information and Program information similar to that
set out in this Agreement;
(f) Published if Approved. by publication in accordance with Section 7.7;
or
(g) Required by Law. to the extent required by applicable laws or
regulations or as ordered by a court or other regulatory body having
competent jurisdiction.
In each of the foregoing cases, the receiving party will use diligent efforts to
limit the disclosure and maintain confidentiality to the extent possible and to
promptly inform the disclosing party of any intended or actual disclosure in
order to allow the disclosing party to seek protective treatment, as the case
may be.
7.3 XENOVA USE OF QLT PROGRAM INFORMATION
Subject to Sections 6.7 and 7.6, QLT shall provide to Xenova, from time to time
(i) annually, a general update on QLT's Program Information, whether or not
Xenova has requested it, and (ii) detailed Program Information as reasonably
requested by Xenova, and Xenova shall have the right to use and cross-reference,
whether alone or through any licensees or other Persons, all of QLT's Program
Information, including:
(a) QLT's regulatory filings and clinical data (including Phase IV data)
for the Drug and the Product; and
(b) any other data which would reasonably be expected to enable Xenova to
increase its Net Proceeds from commercialization of the Drug and/or the
Product outside the Territory;
for the sole purpose of developing and/or commercializing the Drug and/or the
Product:
(c) inside the Field but outside the Territory (subject to QLT's exclusive
development rights in the Development Territory under Article 4, for as
long as those rights continue); and/or (d) outside the Field (excluding
the ODD Field), anywhere, world-wide.
Xenova shall provide compensation to QLT for the foregoing right to use QLT's
Program Information in accordance with Section 10.6.
7.4 QLT USE OF XENOVA PROGRAM INFORMATION
Subject to Section 7.5, except to the extent that Xenova is restricted by any
Third Party agreements in respect of any Xenova Independent Program Information,
QLT shall have the right to use and to cross-reference, whether alone or through
any licensees or subcontractors, all of Xenova's Program Information and Xenova
shall provide to QLT, from time to time (i) annually, a general update on
Xenova's Program Information, whether or not QLT has requested it, and (ii)
detailed Program Information as reasonably requested by QLT from time-to-time,
including:
(a) Xenova's regulatory filings and clinical data (including Phase IV data)
for the Drug and/or the Product; and
(b) Available Xenova Independent Program Information;
for the purpose of developing and/or commercializing the Drug and/or the Product
in the Field in the Territory.
7.5 THIRD PARTY ACCESS
Each of QLT and Xenova will use reasonable endeavours to ensure that any Person
with whom it contracts for the performance of any activities relating to the
development or commercialization of the Drug and/or the Product, whether under
the Program or under any Xenova Independent Program, will allow QLT or Xenova,
as the case may be, to use and share with the Development Committee as
contemplated in Section 2.2 and with the other party as contemplated by Sections
4.5, 7.3 and 7.4, all Information generated by such Person during the course of
such activities. QLT and Xenova shall use
- 28 -
reasonable endeavours to ensure that any written agreement with any such Person
shall include provisions allowing such use and sharing of Information.
[*]
7.6 NO USE OF QLT PROGRAM INFORMATION FOR ODD
Notwithstanding any provision of this Agreement, and in recognition of the
rights reserved to Xenova for the ODD Field under this Agreement, QLT shall have
no obligation to provide to Xenova, nor shall Xenova have any right of access to
or right to use or cross-reference, whether alone or through any licensees, any
of QLT's Program Information to develop and/or commercialize the Drug and/or the
ODD Product in the ODD Field, whether such Program information is received from
QLT or any other Person, including:
(a) QLT's regulatory filings and clinical data (including Phase IV data)
for the Drug and/or the Product; and
(b) any other data which would enable Xenova to increase its Net Proceeds
from commercialization of the Drug and/or the Product outside the
Territory.
However, the provisions of this Section 7.6 shall not entitle QLT to withhold
from Xenova any QLT Program Information, including QLT's regulatory filings and
clinical data (including Phase IV data) for the Drug and/or the Product which,
in the absence of this Section 7.6, QLT would be obligated to provide to Xenova
under this Agreement and which Xenova requires for the purpose of developing
and/or commercializing the Drug and/or the Product in the fields and territories
referenced in Section 7.3.
7.7 PUBLICATIONS
(a) Neither party shall publish or provide public disclosure of any
Information or Improvements relating to the Drug and/or the Product in
the Field except in accordance with this Section 7.7 (except that the
issuing of press releases relating to the Drug and/or Product in the
Field shall be governed by Section 17.15 and not by this Section 7.7).
(b) A party proposing to publish, present or make oral public disclosure of
any Information or Improvements relating to the Drug and/or the Product
in the Field (in this Section 7.7, the "PRESENTING PARTY") shall
furnish a copy of the proposed manuscript to the other party (in this
Section 7.7, the "REVIEWING PARTY") at least [*] prior to submission
for publication or presentation or the date of oral public disclosure,
as the case may be, except for disclosures required by securities
regulatory authorities pursuant to Section 7.2(d). The Reviewing Party
shall return materials provided by the Presenting Party pursuant to
this Section 7.7 within [*] thereafter. The Parties anticipate that the
furnishing of copies and comments under this Section 7.7 may, in
practice, be conducted through the Development Committee; however, any
decision-making on publications shall be governed by the provisions of
this Section 7.7 and not by the provisions of Section 2.2.
(c) The Reviewing Party shall provide to the Presenting Party, without
undue delay, its comments on or proposed changes to the proposed
manuscript. If the proposed manuscript is not acceptable to the
Reviewing Party, the parties shall discuss and agree upon the final
wording and/or disposition thereof.
(d) The parties shall use commercially reasonable efforts to cooperate and
give due regard to the parties' legitimate interests in the Drug and/or
the Product and to ensure that no rights of the Reviewing Party are
jeopardized or forfeited by the proposed publication, presentation or
oral public disclosure, including, without limitation, obtaining
optimal patent protection, coordinating and maintaining the proprietary
nature of submissions for Regulatory Approvals, coordinating with other
ongoing studies in the same field and protecting the confidentiality of
Confidential Information and Program Information.
(e) Without limiting the generality of the foregoing, the Reviewing Party
may, by written notice to the Presenting Party, have the right to delay
publication, presentation or oral public disclosure of any proposed
manuscript for a period of [*] to obtain patent protection or until any
patent applications
* Material has been omitted and filed with the Commission
- 29 -
have been filed, whichever shall first occur. Upon expiration of the
[*] period, the Presenting Party may submit the manuscript for
publication with the wording agreed upon by the parties. The filing of
patent applications shall be governed by Sections 13.1 and 13.2.
(f) Nothing in this Section 7.7 shall be construed in any way as
prohibiting either party from making truthful disclosures arising from
the results of the Program or any other development activities under
this Agreement, once compliance with the foregoing procedures is
observed. For greater certainty, nothing in this Section 7.7 shall
require a Party to utilize greater than commercially reasonable efforts
to impose obligations on any Third Party (as between that Party and any
Third Party), including any licensee, investigator or manufacturer
appointed by such Party, in relation to any publication or public
disclosure of any Information or Improvements of the Third Party
relating to the Drug and/or Product in the Field.
7.8 ACKNOWLEDGEMENT OF PRIOR DISCLOSURES
The parties hereby acknowledge and agree that, in respect of all Confidential
Information relating to the Drug and/or the Product, the provisions of the
Confidentiality Agreement are superseded by the provisions of this Article 7 and
all "Confidential Information" relating to the Drug and/or Product disclosed
under the Confidentiality Agreement, as defined therein, shall be Confidential
Information under this Agreement and shall be subject to a continuing obligation
of confidentiality as set out in this Article 7. In respect of all other
Confidential Information under the Confidentiality Agreement, the
Confidentiality Agreement shall continue in full force and effect.
7.9 RETURN OF CONFIDENTIAL INFORMATION
Upon the early termination of this Agreement, unless otherwise required to
exercise the grants of license set out in Sections 16.7 and 16.8 or as otherwise
agreed between the parties, each party shall:
(a) promptly cease all use of the Confidential Information of the other
party and the Program Information of the other party and ensure that
its employees cease all use thereof and use reasonable efforts to
ensure that its corporate counsel, accountants and consultants cease
all use thereof; and
(b) upon written request of the other party,
(i) return to the other party all original copies of the
Confidential Information of the other party and the Program
Information of the other party in its control or possession;
and
(ii) destroy any and all copies or other reproductions or extracts
of the Confidential Information of the other party and the
Program Information of the other party and all summaries,
abstracts, extracts, computer files, memoranda, notes or other
documents which contain or were prepared based on such
Confidential Information and Program Information of the other
party;
subject to the retention of one complete copy for archival and/or regulatory or
legal purposes. If a party requests destruction of its Confidential Information,
the other party shall document the destruction of the Confidential Information
and shall provide a copy of this documentation to the requesting party.
ARTICLE 8 - INTELLECTUAL PROPERTY; ADDITIONAL TECHNOLOGY; LICENSES
8.1 OWNERSHIP OF INTELLECTUAL PROPERTY
As between QLT and Xenova:
(a) title to and ownership of all rights in and to all Intellectual
Property owned by QLT or licensed to QLT by Third Parties as of the
Effective Date shall at all times remain with QLT and, except as
expressly granted under this Agreement, no rights in or to any such
Intellectual Property shall vest in Xenova; and
* Material has been omitted and filed with the Commission
- 30 -
(b) title to and ownership of all rights in and to all Intellectual
Property owned by Xenova or licensed to Xenova by Third Parties as of
the Effective Date shall at all times remain with Xenova and, except as
expressly granted under this Agreement, no rights in or to any such
Intellectual Property shall vest in QLT.
8.2 OWNERSHIP OF PROGRAM INFORMATION
Subject to the licenses granted under this Agreement, the parties agree that all
Program Information will be owned as follows:
(a) subject to Section 8.2(c), all Program Information related solely to
the Drug itself, or the manufacture or use of the Drug itself, but
excluding Program Information generated by or on behalf of QLT and
relating to marketing strategies, plans and reports, will be solely
owned by Xenova, and
(i) QLT will assign to Xenova all right, title and interest it may
have in and to such Program Information, and
(ii) upon such assignment, such Program Information will be
automatically included in the exclusive license granted by
Xenova to QLT under Section 8.4;
(b) all Available Xenova Independent Program Information, as between Xenova
and QLT, will be solely owned by Xenova;
(c) notwithstanding Section 8.2(a), any Program Information generated,
developed or acquired, whether solely or jointly with any Third Party,
by QLT under the Interim Agreement and this Agreement comprising
manufacturing processes having application to the Drug and/or the
Product, as between Xenova and QLT will be solely owned by QLT, and:
(i) Xenova will assign to QLT all right, title and interest it may
have in and to such Program Information, and
(ii) upon such assignment:
(A) if the manufacturing processes do not have
application beyond the Drug and/or the Product, the
Program Information will be included in the exclusive
license granted by QLT to Xenova under Section
8.5(a), or
(B) if the manufacturing processes do have application
beyond the Drug and/or the Product, paragraph (A)
above shall apply to the extent that it relates to
the Drug and/or Product and in addition QLT will
grant to Xenova a non-exclusive license on the terms
and conditions set out in Section 8.5(b); and
(d) all other Program Information:
(i) if solely created by a party, will be solely owned by the
party that created it, and will be automatically included in
the exclusive licenses granted by each party to the other
party under Sections 8.4 and 8.5(a); or
(ii) if jointly created by Xenova and QLT, will be jointly owned by
Xenova and QLT, and in respect of Xenova's joint interest in
such Program Information, will be automatically included in
the exclusive license granted by Xenova to QLT under Section
8.4. QLT's joint interest in such Program Information will be
automatically included in the licenses granted by QLT to
Xenova under Section 8.5.
