AMENDMENT NO. 1 TO CO-DEVELOPMENT AND LICENSE AGREEMENT

Exhibit 10.1

Execution Version

AMENDMENT NO. 1

TO

CO-DEVELOPMENT AND LICENSE AGREEMENT

This AMENDMENT NO. 1 TO CO-DEVELOPMENT AND LICENSE AGREEMENT (this “Amendment”), dated as of June 13, 2017 (the “Amendment Execution Date”), is made by and between ▇▇▇▇▇▇▇ Pharmaceutica NV, a corporation organized and existing under the laws of Belgium (“▇▇▇▇▇▇▇”) and ▇▇▇▇▇▇▇ Neurosciences, Inc., a corporation organized under the laws of the State of Delaware (“▇▇▇▇▇▇▇”). ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS, the Parties have previously entered into that certain Co-Development and License Agreement dated as of February 13, 2014 (the “License Agreement”) (capitalized terms used herein but not otherwise defined shall have the meaning ascribed to such terms in the License Agreement); and

WHEREAS, the Parties now desire to amend the License Agreement as set forth herein;

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending legally to be bound, hereby agree as follows:

ARTICLE I

AMENDMENT OF LICENSE AGREEMENT

1.1. The amendments to the License Agreement set forth in this Article I shall take effect on the Amendment Effective Date.

1.2. Clause (ii) of Section 2.1 of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(ii) solely for purposes of seeking Regulatory Approval of Licensed Products in the ▇▇▇▇▇▇▇ Territory in the Field or solely for purposes of supporting Regulatory Approval of Licensed Products in the ▇▇▇▇▇▇▇ Territory in the insomnia indication (provided, however, that such license shall not alter the rights and obligations of the Parties under Section 3.11)”

1.3. Clause (ii) of Section 2.3 of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(ii) solely for purposes of seeking Regulatory Approval of Licensed Products in the ▇▇▇▇▇▇▇ Territory in the Field (outside of the insomnia indication) or solely for purposes of supporting Regulatory Approval of Licensed Products in the ▇▇▇▇▇▇▇ Territory in the insomnia indication (provided, however, that such license shall not alter the rights and obligations of the Parties under Section 3.11)”

 

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1.4. Clause (i) of Section 3.3(c) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(i) If the disputed matter relates to the Development or Manufacture of a Licensed Product, including any amendment of the Development Plan or Development Budget, then (A) ▇▇▇▇▇▇▇ shall have final decision making authority to the extent such matter relates to the Development of a Licensed Product for the insomnia indication (provided, however, that ▇▇▇▇▇▇▇ shall not have the right to amend the preclinical studies, safety studies or Phase I Trials set forth on Annex 1 (the “Ongoing Preclinical/Safety/Phase I Studies”) without the prior written approval of ▇▇▇▇▇▇▇) and (B) otherwise, ▇▇▇▇▇▇▇ shall have final decision making authority (provided, however, that if ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ disagree on whether any action in respect of quality, regulatory and medical safety issues that ▇▇▇▇▇▇▇ is taking in the Development of a Licensed Product for any indication other than the insomnia indication (or ▇▇▇▇▇▇▇ is taking in relation to the insomnia indication) could have an adverse impact on the Development of a Licensed Product for the insomnia indication (or any indication other than the insomnia indication, in the case of ▇▇▇▇▇▇▇), the matter (an “Expert Dispute”) will be referred upon the request of either Party to an independent Third Party expert in accordance with Section 13.6).”

1.5. Clause (i) of Section 3.10(f) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(i) Cost Sharing.

 

(A)

After the Amendment Effective Date, ▇▇▇▇▇▇▇ shall be solely responsible for all Development Costs (including any Development Costs payable by ▇▇▇▇▇▇▇ but not yet paid as of the Amendment Effective Date (which ▇▇▇▇▇▇▇ hereby expressly waives)) for the Phase II Trials MDD2001, MDD2002, and ISM2005, the Ongoing Preclinical/Safety/Phase I Studies, the preclinical studies, safety studies and Phase I Trials set forth on Annex 2 (collectively, the “DP4 Activities”). ▇▇▇▇▇▇▇ shall have no further obligation to share in any Development Costs for DP4 Activities. ▇▇▇▇▇▇▇ may not exercise its final decision making authority under Section 3.3(c)(i) to amend the Development Plan or the Development Budget in a manner that would increase Development Costs for the DP4 Activities above (or would accelerate such Development Costs, so that they would be incurred sooner) than the total amounts budgeted for the DP4 Activities in (x) the preliminary budget attached hereto as Annex 3 or (y) if the JSC has approved a Development Budget, the latest Development Budget approved by the JSC (without the exercise of final decision making authority by either Party). Notwithstanding the foregoing, if ▇▇▇▇▇▇▇ does not consent to any such increase or acceleration, then (1) ▇▇▇▇▇▇▇ may

 

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elect to fund one hundred percent (100%) of such additional or accelerated Development Costs and (2) if ▇▇▇▇▇▇▇ makes such an election, the JSC will update the applicable activity in the Development Plan to reflect such increase or acceleration.

