Exhibit 10.4
NDD-094
LICENSE AGREEMENT
between
Novartis Pharma AG,
Novartis AG
and
Vanda Pharmaceuticals, Inc.
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
NDD-094 LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") dated the 4th day of June, 2004
(the "Effective Date") by and between Novartis Pharma AG, a corporation
organized and existing under the laws of Switzerland and having its principal
office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ("Novartis"), Novartis AG, a
corporation organized and existing under the laws of Switzerland and having its
principal office at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ("Novartis AG") and
Vanda Pharmaceuticals, Inc., a corporation organized and existing under the laws
of the State of Delaware and having its principal office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, The United States ("Vanda"). Novartis, Novartis
AG and Vanda may be referred to herein individually as a "Party" and
collectively as the "Parties".
INTRODUCTION
WHEREAS, Novartis AG owns or has rights to certain Novartis Patents (as
defined below) and Novartis AG and Novartis each have rights to Novartis
Know-How (as defined below) related to the Product (as defined below) and the
Compound (as defined below), and each has the right to grant certain rights and
licenses thereunder as set forth herein, and
WHEREAS, Vanda has certain expertise in the development and
commercialization of pharmaceutical products, and Vanda wishes to obtain certain
licenses to the Compound for the purpose of developing and commercializing the
Product, and
WHEREAS, Novartis AG and Novartis each wish to grant a license to Vanda in
respect of such development and commercialisation.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the sufficiency of which is hereby
acknowledged, the Parties to this Agreement mutually agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following initially capitalized terms
in this Agreement, whether used in the singular or plural, shall have the
following meanings:
1.1 "Affiliate" shall mean any corporation, company, partnership,
joint venture and/or firm which controls, is controlled by, or is under
common control with a specified person or entity. For purposes of this
Section 1.1, "control" shall be presumed to exist if one of the following
conditions is met: (a) in the case of corporate entities, control of at
least fifty per cent (50%) of the voting rights at a meeting of the board
of directors or direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest
with the power to direct the management and policies of such non-corporate
entities. The Parties acknowledge that in the case of certain entities
organized under the laws of certain countries outside of the United
States, the
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maximum percentage ownership permitted by law for a foreign investor may
be less than fifty percent (50%), and that in such cases such lower
percentage shall be substituted in the preceding sentence, provided that
such foreign investor has the power to direct the management and policies
of such entity. Notwithstanding the foregoing venture capital investors
in Vanda shall not be considered Affiliates of Vanda.
1.2 "Annex" or "Schedule" shall mean the annexes attached to the
back of this Agreement. In the event of conflict between the drafting of
the operative terms of the Agreement and the Annex, the operative terms of
the Agreement shall prevail.
1.3 "Back-up Compound" shall mean a compound [*].
1.4 "Business Day" shall mean any day on which banking institutions
in New York, New York and Basel are open for business.
1.5 "Commercialization" or "Commercialize" shall mean activities
conducted by a Party either by itself or through a Third Party and
directed to marketing, promoting, distributing, importing, exporting,
offering for sale and selling a Product. When used as a verb,
"Commercialize" means to engage in Commercialization.
1.6 "Commercializing Party" shall mean Vanda, except that
"Commercializing Party" shall mean Novartis as soon as Novartis has
exercised either the Scenario II Option or the Scenario III Option and
thereby has elected to Commercialize the Product.
1.7 "Compound" shall mean the compound currently identified by
Novartis and Novartis AG as NDD-094 or isomers or epimers thereof and any
metabolites and salts thereof and more particularly described on Schedule
1.7.
1.8 "Confidential Information" has the meaning set forth in Section
8.1.
1.9 "Controlled" or "Controls", when used in reference to
intellectual property, shall mean the legal authority or right of a Party
hereto (or any of its Affiliates) to grant a license or sublicense of
intellectual property rights to another party, or to otherwise disclose
proprietary or trade secret information to such other Party, without
breaching the terms of any agreement with a Third Party, infringing upon
the intellectual property rights of a Third Party, or misappropriating the
proprietary or trade secret information of a Third Party.
1.10 "Co-Promotion Agreement" has the meaning set forth in Section
2.1(b).
1.11 "Development Costs" shall mean all reasonable costs incurred by
Vanda after the Effective Date in developing the Product in accordance
with this Agreement, as set out in the Development Plan, which costs shall
[*] and including:
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(a) all reasonable Out-of-Pocket Costs and expenses incurred;
(b) the reasonable direct and indirect costs of internal scientific,
medical or technical personnel (including personnel expenses, travel expenses
and infrastructure costs but for the avoidance of doubt, not including the costs
of managerial, financial, legal or business development personnel) engaged in
such efforts, which costs shall be determined based on the FTE Rate, unless
another basis is otherwise agreed by the Parties in writing;
(c) the reasonable costs and expenses of clinical supplies for such
efforts, including without limitation (i) supply cost of clinical supplies of
the Product; (ii) costs and expenses incurred to purchase and/or package
comparator or combination drugs or devices; and (iii) costs and expenses of
disposal of clinical samples;
(d) the reasonable costs and expenses incurred in connection with
manufacturing process development and validation, manufacturing scale-up and
improvements, stability testing and quality assurance/quality control
development; qualification and validation of Third Party contract manufacturers;
(e) the reasonable direct and indirect costs of senior management of
Vanda to the extent reasonably related to the Product and
(f) all regulatory filing fees.
1.12 "Development Plan" shall mean the detailed plan drafted by Vanda and
showing its intentions and estimated costs with respect to the development of
the Compound.
1.13 "Effective Date" shall mean the date specified in the first paragraph
of this Agreement.
1.14 "EMEA" shall mean the European Agency for the Evaluation of Medicinal
Products.
1.15 "FDA" shall mean the U.S. Food and Drug Administration or its
successor agency.
1.16 "Field of Use" shall mean application to all conditions, disorders
and diseases in humans.
1.17 "First Commercial Sale" shall mean the first sale of a Product to a
Third Party by a Party or an Affiliate or sublicensee of such Party in a country
in the Territory following the obtaining of the applicable Regulatory Approval
of such Product in such country.
1.18 "FTE Rate" shall mean a rate of $[*] per annum for the time of an
employee for a full-time equivalent person year (consisting of a total of [*]
hours per annum) of work, to be pro-rated on a daily basis (per annum amount to
be divided by [*] to produce the rate per whole day consisting of [*] hours) if
necessary, such rate to include all travel expenses.
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1.19 "Good Clinical Practice" shall mean the current Good Clinical
Practice regulations promulgated by the FDA, published at 21 C.F.R Part 50 and
56 as such regulations may be amended, and such comparable regulations or
standards as may be applicable with respect to the design, conduct, performance,
monitoring, auditing, recording, analyses and reporting of clinical trials
outside the United States.
1.20 "GMP" shall mean the current Good Manufacturing Practice regulations
promulgated by the FDA, published at 21 C.F.R. Part 210 et seq. as such
regulations may be amended, and such comparable regulations or standards as may
be applicable with respect to Compound or Product(s) manufactured or sold
outside the United States.
1.21 "Investigational New Drug Application" or "IND" has the meaning set
forth in Section 2.2(a).
1.22 "Indemnified Party" has the meaning set forth in Section 10.3.
1.23 "Indemnifying Party" has the meaning set forth in Section 10.3.
1.24 "Infringement Claim" has the meaning set forth in Section 6.2(a).
1.25 "Joint Development Committee" or "JDC" shall mean the joint global
development committee to be set up by Vanda and Novartis to coordinate the
development and registration efforts described in this Agreement.
1.26 "Loss" has the meaning set forth in Section 10.1
1.27 "Major Market Country" means each and any of [*].
1.28 "NDA" or "New Drug Application" shall mean a new drug application and
all amendments and supplements thereto filed with the FDA pursuant to 21 C.F.R.
Section 314, the EMEA or an equivalent Regulatory Authority in a Major Market
Country, requiring such filing, and including all documents, data and other
information concerning a pharmaceutical product which are necessary for the
gaining of Regulatory Approval seeking permission to market and sell the Product
in a Major Market Country.
1.29 "NDA Acceptance" means the written notification by the FDA or its
equivalent outside the United States, that the NDA has met all the criteria for
filing acceptance pursuant to 21 C.F.R. Section 314.101 or such equivalent.
1.30 "NDA Filing" means the first submission of the NDA to the FDA, EMEA
or its equivalent in a Major Market Country.
1.31 "Net Sales" shall mean [*], less the following deductions in respect
of the Product (each as determined in accordance with International Accounting
Standards ("IAS")) if not previously deducted or reimbursed or paid by a Third
Party in the amount invoiced or received: (a) [*]
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[*]; (b) [*] to the extent included in the invoice price; (c) [*] to the extent
included in the invoice price to the customer; (d) [*], in each case
specifically identifiable as relating to Product; (e) [*]; (f) [*] to the extent
actually allowed as agreed by the parties in writing, [*]. [*] shall be
disregarded for purposes of calculating Net Sales.