8.3 ADDITIONAL TECHNOLOGY
(a) If at any time during the Term, QLT and/or Xenova reasonably determine
that any technology controlled by a Third Party ("ADDITIONAL
TECHNOLOGY") may be necessary or useful for the development or
commercialization of the Drug and/or the Product in the Field in any
country of the world, QLT or Xenova, as appropriate, shall present such
Additional Technology, along with a written report with respect
thereto, to the Development Committee (or in the event that the
- 31 -
Development Committee has been dissolved, to the other party), which
shall then consider the acquisition or licensing of the Additional
Technology, but the Development Committee shall have no power to
require either party to enter into any agreement, or have any financial
or other commitments, with respect to any Additional Technology.
(b) In the case of Additional Technology that may be necessary or useful in
the Field, the Development Committee (or in the event that the
Development Committee has been dissolved, the parties) shall then
determine, whether licenses to, and/or acquisitions of, such Additional
Technology are desirable, and what recommendations to make to the
parties as to which party shall approach and negotiate with the Third
Party.
(c) In negotiating any agreements for the licensing or acquisition of
Additional Technology under this Section 8.3, the party conducting such
negotiations shall, on an ongoing basis throughout such negotiations,
consult with the other party to ensure that the scope of the
Intellectual Property rights licensed or otherwise acquired are
adequate for the uses contemplated by the other party for the
Additional Technology. The parties intend that each party shall be
licensed in respect of its territory directly by the licensing party.
(d) The costs of licensing or otherwise acquiring any Additional Technology
under this Section 8.3 shall be borne, on a territory-by-territory and
field-by-field basis, by the party that has rights in that territory
and field in respect of Drug and/or Product.
(e) In the absence of agreement to proceed with the licensing or
acquisition of any Additional Technology hereunder, nothing in this
Section 8.3 shall be deemed to preclude either party from licensing
and/or acquiring such Additional Technology for its own benefit.
8.4 LICENSE TO QLT
(a) Grant of License. Xenova hereby grants to QLT an exclusive
royalty-bearing license:
(i) to use the Drug and/or the Product in the Field for the
purpose of conducting research and development of the Drug
and/or the Product in the Field in the Territory and (for as
long as QLT is responsible for Initial Development and to the
extent necessary for Initial Development) in Europe;
(ii) to sell, have sold, offer for sale, export (from one part of
the Territory to another) or import the Drug and/or the
Product in the Field in the Territory and to use the Drug
and/or Product for those purposes; and
(iii) to make, have made, export or import the Drug and/or the
Product, anywhere, world-wide for the purpose of exercising
the rights granted under Sections 8.4(a)(i) and 8.4(a)(ii);
under the Xenova Patents and such Program Information as may be now or
hereafter owned or controlled by Xenova during the Term as may be
necessary or useful for such purposes, all on the terms and conditions
set out in this Agreement. For greater certainty:
(iv) the license granted to QLT under Sections 4.1 and 8.4(a)(i):
(A) shall be exclusive in the Field in the Development
Territory for the purpose referred to in those
Sections, to the exclusion of Xenova and all other
Persons, and
(B) shall be subject to the reduction in the geographic
scope of the Development Territory, as provided in
Section 4.2(b); and
(v) the license granted to QLT under Section 8.4(a)(ii) shall be
exclusive in the Field in the Territory for the purpose
referred to in that Section, to the exclusion of Xenova and
all other Persons,
all on and subject to the terms and conditions set out in this
Agreement.
Nothing in this Agreement shall prevent Xenova from making application
for, prosecuting or maintaining any Patents in respect of patentable
Intellectual Property owned by Xenova, including
- 32 -
the Xenova Patents; or entering into agreements with Third Parties in
respect of any Xenova Independent Program.
(b) No right to Sub-License Development. QLT shall not have the right to
sub-license the research and development rights granted under Section
8.4(a)(i) above, provided that notwithstanding the foregoing, QLT may
sub-contract any of its research and development activities to any
Person upon notice to Xenova.
(c) Sub-License Marketing. If QLT wishes to sub-license the rights granted
under Section 8.4(a)(ii) to any Person, the following provisions shall
apply:
(i) QLT shall first give written notice to Xenova of any intention
to sub-license such rights;
(ii) [*] and
(iii) QLT may only sub-license its rights under Section 8.4(a)(ii)
to a Third Party if it shall have received the consent of
Xenova with respect to the proposed sub-license, which consent
shall not be unreasonably withheld or delayed. The criteria to
be considered by Xenova when determining whether to give such
consent shall include whether the proposed sub-licensee:
(A) is appropriately qualified, experienced and competent
in oncology marketing for the area of the Territory
proposed to be sublicensed, and
(B) has the necessary resources to carry out the proposed
activities in such area.
If there is any disagreement between the parties in relation to the
withholding of Xenova's consent under this section, either party may
refer the disagreement to expedited arbitration under Section 17.2.
(d) Sub-License Manufacturing. QLT may only sub-license the rights granted
under Section 8.4(a)(iii) to any Person if QLT shall have received the
consent of Xenova with respect to the proposed sub-license, which
consent shall not be unreasonably withheld or delayed. The criteria to
be considered by Xenova when determining whether to give such consent
shall include whether the proposed sub-licensee:
(i) is appropriately qualified and has been approved by the
relevant health regulatory body for the area of the Territory
where the Drug and/or Product is proposed to be sold,
(ii) is competent to manufacture and process the Drug and/or the
Product (as the case may be) to an appropriate manufacturing
quality; and
(iii) has the production capacity to manufacture and process the
Drug and/or the Product (as the case may be).
If there is any disagreement between the parties in relation to the
withholding Xenova's consent under this section, either party may refer
the matter to expedited arbitration under Section 17.2.
(e) Requirements for Sub-License Agreements. All sublicenses granted by QLT
under this Agreement shall:
(i) be in writing executed by QLT and the sub-licensee;
(ii) not relieve QLT of any obligations, whether financial or
otherwise, under this Agreement and QLT shall make all
required payments to Xenova as if the sublicensed activities
were conducted by QLT; and
(iii) contain [*] substantially similar to those contained in this
Agreement, which provisions shall allow [*] by Xenova and its
representatives as if the sub-licensee had contracted directly
with Xenova.
(f) Compulsory Sub-licenses. Notwithstanding Section 8.4(e), if at any time
in any country in the Territory, QLT is required pursuant to an order
issued by a competent government authority or
* Material has been omitted and filed with the Commission
- 33 -
other applicable law to grant to a government entity or other Third
Party a compulsory sub-license to manufacture, use or sell the Drug
and/or the Product, [*]
(g) Copies of Sub-Licenses. On request of Xenova, QLT will provide to
Xenova a copy of each sublicense agreement entered into by it under
this Agreement.
8.5 LICENSE TO XENOVA
(a) Grant of Exclusive License. Subject to Sections 7.6, 8.5(b), 8.5(c) and
8.5(d), QLT hereby grants to Xenova an exclusive, royalty-bearing (but
only royalty-bearing in the circumstances described in Section 10.6)
license (with the right to sub-license):
(i) to use the Drug and/or the Product for the purpose of
conducting research and development: (i) in the Field outside
the Development Territory (to the extent that and for as long
as such a license to Xenova in the Field in Europe would
conflict with the grant of exclusive development rights in
Europe to QLT under 8.4(a)), and thereafter in the Field
outside the Territory; and (ii) outside the Field anywhere,
world-wide;
(ii) to use, sell, have sold, offer for sale, export or import the
Drug and/or the Product in the Field outside the Territory,
and outside the Field, anywhere, world-wide; and
(iii) to make, have made, export or import the Drug and/or the
Product, anywhere, world-wide for use in exercising the rights
granted under Sections 8.5(a)(i) and (ii);
under the QLT Patents and such Program Information and other
Intellectual Property as may be now or hereafter owned or controlled by
QLT during the Term as may be necessary or useful for such purposes,
all on the terms and conditions set out in this Agreement. For greater
certainty:
(iv) the license granted to Xenova under Section 8.5(a)(i):
(A) shall be exclusive in the Field outside the
Development Territory and outside the Field,
anywhere, world-wide, to the exclusion of QLT and all
other Persons, and
(B) shall benefit from the reduction in the geographic
scope of the Development Territory, as provided in
Section 4.2(b); and
(v) the license granted to Xenova under Section 8.5(a)(ii) shall
be exclusive in the Field outside the Territory and outside
the Field, anywhere, world-wide, to the exclusion of QLT and
all other Persons.
(b) Grant of Non-Exclusive License. Notwithstanding Section 8.5(a), in
respect of any Program Information assigned by Xenova to QLT under
Section 8.2(c) having application beyond the Drug and/or the Product,
QLT hereby grants to Xenova in addition to the exclusive licence
granted under Section 8.5(a), a non-exclusive license (royalty bearing
in the circumstances described in Section 10.6 where relevant) to such
Program Information on the terms and conditions set out in Section
8.5(a), applied mutatis mutandis (such necessary changes including the
terms that such licenses are for products other than Drug or Product
and shall have no field or territory restrictions).
(c) Marketing Default. In the event that QLT has committed an uncured
Marketing Default under Section 5.3, subject to confirmation by
expedited arbitration thereunder, if any, the scope of the licenses set
out in Sections 8.5(a) and 8.5(b) shall be automatically [*] and Xenova
shall have a [*]:
(i) [*]
(ii) [*]
under the QLT Patents and such Program Information as may be now or
hereafter owned or controlled by QLT during the Term as may be
necessary or useful for such purposes, all on the terms and conditions
set out in this Agreement as may be amended by the parties pursuant to
Section 5.3(d).
* Material has been omitted and filed with the Commission
- 34 -
(d) Requirements for Sub-License Agreements. All sublicenses granted by
Xenova under this Agreement shall:
(i) be in writing executed by Xenova and the sub-licensee;
(ii) not relieve Xenova of any obligations, whether financial or
otherwise, under this Agreement and Xenova shall make all
required payments to QLT as if the sublicensed activities were
conducted by Xenova; and
(iii) contain [*] provisions substantially similar to those
contained in this Agreement, which provisions shall allow [*]
by QLT and its representatives as if the sub-licensee had
contracted directly with QLT.
(e) Copies of Sub-Licenses. On request of QLT, Xenova will provide to QLT a
copy of each sublicense agreement entered into by it under this
Agreement.
8.6 GRANTS OF XENOVA INTELLECTUAL PROPERTY
(a) Without limiting the grants set forth in Section 8.4, Xenova shall
ensure that there are no Intellectual Property rights owned or
controlled by Xenova as of the Effective Date related to the Drug
and/or the Product or the use thereof, that are necessary or useful to
permit QLT to perform the Program to completion and to perform the
manufacturing, marketing, supply and other commercialization activities
contemplated by this Agreement for the Drug and/or the Product in the
Field in the Territory ("FURTHER INTELLECTUAL PROPERTY"), other than
those granted to QLT under this Agreement.