 

(B)

After the Amendment Effective Date, ▇▇▇▇▇▇▇ shall be solely responsible for all Development Costs described in clause (e) of the definition of “Development Costs” set forth in Section 1.27 that are incurred on or prior to Decision Point 4 (including any such Development Costs payable by ▇▇▇▇▇▇▇ but not yet paid as of the Amendment Effective Date (which ▇▇▇▇▇▇▇ hereby expressly waives)) (any such Development Costs incurred during such period, the “DP4 PDMS Costs”). ▇▇▇▇▇▇▇ shall have no further obligation to share in any DP4 PDMS Costs. ▇▇▇▇▇▇▇ may not exercise its final decision making authority under Section 3.3(c)(i) to amend the Development Plan or the Development Budget in a manner that would increase DP4 PDMS Costs above (or would accelerate such Development Costs, so that they would be incurred sooner) than the total amounts budgeted for the DP4 PDMS Costs in (x) the preliminary budget attached hereto as Annex 3 or (y) if the JSC has approved a Development Budget, the latest Development Budget approved by the JSC (without the exercise of final decision making authority by either Party). Notwithstanding the foregoing, if ▇▇▇▇▇▇▇ does not consent to any such increase or acceleration, (1) ▇▇▇▇▇▇▇ may elect to fund one hundred percent (100%) of such additional or accelerated Development Costs and (2) if ▇▇▇▇▇▇▇ makes such an election, the JSC will update the applicable activity in the Development Plan to reflect such increase or acceleration. ▇▇▇▇▇▇▇ may not exercise its final decision making authority under Section 3.3(c)(i) to amend the Development Plan or the Development Budget in a manner that would decrease DP4 PDMS Costs below (or would delay such Development Costs, so that they would be incurred later) than the total amounts budgeted for the DP4 PDMS Costs in (x) the preliminary budget attached hereto as Annex 3 or (y) if the JSC has approved a Development Budget, the latest Development Budget approved by the JSC (without the exercise of final decision making authority by either Party).

 

(C)

▇▇▇▇▇▇▇ shall be solely responsible for all Development Costs for Phase III Trials of a Licensed Product in the insomnia indication and related Development activities, including activities related to initiation of such Phase III

 

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Trials (collectively, “PIII Insomnia Activities”). For purposes of this Section 3.10(f)(i)(C), any clinical trial that satisfies both the definition of Phase II Trial set forth in Section 1.71 and the definition of Phase III Trial set forth in Section 1.74 shall be deemed to be a Phase III Trial. If the Parties disagree as to whether a proposed Phase II Trial in the insomnia indication also satisfies the definition of Phase III Trial, such matter shall be an Expert Dispute that will be referred upon the request of either Party to an Expert in accordance with Section 13.6.

 

(D)

The Parties shall share, on a sixty percent (60%) to forty percent (40%) basis (▇▇▇▇▇▇▇:▇▇▇▇▇▇▇), all Development Costs that are not related to DP4 Activities or PIII Insomnia Activities or that are not DP4 PDMS Costs. Notwithstanding the foregoing sentence, the provisions of Section 3.10(c)(ii) shall still apply in the event a Party elects not to share Development Costs in accordance with the provisions of such Section 3.10(c)(ii).

 

(E)

Notwithstanding the provisions of Section 3.10(f)(i)(D) to the contrary, if either Party exercises its final decision-making authority under Section 3.3(c)(i) to start any activity that is not set forth on Annex 1 or Annex 2 (whether or not such activity is in the Development Plan as of the Amendment Effective Date) prior to Decision Point 4, such Party shall bear one hundred percent (100%) of the Development Costs for such activity that are incurred on or prior to Decision Point 4. For clarity, Development Costs incurred for such activity after Decision Point 4 shall be shared in accordance with Section 3.10(f)(i)(D).”