In the event that the Product is sold as part of a combination product,
the Net Sales of the Product, for the purposes of determining royalty payments,
shall be determined by [*]. In the event that [*], Net Sales for purposes of
determining royalty payments shall be mutually agreed by the Parties within a
reasonable period of time prior to the first Regulatory Approval of such
combination product based on [*], and such agreement shall not be unreasonably
withheld.
1.32 "Novartis Know-How" shall mean any proprietary or nonproprietary
information specific to the Compound or Product within the Field of Use and of a
confidential nature necessary or useful for the manufacture, preparation or
development of the Compound or Product Controlled by Novartis and/or Novartis AG
during the term of this Agreement and shall include, without limitation, data,
knowledge and information., including chemical, stability, pharmacological,
toxicological, pre-clinical, clinical and manufacturing data, samples,
documentation, analytical standards, and gene expression data, provided that
Novartis Know-How shall not include [*].
1.33 "Novartis Monthly Average Exchange Rate" shall mean for a currency,
the mathematical average of Reuters Daily Rates between 9:00 a.m. and 10 a.m.
Basel time and the official European Central Bank daily rate fixed at 2 p.m. for
each Business Day of a month, where applicable.
1.34 "Novartis Patents" shall mean those Patents Controlled by Novartis AG
claiming Compound, Product, or their metabolites or any formulation of Compound,
processes, uses and intermediates of the foregoing, including those listed on
Annex 3 attached hereto. For the avoidance of doubt, such Novartis Patents shall
not include patents for [*].
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1.35 "Out of Pocket Costs" shall mean, in accordance with International
Accounting Standards, expenses incurred by a Party and for the avoidance of
doubt, not including pre-paid amounts and capital expenditure.
1.36 "Patents" shall mean all rights under any patents or patent
applications and any continuations, continuations-in-part, divisions,
provisionals, substitutions, patents of addition, reissues, reexamination,
renewals or extensions thereof (including any supplemental patent certificates)
and any confirmation patent or registration patent and all foreign counterparts
of any of the foregoing.
1.37 "Payee" has the meaning set forth in Section 5.6.
1.38 "Payor" has the meaning set forth in Section 5.6
1.39 "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.
1.40 "Phase I Clinical Trial" shall mean the first phase of human clinical
trials of a drug required by the FDA to gain evidence of safety for Product(s),
as described in 21 C.F.R. 312(a), as may be amended and deemed to commence on
the date that the first patient is first dosed by or on behalf of Vanda.
1.41 "Phase II Clinical Trials" shall mean that portion of the FDA
submission and approval process which provides for the initial trials of a
Product on a limited number of patients for the purposes of determining dose
and, evaluating safety and efficacy in the proposed therapeutic indication, as
more fully defined in 21 C.F.R. 312.21(b) as may be amended and deemed to
commence on the date that the first patient is first dosed by or on behalf of
Vanda.
1.42 "Phase III Clinical Trials" shall mean that portion of the FDA
submission and approval process which provides for the continued trials of a
Product on sufficient numbers of patients to generate safety, efficacy and
pharmacoeconomic data to support regulatory approval in the proposed therapeutic
indication, as more fully defined in 21 C.F.R. 312.21(c) as may be amended and
deemed to commence on the date that the first patient is first dosed by or on
behalf of Vanda (and Novartis, if applicable).
1.43 "Primary Market Research Development" shall mean all market research
activity undertaken by the Commercialising Party prior to the First Commercial
Sale.
1.44 "Product" shall mean a formulated pharmaceutical product containing
the Compound or Back-up Compound as an active ingredient and packaged for the
use by the ultimate consumer.
1.45 "Reasonable Commercial Efforts" shall mean the efforts and resources
[*].
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1.46 "Regulatory Approval" shall mean, with respect to a country or group
of countries in the Territory, all authorizations by the appropriate Regulatory
Authority, governmental entity or entities necessary for commercial sale of a
Product in that country or group of countries including, without limitation and
where applicable, approval of labeling, price, reimbursement and manufacturing.
1.47 "Regulatory Authority" shall mean the FDA, EMEA or any other
counterpart or additional governmental or regulatory agencies responsible for
applicable Regulatory Approvals.
1.48 "Scenario I Option" has the meaning set forth in Section 2.2(c).
1.49 "Scenario II Option" has the meaning set forth in Section 2.2(a).
1.50 "Scenario III Option" has the meaning set forth in Section 2.2(b).
1.51 "Sublicensee" shall mean a Person, other than a Vanda Affiliate, to
whom Vanda grants any right or license to use Novartis Patents or Novartis
Know-How or to make, use or sell any Product under all or part of Novartis'
Patents or Novartis' Know-How in the Territory.
1.52 "Supply Agreement" has the meaning set forth in Section 3.2.
1.53 "Support" or "Supporting" shall mean the preparation, filing,
prosecution, maintenance, renewal and defense of a Patent.
1.54 "Term" has the meaning set forth in Section 9.l(a).
1.55 "Territory" shall mean all the countries and territories of the
world.
1.56 "Third Party" shall mean any Person or other entity other than
Vanda, Novartis, Novartis AG or their respective Affiliates of rights conveyed
under this Agreement.
1.57 "Valid Claim" shall mean (i) an unexpired or issued claim of a
Novartis Patent which claim has not been held invalid or unenforceable by final
decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which is not
admitted to be invalid or unenforceable through reissue, disclaimer or otherwise
or (ii) pending patent application that is a Novartis Patent Right, which claim
was filed in good faith and has not been abandoned or finally disallowed without
the possibility of appeal or refiling of said application.
1.58 "Vanda Technology" means all Patents and know-how that are (i)
generated, identified, discovered, created or made by Vanda, its employees or a
Third Party on behalf of Vanda, (ii) controlled by Vanda, and (iii) necessary to
manufacture, use, research, develop, sell or seek regulatory approval,
including, without limitation, manufacturing processes, formulations, modes of
delivery and methods of use for the Compound, Back-up Compound, or Products
developed by Vanda pursuant to its development work with the Compound or the
Back-up Compound.
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ARTICLE 2
LICENSE
2.1 Grant to Vanda.
(a) Subject to the terms and conditions of this Agreement, on the
Effective Date, Novartis and Novartis AG hereby grant to Vanda an exclusive
license, with the right to sublicense with the prior written consent of Novartis
and Novartis AG, such consent not to be unreasonably withheld, under the
Novartis Patents and Novartis Know-How, to develop, use, make and have made
Compound and Product in the Field of Use and in the Territory.
(b) Subject to the Scenario II Option pursuant to Section 2.2(a) and
Scenario III Option pursuant to Section 2.2(b) and the Co-Promotion Option
pursuant to Section 2.3(a) and (b), Vanda shall have an exclusive license to
Commercialize the Compound and Product, with right to sublicense without
consent.
(c) Novartis AG and Novartis retain all rights to Novartis Patents and
Novartis Know-How except to the extent explicitly granted to Vanda hereunder.
2.2 Option
(a) Scenario II Option. Upon the execution of this Agreement, Vanda
agrees and undertakes that it shall commence Phase II Clinical Trials for the
Product on [*]. [*] shall be responsible for the conduct [*] of each of the
Phase I Clinical Trials and Phase II Clinical Trials which it elects to conduct.
Within [*] of the completion of the Phase II Clinical Trials, Vanda shall
provide Novartis with a full written report of the results of the Phase II
Clinical Trials, including the conclusions thereof. Upon request by Novartis,
Vanda shall [*]. Novartis shall have [*] immediately following the delivery to
Novartis of the final Phase II Clinical Trial report to provide notice of
exercise to Vanda stating, that Novartis wishes to co-develop and Commercialize
the Product (the "Scenario II Option").
Upon exercise of the Scenario II Option, Novartis shall [*] and
Novartis shall [*]. After the exercise of the Scenario II Option, Vanda shall
[*]. As per Section 4.2 below Novartis shall [*]. Subject only to the option to
co-promote in Section 2.3(c) below, under Scenario II Novartis and its
Affiliates shall have the exclusive rights for the Commercialisation of the
Compound or Product and Vanda shall grant Novartis an exclusive license under
the Vanda Technology.
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Upon the exercise of the Scenario II Option by Novartis the Scenario I
Option, pursuant to Section 2.2(c) below and Scenario III Option pursuant to
Section 2.2(b) below as well the Co-Promotion Option pursuant to Section 2.3 (a)
and (b) shall be deemed expired.
(b) Scenario III Option. In the event that Novartis does not exercise
its Scenario II Option, Vanda will consider the results of the Phase II Clinical
Trial and may elect to commence Phase III Clinical Trials for the Product within
[*] of the delivery of the final Phase II Clinical Trial report to Novartis.