(b) In the event that Xenova or QLT determines that the Intellectual
Property rights granted under Section 8.4 or elsewhere in this
Agreement are insufficient for QLT to perform the Program to completion
and/or perform the manufacturing, marketing, supply and other
commercialization activities contemplated by this Agreement for the
Drug and/or the Product in the Field in the Territory and that QLT
requests access to Further Intellectual Property for such purposes,
Xenova will license to QLT, at no additional cost to QLT, such Further
Intellectual Property as may be owned or controlled by Xenova as of the
Effective Date related to the Drug and/or the Product or the use
thereof, as may be necessary or useful for QLT to complete the Program
and/or perform the manufacturing, marketing, supply and other
commercialization activities, as the case may be.
ARTICLE 9 - MILESTONE PAYMENTS
9.1 UPFRONT PAYMENT
The parties acknowledge that, pursuant to the Interim Agreement and in partial
consideration for Xenova's commitments under the Interim Agreement and this
Agreement, QLT has paid to Xenova an upfront non-refundable, non-creditable fee
of US$10,000,000.
9.2 MILESTONE PAYMENTS
QLT shall pay to Xenova the following milestone payments within 30 days after
achievement of the respective milestone: (a) First US NDA filing. US[*] upon QLT
filing with the FDA the first NDA for the Product in the Field; and (b) US FDA
Approval.
(i) [*] upon the granting of first Regulatory Approval by the FDA
(whether for a [*]) for the Product in the Field,
(ii) [*] upon the granting of each subsequent Regulatory Approval
by the FDA for any [*] for the Product in the Field, and
* Material has been omitted and filed with the Commission
- 35 -
(iii) [*] upon the granting of each subsequent Regulatory Approval
by the FDA for any [*] for the Product in the Field;
provided that the total of all milestone payments paid by QLT under
this Section 9.2 shall not exceed US$50,000,000 over the Term.
9.3 CURRENCY OF PAYMENT
(a) U.S. Dollars. The upfront and milestone payments set out in this
Agreement are and shall be respectively denominated in United States
dollars.
(b) Currency Choice. At least 10 days prior to the due date of any upfront
and milestone payments to be made by QLT to Xenova under Section 9.2,
Xenova shall notify QLT in writing that Xenova wishes to receive the
payment in United States dollars, British pounds sterling or a
combination thereof. If Xenova does not give this currency choice
notice to QLT, QLT will make the payment in United States dollars.
(c) Foreign Exchange. If Xenova elects to receive any upfront and milestone
payment or part thereof in British pounds sterling, Xenova shall notify
QLT in writing of the date on which it wishes to receive the payment 2
business days prior to the payment date, which shall be no earlier than
the due date, and QLT shall make the payment to Xenova in British
pounds sterling where the exchange rate for United States dollars to
British pounds sterling will be the buying rate for British pounds
sterling quoted by QLT's primary banker.
ARTICLE 10 - ROYALTIES
10.1 ROYALTIES
Subject to the remainder of this Article 10, QLT shall pay to Xenova, without
duplication, on the terms and conditions set out in this Agreement, the
following royalties in respect of the Finished Product:
(a) 15% of Net Sales, in respect of any aggregate Net Sales of all Finished
Products that are less than [*] in a particular calendar year;
(b) 18% of Net Sales, in respect of that portion of aggregate Net Sales of
all Finished Products that are equal to and/or greater than [*] and
less than and/or equal to [*] of such Net Sales in a particular
calendar year; and
(c) 22% of Net Sales, in respect of that portion of aggregate Net Sales of
all Finished Products that are greater than [*] of such Net Sales in a
particular calendar year;
provided that, subject to Section 13.1(e), the royalties payable under this
Section 10.1 shall be earned and payable as follows:
(d) where one or more Valid Claims applicable to the Finished Product under
the Xenova Patents licensed to QLT under Section 8.4 exist in the
country of sale on the date of Commercial Launch of the Finished
Product therein, the royalties hereunder shall be earned and payable
for such country until the expiration of the last of such Valid Claims
in such country;
(e) where no Valid Claims are applicable to the Finished Product under the
Xenova Patents licensed to QLT under Section 8.4 in the country of sale
on the date of Commercial Launch of the Finished Product therein, the
royalties hereunder shall be earned and payable for such country for a
period of 10 years commencing on the date of Commercial Launch of the
Finished Product therein, provided that in respect of [*], if, at any
time during such 10 year period, there is a [*] for such portion of the
10 year period, whether all or part, that [*].
10.2 EXCLUSIONS FROM ROYALTIES
No royalties will be payable under Section 10.1 in respect of:
* Material has been omitted and filed with the Commission
- 36 -
(a) Finished Products used in clinical trials or for compassionate use for
which QLT does not receive consideration; and
(b) amounts derived from sales of Finished Products by QLT to its
Affiliates or by QLT or its Affiliates to their respective
sub-licensees, unless the Affiliates and/or sub-licensees purchasing
the Finished Products, as the case may be, are the end-users of the
Finished Products sold.
10.3 THIRD PARTY LICENSE FEES AND ROYALTIES
Notwithstanding Section 13.7, Xenova shall have sole responsibility for:
(a) the payment of all costs and expenses; and
(b) the performance of all financial (including license fees and
royalties), administrative and other obligations, under any Third Party
Licenses.
10.4 ADJUSTMENT OF ROYALTIES
(a) Compulsory Licenses or Sub-Licenses. If at any time in the Field in any
country in the Territory:
(i) a competent governmental authority grants to a government
entity or other Third Party a compulsory license to
manufacture, use or sell the Drug and/or the Product with
respect to which royalties would be payable pursuant to
Section 10.1; or
(ii) QLT or Xenova is required pursuant to an order issued by a
competent government authority or other applicable law to
grant to a government entity or other Third Party a compulsory
sub-license or license, as the case may be, to manufacture,
use or sell the Drug and/or the Product with respect to which
royalties would be payable pursuant to Section 10.1;
then QLT may [*] for the compulsory license or sub-license. In the
event that a competent governmental authority grants, or QLT or Xenova
is required to grant, a compulsory license in the Field in the
Territory to a government entity or other Third Party on [*], Xenova
agrees that the [*] by the parties [*].
(b) Dispute Resolution - Evaluation/Arbitration. If the parties fail to
agree on an adjustment to the royalty rate under this Section 10.4
within [*] after commencing negotiations, either party may refer the
matter to expedited arbitration under Section 17.2.
10.5 ROYALTY PAYMENTS UPON TERMINATION
If this Agreement is terminated in accordance with Article 16 with respect to
all or some of the Finished Products, QLT shall continue to pay Xenova all
amounts earned pursuant to this Article 10 prior to the date of termination and
any amounts earned thereafter as a result of sales of residual inventory of such
terminated Finished Products. In addition, QLT shall continue to pay to Xenova
all amounts payable hereunder with respect to the Finished Products, if any,
with respect to which this Agreement is not terminated. Such payments shall be
payable on the terms and conditions set out in Article 11, notwithstanding the
termination of this Agreement.
10.6 COMPENSATION FOR USE OF PROGRAM INFORMATION
In consideration of the licenses granted to Xenova by QLT under Section 8.5(a),
Xenova shall pay to QLT, without duplication, during the Term:
(a) Europe. [*] of the Net Proceeds received by Xenova from the
commercialization and sale of the Finished Product in the Field in any
country or regulatory jurisdiction in Europe after Regulatory Approval
has been obtained therefor;
* Material has been omitted and filed with the Commission
- 37 -
(b) Rest of World. [*] of the Net Proceeds received by Xenova from the
commercialization and sale of the Finished Product in the Field in any
country or regulatory jurisdiction outside the Development Territory
after Regulatory Approval has been obtained therefor; and
(c) ODD. [*] of the Net Proceeds received by Xenova from the
commercialization and sale of the Drug in the ODD Field in any country
or regulatory jurisdiction in the Territory after Regulatory Approval
has been obtained therefor.
ARTICLE 11 - PAYMENT TERMS
11.1 PAYMENT OF ROYALTIES
All amounts payable under Sections 10.1 and 10.6 shall be due and payable within
45 days after the close of each calendar quarter during the periods for which
such amounts are earned and payable.
11.2 CURRENCY FOR ROYALTY PAYMENTS
All amounts payable by either party to the other party under Sections 10.1 and
10.6 shall be payable in United States Dollars, by wire transfer, to a bank
account designated by the party receiving such funds. Monthly sales amounts
shall be translated from other currencies to United States Dollars by using an
average rate of exchange computed as the arithmetic average of daily 12 noon
buying rates in New York certified by the New York Federal Reserve Bank for
Customs purposes for each month. [RATE SOURCE: ▇▇▇▇://▇▇▇.▇▇▇▇.▇▇▇.▇▇▇/▇▇▇▇;
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇].
11.3 CURRENCY TRANSFER RESTRICTIONS
If in any country payment or transfer of funds out of such country is prohibited
by law or regulation, the parties hereto shall confer regarding the terms and
conditions on which Finished Products shall be sold in such countries, including
the possibility of payment of royalties to Xenova or QLT, as the case may be, in
local currency to a bank account in such country or the renegotiation of
royalties for such sales, and in the absence of any other agreement by the
parties, such funds payable to Xenova or QLT, as the case may be, shall be
deposited by the other party in whatever currency is allowable in a bank
designated in that country as acceptable to Xenova or QLT, as the case may be.
11.4 TAXES
(a) For the purposes of this Section 11.4, "TAXES" shall include taxes,
tariffs, customs duties, brokerage fees and other related charges,
including, without limitation, social services taxes, goods and
services tax, value added, excise and other sales taxes.
(b) Without prejudice to any obligation that Xenova may have to charge, and
recover from QLT, Value Added Tax on any invoice issued to QLT, Xenova
shall pay all Taxes assessed or levied in connection with any
activities performed by Xenova or payments made to Xenova under this
Agreement. Xenova will remit all Taxes to the appropriate governmental
body within the time legally required for such remittances and shall
promptly provide QLT with written evidence of all such remittances.
(c) Without prejudice to any obligation that QLT may have to charge, and
recover from Xenova, Value Added Tax on any invoice issued to Xenova,
QLT shall pay all Taxes assessed or levied in connection with any
activities performed by QLT or payments made to QLT under this
Agreement. QLT will remit all such Taxes to the appropriate
governmental body within the time legally required for such remittances
and shall promptly provide Xenova with written evidence of all such
remittances.
(d) If any law or regulation in any country requires the withholding by
either party of any Taxes due on payments to be remitted to the other
party under this Agreement, such Taxes shall be deducted from the
amounts paid to the other party, provided that the remitting party
shall take all reasonable measures to reduce the amount of such Taxes.
If the Taxes are deducted from the amounts paid, the remitting party
shall furnish the other party with the originals of all official
* Material has been omitted and filed with the Commission
- 38 -
receipts for such Taxes and such other evidence of such Taxes and
payment thereof as may be reasonably requested by the other party and
shall provide any reasonable assistance or co-operation which may be
requested by the other party in connection with any efforts by the
other party to obtain a credit for such Taxes.