1.6. Clause (iv) of Section 3.10(f) of the License Agreement is hereby deleted in its entirety.

1.7. Clause (ii) of Section 3.10(g) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(ii) At any time following Decision Point 4, ▇▇▇▇▇▇▇ shall have the right, but not the obligation, to opt out of further joint Development of the Licensed Products for the Initial Indications and Initial Formulations by giving ▇▇▇▇▇▇▇ written notice of such election, which election shall be effective thirty (30) days after providing such notice and shall constitute a termination of this Agreement pursuant to Section 11.5(a), subject to Section 11.6(b).”

 

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1.8. Clause (iii) of Section 3.10(g) of the License Agreement (excluding subclauses (A) through (G) thereof) is hereby deleted in its entirety and replaced with the following:

“(iii) At any time following Decision Point 4, ▇▇▇▇▇▇▇ shall have the right, but not the obligation, to opt out of further joint Development of the Licensed Products by giving ▇▇▇▇▇▇▇ written notice of such election, which election shall be effective ninety (90) days after providing written notice of such election. In the event that ▇▇▇▇▇▇▇ makes such election (and provided that ▇▇▇▇▇▇▇ does not make a corresponding election pursuant to Section 3.10(g)(ii)):”

1.9. Subclause (F) of Clause (iii) of Section 3.10(g) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(F) the royalties payable by ▇▇▇▇▇▇▇ pursuant to Section 6.2(a) with respect to Net Sales of Licensed Products sold by ▇▇▇▇▇▇▇ and its Affiliates and Sublicensees in the ▇▇▇▇▇▇▇ Territory (as such territory is amended pursuant to Section 3.10(g)(iii)(A)) that are allocable to an indication other than the insomnia indication shall be reduced to six percent (6%) of such Net Sales, subject to potential further adjustment pursuant to Section 3.10(c)(ii), Section 6.2(b) or Section 6.2(c) (for clarity ▇▇▇▇▇▇▇ is not obligated to pay to ▇▇▇▇▇▇▇ royalties on Net Sales of any Licensed Products sold by ▇▇▇▇▇▇▇ or its Affiliates and Sublicensees in the ▇▇▇▇▇▇▇ Territory (as such territory is amended pursuant to Section 3.10(g)(iii)(A)) allocable to the insomnia indication); and”

1.10. Section 6.2(a) of the License Agreement is hereby deleted in its entirety and replaced with the following:

“(a) Royalty Rate and Royalty Term. In accordance with the terms of this Section 6.2, ▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇▇▇ royalties in the amount of seven percent (7%) of Net Sales of all Licensed Products sold by ▇▇▇▇▇▇▇ and its Affiliates and Sublicensees in the ▇▇▇▇▇▇▇ Territory that are allocable to an indication other than the insomnia indication, subject to any royalty rate reduction made pursuant to Section 3.10(c)(ii), Section 3.10(g)(iii), Section 6.2(b) or Section 6.2(c). Such royalties shall be payable, on a country-by-country and Licensed Product-by-Licensed Product basis, beginning upon First Commercial Sale of a Licensed Product in a particular country in the ▇▇▇▇▇▇▇ Territory that is allocable to an indication other than the insomnia indication until the latest of: (i) the ten (10) year anniversary of the First Commercial Sale of such Licensed Product in such country that is allocable to an indication other than the insomnia indication; (ii) the expiration of the last to expire ▇▇▇▇▇▇▇ Patent or Program Patent Covering (x) the Compound of the Licensed Product as a composition of matter in such country in the ▇▇▇▇▇▇▇ Territory or (y) the labeled use of such Licensed Product for an indication other than the insomnia indication in such country in the ▇▇▇▇▇▇▇ Territory; or (iii) the end of the period during which such Licensed Product is subject to Regulatory Exclusivity in such country (such period for a particular Licensed Product in a particular country, the “▇▇▇▇▇▇▇ Royalty Term”). For clarity, ▇▇▇▇▇▇▇ is not obligated to pay to ▇▇▇▇▇▇▇ royalties on Net Sales of any Licensed Products sold by ▇▇▇▇▇▇▇ or its Affiliates and Sublicensees in the ▇▇▇▇▇▇▇ Territory that are allocable to the insomnia indication. If (A) a Licensed Product is approved in any country in the ▇▇▇▇▇▇▇ Territory for any indication, (B) the Parties expect or anticipate that such Licensed Product will be approved in such country for a second indication and (C) either of such indications is the insomnia indication, then, at least six (6) months before the expected date of approval of