Vanda shall provide written notice of such election to Novartis. Upon such
election, Vanda shall [*]. If Novartis does not receive such election notice
within the [*] period, Novartis may terminate this Agreement according to
Section 9.3. Within [*] of the completion of the Phase III Clinical Trials,
Vanda shall provide Novartis with a full written report of the results of the
Phase III Clinical Trials, including the conclusions thereof. The Phase III
Clinical Trials shall be performed in accordance with a plan reviewed with the
relevant Regulatory Authority in a post Phase IIB meeting and be approved by the
JDC. Upon request by Novartis Vanda shall [*]. Novartis shall have [*]
immediately following the delivery to Novartis of the final Phase III Clinical
Trials report to provide written notice to Vanda of exercise stating, Novartis
wishes to Commercialize the Product (the "Scenario III Option").
Upon exercise of the Scenario III Option, Novartis shall [*] and
Novartis shall [*]. As per Section 4.2 below Novartis shall [*] immediately
after the exercise of the Scenario III Option. Subject only to the option to
co-promote in Section 2.3(c) below, under Scenario III Novartis and its
Affiliates shall have the exclusive rights for the Commercialisation of the
Compound or Product and Vanda shall grant Novartis and exclusive license under
the Vanda Technology.
Upon the exercise of the Scenario III Option by Novartis the Scenario I
Option pursuant to Section 2.2(c) below and the Co-Promotion Option pursuant to
Section 2.3(a) and (b) shall be deemed expired.
(c) Scenario I Option. In the event that Novartis does not exercise the
Scenario II Option or the Scenario III Option, Novartis shall be deemed to have
exercised the Scenario I Option. Under Scenario I Vanda shall be fully
responsible for the entire development, manufacturing and Commercialisation of
the Compound and the Product. Subject to the option to co-promote in Section 2.3
(a) and (b) below, under Scenario I Novartis shall have no right or obligation
to the Commercialisation of the Compound or Product. Within [*] of the last date
for Novartis to exercise the Scenario III Option, but did not exercise such
option, Vanda shall [*].
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(d) Good Clinical Practices. All Phase I Clinical Trials, Phase II
Clinical Trials or Phase III Clinical Trials conducted by Vanda pursuant to this
Agreement shall be conducted in accordance to Good Clinical Practice.
2.3 Co-Promotion Option.
(a) Novartis First Right of Refusal - If pursuant to section 2.2(c)
above Novartis is deemed to have exercised its Scenario I Option, and Vanda
decides to co-promote the product with a Third Party, Vanda shall notify
Novartis in writing of its intention to co-promote the Products with such a
co-promotion partner. Novartis will have [*] from the date Vanda notifies
Novartis of its intention to co-promote the Product with a Third Party to
provide written notice of its intent to exercise its option to co-promote the
Product with Vanda and to negotiate in good faith a Co-Promotion Agreement on
commercially reasonable terms and conditions.
(b) If after such [*] period, the Parties have not entered into a
Co-Promotion Agreement, Vanda would be free to enter into an arrangement with
[*]; provided, that Vanda will provide Novartis a last opportunity to submit a
Matching counteroffer on terms no less favorable to Vanda than those terms last
offered [*]. Vanda shall [*]; provided, however, that Vanda shall not be
required to disclose the identity of such Third Party. Within [*] of Novartis'
receipt of the written notice, Novartis will respond to Vanda in writing
regarding Novartis' interest in Matching the counter-offer. During the same [*]
period following receipt of such notice from Vanda, Novartis may submit to Vanda
the counter-offer. Vanda shall consider such counteroffer from Novartis in good
faith and agree to negotiate with Novartis in the event that the terms of such
Novartis counteroffer are more favourable to Vanda than those of a bona fide
definitive agreement negotiated by Vanda with a Third Party. As used herein,
"Matching" shall mean [*] or (ii) [*].
(c) If Novartis exercises its Scenario II Option or Scenario III
Option, and intends to co-promote the product in a Major Market Country with a
Third Party, Novartis shall notify Vanda in writing of its intention to
co-promote the Products with a co-promotion partner. Vanda will have [*] from
the date Novartis notifies Vanda of its intention to co-promote the Product to
provide written notice of its intent to exercise its option to co-promote the
Product with Novartis on commercially reasonable terms and conditions to be
negotiated in good faith and set forth in the Co-Promotion Agreement. If after
[*] of such good faith negotiations there is no agreement on the
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terms of the Co-Promotion Agreement between the Parties, Novartis shall be free
to co-promote the Product with a Third Party.
ARTICLE 3
MANUFACTURE AND SUPPLY
3.1 Provision of Compound. Within [*] of the Effective Date, Novartis will
provide to Vanda, [*], 20 kg of Compound substance [*] as well as adequate data
in connection with the development of the Compound and Product. Further Novartis
shall sell to Vanda and Vanda shall buy [*] from Novartis the remaining Compound
available at Novartis in addition to the 20 kg specified in this Section 3.1 at
the terms and conditions specified in Schedule 3.1. For the avoidance of doubt,
Novartis makes no representation or warranty that any quantities of Compound
provided to Vanda under this Agreement will meet the GMP standards,
3.2 Right to Manufacture Clinical Supply. Within [*] of the Effective
Date, the Parties shall determine whether Novartis will manufacture and supply
to Vanda the clinical supplies of Compound and/or Product, and the parties shall
negotiate the terms and conditions of a clinical supply agreement pursuant to
which the Compound shall be supplied. To the extent that the Parties do not
enter into an agreement for the supply of Compound for clinical purposes within
[*], then Novartis shall co-operate in all reasonable respects to transfer such
Novartis Know-How to Vanda and provide such other assistance reasonably
necessary in order to enable Vanda or a Third Party to supply clinical supplies
of Compound and/or Product.. Novartis shall have exclusive rights to manufacture
the Compound and Product in the event that Novartis exercises either the
Scenario II Option or the Scenario III Option.
3.3 Transfer of Novartis Know-How and Novartis Patent Files. In
furtherance of the activities contemplated by this Agreement, Novartis and
Novartis AG each shall, or shall cause its Affiliates to, transfer as promptly
as possible to Vanda the Novartis Know-How and the files of the Novartis
Patents, including copies of all relevant laboratory notebook information,
screening data and synthesis schemes clinical trial information and clinical
trial raw and derived datasets, which includes description in any forms, data
and other information disclosed or transferred to Vanda before the Effective
Date. Banked DNA samples and or animal tissues treated with the compound will
only be made available to Vanda for further studies in accordance with the
protocols and informed consents set forth at the time of sample acquisition
provided however that no human tissue samples with identifiable patient data
will be transferred to Vanda. All raw data and individual clinical and genetic
data will be transferred to Vanda under a mutually agreed coding schema, in
order to protect patient confidentiality. All original identifiable patient data
will, however be provided to the FDA as part of the submission package. If Vanda
requires additional genotyping on existing samples, Novartis will contract this
work out, in accordance with the informed consents, on Vanda's
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behalf [*]. If further DNA samples from past study patients are desired, Vanda
will revisit the sites and try to consent or reconsent these patients for
additional DNA sampling. Novartis and Vanda shall [*]. In addition, Novartis and
Novartis AG shall make a Novartis representative familiar with the Novartis
Know-How and the files of the Novartis Patents reasonably available within
reasonable office hours of the relevant employee to assist Vanda with the
transfer as well as to answer any questions Vanda may have concerning such
transferred information. In the event a translator is necessary or any of the
materials need to be translated into English, the Parties shall [*]. Upon
Novartis' exercise of the Scenario II option Vanda shall [*].
3.4 Transfer of Pharmacovigilance obligations and IND. In furtherance of
the activities contemplated by this Agreement, Novartis and Novartis AG each
shall, or shall cause its Affiliates to, transfer to Vanda the IND, including
copies of all relevant registration dossiers. Such transfer shall however be
subject to the transfer of all Pharmacovigilance obligations, with respect to
clinical trials of Products performed prior to the Effective Date by Novartis to
Vanda or Vanda's Affiliates.
ARTICLE 4
DEVELOPMENT AND COMMERCIALIZATION
4.1 Development. Subject to the exercise by Novartis of either the
Scenario II Option or the Scenario III Option, Vanda shall be responsible for
overall development and regulatory filings for the Product in the Territory.
Vanda shall use its Reasonable Commercial Efforts to perform its obligations
under this Agreement and cause or cause to be done, all things necessary to
perform the obligations contemplated hereby. Vanda shall use Reasonable
Commercial Efforts to make all registrations, filings and applications, to give
all notices to the relevant Regulatory Authority and obtain any governmental
transfers, approvals, orders, qualifications and waivers necessary or desirable
for the commercialisation of the Product hereby.
4.2 The JDC shall be set up within four (4) weeks of the Scenario II
Option and shall be comprised of at least one member from Vanda and Novartis
respectively (or further equal numbers from both Parties on an ad hoc basis as
is agreed), plus the chairman [*] to assist in a consistent and harmonized
development of the Product under this Agreement, it being understood that each
member shall be entitled and expected to consult with their organization. The
JDC shall discuss development and registration issues and shall co-ordinate the
development and registration efforts described in this Agreement. Meetings of
the JDC shall be at such times and places and in such form (e.g., in person,
telephonic or video conference) as the members of the JDC shall determine but
shall meet at least once every [*]. Representatives of both Novartis and Vanda
shall be present at any meeting of the JDC. Decisions of the JDC shall be made
by a majority vote at a telephone or video conference or by a written consent
signed by
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[*]. The JDC shall keep minutes of its deliberations (or appoint a secretary to
do so) setting forth, amongst other matters, all proposed actions and all votes
thereon.