11.5 SALES AND PAYMENT REPORTS
After first Regulatory Approval of the Finished Product in the Field, and for
the remainder of the Term, QLT shall submit to Xenova, concurrently with the
quarterly payments made pursuant to Section 10.1, written reports consistent
with GAAP setting out for the calendar quarter, for each type of Finished
Product, on a country-by-country basis (where reasonably feasible):
(a) a report of milestone payments under Section 9.2 owing to Xenova, if
any;
(b) all amounts received by QLT or its Affiliates or sub-licensees, as
applicable, from the sale of the Finished Product to end-users thereof;
(c) details of the quantities of the Finished Product sold in each country;
(d) the amount of any deductions taken from the amounts received by QLT or
its Affiliates, as applicable, from the sale of the Finished Product to
end-users of the Finished Product in calculating Net Sales of the
Finished Product, and
(e) the amount of Net Sales of the Finished Product; and
(f) the amount due and payable pursuant to Section 10.1.
11.6 NET PROCEEDS REPORTS
After first Regulatory Approval of the Finished Product in the Field outside the
Territory and/or after first Regulatory Approval of the ODD Product in the ODD
Field in the Territory, as the case may be, and for the remainder of the Term,
Xenova agrees to submit to QLT, concurrently with the quarterly payments made
pursuant to Section 10.6, written reports consistent with GAAP setting out for
the calendar quarter, for each type of Finished Product or ODD Product, as the
case may be, on a country-by-country basis (where reasonably feasible) and being
sufficient to calculate royalties due to QLT under Section 10.6:
(a) all amounts received by Xenova or its Affiliates or sub-licensees, as
applicable, from the sale of the Finished Product to end-users thereof;
(b) details of the quantities of Finished Product and/or ODD Product sold
in each country;
(c) the amount of any deductions taken from the amounts received by Xenova
or its Affiliates, as applicable, from the sale of the Finished Product
to end-users of the Finished Product in calculating Net Sales of the
Finished Product,
(d) the amount of Net Proceeds for the Product and/or the ODD Product, as
the case may be; and
(e) the amount due and payable pursuant to Section 10.6;
11.7 ACCOUNTS AND AUDIT
(a) Each party shall maintain clear, accurate and complete records in
accordance with GAAP, for a period of at least [*] for each calendar
quarter for which such party is obligated to make payments under
Sections 10.1 or 10.6, as the case may be. In respect of QLT, such
records shall show the manufacturing, sales, use and other disposition
of Finished Products in sufficient detail to determine the royalties
payable to Xenova pursuant to Section 10.1, if any. In respect of
Xenova, such records shall show the manufacturing, sales, use and other
disposition of Products and/or ODD Products and royalties received or
collected from Third Parties from the marketing and distribution of the
Product and/or ODD products, to determine the amounts to QLT pursuant
to Section 10.6.
(b) During the periods set out in Sections 10.1 or 10.6 and for a period of
[*] thereafter, each party (in this section, the "AUDITED PARTY") shall
permit the other party (in this section, the "REQUESTING
* Material has been omitted and filed with the Commission
- 39 -
PARTY"), on reasonable notice and at the Requesting Party's cost and
expense, to arrange for the books and records maintained by the Audited
Party pursuant to Section 11.7(a) to be examined from time to time
during the Audited Party's regular business hours, but not more than
[*], by an independent accounting firm selected by the Requesting Party
and reasonably acceptable to the Audited Party, provided that such
independent accounting firm and its accountants are bound by an
obligation of confidentiality to disclose to the Requesting Party only
whether the royalty statements and payments made by the Audited Party
under this Agreement are accurate and, if not accurate, any evidence of
non-compliance with the terms and conditions of this Agreement. Any
such examination shall be restricted to records covering the preceding
[*] period. The Requesting Party shall provide to the Audited Party a
copy of any audit reports prepared under this subsection.
(c) In the event the report demonstrates that a party has underpaid the
other party, the underpaying party shall pay the amount of such
underpayment immediately. In the event that the underpaid party is the
Requesting Party, if the underpayment is more than [*] for the audited
period, the Audited Party shall reimburse the Requesting Party for the
expense of the audit.
(d) In the event the report demonstrates that a party has overpaid the
other party, the overpaying party may deduct the amount of such
overpayments from future amounts owed to the other party.
11.8 CONFIDENTIALITY OF REPORTS
Each party agrees that:
(a) the information set forth in the reports required by Sections 11.5 and
11.6; and
(b) the records subject to examination under Section 11.7;
shall be subject to the obligations of confidentiality set out in Article 7 and
shall be maintained in confidence by the receiving party and by any independent
accounting firm selected by such party, shall not be used by such party or such
accounting firm for any purpose other than verification of the performance by
the other party of its obligations hereunder, and shall not be disclosed by the
receiving party or such accounting firm to any other person except for purposes
of enforcing this Agreement.
ARTICLE 12 - REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1 XENOVA'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Xenova hereby represents, warrants and covenants to QLT that:
(a) Authority. Xenova is a corporation duly organized, existing, and in
good standing under the laws of England and Wales and has the power,
authority, and capacity to enter into this Agreement and to carry out
the transactions and grant the licenses contemplated by this Agreement,
all of which have been duly and validly authorised by all requisite
corporate proceedings;
(b) No Conflicting Agreements. Xenova has not entered and during the Term
will not enter into any agreement, arrangement or commitment with any
Person regarding the Drug or the Product that is inconsistent with or
in derogation of Xenova's obligations under this Agreement and Xenova
is not subject to any obligations that would prevent it from entering
into or carrying out its obligations under this Agreement;
(c) Ownership and Rights. Except as set forth in EXHIBIT 12.1(c), (i)
Xenova holds all right, title and interest in and to the Xenova
Patents, free and clear of any rights or encumbrances of any Third
Parties in, or in respect of, the Xenova Patents which would impact the
rights granted to QLT under this Agreement; and (ii) the Existing
Xenova Program Information was generated either by Xenova employees or
by Third Party contractors, and in each case the terms of employment or
engagement of such employees or contractors vested in Xenova all right,
title and interest in and to any Intellectual Property generated by
them in respect of such Existing Xenova Program Information, and (iii)
Xenova is not aware (but without necessarily having conducted any
* Material has been omitted and filed with the Commission
- 40 -
searches or investigations) that any Third Party has rights in any
Existing Xenova Program Information that would adversely affect QLT's
rights under this Agreement;
(d) List of Xenova Patents. As far as Xenova is aware (but without
necessarily having conducted any searches or investigations), EXHIBIT
1.1(WWW) sets forth a complete list of all Patents that are owned or
controlled by Xenova as of the Effective Date that are necessary or
useful for the rights and licenses to the Drug and/or Product granted
to QLT hereunder;
(e) Patent Applications Accurate. All statements contained in any
applications for the registration of the Xenova Patents were true and
correct as of the date of such applications. For the purposes hereof,
[*] Patent;
(f) Patents in Good Standing. As of the Effective Date, in respect of all
issued Xenova Patents, all maintenance fees and similar annuity
payments have been made in each of the jurisdictions requiring such
payments;
(g) Disclosure. Xenova has disclosed all material data in its possession,
in any form concerning, and experimental reports in its possession in
writing of, the Drug and/or Product known to or performed by or at the
request of Xenova;
(h) Future Patents. Xenova shall utilize commercially reasonable efforts in
prosecuting all applications for registration of Xenova Patents filed,
and in maintaining all Xenova Patents issued as of and after the
Effective Date;
(i) Sufficiency of Grants. As far as Xenova is aware (but without
necessarily having conducted any searches or investigations), and
except as set forth on EXHIBIT 12.1(c), (A) there are no Intellectual
Property rights owned or controlled by Xenova as of the Effective Date
related to the Drug and/or the Product or the use thereof, that are
necessary or useful to permit QLT to perform the Program to completion
and to perform the manufacturing, marketing, supply and other
commercialization activities contemplated by this Agreement for the
Drug and/or the Product in the Territory, other than those granted to
QLT under this Agreement, and (B) no Third Party Patent or other
proprietary right would be infringed by the development, manufacturing,
marketing, supply and other commercialization activities for the Drug
and/or the Product in the Territory as contemplated by this Agreement;
(j) No Third Party Licenses. Xenova is not a party to any Third Party
Licenses;
(k) No Complaints. Except as set forth in EXHIBIT 12.1(c), Xenova has not
received, in respect of any of the Xenova Patents, any notice,
complaint, threat or claim alleging infringement of, any Patent,
industrial design, trade secret or other Intellectual Property right or
proprietary right of any other Person.
(l) No Regulatory Actions. Xenova has not received, in respect of the Drug,
any hold/seize (medical) actions from any regulatory agency,
department, bureau or other governmental entity.
12.2 QLT'S REPRESENTATIONS, WARRANTIES AND COVENANTS
QLT hereby represents, warrants and covenants to Xenova that:
(a) Authority. QLT is a corporation duly organized, existing, and in good
standing under the laws of the Province of British Columbia and has the
power, authority, and capacity to enter into this Agreement and to
carry out the transactions and grant the licenses contemplated by this
Agreement, all of which have been duly and validly authorised by all
requisite corporate proceedings;
(b) No Conflicting Agreements. QLT has not entered and during the Term will
not enter into any agreement, arrangement or commitment with any Person
regarding the Drug or the Product that is inconsistent with or in
derogation of QLT's obligations under this Agreement and QLT is not
subject to any obligations that would prevent it from entering into or
carrying out its obligations under this Agreement;
* Material has been omitted and filed with the Commission
- 41 -
(c) Program. QLT shall utilize sound and reasonable business practice and
judgment in performance of the Program, including the conduct of
clinical studies thereunder;
(d) Future Patents. QLT shall utilize commercially reasonable efforts in
prosecuting all applications for registration of QLT Patents filed, and
in maintaining all QLT Patents issued as of and after the Effective
Date.
ARTICLE 13 - PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT
13.1 XENOVA PATENTS - PROSECUTION AND MAINTENANCE
(a) Xenova's Responsibility. During the Term, except as otherwise set out
in this section, Xenova shall be responsible for, in its sole
discretion and at its sole expense, the prosecution and maintenance of
the Xenova Patents.
(b) Review. QLT shall have the right to:
(i) review all pending applications, Patents, other proceedings,
communications, reports and observations relating to the
Xenova Patents; and
(ii) make recommendations to Xenova concerning the Xenova Patents.
Xenova shall reasonably consider such comments but shall have
no obligation to revise the filings or other communications.
(c) Disclosure. Xenova shall promptly disclose to QLT and keep QLT fully
informed and/or supply QLT in a timely fashion with:
(i) the complete texts of all Xenova Patents and all relevant
patent applications filed and/or controlled by Xenova; and
(ii) all information received concerning:
(A) the institution or possible institution of any
interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding
involving any Xenova Patents; or
(B) the course of patent prosecution or other proceedings
related to any Xenova Patents;
including by providing QLT with copies of substantive
communications, search reports and third-party observations
submitted to or received from patent offices.
(d) Notice to QLT.
(i) Xenova shall notify QLT in writing of its intentions with
regard to ceasing prosecution or maintenance of Patent
protection for any Xenova Patent in any country in the
Territory in reasonable time for QLT to continue prosecuting
or maintaining the Patent protection at its own discretion and
expense, with a rebuttable presumption that less than [*]
notice is not sufficient notice; and
(ii) Xenova will execute such documents and otherwise cooperate
with QLT as may be necessary (but without significant expense
to Xenova) to perfect and maintain the Patent protection that
Xenova is ceasing and QLT elects to continue pursuant to
Section 13.1(d)(i).