 

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such Licensed Product in such country for the second indication, the JSC will develop and approve a methodology that will be used to allocate Net Sales of such Licensed Product in such country by indication using primary and/or secondary market product level data from Third Party reporting services, such as IMS Health; provided, however, that if such data is not available with respect to such country, the JSC will develop and approve an alternate methodology to allocate Net Sales of such Licensed Product in such country by indication. Notwithstanding Section 3.3(c)(ii), in the event the JSC does not approve such a methodology at least three (3) months prior to the anticipated approval of such Licensed Product for such second indication, then the Parties shall mutually select and engage an independent Third Party accounting firm that has no auditing or other financial relationship with either Party or any of its Affiliates to determine such methodology. Such accounting firm shall, as soon as reasonably practicable after such firm is engaged, deliver a report to each Party with its analysis and determination of such methodology. The determination of such firm shall be final and binding on the Parties, and the costs of such firm’s services shall be shared equally by the Parties.”

1.11. The License Agreement is hereby amended by adding a new Section 6.4 as follows:

“6.4 Additional Payments and Undertakings.

(a) As partial consideration for entering into the Amendment, ▇▇▇▇▇▇▇ shall pay a one-time, non-refundable, non-creditable, payment of thirty million dollars ($30,000,000) to ▇▇▇▇▇▇▇ two (2) Business Days after the Amendment Effective Date.

(b) As partial consideration for entering into the Amendment, ▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇▇▇ certain milestone payments (“Milestone Payments”) following the first occurrence of certain milestone events with respect to a Licensed Product, as set forth in the following table (the “Milestone Events”):

 

Milestone Event		Milestone Payment
Dosing of the fifth patient in a Phase III Trial for the insomnia indication		$	20,000,000
50% of the patients are enrolled in the first Phase III Trial for the insomnia indication, based upon the expected patient enrollment as described in the protocol for such Phase III Trial		$	20,000,000

▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇▇▇ the applicable Milestone Payment in the manner described below after the first occurrence of such applicable Milestone Event with respect to the first Licensed Product. For clarity, each Milestone Payment is payable only once; no Milestone Payment shall be payable for subsequent or repeated achievements of such Milestone Event with one or more of the same or different Licensed Products. Each of the Milestone Payments shall be non-refundable and non-creditable. ▇▇▇▇▇▇▇ shall report to ▇▇▇▇▇▇▇ its achievement of each Milestone Event for which payment to ▇▇▇▇▇▇▇ is due, within ten (10) days after such achievement has occurred, and ▇▇▇▇▇▇▇ shall concurrently therewith invoice ▇▇▇▇▇▇▇ for the applicable Milestone Payment. ▇▇▇▇▇▇▇ will pay each such invoice within sixty (60) days of its receipt thereof.”

 

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1.12. The License Agreement is hereby amended by adding a new Section 13.6 as follows:

“13.6 Disputes Relating to Development. In the event either Party requests the resolution of an Expert Dispute by an independent Third Party expert in accordance with Section 3.3(c)(i), such Expert Dispute shall be resolved as described in this Section 13.6.

(a) Following such request, the Parties shall select and agree upon a mutually acceptable independent, disinterested and impartial Third Party who is knowledgeable in the field of pharmaceutical drug development (the “Expert”). If the Parties do not mutually agree upon an Expert within fifteen (15) Business Days, then upon request by either Party, an arbitrator appointed by JAMS shall select the Expert from a list of three (3) potential Third Parties provided by each Party.

(b) Within five (5) Business Days following selection or appointment of the Expert, each Party shall provide the Expert and the other Party with a concise written proposal for resolution of the Expert Dispute and the reasons such proposed resolution should be adopted. If so requested by the Expert, each Party shall make oral submissions to the Expert based on such Party’s written proposal delivered pursuant to this Section 13.6(b), and each Party shall have the right to be present during any such oral submissions.

(c) The Expert shall select one of the Party’s proposals as his or her final decision no later than five (5) Business Days after the submission of the written proposals and, if any, oral submissions. In making his/her determination, the Expert shall take into account as a key criteria not causing a material cost and/or delay to the Development of Licensed Products for the insomnia indication. The Expert shall not have the authority to modify either Party’s proposal or render any substantive decision other than to so select the proposal of a Party as set forth in its respective written proposal. The Expert’s determination shall be the final and binding remedy of the Expert Dispute.

