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EXHIBIT 10.24
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
BY AND BETWEEN
CIBA-GEIGY LIMITED
AND
NEUROCRINE BIOSCIENCES, INC.
December 20, 1996
*Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS......................................................-1-
1.1 "Affiliate"...................................................-1-
1.2 "Ciba Territory"..............................................-2-
1.3 "Collaboration Products"......................................-2-
1.4 "Control".....................................................-2-
1.5 "Cumulative Pre-Tax Operating Losses".........................-2-
1.6 "Development Program".........................................-2-
1.7 "Development Plan and Budget".................................-2-
1.8 "Europe"......................................................-2-
1.9 "FDA".........................................................-2-
1.10 "Field".......................................................-2-
1.11 "FTE".........................................................-3-
1.12 "IND".........................................................-3-
1.13 "Infeasibility Event".........................................-3-
1.14 "Marketing Collaboration".....................................-3-
1.15 "Major Country"...............................................-3-
1.16 "Manufacturing Costs".........................................-3-
1.17 "Net Sales"...................................................-3-
1.18 "Neurocrine Profit Share".....................................-4-
1.19 "Neurocrine Technology".......................................-4-
1.19.1 "Neurocrine Patents"................................-4-
1.19.2 "Neurocrine Know-How"...............................-4-
1.20 "North America"...............................................-4-
1.21 "Phase II"....................................................-4-
1.22 "Phase III"...................................................-4-
1.23 "PLA".........................................................-4-
1.24 "Plans and Budgets"...........................................-4-
1.25 "Pre-Tax Operating Profit"....................................-4-
1.26 "Programs"....................................................-5-
1.27 "Recoupable Development Costs"................................-5-
1.28 "Research Program"............................................-5-
1.29 "Research Plan and Budget"....................................-5-
1.30 "Steering Committee"..........................................-6-
1.31 "Sublicensee".................................................-6-
1.32 "Third Party Agreement".......................................-6-
1.33 "Valid Claim".................................................-6-
1.34 Accounting Terms..............................................-6-
ARTICLE 2 STEERING COMMITTEE...............................................-6-
2.1 Steering Committee............................................-6-
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TABLE OF CONTENTS
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2.2 Membership....................................................-7-
2.3 Steering Committee Meetings...................................-7-
2.4 Decision Making...............................................-7-
2.5 Project Team and Its Operations...............................-7-
2.5.1 Composition of the Project Team.....................-7-
2.5.2 Responsibilities of the Project Team Leader.........-8-
2.5.3 Responsibilities of the Project Team Members........-8-
2.6 Other Matters.................................................-8-
ARTICLE 3 PLANS AND BUDGETS................................................-8-
3.1 General.......................................................-8-
3.2 Plans and Budgets.............................................-9-
3.2.1 Plans and Budgets...................................-9-
3.2.2 Annual Approval.....................................-9-
3.2.3 Periodic Reviews....................................-9-
ARTICLE 4 RESEARCH AND DEVELOPMENT........................................-10-
4.1 Research Program.............................................-10-
4.2 Development Program..........................................-10-
4.2.1 Selection of Collaboration Products................-10-
4.2.2 Responsibilities...................................-10-
4.3 Neurocrine FTEs..............................................-10-
4.4 Regulatory Filings...........................................-11-
ARTICLE 5 RECORD KEEPING; PUBLICATION.....................................-11-
5.1 Reports and Records..........................................-11-
5.1.1 Records............................................-11-
5.1.2 Reports............................................-11-
5.2 Review of Publication........................................-11-
5.2.1 Notice.............................................-11-
5.2.2 Publication Rights.................................-12-
5.2.3 Delay of Publication...............................-12-
ARTICLE 6 PROGRAM FUNDING; PRE-MARKET PAYMENTS............................-12-
6.1 Advance Payment.............................................-12-
6.2 Funding of Research and Development.........................-13-
6.2.1 Ciba Obligations..................................-13-
6.2.2 Other Expenses....................................-13-
6.2.3 Payment...........................................-13-
6.3 Milestone Payments..........................................-14-
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6.3.1 Milestones.........................................-14-
6.3.2 Credit Against Future Payments.....................-15-
6.3.3 Other Payment Terms................................-15-
ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA............................-16-
7.1 Exchange.....................................................-16-
ARTICLE 8 MARKETING RIGHTS................................................-16-
8.1 Ciba Territory. ............................................-16-
8.2 North America................................................-16-
8.2.1 Marketing Collaboration............................-16-
8.2.2 Operations.........................................-16-
8.2.3 Cost and Profit Sharing............................-17-
8.2.4 Ciba Exclusive.....................................-17-
8.3 Sublicensees.................................................-17-
8.4 Covenants....................................................-17-
8.5 Conflicts of Interest........................................-17-
ARTICLE 9 ROYALTIES.......................................................-18-
9.1 Neurocrine Profit Share..........................................-18-
9.1.1 Calculation of Neurocrine Profit Share for Canada
and USA................................................-18-
9.1.2 Repayment of Recoupable Development Costs..............-18-
9.1.3 Neurocrine Election....................................-20-
9.2 Running Royalties................................................-20-
9.3 Calculation of Royalties.........................................-21-
9.3.1 Annual Net Sales.......................................-21-
9.3.2 No Patents.............................................-21-
9.3.3 Several Patents........................................-21-
9.4 Third Party Payments.............................................-21-
9.4.1 Reimbursement to Neurocrine............................-21-
9.4.2 Ciba Third Party Agreements/Credits to Ciba............-21-
9.4.3 Canada and USA.........................................-22-
9.5 Minimum Royalty Rate.............................................-22-
ARTICLE 10 PAYMENTS; BOOKS AND RECORDS....................................-22-
10.1 Royalty Reports and Payments.................................-22-
10.2 Payment Method...............................................-22-
10.3 Currency Conversion..........................................-22-
10.4 Taxes........................................................-23-
10.5 Records; Inspection..........................................-24-
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10.5.1 Generally..................................-24-
10.5.2 Reimbursable Costs.........................-24-
ARTICLE 11 DUE DILIGENCE.........................................-24-
11.1 Ciba................................................-24-
11.2 Exclusivity of Efforts..............................-24-
ARTICLE 12 MANUFACTURING RIGHTS..................................-25-
12.1 Manufacturing.......................................-25-
12.1.1 Generally.................................-25-
12.1.2 Manufacture in U.S........................-25-
12.1.3 Manufacture by Chiron.....................-25-
12.2 Clinical Materials..................................-25-
12.3 Canada and USA......................................-26-
ARTICLE 13 LICENSE GRANTS........................................-26-
13.1 Grant to Ciba.......................................-26-
13.2 Grant to Neurocrine.................................-26-
13.3 No Rights Beyond Collaboration Products.............-26-
ARTICLE 14 INTELLECTUAL PROPERTY.................................-27-
14.1 Ownership of Inventions.............................-27-
14.2 Patent Prosecution..................................-27-
14.2.1 Neurocrine's Sole Inventions..............-27-
14.2.2 Ciba's Sole Inventions....................-27-
14.2.3 Joint Inventions..........................-27-
14.2.4 Sharing Other Costs.......................-28-
14.2.5 Cooperation...............................-28-
14.3 Defense of Third Party Infringement Claims..........-29-
14.4 Enforcement.........................................-29-
14.4.1 Initiating Actions........................-29-
14.4.2 Recoveries................................-30-
14.5 Third Party Rights..................................-30-
ARTICLE 15 REPRESENTATIONS AND WARRANTIES........................-30-
15.1 Neurocrine Warranties...............................-30-
15.2 Ciba Warranties.....................................-30-
15.3 Disclaimer of Warranties............................-31-
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ARTICLE 16 CONFIDENTIALITY............................................-31-
16.1 Confidential Information.................................-31-
16.2 Permitted Disclosures....................................-31-
ARTICLE 17 INDEMNIFICATION............................................-32-
17.1 Indemnification of Neurocrine............................-32-
17.2 Indemnification of Ciba..................................-32-
17.3 Procedure................................................-32-
ARTICLE 18 TERM AND TERMINATION.......................................-33-
18.1 Term.....................................................-33-
18.2 Termination for Cause....................................-33-
18.3 Termination Upon Notice..................................-33-
18.4 Termination For Infeasibility............................-33-
18.5 Effect of Termination....................................-34-
18.5.1 Accrued Obligations............................-34-
18.5.2 Survival.......................................-34-
ARTICLE 19 DISPUTE RESOLUTION.........................................-35-
19.1 Disputes.................................................-35-
19.2 Full Arbitration.........................................-36-
19.2.1 Arbitrators....................................-36-
19.2.2 Proceedings....................................-36-
ARTICLE 20 MISCELLANEOUS ..............................................-36-
20.1 Governing Law............................................-36-
20.2 Force Majeure............................................-37-
20.3 No Implied Waivers; Rights Cumulative....................-37-
20.4 Independent Contractors..................................-37-
20.5 Notices..................................................-37-
20.6 Assignment...............................................-37-
20.7 Modification.............................................-38-
20.8 Severability.............................................-38-
20.9 Publicity................................................-38-
20.10 Counterparts.............................................-38-
20.11 Headings.................................................-38-
20.12 Export Laws..............................................-38-
20.13 Entire Agreement.........................................-38-
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EXHIBIT A..............................................................-40-
EXHIBIT B..............................................................-41-
EXHIBIT C..............................................................-42-
EXHIBIT D..............................................................-43-
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DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the "Agreement"),
effective as of December 20, 1996 (the "Effective Date"), is made by and between
Neurocrine Biosciences, Inc, a California corporation having offices at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Neurocrine"), and
Ciba-Geigy Limited, a Swiss corporation having offices at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ("Ciba").