4.3 All records of the JDC shall at all times be available to the Parties.
The JDC may delegate to one Party or to a specific representative the authority
to make certain decisions. The costs incurred by each Party through its
participation in the JDC shall [*].
4.4 [*] Reports. While the Compound is under development and until the
completion of Phase II and Phase III Clinical Trials, Novartis will receive
reports every [*] within [*] after the end of [*]. Such reports shall set forth
in summary form the results of development work performed and costs incurred
during the preceding [*] period and the planned development work, time-lines,
launch plans, estimated costs to be incurred and commercialisation to be
performed [*] and explain to Novartis in detail the reasons for [*].
4.5 [*] in Development. If either (1) Vanda should decide to discontinue
the development of the Compound into Product or (2) if a time period of more
than [*] elapses [*] prior to [*] or (3) more than [*] elapses between [*], it
shall promptly notify Novartis in person and in writing and all licenses granted
hereunder will thereupon automatically terminate. Vanda will make available to
Novartis all results of development work carried out up to the point of
discontinuance and Novartis shall have a non-exclusive license to use all such
results of the Vanda Technology solely for use in any future development or
commercialisation work to be carried out in respect of the Compound, Product or
Back-up Compound. Should the Compound ultimately become a commercialized
Product, a [*] % royalty on Net Sales will be payable to Vanda by Novartis where
such Net Sales are [*]. For [*], Novartis shall pay to Vanda a royalty of [*]
per cent on Net Sales for a period of five (5) years after the First Commercial
sale of a Product.
4.6 Regulatory and Marketing Efforts
(a) Market Launch. The Commercializing Party shall use Reasonable
Commercial Efforts to seek marketing authorizations in Major Market Countries
and effect the introduction of Product into Major Market Countries within [*] of
such Product completing the Regulatory Approval process..
(b) [*]. Subject to the terms and conditions of the Co-Promotion
Agreement, if entered into by the Parties, [*] shall be responsible for [*] all
Commercialization of Product in the
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Territory. [*] shall have sole responsibility for all Primary Market Research
Development
4.7 Commercialisation. [*] shall have full responsibility for the costs of
the Commercialisation unless otherwise agreed in writing by the parties.
ARTICLE 5
PAYMENTS
5.1 Upfront Payment. Within [*] of the Effective Date, Vanda shall pay to
Novartis an upfront payment of [*].
5.2 [*]. Vanda shall pay to Novartis [*] a milestone payment upon [*]
should Vanda's aggregate expenditure on [*] not reach [*]. If upon the [*],
Vanda's cost of [*] exceeds, and is less than [*], Vanda will pay to Novartis a
milestone payment equal to [*] minus the cost of [*].
5.3 Outside Funding from a Third Party. If Novartis has not exercised its
Scenario II Option and Vanda needs outside funding to support further
development, Vanda will provide written notice to Novartis of Vanda's intention
to seek a Third Party partner to assist Vanda with the continued development of
the Compound. Novartis will have [*] from its receipt of such notice to inform
Vanda if Novartis is willing to provide a secured interest-bearing loan facility
to Vanda on terms to be negotiated, to be used to fund all subsequent
development costs that Vanda may need to complete its obligations as set out in
the Development Plan (or the Development plan amendments as approved by the
JDC). In the event that Vanda receives debt funding from a Third Party it shall
not grant any interest to that Third Party which conflict with its obligations
to Novartis. If Vanda requests that Novartis relinquish Novartis' Scenario III
Option rights (primarily for the purposes of securing Third Party outside
funding), financial consideration for these rights shall be negotiated between
Vanda and Novartis.
5.4 Milestone Payments by Vanda
(a) Scenario I Milestone Payments. In the event that Novartis does not
exercise its Scenario II Option or Scenario III Option, and Vanda continues with
the development, manufacture and Commercialization of the Product, then Vanda
will pay to Novartis or Novartis AG (as specified) upon achieving the following
milestones in addition and not instead of any payments received prior to such
milestones:
MILESTONE UNITED STATES DOLLARS
[*] [*] to Novartis AG
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[*] [*] to Novartis AG
[*] [*] to Novartis
Each such milestone shall be payable [*] upon the [*].
5.5 Milestone Payments by Novartis
(a) Scenario II Milestone Payments. In the event that Novartis
exercises its Scenario II Option, then, Novartis shall pay to Vanda the
following milestones:
MILESTONE UNITED STATES DOLLARS
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Each such milestone shall be payable [*] upon [*].
(b) Scenario III Milestone Payments. In the event that Novartis
exercises its Scenario III Option, Novartis shall pay to Vanda the following
milestones:
MILESTONE UNITED STATES DOLLARS
[*] [*]
[*] [*]
[*] [*]
Each such milestone shall be payable [*] upon [*].
5.6 Timing.
Payment to be made by one Party (the "Payor") to the other ("Payee")
shall be made within [*] after its receipt of notification by the Payee of the
occurrence of a milestone event giving rise to a payment obligation hereunder,
with an accompanying invoice from the Payee. All payments shall be made by wire
transfer in United States Dollars to the credit of such bank account as may be
designated, from time to time, by the Payor in writing. Vanda may receive a
milestone amount stated in this clause (if payable) [*] from the applicable
paying Party.
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5.7 Development Costs.
(a) Scenario I or Scenario III Development Costs. In the event that
either the Scenario I Option or Scenario III Option applies, [*] will be
responsible for all Development Costs for Product.
(b) Scenario II Development Costs. In the event that Novartis
exercises its Scenario II Option, Novartis will [*]. Thereafter, Novartis shall
pay [*] and Vanda will provide Novartis with [*] invoices for [*] and Novartis
will pay such invoices within [*] of the date of such invoice. Vanda shall [*].
5.8 Royalties.
(a) Payment.
(i) Scenario I Royalty. In the event that Novartis does not
exercise its Scenario II Option or Scenario III Option, Vanda will pay to
Novartis a [*] percent ([*]%) royalty on annual Net Sales of Product by Vanda,
its Affiliates and Sublicensees in the Territory in consideration of the license
granted under the Novartis Know-How and Novartis Patents.
(ii) Scenario II Royalty. In the event that Novartis exercises
its Scenario II Option, Novartis will pay to Vanda a [*] percent ([*]%) royalty
on annual Net Sales of Product by Novartis, its Affiliates and Sublicensees in
the Territory in consideration of the license granted under the Vanda
Technology.
(iii) Scenario III Royalty. In the event that Novartis
exercises its Scenario III Option, Novartis will pay to Vanda a [*] percent
([*]%) royalty on annual Net Sales of Product by Novartis, its Affiliates and
Sublicensees in the Territory in consideration of the license granted under the
Vanda Technology.
(iv) Each of the foregoing shall be collectively and
individually referred to as "Royalties".
(b) Royalty Offset for Third Party Royalty Payments. The
Commercialising Party may require additional patented technologies to which no
Party has rights, from a Third Party, in order to develop, manufacture and
Commercialize the Compound or Products. As between Novartis and Vanda, the
Commercialising Party shall have the right to deduct [*] ([*]%)of such third
person royalty or consideration from the royalty owed to the other Party on Net
Sales of the Product in such country, provided that any deduction under this
Section shall not exceed [*] ([*]%) of the royalty percentage (e.g. [*])
otherwise due to the other Party for Net Sales from that country.
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(c) Royalty Offset for Third Party Intellectual Property
Infringement. As between Novartis and Vanda and in the event that the
manufacture, use or sale of Compound or Product in any country infringes a Third
Party patent and the Commercialising Party must pay to a Third Party a royalty
or consideration accordingly, the Commercialising Party shall have the right to
deduct such third person royalty or consideration from the royalty owed to the
other Party on Net Sales of the Product in such country, provided that any
deduction under this Section shall not exceed [*] ([*]%) of the royalty
percentage [*] otherwise due to the other Party for Net Sales from that country,
and provided further that such deduction shall be in addition to any
indemnification for breach of representation that such Party may be entitled to
receive under this Agreement.
(d) Countries With No Valid Claim Covering Product. As between
Novartis and Vanda and for countries where there is no Valid Claim of an
applicable Patent related to the Compound or Product or a method of use thereof,
Royalty amounts payable by the Commercialising Party with respect to the Net
Sales of Product in such country shall be reduced by [*] percent ([*]%).
(e) As between Novartis and Vanda and the maximum Royalty relief
which may be claimed by the Commercialising Party in respect of this Section 5.8
in any one country is [*] percent ([*]%) of the royalty otherwise due to the
other Party.