(d) Unless otherwise mutually agreed upon by the Parties, the in-person portion (if any) of such proceedings shall be conducted in New York, New York. The Parties shall share equally the costs and fees of the Expert in connection with any proceeding under this Section 13.6. Each Party shall bear its own costs and attorneys’ and witnesses’ fees and associated costs and expenses incurred in connection with any proceeding under this Section 13.6.

(e) The Parties shall use, and shall direct the Expert to use, diligent efforts to resolve any Expert Dispute under this Section 13.6 within twenty (20) Business Days after the selection of the Expert, or if resolution within twenty (20) Business Days is not reasonably achievable, as determined by the Expert, then as soon thereafter as is reasonably practicable.”

 

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ARTICLE II

CONTINUATION OF LICENSE AGREEMENT

2.1. Except as expressly modified in Article I, the License Agreement shall remain in full force and effect following the Amendment Effective Date.

ARTICLE III

GENERAL

3.1. Governing Law; Service of Process. This Amendment shall be governed by and construed under the substantive laws of the State of New York, without regard to conflicts of law or choice of law rules that would provide for application of the law of a jurisdiction outside New York. The Parties agree that service of process upon them in any legal action may be made if delivered in person, by courier service, by telegram, by facsimile or by first class mail, and shall be deemed effectively given upon receipt. Any dispute, claim or controversy that may arise under, out of, in connection with or relating to this Amendment shall be governed by the provisions of Article 13 of the License Agreement.

3.2. Amendments. No subsequent alteration, amendment, change or addition to this Amendment shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

3.3. Headings. All paragraph headings in this Amendment are for convenience of reference only and will not be construed as a limitation of the scope of the particular sections to which they refer.

3.4. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures, including signatures in a fixed electronic format such as PDF, shall have the same effect as originals.

3.5. Successors and Assigns. This Amendment may only be assigned by a Party in connection with an assignment of the License Agreement in accordance with the provisions of Section 14.7 of the License Agreement. This Amendment will apply to, inure to the benefit of and be binding upon the Parties hereto and upon their respective successors and permitted assigns. The Parties agree that this Amendment is not intended by either Party to give any benefits, rights, privileges, actions or remedies to any person, partnership, firm or corporation as a third party beneficiary or otherwise under any theory of law, except as expressly set forth herein.

3.6. Severability. If any one or more of the provisions of this Amendment is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Amendment and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable provision such that the objectives contemplated by the Parties when entering this Amendment may be realized.

 

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3.7. Entire Agreement. The License Agreement, as amended by this Amendment, constitutes the entire understanding among the Parties with respect to the subject matter hereof and thereof and supersedes all prior discussions, writings and agreements (oral or written) relating to the subject matter hereof and thereof.

3.8. Effectiveness.

(a) For purposes of this Amendment, “Amendment Effective Date” means the Closing Date (as defined in the Stock Repurchase Agreement, dated as of the Amendment Execution Date, by and between ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Innovation-JJDC Inc. (f/k/a ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Development Corporation), an Affiliate of ▇▇▇▇▇▇▇ (the “Stock Repurchase Agreement”)).

(b) This Amendment shall automatically terminate, without any further action on the part of either Party, if (i) the Amendment Effective Date does not occur on or prior to August 31, 2017, unless the Parties mutually agree to a later date or (ii) the Stock Repurchase Agreement is terminated in accordance with its terms prior to the occurrence of Amendment Effective Date. In the event of the termination of this Amendment, neither ▇▇▇▇▇▇▇ nor ▇▇▇▇▇▇▇ shall have any liability or obligation to the other under or in respect of this Amendment, except to the extent of any fraud or intentional or willful breach of this Amendment. In the event of any such termination, (i) the License Agreement shall continue in full force and effect in accordance with its terms, (ii) this Amendment shall become void and have no effect and (iii) the amendments to the License Agreement set forth in Article I shall be abandoned without further action by the Parties hereto, except that the provisions of this Article III shall survive the termination of this Amendment.

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered as of the Amendment Execution Date.

 

SIGNATURE PAGE TO AMENDMENT NO. 1 TO

LICENSE AGREEMENT

 

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Annex 1

Ongoing Preclinical/Safety/Phase I Studies

 

1.

428479922EDI1014 SD Elderly PK Study [Completed]

 

2.

42847922EDI1008 C-14 ADME (AM) Study

 

3.

Carc study 2y rats [started March 2017] 1

 

4.