BACKGROUND
A. Ciba and Neurocrine desire to collaborate on the development and
commercialization of altered peptide ligand compounds for the diagnosis,
treatment and/or prevention of multiple sclerosis ("MS") in humans, on the terms
and conditions set forth below.
B. Ciba and Neurocrine have entered into that certain Letter
Agreement dated January 19, 1996, which agreement outlines the terms and
conditions for this Agreement (the "Letter Agreement");
C. Ciba and Neurocrine have entered into those certain Stock
Purchase Agreements executed January 22, 1996 and April 3, 1996, pursuant to
which Ciba has acquired Neurocrine Common Stock, all as provided therein.
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean any entity which controls, is controlled
by or is under common control with Ciba or Neurocrine. An entity shall be
regarded as in control of another entity for purposes of this definition if it
owns or controls more than fifty percent (50%) of the shares of the subject
entity entitled to vote in the election of directors (or, in the case of an
entity that is not a corporation, for the election of the corresponding managing
authority). A "Controlled Affiliate" shall mean an entity that is controlled by
a party to this Agreement.
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1.2 "Ciba Territory" shall mean all countries of the world, but
excluding North America as defined under Section 1.20 below.
1.3 "Collaboration Products" shall mean the product or products
within the Field selected by Ciba in accordance with Section 4.2.1 below for
development and commercialization under this Agreement.
1.4 "Control" shall mean possession of the ability to grant an
exclusive license or sublicense as provided for herein without violating the
terms of any agreement or other arrangements with any third party.
1.5 "Cumulative Pre-Tax Operating Losses" shall mean, with respect to
a Collaboration Product in a country of North America, the total cumulative
amount of Pre-Tax Operating Losses (as defined in Section 1.25 below) with
respect to Net Sales of such Collaboration Product in such country from the date
of the first commercial sale of such Collaboration Product in such country after
PLA approval through the end of the first calendar month for which there is
Pre-Tax Operating Profit for such Collaboration Product in such country.
1.6 "Development Program" shall mean preclinical and clinical testing
of the Collaboration Products, and regulatory affairs activities in each case as
are necessary to obtain approval of governmental health regulatory authorities
to manufacture and market Collaboration Products in the Major Countries.
1.7 "Development Plan and Budget" shall mean the plan and budget for
the Development Program as established from time to time, in accordance with
Article 3 below.
1.8 "Europe" shall mean Switzerland and all countries which are
members of the European Union as of the Effective Date, whether or not such
countries thereafter continue to be European Union members, and any countries
which become members of the European Union after the Effective Date.
1.9 "FDA" shall mean the U.S. Food and Drug Administration.
1.10 "Field" shall mean the development, manufacture, use and sale of
[ * ] compounds for diagnosis, treatment and/or prevention of [ * ], the
mechanism of action of which is to modulate the [ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.11 "FTE" shall mean one full time equivalent personnel working on
the Research Program and/or the Development Program, wherein "one full time
equivalent personnel" shall mean a full-time person dedicated to the Research
Program or the Development Program or, in the case of less than a full-time
dedicated person, a full-time, equivalent person year, based upon a total of one
thousand eight hundred eighty (1,880) hours per year of work related to the
Research Program or the Development Program. It is understood that each FTE
shall be a qualified scientist or expert, as provided in Section 4.3 below.
1.12 "IND" shall mean an Investigational New Drug Application for a
Collaboration Product, as defined in the U.S. Food, Drug and Cosmetic Act and
the regulations promulgated thereunder, or a comparable filing in another
country.
1.13 "Infeasibility Event" shall have the meaning defined in Section
9.1.2(b) below.
1.14 "Marketing Collaboration" shall have the meaning defined in
Section 8.2.1 below.
1.15 "Major Country" shall mean the United States, Canada and/or any
country in Europe.
1.16 "Manufacturing Costs" with respect to units of Collaboration
Products shall mean (i) the direct costs set forth in Exhibit B associated with
manufacturing such units ("Direct Manufacturing Costs") together with a
reasonable allocation for Ciba's overhead costs associated with such manufacture
of up to [ * ] of the Direct Manufacturing Costs, which allocation for
manufacturing overhead shall be made in accordance with generally accepted cost
accounting principles consistently applied by Ciba across all similar
pharmaceutical manufacturing operations; and it being further understood that
Direct Manufacturing Costs shall not include costs associated with excess
capacity (except in the case the parties have agreed that a single-purpose plant
be set up for the manufacture of Products), excess direct labor, inefficiencies,
unusable material, except the usual rejects, waste, etc. or any other costs
related to such manufacture that do not add value or that are not ongoing in the
manufacturing process for such Collaboration Products; or (ii) with respect to
Collaboration Products acquired from a non-Affiliate vendor, reasonable amounts
actually paid to the vendor for such Collaboration Products.
1.17 "Net Sales" shall mean the total amount invoiced to third parties
by Ciba, its Affiliates or permitted Sublicensees, upon sales of Collaboration
Products, less the following reasonable and customary deductions to the extent
deducted by the customer (or charged separately on the invoice and paid by the
customer) from amounts invoiced: (i) all trade, cash and quantity credits,
discounts, refunds or government rebates; (ii) amounts for claims or credits for
returns; and (iii) duties and other governmental charges (including value added
tax), all as determined in accordance with generally accepted accounting
principles (as described in 1.34 below), as consistently applied by Ciba across
all pharmaceutical products for financial reporting purposes. For the removal of
doubt, Net Sales shall not include sales by Ciba to its Affiliates or its
permitted Sublicensees for resale. A "sale" shall also include a transfer or
other disposition for consideration other than cash, in which case such
consideration shall be valued at the fair market value thereof.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.18 "Neurocrine Profit Share" shall have the meaning defined in
Section 9.1 below.
1.19 "Neurocrine Technology" shall mean Neurocrine Patents and
Neurocrine Know-How.
1.19.1 "Neurocrine Patents" shall mean all patents and all
reissues, renewals, re-examinations and extensions thereof, and patent
applications therefor, and any divisions or continuations, or
continuations-in-part, thereof, to the extent the same claim (i) a composition
of matter comprising a Collaboration Product or (ii) the manufacture, sale or
use of a Collaboration Product and which in each case are Controlled by
Neurocrine during the term of this Agreement.
1.19.2 "Neurocrine Know-How" shall mean confidential information,
tangible and intangible, and materials, including, but not limited to:
pharmaceutical, chemical, biological and biochemical products; technical and
non-technical data and information, and/or the results of tests, assays, methods
and processes; and specifications and/or other documents containing said
information and data; in each case that is discovered, developed or acquired by
Neurocrine prior to or during the term of this Agreement, to the extent such
relates to the manufacture, sale or use within the Field of a Collaboration
Product and to the extent that Neurocrine controls the same.
1.20 "North America" shall mean Canada and the United States of
America including its territories and possessions including the Commonwealth of
Puerto Rico ("USA"). References in this Agreement to Canada and the United
States shall be deemed to include their respective territories and possessions.
1.21 "Phase II" shall mean that portion of the clinical studies for
the FDA submission and approval process which provides for the initial trials of
a Collaboration Product on a sufficient number of patients for the purposes of
determining the efficacious therapeutic dose range and evaluating safety in the
proposed therapeutic indication as more fully defined in 21 C.F.R. ss.213.21(b),
or a similar clinical study in a country other than the United States.