(e) No Royalty. In the event that QLT elects to continue prosecution or
maintenance of any Patent forming part of the Xenova Patents in any
country of the Territory, no royalty obligations shall accrue with
respect to sales of Finished Products in that country unless Xenova
agrees to pay the costs of such prosecution or maintenance.
* Material has been omitted and filed with the Commission
- 42 -
13.2 QLT PATENTS - PROSECUTION AND MAINTENANCE
(a) QLT's Responsibility. During the Term, except as otherwise set out in
this Section, QLT shall be responsible for, in its sole discretion and
at its sole expense, prosecution and maintenance of the QLT Patents.
(b) Review. Xenova shall have the right to:
(i) review all pending applications, Patents, other proceedings,
communications, reports and observations relating to the QLT
Patents; and
(ii) make recommendations to QLT concerning the QLT Patents. QLT
shall reasonably consider such comments but shall have no
obligation to revise the filings or other communications.
(c) Disclosure. QLT shall promptly disclose to Xenova and keep Xenova fully
informed, and/or supply Xenova in a timely fashion with:
(i) the complete texts of all QLT Patents, and
(ii) all information received concerning:
(A) the institution or possible institution of any
interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding
involving any QLT Patents; and
(B) the course of patent prosecution or other proceedings
related to any QLT Patents;
including by providing Xenova with copies of substantive
communications, search reports and Third Party observations
submitted to or received from patent offices.
(d) Notice to Xenova.
(i) QLT shall notify Xenova in writing of its intentions with
regard to ceasing prosecution or maintenance of Patent
protection for any QLT Patent in any country in the Territory
in reasonable time for Xenova to continue prosecuting or
maintaining the Patent protection at its own discretion and
expense, with a rebuttable presumption that less than [*]
notice is not sufficient notice; and
(ii) QLT will execute such documents and otherwise cooperate with
Xenova as may be necessary (but without significant expense to
QLT) to perfect and maintain the Patent protection that QLT is
ceasing and Xenova elects to continue pursuant to Section
13.2(d)(i).
13.3 PATENTABLE IMPROVEMENTS
In the event of any Program Information comprising patentable Intellectual
Property, each party will, at the request of the party owning such Program
Information, reasonably cooperate with the other party in seeking Patent
protection therefor.
13.4 XENOVA PATENTS - INFRINGEMENT
(a) Notice. Each of QLT and Xenova agrees that during the Term it will
promptly notify the other party in the event that it becomes aware of
any infringement or potential infringement of the Xenova Patents.
(b) QLT to Prosecute. QLT agrees that during the Term it will prosecute
infringers of the Xenova Patents or otherwise act to eliminate
infringement of the Xenova Patents by Third Parties in the Territory
when, in the sole judgement and discretion of QLT, such action is
necessary, proper and justified in relation to the Product in the Field
in the Territory. In the event litigation is initiated, the costs of
litigation shall be funded as follows:
(i) subject to clause (ii), [*] of the costs of litigation shall
be borne by QLT; and
* Material has been omitted and filed with the Commission
- 43 -
(ii) [*] of the costs of litigation shall be borne by Xenova,
subject to the following:
(A) Xenova's funding obligations will be fully satisfied
by QLT setting off such costs against royalties
payable by QLT to Xenova under Section 10.1 and
Xenova will not be obligated to make out-of-pocket
expenditures to satisfy this funding obligation; and
(B) in no event will Xenova's funding obligations under
this Section 13.4(b) exceed [*] in any calendar year.
(c) Costs and Awards. The costs of the litigation shall be deemed to be
QLT's actual Third Party expenses directly related to or incurred in
connection with the alleged infringement. At such time as the
infringement ceases (whether voluntarily, by settlement or by court
order), QLT's full royalty obligations shall resume. Any award,
recovery, lump-sum settlement or royalty payment (in this section, an
"AWARD") made to QLT by the alleged infringer shall be treated as
follows:
(i) Xenova Reimbursed. first, the Award shall be applied to pay
Xenova in respect of any amounts set-off against royalties
pursuant to Section 13.4(b)(ii)(A);
(ii) QLT Reimbursed. secondly, the Award shall be applied to
reimburse QLT for all actual Third Party expenses directly
related to or incurred in connection with the alleged
infringement for which royalty payments were not withheld; and
(iii) Remainder. thirdly, any remaining amount of the Award shall be
treated as if it were Net Sales of Finished Product, with
Xenova receiving a royalty on the remaining amount in
accordance with Section 10.1 and QLT retaining the balance.
(d) QLT Does Not Prosecute. If QLT elects not to bring or prosecute
infringement litigation pursuant to this Section 13.4 it will promptly
notify Xenova and Xenova may elect to bring suit against the alleged
infringer at its sole expense, and in its sole discretion. In this
case, any award, recovery, lump-sum settlement or royalty payment made
by the alleged infringer shall be retained by Xenova.
13.5 QLT PATENTS - INFRINGEMENT
(a) QLT's Responsibility. QLT agrees that during the Term, it will, at
QLT's sole cost and expense, protect its interests in the QLT Patents
from infringement by Third Parties and that it will prosecute
infringers or otherwise act to eliminate infringement when, in the sole
judgement and discretion of QLT, such action is necessary, proper and
justified.
(b) Xenova's Assistance. Xenova agrees that during the Term it will
promptly notify QLT in the event that it becomes aware of any
infringement or potential infringement of the QLT Patents and agrees
that it will, at QLT's request and expense, reasonably assist QLT to
prevent or discontinue any such infringement or potential infringement.
13.6 THIRD PARTY CLAIMS OF INFRINGEMENT
(a) In the event of the initiation of any suit (an "INFRINGEMENT SUIT") in
the Territory by a Third Party against Xenova or QLT or any of their
respective Affiliates for Patent infringement arising from the
manufacture, use, sale, distribution or marketing of the Drug and/or
the Product, the party sued shall promptly notify the other party in
writing.
(b) In the event that a party alone is subject to an Infringement Suit:
(i) that party shall have the first right, but not the obligation,
to defend the Infringement Suit;
(ii) that party will provide the other party with the opportunity
to participate in the defense of such Infringement Suit; and
(iii) the other party shall assist and cooperate with the party
being sued in any such litigation.
If the party being sued fails to defend the Infringement Suit within a
reasonable time after receiving notice of the Infringement Suit, then
the other party shall have the right, but not the
* Material has been omitted and filed with the Commission
- 44 -
obligation, to defend the Infringement Suit and the party being sued
shall assist and cooperate with the other party in any such litigation.
(c) In the event that both QLT and Xenova are subject to an Infringement
Suit:
(i) each of Xenova and QLT shall have the right, but not the
obligation, to jointly defend the Infringement Suit; and
(ii) the parties shall assist and cooperate with each other in any
such litigation.
If either party fails to jointly defend the Infringement Suit with the
other party within a reasonable time after receiving notice of the
Infringement Suit, then the other party shall have the right, but not
the obligation, to solely defend the Infringement Suit and the
declining party shall assist and cooperate with the defending party in
any such litigation.
(d) The party or parties conducting the defense of an Infringement Suit
shall have full or joint control over its conduct, as the case may be,
provided that neither party shall make any admissions or concessions
nor enter into any settlements with respect to an Infringement Suit
without the other party's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed.
(e) The costs of defending any Infringement Suit incurred by either party
(i) shall be borne by Xenova if the infringement arises primarily from
[*][*] (and primarily not [*][*]) or from a breach by Xenova of any of
the warranties given by it under Section 12.1, (ii) shall be borne by
QLT if the infringement arises from a breach by QLT of any of the
warranties given by it under Section 12.2, and (iii) shall otherwise be
borne by each party [*]to the extent that [*] (thus, by way of example,
if the costs relate to the defence of a claim that is [*]).
13.7 INFRINGEMENT OF THIRD PARTY PATENTS
(a) Without limiting Xenova's obligation to indemnify QLT under Section
15.1, and notwithstanding Section 10.1, in the event that any
activities licensed to QLT under this Agreement are found to infringe
the Intellectual Property rights of a Third Party and result in the
payment of Third Party royalties or other compensation by QLT or a QLT
Affiliate or sub-licensee to the Third Party, QLT may, in its sole
discretion, reduce its royalty payments to Xenova under Section 10.1 in
an amount equal to the Third Party royalties or other compensation paid
to the Third Party, up to a maximum of [*] of the royalties payable to
Xenova under Section 10.1, in respect of each country in the Territory
for which Third Party royalties are being paid, provided that such
reductions shall only be made where the infringement arises from the
use of Intellectual Property licensed to QLT under this Agreement, and
not any other Intellectual Property that QLT chooses to use in the
manufacture, use, sale, distribution or marketing of the Drug and/or
the Product.
ARTICLE 14 - TRADEMARKS
14.1 PRODUCT TRADEMARKS
(a) During the Term, QLT shall be responsible for, in its sole discretion
and at its sole expense, the origination, selection, application,
prosecution, registration and maintenance of one or more trademarks and
trade-names under which the Product and/or the Finished Product will be
marketed, distributed and sold in the Field in the Territory.
(b) QLT will, at Xenova's request, add or cause to be added, a marking in a
form proposed by Xenova and reasonably acceptable to QLT on the
packaging of all Finished Product sold by QLT, its Affiliates or
sub-licensees hereunder, to indicate the connection of Xenova as
licensor of the Product, provided that such marking shall not cause any
contravention of GMPs or any United States of America or other foreign
federal, state, provincial or local laws, regulations or bylaws,
including those relating to labelling or packaging.
* Material has been omitted and filed with the Commission
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14.2 USE OF TRADEMARKS
Nothing contained in this Agreement shall give either party any right to use any
trademark or trade-name of the other party, except with the prior written
consent of the other party.
ARTICLE 15 - INDEMNITY AND LIMITATIONS OF LIABILITY
15.1 MUTUAL INDEMNIFICATION
Except as otherwise specifically provided in this Agreement, each of the parties
(in this section, an "INDEMNIFYING PARTY") agrees to defend, indemnify and hold
harmless the other party and its Affiliates and their respective directors,
officers, employees and agents (in this section, the "INDEMNIFIED PARTIES") from
and against all threatened or actual actions, claims, demands, proceedings,
suits, losses, damages, costs and expenses (including reasonable attorney fees)
but excluding punitive damages (collectively, in this Article, "CLAIMS") of
Third Parties of whatsoever kind or nature (including but not limiting the
generality of the foregoing, in respect of death, injury, loss or damage to any
person or property) incurred, caused, arising out of or relating to:
(a) any breach or violation of, or failure to properly perform, any
covenant made in this Agreement by the Indemnifying Party, unless
waived in writing by the applicable Indemnified Party;
(b) any breach of any of the representations or warranties made in this
Agreement by the Indemnifying Party; or
(c) the gross negligence or willful misconduct of the Indemnifying Party;
except to the extent that such Claims are attributable to the negligence or
willful misconduct of any of the Indemnified Parties.