(f) Term for Royalty Payments. Royalties shall be payable on a
country by country basis from the First Commercial Sale until the later of
either the last applicable Patent to expire (including extensions thereof) with
a Valid Claim which in absence of the license would be infringed by the
Compound, the Product or a method of use thereof, or five (5) years from the
date of First Commercial Sale of a Product.
5.9 Sales Reports.
(a) Substance of Reports. After the First Commercial Sale of Product
and during the term of this Agreement, the Commercializing Party shall furnish
or cause to be furnished to the other Party on a [*] basis no later than [*]
after the end of the preceding [*] a written report showing the Net Sales of
Product in each country in the Territory.
(b) Timing. Final yearly reports shall be due on [*] following the
close of the calendar year.
(c) Records. The Commercializing Party shall keep accurate records
in sufficient detail to enable the amounts due hereunder to be determined and to
be verified by an independent certified public accountant mutually agreed upon
by the Parties pursuant to Section 5.4(e).
(d) Vanda Currency Exchange. With respect to payments to be made by
Vanda to Novartis in respect of Net Sales invoiced in United States Dollars, the
Net Sales and
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the amounts due to Novartis hereunder shall be expressed in United States
Dollars. With respect to Net Sales invoiced in a currency other than United
States Dollars, the Net Sales shall be expressed in the domestic currency of the
entity making the sale, together with the Dollar equivalent, calculated using
the arithmetic average of the spot rates on the last Business Day of each month
of the calendar quarter in which the Net Sales were made. The "closing mid-point
rates" found in the "dollar spot forward against the dollar" table published by
The Financial Times or any other publication as agreed to by the Parties shall
be used as the source of spot rates to calculate the average as defined in the
preceding sentence. All payments shall be made in United States Dollars. If at
any time legal restrictions in any country in the Territory prevent the prompt
remittance of any payments with respect to sales in that country, Vanda shall
have the right and option to make such payments by depositing the amount thereof
in local currency to Novartis' account in a bank or depository in such country.
(e) Novartis Currency Exchange. With respect to royalty payments to
be made by Novartis to Vanda in relation to Net Sales invoiced in United States
Dollars, payments to Vanda by Novartis shall be made in United States Dollars.
With respect to the calculation of royalty payments to be made by Novartis to
Vanda in relation to Net Sales invoiced in a currency other than United States
Dollars, for the conversion of the Net Sales amount into United States Dollars,
the Novartis Monthly Average Exchange Rate or such other standard methodology
for currency conversion as employed by Novartis at that time, shall be used.
(f) In the event of a co-commercialization between Vanda and
Novartis, local payments to be made between Vanda and Novartis shall be made in
the applicable local currency.
(g) Royalty Payment Due Date; Accrual. Royalties which have accrued
during any calendar year and are required to be shown on a sales report provided
for under this Section 5.4 (a) of this Agreement shall be due and payable on the
date such sales report is due.
(i) The Commercializing Party, its Affiliates and Sublicensees
shall keep for [*] from the date of each payment of royalties
complete and accurate records of sales by the Commercializing Party
and its Affiliates and Sublicensees of Product in sufficient detail
to allow the accruing royalties to be determined accurately.
(ii) The non-Commercializing Party shall have the right for a
period of [*] after receiving any report or statement with respect
to royalties due and payable to appoint an independent certified
public accountant reasonably acceptable to the Commercializing Party
to inspect the relevant records of the Commercializing Party and its
Affiliates and Sublicensees to verify such report or statement not
more than [*].
(iii) The Commercializing Party and its Affiliates and
Sublicensees shall each make its records available for inspection by
such independent certified public accountant during regular business
hours at such place or
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places where such records are customarily kept, upon reasonable
notice from the non-Commercializing Party, solely to verify the
accuracy of the reports and payments. Such inspection right shall
not be exercised [*].
(iv) The non-Commercializing Party agrees to hold in strict
confidence all information concerning royalty payments and reports,
and all information learned in the course of any audit or inspection
(and not to make copies of such reports and information), except to
the extent necessary for the non-Commercializing Party to reveal
such information in order to enforce its rights under this Agreement
or if disclosure is required by law, regulation or judicial order.
The results of each inspection, if any, shall be binding on both
Parties.
(v) The non-Commercializing Party shall pay for such
inspections, except that in the event there is any upward adjustment
in aggregate royalties payable for any year shown by such inspection
of [*] ([*]%) of the amount paid, the Commercializing Party shall
pay for such inspection. Any overpayments shall be fully creditable
against amounts payable in subsequent payment periods.
(vi) The Commercializing Party shall include in each
sublicense or marketing agreement entered into by it pursuant to
this Agreement a provision requiring the Sublicensee or marketing
partner to keep and maintain adequate records of sales made pursuant
to such sublicense or marketing agreement and to grant access to
such records by the aforementioned independent public accountant for
the reasons specified in this Section.
5.10 Tax Withholding. The withholding tax, duties, and other levies (if
any) applied by a government of any country of the Territory on payments made by
one Party (the "Payor") to the other ("Payee") hereunder shall be borne by [*].
[*] shall cooperate with [*] to enable [*] to claim exemption therefrom under
any double taxation or similar agreement in force and shall provide to Payee
proper evidence of payments of withholding tax and assist [*] by obtaining or
providing in as far as possible the required documentation for the purpose of
[*] tax returns.
5.l1. Interest Due. In case of any delay in payment by Vanda to Novartis
not occasioned by Force Majeure, interest on the overdue payment shall accrue at
an annual interest rate, compounded monthly, equal to the three month London
Interbank Offer Rate (LIBOR) as determined for each month on the last Business
Day of that month, assessed from the day payment was initially due. The
foregoing interest shall be due from Vanda without any special notice.
5.12 Payments to Novartis. A11 payments to be made by Vanda shall be made
to the following bank account of Novartis and Novartis AG:
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Bank: [*]
Swift: [*]
Correspondent Bank for USD: [*]
USD Account ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ / ▇▇▇▇▇▇▇▇▇▇▇: [*]
USD Account Novartis Pharma AG, Base1 / Switzerland:[*]
5.13 Pavements to Vanda. All payments to be made by Novartis shall be made
to the following bank account of Vanda:
[*]
ABA: [*]
Account #: [*]
Account Name: [*]
ARTICLE 6
INTELLECTUAL PROPERTY
6.1 Novartis Patentable Inventions and Know-How.
Any invention made by Novartis shall be owned by Novartis and any
invention made by Vanda shall be owned by Vanda.
(a) Novartis Patent Prosecution.
(i) During the term of the Agreement, [*] shall, diligently
and in the reasonable exercise of its commercial discretion, Support
the Novartis Patents in the countries where such Novartis Patents
are filed as of the Effective Date. Except as provided in Paragraph
6.l(a)(ii) for discontinued Novartis Patents, the Parties will [*].
(ii) If [*] does not intend to file for patent protection or
does not wish to continue Supporting a Novartis Patent, (a
"discontinued Novartis Patent") then it shall give at least [*]
advance notice, and in no event less than a reasonable period of
time for the other Party to act in its stead.
{A) In such case, the other Party may elect at its sole
discretion to continue Supporting the discontinued Novartis
Patent [*].
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(B) Discontinuance may be elected on a
country-by-country basis or for a patent application or patent
series in total.
(b) Co-operation. [*] will consult with the other Party and will
keep the other Party continuously informed of all matters relating to Support of
the Novartis Patents.
(i) [*] shall provide the other Party with a copy of any
Novartis Patents relating to the Compound or Product, prior to
filing the first of such Patents in any jurisdiction and copies of
all material correspondence with the relevant patent office
pertaining to the Novartis Patents and relating to the Compound or
Product.
(ii) In no event shall a Party relinquish control of the
prosecution of Novartis Patents to a Third Party.
6.2 Infringement Claims by Third Parties.
(a) Notice. If the manufacture, use or sale of Product under the
Novartis Patents results in a claim or a threatened claim by a Third Party
against a Party hereto for patent infringement or for inducing or contributing
to patent infringement ("Infringement Claim"), the Party first having notice of
an Infringement Claim shall promptly notify the other in writing. The notice
shall set forth the facts of the Infringement Claim in reasonable detail.
(b) Third Party Licenses. In the event that exploitation under the
Novartis Patents in connection with manufacture, use or sale of Compound or
Product in a country would infringe a Third Party Patent and a license to such
Third Party Patent is available and [*] seeks such a license, the Parties agree
that [*].
(c) Litigation. In the event of the institution of any suit by a
Third Party against Vanda as a result of Vanda's manufacture, use or sale of
Compound or Product, Vanda shall have the right but not the obligation to defend
such suit [*]. Novartis shall cooperate and assist Vanda in any such litigation
[*].
6.3 Infringement Claims Against Third Parties.
(a) Cooperation. Novartis and Vanda each agree to take reasonable
actions to protect Novartis Patents from infringement, subject to the terms of
this Section 6.3. If one Party brings any such action or proceeding, the second
Party may be joined as a Party plaintiff if necessary for the action or
proceeding to proceed and, in case of joining, the second Party agrees to give
the first Party reasonable assistance and authority to file and to prosecute
such suit.