1.22 "Phase III" shall mean that portion of the clinical studies for
the FDA submission and approval process which provides for continued trials of a
Collaboration Product on sufficient numbers of patients to establish the safety
and efficacy of such Collaboration Product to support regulatory approval in the
proposed therapeutic indication as more fully defined in 21 C.F.R. ss.312.21(c),
or a similar clinical study in a country other than the United States.
1.23 "PLA" shall mean a Product License Application or a New Drug
Application filed with the FDA or equivalents in any country.
1.24 "Plans and Budgets" shall mean, collectively, the Research Plan
and Budget and the Development Plan and Budget in effect from time to time.
1.25 "Pre-Tax Operating Profit" shall mean, with respect to a
Collaboration Product in a country of North America, Net Sales of such
Collaboration Product in such country, [ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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[ * ] If for any calendar quarter the calculation of Pre-Tax Operating Profit
is less than zero, such amount shall be referred to herein also as a "Pre-Tax
Operating Loss."
1.26 "Programs" shall mean, collectively, the Research Program and
Development Program.
1.27 "Recoupable Development Costs" shall mean [ * ] of: (i) all
direct costs set forth in Exhibit D incurred by Ciba in performing the
Development Program ("Direct Development Costs") in accordance with the
Development Plans and Budgets in effect from the effective date of the Letter
Agreement (other than those paid to Neurocrine), as specified in Exhibit D; (ii)
amounts paid to Neurocrine under Section 6.2.1 below in reimbursement for
Neurocrine personnel to the extent such personnel were engaged in performing the
Development Program, and (iii) amounts paid to Neurocrine under Section 6.2.2
below in reimbursement for expenses incurred by Neurocrine in performing the
Development Program. It is understood that no overhead will be applied to the
amounts described in part (ii) or (iii) of this Section 1.27. It is understood
that, without limitation, the amounts paid to Neurocrine under Section 6.1 or
6.3, or under Section 6.2.1 below for Neurocrine personnel engaged in performing
the Research Program, shall not be Recoupable Development Costs.
1.28 "Research Program" shall mean the developmental research
activities within the Field relating to: (i) elucidation of the mechanism of
action of APLs and their effects on pathology and cytokine modulation with the
aim to identify surrogate markers for monitoring patients; (ii) performance of
ADME, and clinical assay development (including surrogate markers); (iii)
development of APLs for secondary target both to support broad patent claims and
for potentially expanding patient/market segments; and (iv) such other research
activities within the Field as the parties may agree upon; in each case as set
forth in the Research Plan and Budget in effect from time to time.
1.29 "Research Plan and Budget" shall mean the plan and budget for the
Research Program as established from time to time, in accordance with Article 3
below.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.30 "Steering Committee" shall have the meaning set forth in Section
2.1 below.
1.31 "Sublicensee" shall mean, with respect to a particular
Collaboration Product, a third party to whom Ciba has granted a right or license
to make, use or sell such Collaboration Product. As used in this Agreement,
"Sublicensee" shall also include a third party who distributes such
Collaboration Product, provided that such third party conducts marketing and
promotion of such Collaboration Product within the applicable territory.
1.32 "Third Party Agreement" shall mean that certain License Agreement
between Neurocrine and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Junior University effective as of
November 30, 1994; and any other license or similar agreement entered into by
Neurocrine or Ciba with respect to patent rights or technology, which license or
other agreement Ciba and Neurocrine agree at any time are reasonably necessary
to allow the manufacture, use or sale of any Collaboration Product in the
applicable territory.
1.33 "Valid Claim" shall mean a claim of an issued and unexpired
patent or a claim of a pending patent application within the Neurocrine Patents
which has not been held invalid or unenforceable by a court or other government
agency of competent jurisdiction from which no appeal can be or has been taken,
and has not been admitted to be invalid or unenforceable through reexamination,
disclaimer or otherwise; provided that if a claim of a pending application has
not issued as a claim of an issued patent within the Neurocrine Patents within
ten (10) years after the filing date from which such claim takes priority, such
pending claim shall not be a Valid Claim for purposes of this Agreement.
1.34 Accounting Terms. With respect to accounting terms used herein,
including without limitation "direct costs," it is understood that the same
shall be calculated by Ciba in accordance with the International Accounting
Standards code ("IASC"); provided, however, that for purposes of calculating
costs and expenses, to the extent Ciba's calculation in accordance with the IASC
is different than a calculation of such costs and expenses in accordance with
U.S. generally accepted accounting principles, such costs and expenses for
purposes of this Agreement shall not exceed the amounts calculated in accordance
with U.S. GAAP.
ARTICLE 2
STEERING COMMITTEE
2.1 Steering Committee. Ciba and Neurocrine shall establish a
steering committee to oversee, review and coordinate the Programs and the
implementation thereof ("Steering Committee"). From time to time, the Steering
Committee may establish subcommittees to oversee particular projects or
activities (such as separate subcommittees to oversee the Research Program and
the Development Program), and such subcommittees will be constituted as the
Steering Committee agrees.
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2.2 Membership. The Steering Committee shall be comprised of an equal
number of representatives from each of Ciba and Neurocrine, selected by such
party. The exact number of such representatives shall be three (3) for each of
Ciba and Neurocrine (or such other number as the parties agree), with each party
designating representatives from the research, clinical development and business
organizations of each party. Subject to the foregoing provisions of this Section
2.2, Neurocrine and Ciba may replace its Steering Committee representatives or
nominate deputies at any time, with prior written notice to the other party.
2.3 Steering Committee Meetings. During the performance of the
Programs, the Steering Committee shall meet semi-annually, or as otherwise
agreed by the Steering Committee Members. Unless the Steering Committee Members
agree otherwise, at least one (1) meeting of the Steering Committee per full
calendar year will be held at each party's facilities. At its meetings, the
Steering Committee will (i) formulate and review the Research Program objectives
and Development Program objectives, as appropriate, (ii) monitor the progress of
the Research Program and Development Program toward the respective objectives,
and (iii) review and approve the Plans and Budgets, pursuant to Section 3.2
below. With the consent of the Steering Committee Members, other representatives
of Neurocrine or Ciba may attend Steering Committee or subcommittee meetings as
non-voting observers.
2.4 Decision Making. Except as set forth in this Section 2.4,
decisions of the Steering Committee shall be made by majority approval. In the
event the required majority for a decision cannot be found within 30 days and
all the members of each party take the same opposing positions in a matter of
importance, the matter shall be submitted to the [ * ] who shall meet and
discuss in good faith to resolve such matter; provided, however, that if such
meeting and good faith discussions do not result in mutual agreement, [ * ]
Non-attending members of the Steering Committee may represent themselves
by proxies or deputies in any decision.
2.5 Project Team and Its Operations. A project team appointed by the
Parties shall be charged with planning, implementation and coordinating the
conduct of the Programs (the "Project Team").
2.5.1 Composition of the Project Team. Promptly following the
Effective Date, the Parties agree to identify and communicate to the other Party
the Project Team members in their organization. It is understood that the
Project Team members have to be knowledgeable with respect to the activities to
be carried out under the Plans and Budgets. The Project Team shall not be
required to hold meetings, but may communicate by teleconference and other
appropriate means. Nevertheless, the Project Team members shall be fully
integrated in the Project Team. The Project Team leader (the "Project Team
Leader") shall be appointed by Ciba.
2.5.2 Responsibilities of the Project Team Leader. The Project
Team Leader shall have the responsibility for the operational aspects of the
Programs, and shall prepare and submit to
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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the Steering Committee issues and problems to be decided by the Steering
Committee. In particular, the Project Team Leader shall (i) prepare those
aspects of the Research Plan and Budget and the Development Plan and Budget as
provided in Section 3.2 below based upon the Ciba standard format (after giving
consideration to input from Neurocrine), in accordance with the Development
objectives approved by the Steering Committee, including a detailed Research and
Development task list as the basis for the Steering Committee to assign the
various tasks to the Project Team, (ii) implement the Plans and Budgets through
the Project Team; such implementation shall give due regard to the aim of a
worldwide product registration and be in strict compliance with Good Laboratory
Practice, Good Clinical Practice and Good Manufacturing Practice, as well as all
applicable law and regulations in the country where the Programs are performed
for the registration of Collaboration Products; (iii) interact with the Steering
Committee on a regular basis to keep it apprised of the progress of the
Programs, to bring to its attention any problems or issues which may have an
impact on the content of the Plans and Budgets or the timing of the Programs
(e.g. regulatory submissions) and to submit to its approval any deviations from
the Plans and Budgets; and (iv) update the Plans and Budgets as often as may be
requested by the Steering Committee.