15.2 PRODUCT LIABILITY INDEMNITY
In addition to Section 15.1,
(a) QLT agrees to defend, indemnify and hold harmless Xenova and its
Affiliates and their respective directors, officers, employees and
agents (in this section, the "XENOVA INDEMNIFIED PARTIES") from and
against all Claims of Third Parties of whatsoever kind or nature
(including but not limiting the generality of the foregoing, in respect
of death, injury, loss or damage to any person or property) incurred,
caused, arising out of or relating to:
(i) the administration, utilization and/or ingestion of the Drug
and/or the Product in the Field in the Development Territory
pursuant to any clinical trials conducted by or on behalf of
QLT under this Agreement; and
(ii) the administration, utilization and/or ingestion of the Drug
and/or the Product in the Field in the Territory provided to
the injured Third Party by or on behalf of QLT under this
Agreement;
except to the extent that such Claims are attributable to the
negligence or willful misconduct of the Xenova Indemnified Parties; and
(b) Xenova agrees to defend, indemnify and hold harmless QLT and its
Affiliates and their respective directors, officers, employees and
agents (in this section, the "QLT INDEMNIFIED PARTIES") from and
against all Claims of Third Parties of whatsoever kind or nature
(including but not limiting the generality of the foregoing, in respect
of death, injury, loss or damage to any person or property) incurred,
caused, arising out of or relating to:
(i) the administration, utilization and/or ingestion of the Drug
and/or the Product:
(A) in the Field outside the Development Territory, or
(B) outside the Field, anywhere, worldwide,
pursuant to any clinical trials conducted by or on behalf of
Xenova; and
- 46 -
(ii) the administration, utilization and/or ingestion of the Drug
and/or the Product:
(A) in the Field outside the Development Territory, or
(B) outside the Field, anywhere, worldwide,
provided to the injured Third Party by or on behalf of Xenova;
except to the extent that such Claims are attributable to the
negligence or willful misconduct of the QLT Indemnified Parties.
15.3 INDEMNIFICATION PROCEDURE
If either QLT or Xenova or any of their respective Affiliates (in this section,
an "INDEMNIFIED PARTY"), receives any written Claim which it believes is the
subject of, or otherwise believes that circumstances exist giving rise to, an
indemnity under this Agreement by either Xenova or QLT, as the case may be (in
this section, an "INDEMNIFYING PARTY"), the Indemnified Party shall, as soon as
reasonably practicable after forming such belief, give notice of the Claim or
circumstances to the Indemnifying Party, including full particulars of the claim
or circumstances to the extent known to the Indemnified Party, provided,
however, that the failure to give timely notice to the Indemnifying Party as
contemplated hereby shall not release the Indemnifying Party from any liability
to indemnify any persons indemnified under this Article 15, and, subject to
Article 13 in respect of infringement claims and infringement actions, the
following shall apply:
(a) the Indemnifying Party shall have the right, by prompt notice to the
Indemnified Party, to assume the defense of the Claim with counsel
reasonably satisfactory to the Indemnified Party, and at the cost of
the Indemnifying Party;
(b) if the Indemnifying Party does not so assume the defense of the Claim,
the Indemnified Party may assume the defense with counsel of its choice
at the sole expense of the Indemnifying Party;
(c) if the Indemnifying Party assumes the defense of the Claim, the
Indemnified Party may participate therein through counsel of its
choice, but the cost of such counsel shall be borne solely by the
Indemnified Party;
(d) any party not assuming the defense of any such Claim shall render all
reasonable assistance to the party assuming the defense, and all
out-of-pocket costs of this assistance shall be borne solely by the
Indemnifying Party; and
(e) no Claim shall be settled other than by the party defending the Claim,
and then only with the consent of the other party, which shall not be
unreasonably withheld, provided, however, that the Indemnified Party
shall have no obligation to consent to any settlement of any Claim
which imposes on the Indemnified Party any liability or obligation
which cannot be assumed and performed in full by the Indemnifying
Party.
15.4 NO CONSEQUENTIAL DAMAGES
EXCEPT FOR, AND WITHOUT LIMITING THE SCOPE OF THE INDEMNIFICATION OBLIGATION
UNDER, Sections 15.1 AND 15.2, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY LOST PROFITS, LOST SAVINGS OR ANY PUNITIVE, EXEMPLARY,
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING OUT OF ANY BREACH OR
BREACHES OF THIS AGREEMENT OR THE POSSESSION OR USE OF THE DRUG, THE PRODUCT OR
ANY OTHER MATERIALS OR SERVICES TO BE SUPPLIED HEREUNDER, EVEN IF THE OTHER
PARTY HAS KNOWLEDGE OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGES.
ARTICLE 16 - TERM AND TERMINATION
16.1 TERMINATION
This Agreement may not be terminated by either party except in accordance with
this Article 16. Termination of this Agreement, in whole or in part, before the
expiration of the term shall be without
- 47 -
prejudice to the right of any party accrued to the effective date of
termination, without prejudice to the remedies in respect of any previous breach
of any of the representations, warranties and covenants herein contained and
without prejudice to any rights to indemnification set forth herein and to any
other provisions referred to in Section 16.9 and without prejudice to any other
right or remedy that the terminating party may have.
16.2 EXPIRATION
(a) This Agreement shall commence on the Effective Date and shall expire
upon the later of:
(i) the expiration, lapse or invalidation of the last Valid Claim
under any Xenova Patent licensed to QLT under Section 8.4 in
all countries in the Territory; and
(ii) the expiration 10 years after the date of Commercial Launch in
the last country in the Territory for which QLT chooses to
undertake Commercial Launch;
unless otherwise agreed by the parties, and subject to any earlier
termination in accordance with the provisions of this Agreement (the
"TERM").
(b) Notwithstanding the Term set out in Section 16.2(a), in each country in
the Territory, upon the later of the expiration, lapse or invalidation
of the last Valid Claim licensed to QLT under Section 8.4 in such
country and the expiration of 10 years after Commercial Launch in such
country, if applicable:
(i) this Agreement shall be terminated with respect to the grant
of license set out under Section 8.4 in such country, and
without further action on the part of either party, QLT shall
be granted a perpetual, non-exclusive, fully paid,
royalty-free license, with the right to sub-license, under the
Program Information and other Intellectual Property owned or
controlled by Xenova to develop, make, have made, use, have
used, sell, have sold, offer for sale, import and export the
Drug and/or the Product in the Field in such country; and
(ii) all regulatory licenses and filings in such country related to
the Drug and/or the Product shall remain owned by QLT.
16.3 EARLY TERMINATION BY QLT
(a) Before Commercial Launch. At any time before Commercial Launch of the
Product in any country in the Territory, QLT may terminate this
Agreement for convenience, in its entirety, upon not less than 90 days'
prior written notice to Xenova; provided that if such termination
notice is to be given within the [*]after the Effective Date, QLT shall
first offer to discuss with Xenova QLT's intention to terminate and the
reasons therefor before delivering any such termination notice.
(b) After Commercial Launch. At any time after Commercial Launch of the
Product in any country in the Territory, QLT may terminate this
Agreement for convenience, in its entirety, upon not less than 180
days' prior written notice to Xenova.
(c) Adverse Change. Notwithstanding Sections 16.3(a) and 16.3(b), in the
event of any confirmed information of Serious Adverse Events related to
the utilization, medical administration, safety or efficacy profile of
the Drug or the Product, QLT may terminate this Agreement, in its
entirety, at any time upon 60 days prior written notice to Xenova.
(d) Material Breach. At any time during the Term, in the event of a
material breach by Xenova of any of its material obligations under this
Agreement, QLT may terminate this Agreement, in its entirety:
(i) upon not less than 45 days' prior written notice to Xenova, if
the breach is, by its nature, reasonably expected to be
curable, provided that Xenova shall have the opportunity to:
(A) cure the breach within the 45-day period; or
* Material has been omitted and filed with the Commission
- 48 -
(B) if the breach is not capable of cure within the
45-day cure period, commence a cure within the 45-day
period and diligently pursue the cure to completion
within a reasonable period;
to avoid termination of this Agreement; or
(ii) immediately by written notice, if the breach is, by its
nature, incurable.
16.4 EARLY TERMINATION BY XENOVA
Material Breach. At any time during the Term, in the event of a material breach
by QLT of any of its material obligations under this Agreement, Xenova may
terminate this Agreement, in its entirety:
(a) upon not less than 45 days' prior written notice to QLT, if the breach
is, by its nature, reasonably expected to be curable, provided that QLT
shall have the opportunity to:
(i) cure the breach within the 45-day period; or
(ii) if the breach is not capable of cure within the 45-day cure
period, commence a cure within the 45-day period and
diligently pursue the cure to completion within a reasonable
period;
to avoid termination of this Agreement; or
(b) immediately by written notice, if the breach is, by its nature,
incurable.
For greater certainty, the parties acknowledge and agree that a Marketing
Default shall not, in and of itself, constitute a material breach by QLT of a
material obligation under this Agreement and that Xenova's sole remedies in
respect of a Marketing Default (for which Xenova pursues remedies under Section
5.3) shall be as set out in Section 5.3(d).
16.5 TERMINATION ON BANKRUPTCY
During the Term, either party may, at its option, on 10 days prior written
notice, terminate this Agreement upon the happening of any one or more of the
following events by delivering written notice to that effect to the other party:
(a) if the other party is adjudged bankrupt or insolvent;
(b) if any petition under the Bankruptcy and Insolvency Act (Canada), the
Insolvency Act (UK), or any other statute of similar purport, is filed
by or against the other party and such petition is not dismissed within
90 days after it has been filed;
(c) if the other party makes a general assignment for the benefit of its
creditors;
(d) if the other party applies for, or appoints, a receiver, trustee,
custodian, or liquidator of the party or of its assets;
(e) if any resolution is passed or order made or other steps taken for the
winding up, liquidation or other termination of the existence of the
other party; or
(f) if the other party ceases to carry on its business.
16.6 EFFECT OF TERMINATION
In the event that this Agreement is terminated:
(a) both parties hereto shall be released from all obligations and duties
imposed or assumed under this Agreement except as expressly provided
under Section 16.9;
(b) each of QLT and Xenova shall remain responsible to pay to the other
party all royalty payments and other amounts accruing prior to the
effective date of termination, which shall be payable on the terms and
conditions set out in Article 11 notwithstanding the termination of
this Agreement, and may proceed to enforce payment thereof through
exercise any or all of the rights and
- 49 -
remedies contained herein or otherwise available to it at law or in
equity, successively or concurrently at the option of such party; and
(c) QLT and its sub-licensees shall have a reasonable time to liquidate all
inventory of Finished Product in QLT's possession or control, provided
that QLT will continue to make royalty payments to Xenova in the manner
specified under this Agreement on Net Sales of such inventories,
notwithstanding the termination of this Agreement.