Carc 1mo rep [started June 2017] 2

 

 

1	Note: The budgeted amount for this study is included in the line item entitled “DSSc” on Annex 3.

2	Note: The budgeted amount for this study is included in the line item entitled “DSSc” on Annex 3.

 

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Annex 2

Planned Preclinical/Safety/Phase I Studies

 

1.

42847922MDD1003 Oral Contraceptives DDI [scheduled to start Sept 2017]

 

2.

42847922MDD1004 Relative BA & Food Effect [scheduled to start 1H 2018]

 

3.

42847922MDD1007 Thorough QT Study [scheduled to start Dec 2017]

 

4.

42847922MDD1009 Phase 1b MDD Monotherapy Trial [scheduled to start July 2017] 3

 

5.

Rat fertility [scheduled to start Mar 2018], if determined to be necessary. 4

 

6.

EDI1015 / DDI1015 [scheduled to start 2018, following consultation with Health Authorities to potentially replace with modeling]

 

7.

Renal Impairment [protocol still to be developed]

 

8.

Hepatic Impairment [protocol still to be developed]

The following studies are scheduled to start after Decision Point 4, but if ▇▇▇▇▇▇▇ exercises its final decision-making authority to commence any of such studies prior to Decision Point 4, such studies shall be considered DP4 Activities:

 

1.

42847922MDD1006 Driving Study in Elderly HV

 

2.

42847922MDD1005 Driving Study in Healthy Volunteers

 

3.

42847922M1008 Abuse Liability

 

4.

Juv. tox 3mo rat 5

 

 

3

Note: The proposed budgeted amount for this study has not yet been presented to or discussed by the JDT or approved by the JSC, so is not shown on Annex 3. For clarity, this does not affect ▇▇▇▇▇▇▇’▇ obligations under Section 3.10(f)(i) to be solely responsible for all Development Costs for this study.

4	Note: The budgeted amount for this study is included in the budget line item entitled “DSSc” on Annex 3.

5	Note: The budgeted amount for this study is included in the budget line item entitled “DSSc” on Annex 3.

 

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Annex 3

Preliminary Development Budget

[See attached.]

Note: The FTE numbers and dollar amounts shown on Annex 3 reflect the number of employees expected to be necessary to conduct the budgeted Development Plan studies. The Parties acknowledge that ▇▇▇▇▇▇▇ sent a proposal to ▇▇▇▇▇▇▇ on April 28 that includes FTE numbers and dollar amounts for ▇▇▇▇▇▇▇ employees. Because the JDT has not yet discussed and the JSC has not yet approved this proposal, it is not reflected on Annex 3. The Parties agree that the JDT will discuss this proposal at its first meeting that occurs after the Amendment Effective Date.

 

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Preliminary budget 2017, 2018 & 2019 Orexin II April 7, 2017

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Preliminary budget: Summary Prelim 2017 Prelim 2018 Prelim 2019 Total Total Total Group Description per function aMDD ISM aMDD + ISM aMDD ISM aMDD + ISM aMDD ISM aMDD + ISM PDMS Subtotal 12,018 155 12,173 10,323 - 10,323 4,245 - 4,245 DSSc Subtotal 2,520 225 2,746 1,336 - 1,336 3,834 186 4,020 Clinical aMD 42847922EDI1008 C-14 ADME (AM) Study 910 2 - Clinical aMD 42847922EDI1014 SD Elderly PK Study 1,235 - - Clinical aMD 42847922MDD1003 Oral Contraceptives DDI 371 808 - Clinical aMD 42847922MDD1004 Relative BA & Food Effect St 775 1,051 - Clinical aMD 42847922MDD1005 Driving Study in Healthy Volunteers 1,293 1,170 Clinical aMD 42847922MDD1006 Driving Study in Elderly HV 1,293 1,170 Clinical aMD 42847922MDD1007 Thorough QT Study 1,312 1,342 - Clinical aMD 42847922MDD1008 Abuse Liability Study 823 - Clinical aMD 42847922MDD2001 2-stage Phase 2B Study of A 8,150 15,359 1,744 Clinical aMD 42847922EDI1015 Fluvoxamine DDI Study (Placeholder) 181 - Clinical aMD 42847922MDD2002 Phase 2B H2H Differentiatio 4,668 8,677 3,464 Clinical aMD Study in Patients with Renal Impairment - 64 Clinical aMD Study in Patients with Hepatic Impairment - 78 Clinical aMD Ph III MDD Long-Term Safety/Efficacy #2 2,450 8,050 Clinical aMD Ph III Pivotal Dose Confirmation Study #1 175 7,700 Clinical aMD Ph III Relapse Prevention Study 175 7,700 Clinical aMD Ph III Pivotal Dose Confirmation Study #2 175 10,850 Clinical aMD Ph III MDD Long-Term Safety/Efficacy #1 3,150 9,450 Clinical ISM 42847922ISM2005 Ph IIB Dose-Range Differentiation Study 2,819 23,598 6,456 Clinical ISM Ph III Pivotal Dose Confirmation Study #1 - 3,579 Clinical ISM Ph III Pivotal Dose Confirmation Study #2 - 3,579 Clinical ISM Ph III Parallel Group Differentiation Trial #1 - 1,465 Clinical ISM Ph III Parallel Group Differentiation Trial #2 - 525 Clinical aMD General Clinical 1,768 700 700 Clinical ISM General Clinical 333 - 350 Clinical Subtotal 19,188 3,152 22,340 37,654 23,598 61,252 52,140 15,954 68,094 Other general support 2,545 525 3,070 5,950 1,050 7,000 7,000 1,400 8,400 Total Orexin 2 Spend (ex BU) 36,271 4,057 40,328 55,262 24,648 79,910 67,219 17,540 84,759