2.5.3 Responsibilities of the Project Team Members. The Project
Team members shall carry out the tasks assigned to them by the Project Team
Leader in accordance with the Plans and Budgets and comply with Ciba working
techniques; they shall be available for advice and consultation to the Project
Team Leader, in particular in connection with the drafting and updating of the
Plans and Budgets.
2.6 Other Matters. It is understood that nothing in this Article 2
shall be deemed to limit the right of Ciba or Neurocrine to raise issues or
topics to be dealt with by the Steering Committee, within the scope of Sections
2.1 and 2.3 above.
ARTICLE 3
PLANS AND BUDGETS
3.1 General. Subject to the terms and conditions set forth herein,
Ciba and Neurocrine shall cooperate during the performance of the Programs (i)
with respect to the Research Program in accordance with a Research Plan and
Budget, and (ii) with respect to the Development Program in accordance with the
Development Plan and Budget, all as established in accordance with Section 3.2
below. The activities conducted in connection with the Programs will be overseen
and administered by the Steering Committee, pursuant to Article 2.
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3.2 Plans and Budgets.
3.2.1 Plans and Budgets.
(a) Within thirty (30) days of the Effective Date of this
Agreement, the parties shall meet and agree on an initial Research Plan and
Budget and an initial Development Plan and Budget, each of which shall be fixed
through December 31, 1996, except as otherwise determined by the Steering
Committee.
(b) By July 15 of each year, Ciba with the input of
Neurocrine as to the activities proposed to be performed by Neurocrine as set
forth in Section 3.2.1(c) below, shall prepare and provide to the Steering
Committee a reasonably detailed Research Plan and Budget and Development Plan
and Budget for the next calendar year pursuant to which the performance of the
Research Program and the performance of the Development Program, respectively,
will be carried out. By the same date a best estimate forecast of the overall
budget for the year after the next calendar year shall be prepared ("the
Estimate"). The Research Plan and Budget shall specify the objectives and work
plan activities with respect to the Research Program, and the headcounts and
other costs and expenses of the Research Program, including consultants and
third party contractors. The Development Plan and Budget shall specify the
objectives and work plan activities with respect to the Development Program, the
headcounts and other costs and expenses associated therewith, including
consultants and third party contractors, and shall include only such activities
and expenses as are necessary for and specific to development of Collaboration
Products for the purpose of obtaining regulatory approval for such Collaboration
Products in the Major Countries.
(c) During the performance of the Programs, by June 1 of
each year, Neurocrine shall submit to Ciba its proposed contributions to the
Research Plan and Budget and Development Plan and Budget as well as the Estimate
to be submitted to the Steering Committee for approval for the following
calendar year.
3.2.2 Annual Approval. The Steering Committee shall review the
proposed Plans and Budgets submitted by Ciba under Section 3.2.1 above as soon
as reasonably feasible and shall establish and approve no later than August 31
of such year the final Plans and Budgets for the next succeeding year. All Plans
and Budgets adopted pursuant to this Article 3 shall be reasonable and customary
in relation to other similar products in the field of MS and shall be consistent
with the other terms and conditions of this Agreement.
3.2.3 Periodic Reviews. The Steering Committee shall review the
Research Plan and Budget and Development Plan and Budget on an ongoing basis and
may make changes thereto; provided, however, the Plans and Budgets in effect for
a year shall not be modified except as approved by the Steering Committee.
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ARTICLE 4
RESEARCH AND DEVELOPMENT
4.1 Research Program. The Research Program shall be conducted by
Neurocrine, and Neurocrine shall use all diligent efforts to conduct the
Research Program in accordance with the Research Plan and Budget then in effect.
Ciba shall pay to Neurocrine the funding for the activities conducted pursuant
to the Research Program in accordance with the Research Plan and Budget then in
effect, subject to Section 6.2 below.
4.2 Development Program.
4.2.1 Selection of Collaboration Products. It is understood that
the Programs will focus on the development and commercialization of Neurocrine
product compound candidates NBI [ * ] and/or such other compounds within the
Field as are selected by Ciba, during the period specified in this Section 4.2.1
below, from compounds discovered in the course of performing the Research
Program. Ciba shall have the right to select as Collaboration Products from time
to time one or more of such compounds to be developed pursuant to the
Development Program, by so notifying Neurocrine in writing at any time within
five (5) years after the Effective Date.
4.2.2 Responsibilities. Subject to the requirements of Section
4.3, [ * ] shall be primarily responsible for conducting, directly or through
third parties, the Development Program with respect to Collaboration Products in
accordance with the Development Plan and Budget then in effect, including the
time schedules therein [ * ] shall be consulted and kept fully informed with
respect to the Development Program through its representatives on the Steering
Committee and as otherwise reasonably requested. [ * ] will assist in or
conduct portions of the Development Program as set forth in the Development Plan
and Budget then in effect, and as contemplated in Section 4.3 below, which
activities Ciba shall fund as set forth in Section 6.2 below. [ * ] shall not
commission any such activities to contract research/development organizations
without the prior agreement by the Steering Committee.
4.3 Neurocrine FTEs. During the five (5) year period beginning
January 1, 1996, and ending December 31, 2000, Neurocrine shall devote to the
Research Program and the Development Program a minimum of [ * ] Neurocrine
FTEs per year. Thereafter, if a PLA has not been filed in the United States for
a Collaboration Product, Neurocrine shall devote to the Research Program and the
Development Program a minimum of [ * ] Neurocrine FTEs per year until such a
PLA is filed (except as otherwise provided in Section 6.2.1 below). The Plans
and Budgets shall at all times provide for such minimum numbers of Neurocrine
FTEs. The Steering Committee shall allocate those responsibilities to be
conducted by the Neurocrine FTEs between the Research Program and the
Development Program; provided, however, that at least [ * ] of such Neurocrine
FTEs shall at all times be allocated to the Development Program unless
Neurocrine and Ciba otherwise agree. It is understood that the FTEs assigned to
the Research Program and/or the Development Program shall be qualified
scientists or experts (of whom at least half shall have a Ph.D., M.D., or
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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equivalent degree or experience) as may be required for work to be conducted
under the Research and/or Development Plans and Budgets then in effect.
Neurocrine shall at all times during the Research and Development Programs keep
contemporaneous written records of FTEs allocated to the Research Program and
the Development Program.
4.4 Regulatory Filings. Ciba shall be responsible for the preparation
and filing of all regulatory documents with respect to the Collaboration
Products, which shall be prepared and filed in the name of Ciba in accordance
with the Development Plan and Budget then in effect.
ARTICLE 5
RECORD KEEPING; PUBLICATION
5.1 Reports and Records.
5.1.1 Records. Neurocrine and Ciba shall maintain records of the
Programs (or cause such records to be maintained) in sufficient detail and in
good scientific manner as will properly reflect all work done and results
achieved in the performance of the Programs (including all data in the form
required under any applicable governmental regulations). Each party shall allow
the other to have, subject to Article 16 below, prompt access to all records,
materials and data generated on behalf of such party with respect to each
Collaboration Product at reasonable times and in a reasonable manner. Such
access shall be limited to access by representatives on the Steering Committee
and such other representatives as the other party reasonably approves.
5.1.2 Reports. Each party shall on a quarterly basis provide the
Steering Committee with an oral or written report summarizing the progress of
those aspects of the Research Program and/or Development Program performed by
such party with respect to each Collaboration Product during the preceding
calendar quarter. Such reports shall be due within thirty (30) days after the
end of each calendar quarter during the performance of the Research Program and
Development Program, unless otherwise agreed by the parties.
5.2 Review of Publication. For scientific data resulting from the
Research Program or the Development Program which the Steering Committee has
approved in principle should be published, the party who produced such results
shall have the right to publish the same in accordance with this Section 5.2.
The Steering Committee shall approve (with or without conditions) or disapprove
any such publication within thirty (30) days of a request to do so, taking into
consideration the commercial and competitive consequences of such publication;
and if the Steering Committee fails to so approve or disapprove within such
period (other than due to an action or inaction of the party proposing such
publication), the publication shall be deemed approved.