16.7 XENOVA LICENSE IN THE CASE OF CERTAIN EARLY TERMINATIONS
In the event that:
(a) QLT terminates this Agreement under any of Sections 16.3(a), 16.3(b) or
16.3(c);
(b) Xenova terminates this Agreement under Section 16.4;
(c) a country is deleted from the Territory under Section 5.2(b), with
respect to the country deleted; or
(d) either Party terminates this Agreement under Section 16.5;
then the following shall occur:
(e) if the effective date of termination occurs prior to the receipt of the
first NDA approval of the Product in the Field in the Territory:
(i) QLT shall grant to Xenova an irrevocable, royalty-free,
world-wide (or in the case of a country deleted from the
Territory pursuant to Section 5.2(b), for such country),
exclusive license, with the right to sublicense, to use the
Drug and/or the Product for the purpose of researching,
developing, making, having made, using, having used, selling,
having sold, offering for sale, importing and exporting the
Drug and/or the Product in the Field, anywhere, world-wide (or
in the case of a country deleted from the Territory pursuant to
Section 5.2(b), for such country), under the QLT Patents and
such Program Information and other Intellectual Property as may
be owned or controlled by QLT as of the effective date of
termination as may be necessary or useful for such purposes,
all on the terms and conditions set out in this Agreement,
provided that, in respect of any Program Information assigned
by Xenova to QLT under Section 8.2(c) having application beyond
the Drug and/or the Product, the license set out herein shall
be non-exclusive, and
(ii) QLT will assign and transfer to Xenova all registered
trademarks, trademark applications and trade-names, including
all goodwill associated therewith, used solely to market,
distribute and sell the Product and/or the Finished Product in
the Field in the Territory, and
(iii) subject to the Act and other applicable laws, QLT will use
commercially reasonable efforts to assign and transfer to
Xenova all regulatory filings made by or on behalf of QLT in
connection with the Drug and/or the Product in the Field in the
Territory; and
(f) if the effective date of termination occurs after the receipt of the
first NDA approval of the Product in the Field in the Territory, the
provisions of Sections 16.7(e)(i), 16.7(e)(ii) and 16.7(e)(iii) shall
apply, provided that the license granted under Section 16.7(e)(i) shall
be a royalty-bearing license. In this case, the royalty to be paid by
Xenova to QLT shall:
(i) be paid in consideration for the development and
commercialization work performed by QLT prior to the effective
date of termination,
(ii) be mutually agreed by the parties negotiating in good faith,
provided that:
(A) the royalty rates shall be lower than those set out
in Section 10.1, which shall be the maximum royalty
rates available, and
(B) if the parties do not agree to a royalty rate within
45 days after the effective date of termination, the
matter will be referred to expedited arbitration
under Section 17.2, and
- 50 -
(iii) be payable on terms and conditions set out in Article 11,
notwithstanding the termination of this Agreement,
provided that if Xenova has terminated this Agreement for QLT's failure
to implement a Specific Action under Section 5.2(c), the cumulative
amount payable by Xenova in respect of the royalty payable hereunder
shall be capped at a maximum amount equal to QLT's cumulative
development and commercialization costs with respect to the Drug and/or
the Product in the Field.
16.8 QLT LICENSE IN THE CASE OF CERTAIN EARLY TERMINATIONS
In the event that:
(a) QLT terminates this Agreement under Section 16.3(d) due to a material
breach by Xenova; or
(b) QLT terminates this Agreement under Section 16.5;
all rights and licenses granted by Xenova to QLT under this Agreement shall
continue as exclusive or non-exclusive royalty-bearing licenses, as the case may
be, granted by Xenova to QLT on the terms and conditions set out in this
Agreement, provided that:
(c) the royalty rates to be paid by QLT to Xenova after the effective date
of termination shall:
(i) be mutually agreed by the parties negotiating in good faith,
and
(ii) be lower than the royalty rates set out in Section 10.1, which
shall be the maximum royalty rates available, and
(d) if the parties do not agree to a royalty rate within 45 days after the
effective date of termination, the matter will be referred to expedited
arbitration under Section 17.2.
Such royalty payments shall be payable on the terms and conditions set out in
Article 11 notwithstanding the termination of this Agreement.
16.9 SURVIVAL
Expiration or early termination of this Agreement shall not relieve either party
of its obligations incurred prior to such expiration or early termination. In
addition, the following provisions shall survive any expiration or early
termination of this Agreement:
(a) Article 1 (Interpretation);
(b) Section 3.11 (QLT's Liability for Recall);
(c) Article 7 (Confidentiality and Use of Information);
(d) 8.1 (Ownership of Confidential Information) and 8.2 (Ownership of
Program Information);
(e) Section 10.5 (Royalty Payments Upon Termination);
(f) Sections 11.1 to 11.6 inclusive (Payment Terms) shall survive in
respect of any payments that may be due under this Agreement after the
date of termination;
(g) Section 11.7 (Accounts and Audit) and 11.8 (Confidentiality of
Reports);
(h) Article 12 (Representations, Warranties and Covenants);
(i) Article 15 (Indemnity and Limitations of Liability);
(j) Sections 16.6 (Effect of Termination), 16.7 (Xenova License in the case
of Certain Early Terminations), 16.8 (QLT License in the case of
Certain Early Terminations) and 16.9 (Survival); and
(k) Article 17 (Miscellaneous Provisions).
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ARTICLE 17 - MISCELLANEOUS PROVISIONS
17.1 GOVERNING LAW
This Agreement will be governed by and construed in accordance with the laws of
England, excluding any choice of law rules that may direct the application of
the laws of another jurisdiction. The parties acknowledge and agree that the
International Sale of Goods Act and the United Nations Convention on Contracts
for the International Sale of Goods shall have no application to this Agreement.
17.2 EXPEDITED ARBITRATION
(a) Notice. In the event of any dispute, controversy or claim arising
under, out of or in connection with the subject matter of this
Agreement or the breach, termination or invalidity of this Agreement
(each, a "DISPUTE") that relates to:
(i) the matters described in Section 3.7(f);
(ii) disagreement as to whether Commercial Launch of the Product in
[*] as a whole, as set out in Section 5.2(b);
(iii) whether QLT has failed to diligently discharge its
commercialization obligations, as set out in Section 5.2(a);
(iv) confirmation of whether QLT has committed a Marketing Default,
as set out in Section 5.3(c);
(v) the inability of the parties to mutually agree on revised
financial terms in the event of a Marketing Default, as set
out in Section 5.3(d);
(vi) disagreement as to whether there exists any actual or
potential Cross-Over Use or Cross Pricing Risk or disagreement
with respect to mitigation measures, as set out in Section 6.7
(where the arbitrator shall be instructed to attempt to find a
mutually acceptable solution to avoid the Cross-Over Use or
Cross-Pricing Risk whilst giving reasonable protection to each
party's commercial interests);
(vii) the refusal of Xenova to grant its consent to a sub-license
proposed to be granted by QLT, as set out in Sections 8.4(c)
and 8.4(d); or
(viii) the inability of the parties to mutually agree on revised
financial terms in the event of certain early terminations, as
set out in Sections 16.7 and 16.8;
the party asserting the claim (the "ASSERTING PARTY") shall first
inform the other party, in writing, of the specific nature of the
Dispute, the pertinent provisions of this Agreement and its proposed
resolution.
(b) Executive Resolution Efforts. Any Dispute shall first be submitted to
the senior management of the parties for amicable resolution for a
period of not less than [*] to resolve the Dispute prior to engaging in
a formal Dispute resolution process. Any Dispute that cannot be settled
amicably by the senior management of the parties shall be finally
settled by arbitration in accordance with the clauses (b) to (c) of
this Section 17.2 .
(c) Submission to Arbitration. Each Dispute hereunder shall be submitted to
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA") by a panel of one
arbitrator (unless the parties agree otherwise) appointed by the AAA
and who is knowledgeable as to the subject matter of the Dispute.
(d) AAA Expedited and Optional Emergency Rules to Apply. The parties agree
that the AAA Expedited Procedures and Optional Rules for Emergency
Measures of Protection shall apply to all arbitral proceedings under
this Section 17.2, notwithstanding the amount or complexity of any
Dispute.
(e) Procedures. The arbitrator shall have the right to order discovery as
he or she deems appropriate, and to order injunctive relief and the
payment of legal fees, costs and other
* Material has been omitted and filed with the Commission
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damages, excluding punitive damages. Judgement upon the award rendered
by the arbitrator may be entered in any court having jurisdiction.
(f) Place of Arbitration. Any arbitration conducted under this Section 17.2
shall take place in New York City, New York, USA.
17.3 TRADITIONAL ARBITRATION
Except for:
(a) applications for injunctions for the protection of the Xenova Patents,
the QLT Patents, Program Information, Confidential Information or any
other Intellectual Property of either party, which shall not be subject
to arbitration, but shall be submitted to a court of competent
jurisdiction for resolution; and
(b) matters subject to expedited arbitration as set out in Section 17.2;
any Dispute shall be first submitted to the senior management of the parties for
amicable resolution for a period not less than [*] to resolve the Dispute prior
to engaging in a formal dispute resolution process. Any Dispute that cannot be
settled amicably by the senior management of the parties shall be finally
settled by arbitration in accordance with the procedures set out in Section
17.2, except that the Dispute shall be submitted to arbitration before a panel
of 3 arbitrators appointed by the AAA and the AAA Expedited Procedures and
Optional Rules for Emergency Measures of Protection referred to in Section
17.2(d) shall not apply.
17.4 AMENDMENT
Neither party shall claim any amendment, modification, or release from any
provision hereof by mutual agreement, acknowledgement or acceptance or purchase
order forms or otherwise, unless in writing signed by an authorized
representative of each party.
17.5 ASSIGNMENT
No party shall assign this Agreement, in whole or in part, to any person without
the prior written consent of the other parties, such consent not to be
unreasonably withheld or delayed, provided that either party may assign and
transfer all of its rights and obligations under this Agreement without consent
of the other parties,
(a) to an Affiliate (with a provision for assignment back to the assigning
party in the event the Affiliate ceases to be an Affiliate) ;
(b) to a successor or assignee of all or substantially all of the assigning
party's assets (including intellectual property rights) and business in
the field of oncology (which must include all rights associated with
the Drug and/or Product but, in the case of [*]) ("Oncology Assets"),
provided that written notice is delivered to the other parties.
However, a party shall not have any right to assign and transfer its
Oncology Assets under this paragraph (b) if the [*]; or
(c) to a successor or assignee of all or substantially all of the assigning
party's assets;
Any permitted assignee shall assume all obligations of its assignor under this
Agreement. Unless:
(d) such assignment has been consented to in writing by the other party; or
(e) in the event of an assignment under paragraphs (b) and (c) hereof, the
successor or assignee agrees to assume such obligations;
then no assignment shall relieve any party of responsibility for the performance
of any obligations arising from and after the effective date of such assignment
which such party has hereunder, and in any event the assignor shall remain bound
by the provisions of Article 7 and Sections 8.1 and 8.2. Any assignment in
violation of the foregoing shall be null and void.
* Material has been omitted and filed with the Commission
- 53 -
17.6 COMPLIANCE WITH LAWS
Each party will be responsible for assuring that all applicable rules, laws and
regulations are met in the performance of its duties
under this Agreement.
17.7 ENTIRE AGREEMENT
This Agreement, together with the Exhibits hereto, constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof, and supersedes all written or oral prior agreements and
understandings between the parties with respect to the subject matter hereof,
including, without limitation, the Interim Agreement. In the event of conflict
between the terms and conditions of this Agreement and those of any Exhibit
attached to this Agreement, the terms and conditions of this Agreement shall
govern, unless the parties expressly provide that the conflicting term or
condition of such Exhibit or agreement shall supersede the corresponding term or
condition of this Agreement.