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Preliminary budget: OOP Prelim 2017 Prelim 2018 Prelim 2019 TOTAL TOTAL TOTAL aMDD + aMDD + aMDD + Group Indication Description per function aMDD ISM ISM aMDD ISM ISM aMDD ISM ISM PDMS 4,211 - 4,211 3,323 - 3,323 745 745 DSSc 1,867 114 1,981 1,196 - 1,196 3,484 186 3,670 Clinical aMDD 42847922EDI1008 C-14 ADME (AM) Study 598 2 Clinical aMDD 42847922EDI1014 SD Elderly PK Study 759 - Clinical aMDD 42847922MDD1003 Oral Contraceptives DDI 196 458 Clinical aMDD 42847922MDD1004 Relative BA & Food Effect Study 443 701 Clinical aMDD 42847922MDD1005 Driving Study in Healthy Volunteers 593 470 Clinical aMDD 42847922MDD1006 Driving Study in Elderly HV 593 470 Clinical aMDD 42847922MDD1007 Thorough QT Study 689 992 Clinical aMDD 42847922MDD1008 Abuse Liability Study 123 Clinical aMDD 42847922MDD2001 2-stage Phase 2B Study of Adj. Treatment 7,379 13,609 1,044 Clinical aMDD 42847922EDI1015 Fluvoxamine DDI Study (Placeholder) 181 Clinical aMDD 42847922MDD2002 Phase 2B H2H Differentiation Study vs Qu 3,736 7,977 3,114 Clinical aMDD Study in Patients with Renal Impairment 64 Clinical aMDD Study in Patients with Hepatic Impairment 78 Clinical ISM 42847922ISM2005 Ph IIB Dose-Range Differentiation Study 2,497 21,848 5,756 Clinical ISM Ph III Pivotal Dose Confirmation Study #1 2,879 Clinical ISM Ph III Pivotal Dose Confirmation Study #2 2,879 Clinical ISM Ph III Parallel Group Differentiation Trial #1 940 Clinical 13,800 2,497 16,297 25,229 21,848 47,077 5,240 12,454 17,694 Other TOTAL Orexin 2 Lead Program Spend JnJ OOP $ 19,878 2,611 22,489 29,747 21,848 51,595 9,469 12,640 22,109