5.2.1 Notice. As soon as is practicable prior to the oral public
disclosure, and prior to the submission to any outside person for publication of
a manuscript describing any such scientific
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data resulting from any stage of the Research Program or Development Program, in
each case to the extent the contents of the oral disclosure or manuscript have
not been previously disclosed pursuant to this Section 5.2 before such proposed
disclosure, Neurocrine or Ciba, as the case may be, shall provide to the other
party a written summary of any oral disclosure to be made, a copy of any visual
or audiovisual aid to be used in conjunction with such oral disclosure, or a
copy of the manuscript to be submitted, and shall allow the other party at least
thirty (30) days to determine whether such oral disclosure or manuscript
contains subject matter for which patent protection should be sought prior to
publication or which either party believes should be modified to avoid
disclosure of confidential information. With respect to publications by
investigators or other third parties, such publications shall be subject to
review by the other party under this Section 5.2 only to the extent that
Neurocrine or Ciba (as the case may be) has the right to do so. It is understood
that each party shall only have the right to publish under this Section 5.2
scientific data which such party (or its third party contractors) generated in
performing the Research Program or Development Program.
5.2.2 Publication Rights. After the expiration of thirty (30)
days from the date of mailing such manuscript or written summary of an oral
disclosure, unless Neurocrine or Ciba has received a written notice as specified
in Section 5.2.3 below, the authoring party shall be free to submit such
manuscript for publication or to orally disclose or publish the disclosed
research results in any manner consistent with academic standards.
5.2.3 Delay of Publication. Prior to the expiration of the thirty
(30) day period specified in Section 5.2 above, the other party may notify the
submitting party in writing of its determination that such oral presentation or
manuscript contains confidential or proprietary material of such other party or
material that consists of patentable subject matter for which patent protection
should be sought. The notified party shall withhold its proposed public
disclosure and confer with the other party to determine the best course of
action to take in order to modify the disclosure or to obtain patent protection.
After resolution of the confidentiality, regulatory or other issues, or the
filing of a patent application or due consideration as to whether a patent
application can reasonably be filed, but in no event more than sixty (60) days
after the submitting party's receipt of the notice described above, the
submitting party shall be free to submit the manuscript and/or make its public
oral disclosure, subject to Article 16 below.
ARTICLE 6
PROGRAM FUNDING; PRE-MARKET PAYMENTS
6.1 Advance Payment. The parties acknowledge that Ciba has paid to
Neurocrine a non- refundable, non-creditable fee in the amount of Five Million
Dollars ($5,000,000) prior to the execution of this Agreement.
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6.2 Funding of Research and Development.
6.2.1 Ciba Obligations. During the five (5) year period beginning
January 1, 1996, and ending December 31, 2000, Ciba shall pay to Neurocrine
[ * ] Dollars [ * ] per year to support [ * ] Neurocrine FTEs working
on the Research Program and/or the Development Program. Thereafter, if a PLA has
not been filed in the United States for a Collaboration Product, Ciba shall
continue to pay to Neurocrine [ * ] Dollars [ * ] per year to support
[ * ] Neurocrine FTEs working on the Development Program until such a PLA is
filed, [ * ] for such period shall be proportionately reduced. It is
understood that, except as provided in Section 6.2.2 below, the FTE costs to be
paid under this Section 6.2.1 include all costs to be reimbursed to Neurocrine
with respect to Neurocrine's performance of its responsibilities under the
Research and/or Development Plans and Budgets. Neurocrine shall have no
obligation to make performances in excess of those compensated by the amounts to
be paid to Neurocrine under this Section 6.2.1 and Section 6.2.2 below.
6.2.2 Other Expenses. In addition to the funding for the
Neurocrine FTEs performing the Programs pursuant to Section 6.2.1, Ciba shall
reimburse Neurocrine for other expenses, if any, (i) expressly provided for in
the applicable Research and/or Development Plans and Budgets, and (ii) incurred
by Neurocrine in performing the Research and/or Development Programs in
accordance with such Plans and Budgets. Such other reimbursable expenses would
include, for example, costs paid to clinical trial sites with respect to
clinical trials, costs of clinical trial materials, preclinical toxicology and
other studies, and other research and development expenses paid to third parties
with respect to activities the Steering Committee decides Neurocrine shall
manage.
6.2.3 Payment. Ciba shall pay to Neurocrine semiannually in
advance the amounts provided for in Sections 6.2.1 and 6.2.2 above, not later
than January 1 and July 1 of each year; such payments to be used solely for the
purposes as set out in this Agreement. [ * ] For the period from the end of
the calendar month of the Effective Date through December 31, 1996, such
amounts, to the extent they have not been paid before, shall be paid within ten
(10) days from the Effective Date. Within thirty (30) days following the end of
each calendar half-year in which Neurocrine FTEs are engaged in activities
pursuant to the Research and/or Development Program for whom reimbursement is
provided hereunder, Neurocrine shall provide to Ciba a summary of FTEs actually
devoted to the programs, and other expenses to be reimbursed under Section
6.2.2, actually incurred by Neurocrine during such calendar half-year. If at the
end of a calendar half-year the number of FTEs applied by Neurocrine to the
Programs from January 1, 1996 through the end of such calendar half-year were
less than those reimbursed to Neurocrine by Ciba hereunder, Neurocrine shall
apply additional FTEs to the Programs in the next succeeding periods to make up
such shortfall.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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If the number of FTEs applied by Neurocrine to the Programs during a calendar
half-year were more than those reimbursed by Ciba, Neurocrine's obligation to
supply FTEs in subsequent periods shall be reduced by the number of such
additional FTEs. If the other expenses incurred by Neurocrine in accordance with
Section 6.2 were less than those reimbursed in advance by Ciba, Ciba shall be
entitled to credit the amount of the overpayment to the next payment due under
this Section 6.2; and if such expenses reasonably incurred by Neurocrine were in
excess of the amounts so advanced by Ciba, Ciba shall pay the difference to
Neurocrine within thirty (30) days of receiving Neurocrine's report to such
effect. Notwithstanding the above, Neurocrine shall not deviate from the
approved Plans and Budgets without the prior approval of the Steering Committee,
which shall not be withheld unreasonably.
6.3 Milestone Payments.
6.3.1 Milestones. Ciba agrees to make the following payments to
Neurocrine upon the occurrence of each milestone specified below for the first
Collaboration Product which meets such milestone:
MILESTONES PAYMENT
---------- -------
[ * ]
TOTAL OF 1-6:
It is understood that an IND shall be considered "filed" when accepted by the
FDA or its equivalent in another country. For the avoidance of doubt, it is
understood and agreed that in the event Ciba develops a Collaboration Product
for a different indication or route of administration, or one or more
Collaboration Products different from that for which the milestones above have
been paid to
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Neurocrine, no further milestones shall be due for such different indications,
routes, or Collaboration Products (i.e., Ciba shall not have to pay Neurocrine
more than one time for achievement of each of the milestones above, irrespective
of how many different indications, routes of administration, or Collaboration
Products the parties may decide to develop pursuant to this Agreement).
6.3.2 Credit Against Future Payments.
(a) [ * ] of the milestone payments set forth
in Section 6.3.1 above with respect to milestones 4, 5 and 6 above shall be
creditable against the royalty and Neurocrine Profit Share payments accrued
under Article 9 on Net Sales of such Collaboration Products. The milestone
payments due upon occurrence of milestones 1, 2 or 3 above shall not be
creditable.
(b) Notwithstanding any of the foregoing, no royalty or
Neurocrine Profit Share payment with respect to a Collaboration Product shall be
reduced by more than [ * ] by reason of the credits under this Section 6.3.2;
and in no event shall the credit under this Section 6.3.2 reduce the Neurocrine
Profit Share to less than [ * ] of Pre-Tax Operation Profits.
6.3.3 Other Payment Terms.
(a) If at the time any milestone is achieved, any prior
milestones (other than those under Milestone 1 above) have not been achieved,
the payments for such prior milestones shall then be due. In addition, it is
understood that certain Phase II trials currently anticipated for the first
Collaboration Product may be designated as pivotal for PLA filing purposes
without further pivotal studies being required prior to PLA filing; accordingly,
in the event that Ciba determines to file a PLA using the results of such trials
as pivotal data for registration purposes, Milestone 4 above shall be deemed to
have been met for purposes of such Collaboration Product upon such determination
by Ciba.
(b) Notwithstanding the foregoing, in the event one or more
research milestones specified in Milestone 1 above remains unachieved at the
time Milestone 4 or 5 (whichever is earlier) is achieved, the payment for such
unachieved research milestone(s) shall then be due.