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(b) Notice. If any Novartis Patents are infringed by a Third Party,
the Party to this Agreement first having knowledge of such infringement, or
knowledge of a reasonable probability of such infringement, shall promptly
notify the other in writing. The notice shall set forth the facts of such
infringement in reasonable detail.
(c) Institution of Proceedings. [*] shall have the primary right,
but not the obligation, to institute, prosecute, and control with its own
counsel [*] any action or proceeding with respect to infringement of the claims
of such Novartis Patents and the other Party shall have the right, but not the
obligation at its own expense, to be represented in such action by its own
counsel.
(d) Failure to Institute Proceedings. If [*] fails to institute,
prosecute, and control such action or prosecution and fails to do so within a
period of [*] after receiving notice of the infringement, [*] shall have the
right but not the obligation to bring and control any such action by counsel of
its own choice, and [*] shall have the right [*], to be represented in any such
action by counsel of its own choice.
(e) Division of Damages Award. Each Party shall[*]. Any excess
amount awarded in damages shall [*].
(f) Settlement. The Parties shall keep each other informed of the
status of and of their respective activities regarding any litigation or
settlement thereof concerning Product; provided, however, that no settlement or
consent judgment or other voluntary final disposition of a suit under this
Section [*].
6.4 Notice of Certification. Novartis and Vanda each shall immediately
give notice to the other of any certification filed under the "U.S. Drug Price
Competition and Patent Term Restoration Act of 1984" (or its foreign equivalent)
claiming that a Novartis Patent is invalid or that infringement will not arise
from the manufacture, use or sale of any Product by a Third Party ("▇▇▇▇▇-▇▇▇▇▇▇
Suit Notice").
(a) Within [*] after receipt of notice of such certification [*]
shall give written notice to [*] of its decision as to whether to bring a suit
[*] within a [*] period from the date of such certification. Should [*] inform
[*] that it is not to bring a suit, then [*] shall be free to immediately bring
such a suit in its name. If [*] brings suit, at [*] written request [*] agrees
to be named as a party to such suit. If [*] brings such a suit, at [*] written
request [*] agrees to be named as a party to such suit.
(b) [*] may then, but is not required to, bring suit against
the party that filed the certification.
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(c) Any suit by [*] or [*] shall either be in the name of [*] or in
the name of [*], or jointly in the name of [*] and [*], as may be required by
law.
(d) For this purpose, the Party not bringing suit shall execute such
legal papers necessary for the prosecution of such suit as may be reasonably
requested by the Party bringing suit.
6.5 Patent Term Extensions. The Parties shall cooperate in good faith with
each other in gaining patent term extensions wherever applicable to Novartis
Patents covering Compound or Product.
(a) Vanda and Novartis shall jointly determine which Novartis
Patents shall be extended.
(b) All filings for such extension shall be made by the Party
responsible for prosecution and maintenance of the Novartis Patent, provided,
however, that in the event that the Party who is responsible for prosecution and
maintenance of the Novartis Patent elects not to file for an extension, such
Party shall (i) inform the other Party of its intention not to file and (ii)
grant the other Party the right to file for such extension.
6.6 Trademarks. No trade ▇▇▇▇ shall be included in the licences granted to
Vanda under this Agreement. The parties agree to negotiate the terms of a
further agreement governing trade marks related to the Compound or Product.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Novartis AG and Novartis Representations and Warranties. Each of
Novartis and Novartis AG hereby represents and warrants to Vanda as of the
Effective Date that:
(a) This Agreement has been duly executed and delivered by it and
constitutes the valid and binding obligation of it, enforceable against it in
accordance with its terms except as enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by general equitable
principles. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of it, its officers and
directors;
(b) to the best of Novartis' and Novartis AG's knowledge, the
Novartis Patents and Novartis Know-How exist and neither Novartis nor Novartis
AG have information that would render any Patent invalid or unenforceable,
except as disclosed to Vanda or available to Vanda in public information;
notwithstanding anything to the contrary in this Agreement, in no event shall
Novartis or Novartis AG be deemed to have guaranteed the validity of the
Patents.
(c) it has not previously assigned, transferred, conveyed or
otherwise encumbered its right, title and interest in Novartis Patents;
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(d) to the best of Novartis AG's knowledge, (i) it is the sole and
exclusive owner of the Novartis Patents, (ii) all of which are free and clear of
any liens, charges and encumbrances, and (iii) no other person, corporate or
other party entity, or governmental entity or subdivision thereof, has or shall
have any claim of ownership with respect to the Novartis Patents, whatsoever;
(e) So far as it is aware, the execution, delivery and performance
of this Agreement does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a Party or by which it may be
bound, and, to the best of its knowledge, does not violate any material law or
regulation of any court, governmental body or administrative or other agency
having authority over it that would be inconsistent with the obligations under
this Agreement;
(f) It is not subject to any order, decree or injunction by a court
of competent jurisdiction which prevents or materially delays the consummation
of the transactions contemplated by this Agreement.
NOVARTIS AND NOVARTIS AG MAKE NO REPRESENTATION OR WARRANTY AND
SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT THE DEVELOPMENT OF COMPOUND OR
PRODUCTS WILL BE SUCCESSFUL, IN WHOLE OR IN PART, OR THAT NOVARTIS PATENTS AND
NOVARTIS KNOW- HOW WILL BE SUITABLE FOR COMMERCIALIZATION OR THAT THE COMPOUND
AND/OR PRODUCTS WILL BE SUITABLE FOR USE WITH ANY ADDITIONAL PATENTED
TECHNOLOGIES LICENSED FROM A THIRD PARTY. NOVARTIS AND NOVARTIS AG EXPRESSLY
DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE
WITH RESPECT TO NOVARTIS PATENTS AND NOVARTIS KNOW-HOW, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OR MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE
OR NON-INFRINGEMENT.
7.2 Vanda Representation And Warranty. Vanda hereby represents and
warrants to each of Novartis and Novartis AG as of the Effective Date that:
(a) The execution, delivery and performance of this Agreement by
Vanda does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a Party or by which it may be bound, and, to the best of
its Knowledge, does not violate my material law or regulation of any court,
governmental body or administrative or other agency having authority over it;
(b) Vanda is not currently a party to, and during the term of this
Agreement will not enter into, any agreements, oral or written, that are
inconsistent with its obligations under this Agreement;
(c) Vanda is duly organized and validly existing under the laws of
the country of its incorporation and has full legal power and authority to
enter into this Agreement; and
Page 25 of 44
(d) Vanda is not subject to any order, decree or injunction by a
court of competent jurisdiction which prevents or materially delays the
consummation of the transactions contemplated by this Agreement.
7.3 Disclaimer of Warranties. THE LIMITED WARRANTIES CONTAINED IN THIS
ARTICLE ARE THE SOLE WARRANTIES GIVEN BY THE PARTIES AND ARE MADE EXPRESSLY IN
LIEU OF AND EXCLUDE ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, INFRINGEMENT OR OTHERWISE, AND ALL OTHER EXPRESS OR
IMPLIED REPRESENTATIONS AND WARRANTIES PROVIDED BY COMMON LAW, STATUTE OR
OTHERWISE ARE HEREBY DISCLAIMED BY EACH PARTY.
ARTICLE 8
CONFIDENTIALITY
8.1 Confidentiality. During the term of this Agreement, and for a period
of [*] thereafter, Novartis and Novartis AG will maintain in confidence all
information disclosed by Vanda and Vanda will maintain in confidence all
information disclosed by Novartis and Novartis AG, including for the avoidance
of doubt, Novartis Know-how ("Confidential Information"). With respect to
Novartis and Novartis AG, Vanda shall not use, disclose or grant use of such
Confidential Information except as required under this Agreement. With respect
to Vanda, Novartis and Novartis AG shall not use, disclose or grant use of such
Confidential Information except as required under this Agreement, each Party
shall use at least the same standard of care as it uses to protect its own
Confidential Information to ensure that its and its Affiliates' employees,
agents, consultants, and clinical investigators only make use of Confidential
Information for the purpose of this Agreement and do not disclose any
Confidential Information without the express prior Written consent of the other
Party, which consent shall not be unreasonably withheld, or make any
unauthorized use of such Confidential Information. Each Party shall promptly
notify the other upon discovery of any unauthorized use or disclosure of
Confidential Information. Confidential Information shall not include any
information which and to the extent:
(a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the other Party;
(c) becomes generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement;
(d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
other Party not to disclose such information; or
(e) was independently developed by the receiving Party without
reference to the disclosure by the other Party.
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8.2 Terms of Agreement. The Parties agree that the material financial
terms of the Agreement shall be considered the Confidential Information of each
Party.
8.3 Permitted Disclosure. Each Party may disclose the Confidential
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation, or
complying with any applicable statute or governmental regulation provided such
Party has given the disclosing Party prompt written notice allowing it to limit
such disclosure. In addition, each Party may disclose Confidential Information
to its Affiliates and to its Sublicensees; provided, however, in connection with
any such disclosure the disclosing Party shall secure confidential treatment of
such Confidential Information.