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Preliminary budget: FTE $ Prelim 2017 Prelim 2018 Prelim 2019 TOTAL TOTAL TOTAL Group Indication aMDD ISM aMDD + ISM aMDD ISM aMDD + ISM aMDD ISM aMDD + ISM PDMS 7,807 155 7,962 7,000 - 7,000 3,500 - 3,500 - - DSSc 654 111 765 140 - 140 350 - 350 - - Clinical aMDD 42847922EDI1008 C-14 ADME (AM) Study 312 - Clinical aMDD 42847922EDI1014 SD Elderly PK Study 476 - Clinical aMDD 42847922MDD1003 Oral Contraceptives DDI 175 - 350 Clinical aMDD 42847922MDD1004 Relative BA & Food Effect Study 333 - 350 Clinical aMDD 42847922MDD1006 Driving Study in Elderly HV - - 700 700 Clinical aMDD 42847922MDD1005 Driving Study in Healthy Volunteers - - 700 700 Clinical aMDD 42847922MDD1007 Thorough QT Study 623 - 350 Clinical aMDD 42847922MDD1008 Abuse Liability Study - - 700 Clinical aMDD 42847922MDD2001 2-stage Phase 2B Study of Adj. Treatment in 771 - 1,750 700 Clinical aMDD 42847922MDD2002 Phase 2B H2H Differentiation Study vs Que 933 - 700 350 Clinical aMDD Ph III MDD Long-Term Safety/Efficacy #2 - - 2,450 8,050 Clinical aMDD Ph III Pivotal Dose Confirmation Study #1 - - 175 7,700 Clinical aMDD Ph III Relapse Prevention Study - - 175 7,700 Clinical aMDD Ph III Pivotal Dose Confirmation Study #2 - - 175 10,850 Clinical aMDD Ph III MDD Long-Term Safety/Efficacy #1 - - 3,150 9,450 Clinical ISM 42847922ISM2005 Ph IIB Dose-Range Differentiation Study - 322 1,750 700 Clinical ISM Ph III Pivotal Dose Confirmation Study #1 - - 700 Clinical ISM Ph III Pivotal Dose Confirmation Study #2 - - 700 Clinical ISM Ph III Parallel Group Differentiation Trial #2 - - 525 Clinical ISM Ph III Parallel Group Differentiation Trial #1 - - 525 Clinical aMDD General Clinical support 1,768 - 700 700 - Clinical ISM General Clinical support - 333 350 - - Clinical 5,389 655 6,043 12,425 1,750 14,175 46,900 3,500 50,400 Other general support 2,545 525 3,070 5,950 1,050 7,000 7,000 1,400 8,400 TOTAL Orexin 2 Lead Program Spend JnJ FTE # 16,394 1,446 17,839 25,515 2,800 28,315 57,750 4,900 62,650

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Preliminary budget: FTE # Prelim 2017 Prelim 2018 Prelim 2019 TOTAL TOTAL TOTAL Group Indication aMDD ISM aMDD + ISM aMDD ISM aMDD + ISM aMDD Ism aMDD + ISM PDMS 22 0 23 20 - 20 10 0 10 ▇▇▇▇ ▇ ▇ ▇ ▇ - ▇ ▇ - ▇ Clinical aMDD 42847922EDI1008 C-14 ADME (AM) Study 1 - Clinical aMDD 42847922EDI1014 SD Elderly PK Study 1 - Clinical aMDD 42847922MDD1003 Oral Contraceptives DDI 1 1 Clinical aMDD 42847922MDD1004 Relative BA & Food Effect Study 1 1 Clinical aMDD 42847922MDD1006 Driving Study in Elderly HV 2 2 Clinical aMDD 42847922MDD1005 Driving Study in Healthy Volunteers 2 2 Clinical aMDD 42847922MDD1007 Thorough QT Study 2 1 Clinical aMDD 42847922MDD1008 Abuse Liability Study 2 Clinical aMDD 42847922MDD2001 2-stage Phase 2B Study of Adj. Treatme 2 5 2 Clinical aMDD 42847922MDD2002 Phase 2B H2H Differentiation Study vs 3 2 1 Clinical aMDD Ph III MDD Long-Term Safety/Efficacy #2 7 23 Clinical aMDD Ph III Pivotal Dose Confirmation Study #1 1 22 Clinical aMDD Ph III Relapse Prevention Study 1 22 Clinical aMDD Ph III Pivotal Dose Confirmation Study #2 1 31 Clinical aMDD Ph III MDD Long-Term Safety/Efficacy #1 9 27 Clinical ISM 42847922ISM2005 Ph IIB Dose-Range Differentiation Study 1 5 2 Clinical ISM Ph III Pivotal Dose Confirmation Study #1 2 Clinical ISM Ph III Pivotal Dose Confirmation Study #2 2 Clinical ISM Ph III Parallel Group Differentiation Trial #2 2 Clinical ISM Ph III Parallel Group Differentiation Trial #1 2 Clinical aMDD General Clinical support 5 2 2 Clinical ISM General Clinical support 1 1 Clinical 15 2 17 36 5 41 134 10 144 Other aMDD Other Project Support 7 17 20 Other ISM Other Project Support 2 3 4 Other general support 7 2 9 17 3 20 20 4 24 TOTAL Orexin 2 Lead Program Spend JnJ FTE # 47 4 51 73 8 81 165 14 179