(c) The payments set forth in this Section 6.3 shall each
be due and payable within thirty (30) days after the occurrence of the milestone
event. Neurocrine and Ciba each agree to promptly notify the other in writing of
its achievement of any milestone. For milestones accomplished by Neurocrine,
such payment shall be due within thirty (30) days after written notice thereof
to Ciba, subject to Ciba's verification during such thirty (30) day period that
the milestone occurred.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ARTICLE 7
USE OF PRECLINICAL AND CLINICAL DATA
7.1 Exchange. Ciba and Neurocrine shall each have access to and
subject to the terms and conditions under this Agreement the right to use in
connection with the Development Program, including incorporation in any
regulatory filing for a Collaboration Product, any preclinical and/or clinical
data with respect to Collaboration Products developed in the course of the
Research Program or the Development Program. Ciba will provide to Neurocrine
access to all regulatory filings made for clinical trial and marketing approval
by Ciba in any country with respect to each Collaboration Product, together with
the underlying preclinical and clinical data, at reasonable times and on
reasonable notice, to the extent Ciba has the right to do so.
ARTICLE 8
MARKETING RIGHTS
8.1 Ciba Territory. Ciba shall have the exclusive right, with the
right to further grant the right, to market, sell, and distribute the
Collaboration Products for use in the Ciba Territory in full autonomy, subject
to all other terms and conditions of this Agreement. Ciba agrees not to market,
promote or distribute directly or indirectly any Collaboration Product for use
outside of the Ciba Territory, except as provided in Section 8.2 below, and Ciba
further agrees, subject to Section 8.2.4 below, not to provide Collaboration
Products to any third party if Ciba knows or has reason to believe that
Collaboration Products provided to such third party will be sold for use or used
outside the Ciba Territory.
8.2 North America. Rights to market, sell, and distribute the
Collaboration Products for use in North America shall be as follows:
8.2.1 Marketing Collaboration. Except as provided in Sections
8.2.4 and 9.1.3 below, Ciba and Neurocrine shall establish a marketing
collaboration with respect to the marketing, promotion and distribution of the
Collaboration Products in North America (the "Marketing Collaboration"). Upon
request by either party prior to the first commercial sale of a Collaboration
Product in Canada and/or USA, the parties shall determine the appropriate legal
structure(s) for such Marketing Collaboration (which may be different in Canada
and USA) to implement the arrangement contemplated in Sections 8.2.2, 8.2.3 and
9.1 below, and shall enter into a more detailed agreement(s) defining such
arrangement (the "Marketing Collaboration Agreement"). The Marketing
Collaboration Agreement(s) shall be solely between the respective Affiliates of
Ciba in Canada and USA respectively and Neurocrine.
8.2.2 Operations. The respective Affiliates of Ciba shall be
responsible for the establishment, control and implementation of the promotion,
distribution and marketing strategy
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plans and budgets for Collaboration Products in the USA and Canada through the
Marketing Collaboration. However, to the extent consistent with the optimal
commercialization of the Collaboration Products in Canada and/or USA, Neurocrine
shall have the right to reasonably participate in the sales, marketing, and
promotion activities in Canada and USA for such Collaboration Products.
Neurocrine's role in the sales, marketing and promotion of the Collaboration
Product will be defined more specifically in the respective Marketing
Collaboration Agreements. In any case the Collaboration Products will be
marketed under a trademark and a brand logo selected by Ciba.
8.2.3 Cost and Profit Sharing. [ * ] of the Marketing
Collaboration will be shared by the parties in accordance with Section
9.1 below. Ciba (itself or through its Affiliates) shall be responsible for
providing sales, marketing, and all other services necessary for the
commercialization of each Collaboration Product in Canada and USA, and for the
Marketing Collaboration to meet its obligations, including without limitation
any costs associated with the launch, marketing and promotion of the
Collaboration Product and reimbursement of costs incurred by Neurocrine in
accordance with the Marketing Collaboration Agreement or in accordance with
Section 8.2.2 above in connection with such launch, marketing, distribution and
promotion. Accordingly, it is understood that Net Sales from Collaboration
Products within the Marketing Collaboration will be credited to Ciba.
8.2.4 Ciba Exclusive. In the event that Neurocrine elects not to
enter into or continue the Marketing Collaboration for a Collaboration Product
in Canada and USA in accordance with Section 9.1.3 below, Ciba shall have the
exclusive right to market, sell and distribute such Collaboration Product in
Canada and USA in full autonomy, subject to the payment of the amounts set forth
in Section 9.1.3 and all other terms and conditions of this Agreement.
8.3 Sublicensees. Subject to Article 11 below Ciba may grant
sublicenses under its rights to market, sell and distribute Collaboration
Products in the Ciba Territory and, with Neurocrine's approval, in North
America; provided, however, that if Ciba has the exclusive right to market, sell
and distribute such Collaboration Product in North America under Section 8.2.4
above, or if the desired sublicensee is an Affiliate of Ciba, then no such
approval shall be required.
8.4 Covenants. It is understood that, with respect to any particular
Collaboration Product, whether or not the manufacture, use and sale of such
Collaboration Product by Neurocrine and/or Ciba in any country requires a
license under intellectual property rights of the other, neither Neurocrine nor
Ciba shall market, sell or distribute a Collaboration Product anywhere in the
world except in accordance with this Agreement.
8.5 Conflicts of Interest. To avoid conflicts of interest with
respect to other products and services of Ciba and its Affiliates, Ciba agrees
that neither it nor its Controlled Affiliates shall price or discount
Collaboration Products in a manner that discriminates against such Collaboration
Products in favor of such other products or services.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ARTICLE 9
ROYALTIES
9.1 Neurocrine Profit Share.
9.1.1 Calculation of Neurocrine Profit Share for Canada and USA.
With respect to the sales of a Collaboration Product for use in
Canada and USA through the Marketing Collaboration for such
Collaboration Product, Ciba (itself or through its U.S. or
Canadian Affiliates) shall pay to Neurocrine the Neurocrine
Profit Share for such Collaboration Product. As used herein, the
"Neurocrine Profit Share" for a Collaboration Product shall mean
[ * ] of [ * ] from Net Sales of such Collaboration Product in
Canada and USA; provided, however, that (on a country-by-country
and product-by-product basis) Ciba shall be entitled to retain an
additional [ * ] (the "Ciba Differential") (i.e., so that the
Neurocrine Profit share is only [ * ] until such time as the
cumulative Ciba Differential retained by Ciba in the U.S. and
Canada, respectively, equals or exceeds the sum of (i) the
Recoupable Development Costs for such Collaboration Product and
(ii) the [ * ] for such Collaboration Product from such Net Sales
in such country. It is understood and agreed that once any
Recoupable Development Costs have been recovered by Ciba through
the mechanism outlined in this Section 9.1.1 or otherwise
reimbursed to Ciba, such recovered or reimbursed amounts shall
cease to be Recoupable Development Costs for all purposes of this
Agreement.
9.1.2 Repayment of Recoupable Development Costs.
(a) In the event that a Collaboration Product can reasonably be
commercialized in neither the United States nor Canada, Ciba may
terminate this Agreement in accordance with Section 9.1.2(c) and
Section 18.4 below, at which point Neurocrine shall repay to Ciba
[ * ] of the Recoupable Development Costs (to the extent such
Recoupable Development Costs have not otherwise been recouped by
Ciba). At Neurocrine's election, such payment shall be made in
cash, and/or in shares of Neurocrine Common Stock (the "Shares")
valued at a price (the "Repayment Price") equal to the greater of
[ * ] per share [ * ] or the fair market value thereof as of the
date of such election by Neurocrine. In the event that the Shares
shall be subdivided or combined after the date hereof by way of
stock split, reverse stock split, or other form of corporate
re-organization of Neurocrine, the Repayment Price of [ * ] per
share shall be proportionately adjusted.
(b) For purposes of this Section 9.1.2, it will be deemed
that a Collaboration Product can reasonably be commercialized neither in the
United States nor in Canada if one of the following events or an event of
similar magnitude occurs (each of these events being referred to as an
"Infeasibility Event"):
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(i) Both of the following conditions are met: (A) the
potential Collaboration Product would necessarily infringe, in a manner that
would block the commercialization of such Product, a patent owned by a third
party that is issued in the USA and Canada ("Infringed Rights"); and (B) neither
party is able to secure a license under such Infringed Rights on reasonable
terms and conditions within a reasonable time period.
(ii) All three (3) of the following conditions are met:
(A) [ * ] (B) no other Collaboration Products with similar market potential are
then part of the Plan and Budget then in effect, and (C) it is likely that the
nature of the adverse events described in (A) above would result from all
Collaboration Products.
(iii) Both of the following conditions are met: (A)
[ * ] and (B) no other Collaboration Products with similar market potential are
then part of a Plan and Budget then in effect or all data produced with respect
to remaining Collaboration Products demonstrate that [ * ]
(iv) Both of the following conditions are met: If (A)
[ * ] and (B) Ciba and/or Neurocrine as a consequence of this notification
decide(s) not to market the Collaboration Product in the USA or give(s) up
marketing the Collaboration Product in the USA, provided that Ciba can show
reasonable grounds for this consequence.