8.4 Employee Obligations. The Parties shall undertake to ensure that all
their employees who have access to Confidential Information of the other Party
are under obligations of confidentiality fully consistent with those provided in
this Article.
8.5 Publication. As between Novartis and Novartis AG on the one hand, and
Vanda on the other, no Party may publish confidential or proprietary information
of the other Party, without the consent of the other Party. The reviewing Party
shall have [*] from receipt of the proposed oral disclosure or written
publication to provide comments and/or proposed changes to the disclosing Party.
The review period may be extended for [*] to permit the reviewing Party to file
one or more patent applications as it deems appropriate. This Section 8.5 shall
be inapplicable to the publication of information presented in substantially the
same form in which was previously published or disclosed to the public, and at
any other disclosures which, on the advice of counsel, are required by law to be
disclosed.
ARTICLE 9
TERM AND TERMINATION
9.1 TERM.
(a) Term. Unless earlier terminated as provided herein, the term of
this Agreement shall commence as of the Effective Date and shall remain in full
force and effect until the end of the last to expire milestone or royalty
payment obligation of a Party under this Agreement (the "Term").
(b) Accrued Obligations. Except where explicitly provided elsewhere
herein, termination of this Agreement for any reason, or expiration of this
Agreement, will not affect: (i) obligations, including the payment of any
royalties or other sums which have accrued as of the date of termination or
expiration, and (ii) rights and obligations which, from the context thereof, are
intended to survive termination or expiration of this Agreement.
9.2 Termination for Insolvency, Either Party may terminate this Agreement
immediately upon delivery of written notice to the other Party (a) upon the
institution by or against the other Party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of the other
Party's debts; provided, however with respect to involuntary proceedings, that
such proceedings are not dismissed within one hundred and twenty (120) days; (b)
upon the other Party's making an assignment for the benefit of
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creditors; or (c) upon the other Party's dissolution or ceasing to do business.
In the event that such insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of a Party's debts are instituted, that
Party shall immediately notify the other Party of such proceedings.
9.3 Termination for Lack of Diligence. If Vanda [*], as determined by
Vanda with the agreement of Novartis or materially breaches the terms of this
Agreement, then Novartis may terminate this Agreement upon [*] prior written
notice to Vanda. Such prior written notice shall specify that it is a notice of
termination under this Section 9.3. Within [*] following Vanda's receipt of such
prior written notice (the "Response Period"), Vanda shall [*]. At the request of
either Vanda or Novartis, representatives of Novartis and Vanda shall meet to
[*]. For avoidance of doubt, Vanda may remedy any remediable breach of its
obligation under this Section 9.3 during the Response Period. Should Vanda,
during the Response Period, fail to (i) remedy such remediable breach, (ii)
respond to Novartis' written notice of termination under this Section, or (iii)
provide to Novartis any written response regarding compliance or remedy of
breach under this Section, then Novartis may terminate this Agreement pursuant
to the termination provisions set forth in Section 9.4.
9.4 Material Breach. Either Party may terminate this Agreement upon [*]
prior written notice to the other Party upon the material breach by the other
Party of any of its obligations under this Agreement; provided, however, that
such termination shall become effective only if the other Party shall fail to
remedy or cure the breach within [*] period. If either Party is in breach
of any material obligation hereunder and, in the case of a breach incapable of
remedy, the Party not in breach of the material obligation may forthwith
terminate this Agreement by notice without prejudice to the accrued rights of
either Party.
9.5 Termination by Vanda. Vanda's obligations to develop and commercialise
under this Agreement may be terminated by it at any time upon [*] prior written
notice to Novartis in the event that [*], and Vanda agrees to give Novartis
prompt notice in writing and in person thereof of such issue.
9.6 Effect Of Termination.
(a) Effect On License. Upon the expiration or earlier termination of
this Agreement, the rights licensed under this Agreement shall be treated as
follows:
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(i) Upon the expiration of the Term, Vanda shall have a fully
paid-up, perpetual, irrevocable, royalty-fee, transferable, worldwide,
non-exclusive right and license under the Novartis Patents and Novartis Know-How
existing as of the date of such expiration to make, have made, use, offer to
sell, and sell Product in the Territory.
(ii) Upon termination by Novartis pursuant to Section 9.2,
9.3, 9.4 or by Vanda pursuant to Section 9.5 all rights to Product granted by
Novartis to Vanda shall revert to Novartis. Upon such termination, Vanda shall
grant to Novartis a non-exclusive, world-wide, transferable, irrevocable,
perpetual license, with the right to sublicense, under the Vanda Technology to
make, use, offer to sell, sell and import Products solely in the country or
countries in which Vanda's licenses under this Agreement were so terminated. If
the termination was not due to Section 9.4 and if the Product is ultimately
commercialized, Novartis would pay Vanda [*]% of Net Sales until the later of
either the last Novartis Patent to expire (including extensions thereof) with a
Valid Claim related to the Compound or Product or a method of use thereof, or
five (5) years from the date of First Commercial Sale.
(b) Ongoing Obligations.
(i) Upon expiration or termination of this Agreement for any reason,
each Party shall immediately return to the other Party or destroy any
Confidential Information disclosed by the other Party, except for one copy which
may be retained in its confidential files for archive purposes only.
(ii) Upon termination of this Agreement by Novartis pursuant to
Sections 9.2, 9.3, 9.4 or by Vanda pursuant to Section 9.5, Vanda shall assign
and deliver to Novartis all data and information (including registration
dossiers) obtained for or in pursuing Regulatory Approvals, and all Regulatory
Approvals (e.g., to Novartis; designee in the Territory as permitted under the
applicable law) for Product in the Territory received as of such termination
date.
9.7 Inventory. Notwithstanding the foregoing, upon early termination of
this Agreement pursuant to Sections 9.2, 9.3, 9.4 or 9.5, Vanda shall have the
right to sell all remaining Product in its inventory [*] after the date of
termination, subject to the payment to Novartis of the amounts specified in
Article 5. Thereafter, Vanda agrees [*].
9.8 Royalty and Payment Obligations. Termination of this Agreement by
either Party for any reason will not release the other Party from any obligation
to pay royalties or make any other payments to the Party which were accrued
prior to and including the effective date of termination or expiration
(including for Net Sales and milestones payable prior to the date of
termination). Termination of this Agreement by either Party for any reason will
not release Vanda from any obligation to pay royalties to Novartis on sales
arising from Section 9.7. All payments due to Novartis but not yet paid by Vanda
as of the date of termination shall become immediately due to Novartis.
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ARTICLE 10
INDEMNIFICATION
10.1 Indemnification by Novartis. Novartis will indemnify and hold Vanda
and its Affiliates, and their employees, officers and directors harmless against
any loss, damages, action, suit, claim, demand, liability, expense, bodily
injury, death or property damage (a "Loss"), that may be brought, instituted or
arise against or be incurred by such persons to the extent such Loss is based on
or arises out of [*]; provided however, that the foregoing indemnification shall
not apply to any Loss to the extent such Loss is caused by the grossly negligent
or willful misconduct of Vanda, its Affiliates or Sublicensees.
10.2 Indemnification by Vanda. Vanda will indemnify and hold Novartis and
Novartis AG, and its Affiliates, and their employees, officers and directors
harmless against any Loss that may be brought, instituted or arise against or
be incurred by such persons to the extent such Loss is based on or arises out
of:
(a) [*]; or
(b) [*];
(c) provided that the foregoing indemnification shall not apply to
any Loss to the extent such Loss is caused by the grossly negligent or willful
misconduct of Novartis, Novartis AG or its Affiliates.
10.3 Claims Procedures. Each Party entitled to be indemnified by the other
Party (an "Indemnified Party") pursuant to Section 10.1 or 10.2 hereof shall
give notice to the other Party (an "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any threatened or asserted claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided:
(a) That counsel for the Indemnifying Party, who shall conduct the
defense of such claim or any litigation resulting therefrom, shall [*] by the
Indemnified Party [*] and the Indemnified Party may participate in such defense
[*].
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(b) The failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement to the extent that the failure to give notice did not result in harm
to the Indemnifying Party.
(c) No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the approval of each Indemnified Party which
approval shall not be unreasonably withheld, consent to entry of any judgment or
enter into any settlement which [*].