17.8 EXHIBITS
The Exhibits listed below and attached hereto shall be deemed to form an
integral part of this Agreement:
Exhibit 1.1(p) Description of XR9576
Exhibit 1.1(q) Drug Specification
Exhibit 1.1(ccc) Summary of Program Activities
Exhibit 1.1(hhh) Definition of Registration Package
Exhibit 1.1(www) List of Xenova Patents
Exhibit 12.1(c) Issues Relating to Xenova Patents
17.9 FORCE MAJEURE
If the performance of any part of this Agreement by either party, or of any
obligation under this Agreement, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control of the party liable
to perform, unless conclusive evidence to the contrary is provided, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable commercial
efforts to avoid or remove such causes of non-performance and shall continue
performance with the utmost dispatch whenever the causes are removed. When such
circumstances arise, the parties shall discuss what, if any, modification of the
terms of this Agreement may be required in order to arrive at an equitable
solution.
17.10 FURTHER ASSURANCES
The parties hereby covenant and agree without the necessity of any further
consideration, to execute, acknowledge and deliver any and all such other
documents and take any such other action as may be reasonably necessary to carry
out the intent and purpose of this Agreement.
17.11 HEADINGS
The headings in this Agreement are solely for convenience of reference and shall
not be used for purposes of interpreting or construing the provisions hereof.
17.12 INJUNCTION
Each party agrees that the other parties may be irreparably damaged if any
provision of this Agreement is not performed in accordance with its terms.
Accordingly, each party will be entitled to apply for an injunction or
injunctions to prevent breaches of any of the provisions of this Agreement by
the other parties, without showing or proving any actual or threatened damage,
notwithstanding any rule of law or equity to the contrary, and may specifically
enforce such provisions by an action instituted in a court
- 54 -
having jurisdiction. These specific remedies are in addition to any other remedy
to which the parties may be entitled at law or in equity.
17.13 INUREMENT
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
17.14 NOTICE
All notices, requests and other communications required or permitted to be given
hereunder or with respect hereto will be in writing, and may be given by:
(a) personal delivery;
(b) registered first-class Canada or United Kingdom air mail, postage
prepaid by the sender, return receipt requested;
(c) overnight delivery service, charges prepaid by the sender; or
(d) via facsimile (confirmed by delivery by one of the 3 methods stated
above);
and, in each case, addressed to the other party at the address for such party as
set forth below, and will be effective one Business Day after receipt in the
case of deliveries under Sections 17.14(a), 17.14(c) or 17.14(d), and 5 Business
Days after mailing in the case of deliveries under Section 17.14(b).
If to QLT:
QLT Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chief Executive Officer
Fax No.: ▇▇ ▇▇▇ ▇▇▇-▇▇▇▇
With a copy to:
Farris, Vaughan, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Dominion Bank Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:R. ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
Fax No.: ▇▇ ▇▇▇ ▇▇▇-▇▇▇▇
If to Xenova:
Xenova Limited
957 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chief Executive Officer
Fax No.: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Any party may change its address at which notice is to be received by written
notice provided pursuant to this Section 17.14.
17.15 PRESS RELEASES/PUBLICITY
Each party agrees that it will not, without the prior written consent of the
other party:
(a) originate any publicity, news release or public announcement, written
or oral, whether to the public, the press, stockholders or otherwise,
referring to the existence or to the terms of this
- 55 -
Agreement, including its existence, the subject matter to which it
relates, the performance under it (including the progress of
development activities in relation to the Drug in the Field in the
Development Territory) or any of its specific terms and conditions,
except for:
(i) disclosures that are substantially the same as the disclosure
in the initial press releases; or
(ii) such announcements as, in the opinion of the counsel for the
party making such announcement, are required by law, including
Canadian, United Kingdom and United States of America
securities laws, rules or regulations, and the regulations of
the London Stock Exchange or the Toronto Stock Exchange, or
NASDAQ.
If a party decides to make an announcement it believes to be required
by law with respect to this Agreement, it will give the other party
such notice as is reasonably practicable and an opportunity to comment
upon the announcement; or
(b) disclose the existence of this Agreement, any of the subject matter
hereof, or any of the terms hereof to any Third Party, without the
prior written consent of the other party, except as reasonably required
for a party to perform its obligations under this Agreement or as
otherwise provided in this Agreement.
17.16 RELATIONSHIP OF PARTIES
It is not the intent of QLT and Xenova to form any partnership or joint venture.
QLT and Xenova shall, in relation to their respective obligations hereunder, act
as independent contractors, and nothing in this Agreement shall be construed to
give either QLT or Xenova the power or authority to act for, bind or commit the
other in any way whatsoever.
17.17 RIGHTS AND REMEDIES
The rights and remedies available under this Agreement shall be cumulative and
not alternative and shall be in addition to and not a limitation of any rights
and remedies otherwise available to the parties at law or in equity, except as
expressly set out in this Agreement.
17.18 SEVERABILITY
If any term or provision of this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.
17.19 WAIVER
No waiver or modification of any of the terms of this Agreement shall be valid
unless in writing and signed by an authorized representative of each of the
parties hereto. Failure by any party to enforce any rights under this Agreement
shall not be construed as a waiver of such rights, nor shall a waiver by any
party in one or more instances be construed as constituting a continuing waiver
or as a waiver in other instances.
- 56 -
17.20 WORDING
Wherever the singular or masculine form is used in this Agreement, it will be
construed as the plural or feminine or neuter form, as the case may be, and vice
versa, as the context or the parties require. The parties agree that whenever
the phrase "including" is used in this Agreement that it shall mean "including,
without limitation".
17.21 THIRD PARTY RIGHTS
Each of the persons identified in Sections 15.1 and 15.2 may in his own right
enforce the provisions of those respective Sections. Except as provided in the
previous sentence of this Section 17.21, this Agreement is not made for the
benefit of, nor shall any of its provisions be enforceable by, any person other
than the parties to this Agreement and their respective successors and permitted
assignees.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
QLT INC. XENOVA LIMITED
by its authorized signatory: by its authorized signatory:
By: __________________________ By: __________________________
Name: Name:
Title: Title:
EXHIBIT 1.1(p)
DESCRIPTION OF XR9576
[*]
* Material has been omitted and filed with the Commission
- 2 -
EXHIBIT 1.1(q)
DRUG SPECIFICATION
As set out in [*] as delivered by QLT to Xenova.
* Material has been omitted and filed with the Commission
EXHIBIT 1.1(CCC)
SUMMARY OF PROGRAM ACTIVITIES
The following summarizes the proposed Development Plan for the Product. This
Development Plan as it relates to the primary indication is subject to change at
the discretion of the Development Committee or as a result of any requirements
of the FDA.
Primary (Initial) Indication to be Pursued
- First line therapy of advanced NSCLC (Stage IIIb/IV NSCLC) in combination with
chemotherapy.
Clinical Development
QLT will conduct two international [*] randomized placebo-controlled trials of
chemotherapy plus placebo versus chemotherapy plus the Product, as follows:
- Each study to investigate a different chemotherapy regimen ([*]).
- European involvement will include a minimum of [*] European sites for the two
combined trials in [*] countries.
- Approximately [*] patients per trial (a total of [*] patients) for the two
combined trials.
- [*].
CMC
- Establish product monographs for the Drug and the Product.
- Produce final validated form of the Product in [*].
- Establish scaled up manufacturing process capable of supplying commercial
requirements.
Preclinical Toxicology
- Perform additional toxicology studies required to file NDA ([*] briefing
document).
Regulatory
- [*].
- Manage all ongoing interactions with FDA during the Program.
- Assemble NDA filing to take through FDA review to approval.
- Provide NDA dossier to support Xenova's registration in Europe.
Other Studies in the Primary Indication and Other Indications
- [*].
- Any additional studies required by the FDA for registration in the primary
indication will be conducted after a [*] decision.
- Other additional studies in the primary or subsequent indications will be
reviewed and approved, if appropriate, by the Development Committee before
commencement.
* Material has been omitted and filed with the Commission
EXHIBIT 1.1(hhh)
REGISTRATION PACKAGE
(a) Common Technical Document Structure:
MODULE 1: ADMINISTRATIVE INFORMATION
1. MODULE 1 TABLE OF CONTENTS
2. DOCUMENTS SPECIFIC TO EACH REGION (APPLICATION FORMS AND PRESCRIBING
INFORMATION)
MODULE 2: CTD SUMMARIES
1. OVERALL CTD TABLE OF CONTENTS
2. INTRODUCTION
3. QUALITY OVERALL SUMMARY
4. NONCLINICAL OVERVIEW
5. CLINICAL OVERVIEW
6. NONCLINICAL SUMMARY
7. PHARMACOLOGY
(A) WRITTEN SUMMARY
(B) TABULATED SUMMARY
8. PHARMACOKINETICS
(A) WRITTEN SUMMARY
(B) TABULATED SUMMARY
9. TOXICOLOGY
(A) WRITTEN SUMMARY
(B) TABULATED SUMMARY
10. CLINICAL SUMMARY
(A) SUMMARY OF BIOPHARMACEUTICS AND ASSOCIATED ANALYTICAL METHODS
(B) SUMMARY OF CLINICAL PHARMACOLOGY STUDIES
(C) SUMMARY OF CLINICAL EFFICACY
(D) SUMMARY OF CLINICAL SAFETY
(E) SYNOPSES INDIVIDUAL STUDIES
MODULE 3: QUALITY
1. TABLE OF CONTENTS
2. BODY OF DATA
3. KEY LITERATURE REFERENCES
MODULE 4: NONCLINICAL STUDY REPORTS
1. TABLE OF CONTENTS
2. STUDY REPORTS
3. LITERATURE REFERENCES
MODULE 5: CLINICAL STUDY REPORTS
1. TABLE OF CONTENTS OF CLINICAL STUDY REPORTS
2. TABULAR LISTINGS OF ALL CLINICAL STUDIES
3. CLINICAL STUDY REPORTS
4. LITERATURE REFERENCES
- 2 -
(b) List of additional studies required by the FDA prior to NDA submission
for the Product ([*]):
1. NON-CLINICAL: The following table lists the planned non-clinical
studies that have been identified by Xenova as necessary prior to a NDA
submission. These studies were presented to the FDA in the briefing
document that was sent prior to the end of Phase II meeting. It is
anticipated that these studies would not need to be initiated until the
results from the [*] are known.
STUDY
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[*]
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2. CLINICAL STUDIES: In the clinical section of the minutes to the end
of the Phase II meeting with the FDA, the FDA requested [*].
* Material has been omitted and filed with the Commission
EXHIBIT 1.1(www)
LIST OF XENOVA PATENTS
[*].
[*].
[*]
* Material has been omitted and filed with the Commission
EXHIBIT 12.1(c)
ISSUES RELATING TO XENOVA PATENTS
(1) All matters that would be shown by searches of publicly available
patent prosecution files in respect of Xenova's patents covering the
Drug, held at Patent Offices in the Territory, are disclosed or deemed
to be disclosed to QLT.
(2) Xenova has not conducted searches or inquiries in relation to the
existence of Third Party patents or other proprietary rights, and makes
no representation and gives no warranty in relation to any Third Party
patents and other proprietary rights not known to it.
(3) [*].
--------
* Material has been omitted and filed with the Commission