(c) To exercise its right to terminate pursuant to this
Section 9.1.2, Ciba shall provide to Neurocrine a notice of Ciba's intention to
terminate under this Section 9.1.2, describing the particular Infeasibility
Event which Ciba believes has occurred. The Steering Committee shall determine
within sixty (60) days after Neurocrine's receipt of such notice whether the
Infeasibility Event has in fact occurred. If the Steering Committee finds that
the Infeasibility Event has occurred, Ciba shall have the right to terminate the
Agreement under Section 18.4 within one hundred twenty (120) days after Ciba's
notice, which termination shall take effect upon ninety (90) days notice, unless
Neurocrine has provided to the Steering Committee a reasonable plan to overcome
the Infeasibility Event, which plan shall be duly considered by the Steering
Committee. If there is any other dispute as to whether an Infeasibility Event
has occurred, the matter shall be resolved in accordance with Sections 19.1 and
19.2 below. Unless Ciba withdraws its notice of termination under this Section
within ninety (90) days after its delivery to Neurocrine, this Agreement shall
terminate at the end of such period regardless of whether the Steering Committee
agrees that an Infeasibility Event has occurred or whether Neurocrine disputes
Ciba's right to terminate under this Section 9.1.2. If any such dispute proceeds
to arbitration and the arbitration
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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concludes that Ciba did not have the right to terminate under this Section
9.1.2, the termination shall be deemed a termination by Ciba under Section 18.3
below.
9.1.3 Neurocrine Election. At Neurocrine's election with respect
to any Collaboration Product, to be notified to Ciba [
* ]
the Marketing Collaboration(s) shall not be formed, or if formed shall thereupon
terminate, with respect to such Collaboration Product, and Ciba or its
Affiliates shall have the exclusive rights with respect to such Collaboration
Product provided in Section 8.2.4 above. In addition, in such event Section
9.1.2 shall not apply with respect to any Recoupable Development Costs
attributable to such Collaboration Product incurred before or after Neurocrine's
election, and in lieu of the Neurocrine Profit Share described in Section 9.1.1
above, Ciba shall pay to Neurocrine royalties on Annual Net Sales by Ciba, its
Affiliates and Sublicensees of such Collaboration Product in North America equal
to the following percentages of such Annual Net Sales in North America:
Annual Net Sales in North Royalty on Incremental
America Amount of Net Sales
-------------------------------------------------------------------------------
[ * ] [ * ]
In the event that it is impracticable for Ciba to consolidate sales for Canada
and the United States, the parties agree to establish separate royalty scales,
consistent with the foregoing, to allow for separate calculations of royalties
on Canadian and U.S. Net Sales and achieve the same results as if they were
consolidated. [
*
].
9.2 Running Royalties. In addition to the amount to be paid under
Section 9.1 above, Ciba shall pay royalties to Neurocrine equal to the following
percentages of Annual Net Sales by Ciba, its Affiliates and permitted
Sublicensees permitted of Collaboration Products sold for use in the Ciba
Territory:
Annual Net Sales in the Ciba Royalty on Incremental
Territory Amount of Net Sales
-------------------------------------------------------------------------------
[ * ] [ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.3 Calculation of Royalties.
9.3.1 Annual Net Sales. For purposes of Section 9.1.3 and Section
9.2 above, "Annual Net Sales" for a territory shall mean total Net Sales of
Collaboration Products for use in such territory for a particular calendar year
after the first commercial sale of the first Collaboration Product in the
applicable territory (i.e. Canada and USA, in the case of Section 9.1.3 above,
and the Ciba Territory in the case of Section 9.2 above), and units of
Collaboration Products shall be considered sold in the year in which the order
is accepted, the units are shipped to a customer, or the invoice is sent,
whichever occurs first. In the event that during the term of this Agreement
Annual Net Sales for a territory are accumulated in a period of less than one
(1) full calendar year, for purposes of determining the incremental royalty rate
under Section 9.1.3 above and/or Section 9.2 for such period, the royalty to be
paid shall be based on annualizing the Annual Net Sales according to the formula
(12/X)(Y), where X is the number of calendar months (any calendar month in which
sales activity occurs in the territory on fifteen (15) or more days shall
qualify as a calendar month for purposes of this calculation) in the period, and
Y is the sum of all Net Sales during the period in that territory.
9.3.2 No Patents. Subject to Section 9.5 below, in the event that
the sale of a Collaboration Product is not covered by a Valid Claim in the
country in which such Collaboration Product is sold, the royalty rates in
Section 9.1.3 and Section 9.2 above payable with respect to Net Sales of such
Collaboration Products in such country shall be reduced by [ * ]
9.3.3 Several Patents. No cumulation of royalties shall be made
in the event a Collaboration Product is covered by Valid Claims of more than one
patent.
9.4 Third Party Payments.
9.4.1 Reimbursement to Neurocrine. Subject to Section 9.4.3
below, Ciba shall reimburse Neurocrine for [ * ] of the running royalties paid
by Neurocrine under that certain License Agreement between Stanford University
and Neurocrine effective as of November 30, 1994 (the "Stanford Agreement"), and
subject to Section 9.4.2 below, [ * ] percent [ * ] of any running royalty by
Neurocrine under any other Third Party Agreement entered into by Neurocrine, in
each case as a result of the development and commercialization of Collaboration
Products in accordance with this Agreement.
9.4.2 Ciba Third Party Agreements/Credits to Ciba. Ciba shall
also be solely responsible for the payment of any running royalties due on Net
Sales to third parties under Third Party Agreements entered into by Ciba;
provided, however, that subject to Section 9.5 below, [ * ] of (i) payments made
by Ciba pursuant to such a Third Party Agreement, and (ii) amounts paid to
Neurocrine under Section 9.4.1 above with respect to Third Party Agreements
other than the Stanford Agreement, shall be credited against royalties due to
Neurocrine under Section 9.1.3 and Section 9.2 above on Net Sales of the
Collaboration Product and country for which such payments were made under such
Third Party Agreements, up to a maximum of [ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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percent [ * ] of amount of the royalties due Neurocrine under Section 9.1.3 and
Section 9.2 above on such Net Sales.
9.4.3 Canada and USA. In the event that a Marketing Collaboration
is formed for a Collaboration Product in Canada and USA pursuant to Section 8.2
above, all running royalties due to third parties under the Third Party
Agreements on Net Sales of Collaboration Products for use in Canada and USA
shall be deducted from the resulting revenues to the Marketing Collaboration as
costs of goods prior to determining the [ * ] (or [ * ] as the case may be), and
Ciba shall pay or reimburse Neurocrine for such running royalties under the
Third Party Agreements on Net Sales through the Marketing Collaboration.
9.5 Minimum Royalty Rate. Notwithstanding any other provision of this
Agreement, in no event shall the net royalties paid to Neurocrine on Net Sales
of Collaboration Products under Section 9.1.3 or Section 9.2 above be reduced to
less than [ * ] of such Net Sales. As used in this Section 9.5, "net royalties"
shall mean the amount of royalties actually paid to and retained by Neurocrine
after all credits and adjustments provided under this Agreement, and after
deducting any amounts paid by Neurocrine to third parties under any Third Party
Agreement(s) and not reimbursed by Ciba thereunder.
ARTICLE 10
PAYMENTS; BOOKS AND RECORDS
10.1 Royalty Reports and Payments. After the first commercial sale of
a Collaboration Product in any country, Ciba agrees to make quarterly written
reports to Neurocrine within seventy-five (75) days after the end of each
calendar quarter, which report shall include, in reasonable detail (i) a
calculation of royalties due to Neurocrine with respect to net sales of
Collaboration Products in such quarter, and (ii) the Neurocrine Profit Shares
for such quarter, each such report shall state the number, description, and
aggregate Net Sales of the Collaboration Product sold during the calendar
quarter. Concurrently with the making of such reports, Ciba shall pay to
Neurocrine the royalties and Neurocrine Profit Shares specified in Article 9.
10.2 Payment Method. All payments under this Agreement shall be made
by bank wire transfer in immediately available funds to a bank account
designated by Neurocrine. All payments hereunder shall be made in U.S. dollars.
10.3 Currency Conversion. Sales outside the United States accrued in
currencies other than Swiss Francs shall be converted into Swiss Francs
according to Ciba's standard method of exchange conversion of foreign sales for
statistical purposes, such as used for Ciba's annual report to its shareholders.