(d) Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
10.4 Indemnification Amounts. An Indemnifying Party shall not have
liability with respect to any breach of any of this Agreement: (a) for any
individual item where the Loss relating thereto is [*], and (b) in respect of
each individual item where the Loss relating thereto is equal to or greater [*],
unless and until [*] and then the Indemnifying Party will be liable for the
entire amount of the Losses described in this clause. Each Party shall take and
shall cause its Affiliates to take all reasonable steps to [*]
10.5 Compliance. The Parties shall comply fully with all applicable laws
and regulations in connection with their respective activities under this
Agreement.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Dispute Resolution. In the event of any controversy or claim arising
out of relating to or in connection with any provision of this Agreement, or the
rights or obligations hereunder, the Parties shall try to settle their
differences amicably between themselves. As between Novartis and Novartis AG on
the one hand, and Vanda on the other, each Party may initiate such informal
dispute resolution by sending written notice of the dispute to the other Party,
and within [*] after such notice appropriate representatives of the Parties
shall meet for attempted resolutions by good faith negotiations. If such
representatives are unable to resolve such disputed matters, it shall be
referred to [*], for discussion and resolution.
11.2 Governing Law. This Agreement shall be construed and the respective
rights of the Parties determined according to the substantive laws of the State
of
New York notwithstanding the provisions governing conflict of laws under such
New York law to the contrary, except matters of intellectual property law which
shall be determined in accordance with the intellectual property laws relevant
to the intellectual property in question.
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11.3 Jurisdiction. Any controversy or claim arising out of or in
connection with this Agreement, which cannot be settled within [*] of the notice
according to Section 11.1, shall be under the exclusive jurisdiction of the
courts in
New York, NY, USA.
11.4 Waiver. The failure on the part of Vanda or Novartis to exercise or
enforce any rights conferred upon it hereunder shall not be deemed to be a
waiver of my such rights nor operate to bar the exercise or enforcement thereof
at any time or times thereafter. The observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the Party entitled to enforce such term, but
any such waiver shall be effective only if in writing signed by the Party
against whom such waiver is to be asserted.
11.5 Force Majeure. No Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement, other
than an obligation to make a payment, when such failure or delay is caused by or
results from fire, floods, embargoes, government regulations, prohibitions or
interventions, war, acts of war (whether war be declared or not), insurrections,
riots, civil commotions, strikes, lockouts, acts of God, or any other cause
beyond the reasonable control of the affected Party.
11.6 Severability. It is the intention of the Parties to comply with all
applicable laws domestic or foreign in connection with the performance of its
obligations hereunder. In the event that any provision of this Agreement, or any
part hereof, is found invalid or unenforceable, the remainder of this Agreement
will be binding on the Parties hereto, and will be construed as if the invalid
or unenforceable provision or part thereof had been deleted, and the Agreement
shall be deemed modified to the extent necessary to render the surviving
provisions enforceable to the fullest extent permitted by law.
11.7 Government Acts. In the event that any act, regulation, directive, or
law of a government, including its departments, agencies or courts, should make
impossible or prohibit, restrain, modify or limit any material act or obligation
of Vanda or Novartis or Novartis AG under this Agreement, the Party, if any, not
so affected shall have the right, at its option, to suspend or terminate this
Agreement as to such country, if good faith negotiations between the Parties to
make such modifications to this Agreement as may be necessary to fairly address
the impact thereof, after a reasonable period of time are not successful in
producing mutually acceptable modifications to this Agreement.
11.8 Assignment. This Agreement may not be assigned or otherwise
transferred by either Party without the prior written consent of the other
Party; provided, however, that either Party may assign this Agreement, without
the consent of the other Party, (i) to any of its Affiliates, if the assigning
Party guarantees the full performance of its Affiliates' obligations hereunder,
or (ii) in connection with the transfer or sale of all or substantially all of
its assets or business or in the event of its merger or consolidation with
another company. In all cases the assigning Party shall provide the other Party
with prompt notice of any such assignment. Any purported assignment in
contravention of this Section shall, at the option of the non-
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assigning Party, be null and void and of no effect. No assignment shall release
either Party from responsibility for the performance of any accrued obligation
of such Party hereunder.
11.9 Counterparts. This Agreement may be executed in duplicate, both of
which shall be deemed to be originals, and both of which shall constitute one
and the same Agreement.
11.10 No Agency. Nothing herein contained shall be deemed to create an
agency, joint venture, amalgamation, partnership or similar relationship between
Novartis AG and Novartis on the one hand, and Vanda on the other.
Notwithstanding any of the provisions of this Agreement, as between Novartis
and Novartis AG on the one hand, and Vanda on the other, no Party shall at any
time enter into, incur, or hold itself out to third Parties as having authority
to enter into or incur, on behalf of the other Party, any commitment, expense,
or liability whatsoever, and all contracts, expenses and liabilities undertaken
or incurred by one Party in connection with or relating to the development,
manufacture or sale of Compounds or Products shall be undertaken, incurred or
paid exclusively by that Party, and not as an agent or representative of the
other Party.
11.11 Notice. As between Novartis and Novartis AG on the one hand, and
Vanda on the other, all communications between the Parties with respect to any
of the provisions of this Agreement will be sent to the addresses set out below,
or to other addresses as designated by one Party to the other by notice pursuant
hereto, by internationally recognized courier or by prepaid certified, air mail
(which shall be deemed received by the other Party on the seventh Business Day
following deposit in the mails), or by facsimile transmission or other
electronic means of communication (which shall be deemed received when
transmitted), with confirmation by letter given by the close of business on or
before the next following Business Day:
If to Novartis AG, at:
Novartis AG
[*]
Basel, Switzerland
Attn: [*]
If to Novartis, at:
Novartis Pharma AG
[*]
Basel, Switzerland
Attn: [*]
If to Vanda at:
Vanda Pharmaceuticals Inc.
[*]
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: [*]
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11.12 Headings. The paragraph headings are for convenience only and will
not be deemed to affect in any way the language of the provisions to which they
refer.
11.13 Entire Agreement. This Agreement contains the entire understanding
of the Parties relating to the matters referred to herein, and may only be
amended by a written document, duly executed on behalf of the respective
Parties.
***[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]***
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
VANDA PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
NOVARTIS PHARMA AG
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
June 4, 2004
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Head, Global Partnering
Business Development & Licensing
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Legal Counsel
22nd June, 2004
NOVARTIS AG
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorised Signatory
23-06-04
Page 35 of 44
Schedule 1.7
NDD094 corresponds to [*]. It has the molecular formula [*] and the following
structure:
[*]
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SCHEDULE 3.1
TERMS AND CONDITIONS FOR THE SALE OF COMPOUND FORM NOVARTIS TO VANDA
Available Compound Substance and Lot Number:
--------------------------------------------
[*]
----
Total available Compound substance for technical use only
====
Price per kg of Compound substance:
-----------------------------------
[*]
Delivery Terms:
EX WORKS (as such term is defined in INCOTERMS 2000 of the International Chamber
of Commerce in Paris: delivery to Vanda shall occur when the Compound and
Product is placed at Vanda's disposal at Novartis' premises)
NOVARTIS AND NOVARTIS AG MAKE NO REPRESENTATION OR WARRANTY THAT ANY QUANTITIES
OF COMPOUND PROVIDED TO VANDA UNDER THIS AGREEMENT WILL [*].
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ANNEX 1 - DEVELOPMENT PLAN AND BUDGET
A. DEVELOPMENT TIMELINES
[*]
B CLINICAL TRIALS TO BE PERFORMED UNDER DEVELOPMENT PLAN BY VANDA:
B1 [*]
Primary objectives:
(1) [*]
(2) [*]
B2 [*]
Primary objectives:
(1) [*]
(2) [*]
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B3 [*]
Primary objectives:
(1) [*]
(2) [*]
(3) [*]
(4) [*]
B4 [*]
Primary Objectives:
(1) [*]
(2) [*]
(3) [*]
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C. DEVELOPMENT COST
[*]
VANDA PHARMACEUTICALS, INC.
NDD094
[*]
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ANNEX 2
***[INTENTIONALLY LEFT BLANK]***
Page 41 of 44
ANNEX 3
PATENT SCHEDULE [*]
[*]
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[*]
Page 43 of 44
ANNEX 4
Novartis POLICY STATEMENT
VANDA agrees to abide by the following policy statement, which is binding on all
parties under contract with Novartis, and is in support of the protection of
internationally proclaimed human rights, ethical and legal behaviour, fair,
courteous and respectful treatment of others, and professionalism and good
business practice.
Gifts, favours, kickbacks, entertainment or other offering of financial
advantage to an official of a government or a government-controlled entity for
the purpose of obtaining business or other services, as set out in the OECD
Convention on Combating Bribery of Foreign Public Officials are not allowed.
Gifts, favours or entertainment to non-governmental officials may be provided to
others only if they meet all of the following criteria:
(a) they are consistent with government regulations and customary
business practices;
(b) they are not excessive in value, and cannot be construed as a bribe
or a pay-off;
(c) they are not in contravention of applicable law or ethical
standards; and
(d) they will not embarrass Novartis, VANDA, or the recipient if
publicly disclosed.
VANDA shall respect the principles and rules of fair competition and shall not
violate applicable antitrust laws.
VANDA hereby agrees that in its dealings on behalf of Novartis, it will take no
action, directly or indirectly, that is inconsistent with the language or spirit
of this policy statement. VANDA further acknowledges and agrees that any such
action will serve as grounds for immediate termination of this Agreement by
Novartis.
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