The conversion of amounts payable under this Agreement from Swiss Francs into
U.S. dollars shall be made using the average of the buying and selling rates of
exchange as published in The Wall Street Journal on the last business day of the
month in which such payment was due.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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10.4 Taxes.
10.4.1 General. All payments under this Agreement will be made
without any deduction or withholding for or on account of any tax unless such
deduction or withholding is required by any applicable law. If the paying party
is so required to deduct or withhold such party will:
(1) promptly notify the other party of such requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice that such
amount has been assessed against the other party;
(3) promptly forward to the other party an official receipt
(or certified copy), or other documentation reasonably acceptable to the other
party, evidencing such payment to such authorities.
In case the other party cannot take a full credit against its tax liability for
the withholding tax deducted or withheld by the paying party then such party may
propose a change to the then current arrangement with respect to the flow of
monies under this Agreement in order to reduce or eliminate the extra cost for
any party.
In case no solution can be found in order to reduce or eliminate above referred
extra cost or the other party has sound business reasons to reject the paying
party's proposals and the other Party can demonstrate by means of written
documentation, certified by a mutually agreed external auditor, that the other
party cannot take a full credit against its tax liability then the amount of
taxes to be paid by the other party exceeding the tax credit, if any, will be
reimbursed by the paying party up to fifty percent (50%) of such amount.
10.4.2 Marketing Collaboration. In the event Neurocrine and one
or more of Ciba's Affiliates enter into the Marketing Collaboration in Canada
and USA pursuant to Section 8.2, then (a) the Affiliate of Ciba which is party
to the Marketing Collaboration Agreement with respect to the jurisdiction in
question (the "Ciba Affiliate Party") shall indemnify Neurocrine and any deemed
joint venture established pursuant to the Marketing Collaboration Agreement from
and against any tax or similar governmental charge assessed with respect to and
directly attributable to the Ciba Affiliate Party's interest in the income or
assets of any such deemed joint venture as to which taxes or governmental
charges should be allocated to the Ciba Affiliate Party, and (b) Neurocrine
shall indemnify the Ciba Affiliate Party and any deemed joint venture
established pursuant to the Marketing Collaboration Agreement from and against
any tax or similar governmental charge assessed with respect to and directly
attributable to Neurocrine's interest in the income or assets of any such deemed
joint venture as to which taxes or governmental charges should be allocated to
Neurocrine.
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10.5 Records; Inspection.
10.5.1 Generally. Ciba, Neurocrine and their Affiliates and
Sublicensees shall keep complete, true and accurate books of account and records
for the purpose of determining the amounts payable or accountable hereunder.
Such books and records shall be kept at one of the prin cipal place of business
of Ciba, its Affiliate or Sublicensee as the case may be, for at least three (3)
years following the end of the calendar quarter to which they pertain. Such
records will be open for inspection during such three (3) year period by a
independent auditor of Neurocrine for the purpose of verifying the amounts
payable by Ciba pursuant to Article 9. Such inspections may be made no more than
once each calendar year, at reasonable times mutually agreed by Neurocrine and
Ciba. The auditing party's representative or agent will be obliged to execute a
reasonable confidentiality agreement prior to commencing any such inspection.
Such auditor shall only report inaccuracies in amounts payable under this
Agreement. With respect to audits of Ciba's books and records, Ciba may request
that an independent auditor familiar with Ciba's record keeping systems be
present at the audit to assist Neurocrine's auditor in using Ciba's internal
record management system. Each party shall bear the costs and expenses of its
representative for inspections conducted under this Section 10.5, unless a
variation or error producing an underpayment in amounts payable exceeding five
percent (5%) of the amount paid for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
to the inspection for such period and any unpaid amounts that are discovered
will be paid by the party to the favor of which the deviation occurred, together
with interest on such unpaid amounts at the rate specified in Section 10.2
above.
10.5.2 Reimbursable Costs. Without limiting Section 10.5.1 above,
it is understood that Section 10.5.1 shall apply with respect to Recoupable
Development Costs, Manufacturing Costs and Other Operating Costs, provided that
for such items the three (3) year period specified in 10.5.1 shall begin with
the period in which Ciba recoups such amounts under Section 9.1 above. Within
seventy-five (75) days after the end of each year during the term of the
Development Program until all Recoupable Development Costs are recouped by Ciba
under Section 9.1 above, Ciba shall provide to Neurocrine a written report
describing in reasonable detail the Recoupable Development Costs incurred during
such year, and the total Recoupable Development Costs incurred from the
commencement of the Development Program through the end of such year.
ARTICLE 11
DUE DILIGENCE
11.1 Ciba. Ciba shall use the same diligent efforts with respect to
the development, marketing, sale, promotion and monitoring of each Collaboration
Product as Ciba expends for its own products being developed with similar market
potential.
11.2 Exclusivity of Efforts. During the performance of the Programs,
and thereafter until the approval of a PLA for a Collaboration Product in a
Major Country, Ciba and Neurocrine each
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agree not to develop or commercialize a product within the Field or to grant to
a third party a license to sell any product specifically intended, at the time
the license is granted, for use within the Field, other than Collaboration
Products under this Agreement, subject to the following: In the event that such
Collaboration Product can be developed additionally for (an) indication(s) other
than MS ("Other Indications"), the parties may agree to develop and
commercialize such Collaboration Product for Other Indications according to the
terms of this Agreement. If Neurocrine does not agree to such development, Ciba
may perform such development on its own and at its own expense; provided,
however, to the extent Section 8.2 and Section 9.1.2 above would otherwise apply
to such Collaboration Product: (i) no costs associated with such Other
Indications for such Collaboration Product shall be included in Recoupable
Development Costs hereunder; (ii) all costs associated with such Other
Indications for a Collaboration Product, including without limitation the costs
to launch and promote such Collaboration Product for such Other Indications, as
well as the revenues from sales of such Collaboration Product for such Other
Indications, shall all be excluded from the calculation of Pre-Tax Operating
Profit for purposes of determining Neurocrine's Profit Share from such
Collaboration Product; and (iii) the royalties specified in Article 9 above
shall apply to all Net Sales of such Collaboration Product for such Other
Indications throughout the world.
ARTICLE 12
MANUFACTURING RIGHTS
12.1 Manufacturing.
12.1.1 Generally. Subject to Sections 12.2 and 12.3 below, Ciba
shall have the exclusive right to manufacture or have manufactured the
Collaboration Products anywhere in the world for sale or use throughout the
world. Neurocrine shall use its best efforts to make available to Ciba any
necessary and/or useful manufacturing know-how of third parties manufacturing
Collaboration Products.
12.1.2 Manufacture in U.S.. To the extent required by 35 U.S.C.
ss.200 et seq, all Collaboration Products for sale in the United States shall be
substantially manufactured in the United States. Neurocrine agrees to use good
faith efforts to obtain a waiver of any such requirement under the Stanford
License.
12.1.3 Manufacture by [ * ]. Neither [ * ] nor any entities
controlled by [ * ] shall manufacture the Collaboration Products for the
Marketing Collaboration without the written consent of Neurocrine.
12.2 Clinical Materials. Neurocrine shall use reasonable efforts to
manufacture or have manufactured and supply to Ciba, and Ciba shall purchase
from Neurocrine, such quantities of Collaboration Products as are reasonably
required by Ciba to perform its obligations under the Development Program
through Phase II trials in the United States pursuant to the Development
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Plan and Budget then in effect. All other Collaboration Products for use in the
Development Program shall be manufactured or supplied by Ciba. The transfer
price that Ciba shall pay to Neurocrine for quantities of such Collaboration
Products pursuant to Section 6.2.2 shall be one hundred percent (100%) of
Neurocrine's Manufacturing Costs of such Collaboration Products.
12.3 Canada and USA. In the event that a Marketing Collaboration is
formed under Section 8.2 above to market a Collaboration Product in Canada and
USA and Ciba elects to manufacture the Collaboration Product for
commercialization in the USA and/or Canada, Ciba shall supply Collaboration
Products for sale in Canada and USA at a price equal to Ciba's Manufacturing
Cost for such Collaboration Products; provided, however, that if a third party
can supply the Collaboration Product to the Marketing Collaboration in
equivalent quality and reliability, in sufficient quantities and at a price that
is less than Ciba's Manufacturing Cost for such Collaboration Product, either
(i) the Collaboration Product shall be supplied to the Marketing Collaboration
from such third party, or (ii) the Collaboration Product shall be supplied by
Ciba at a price equal to the unit price at which the third party would supply
such Collaboration Product. In connection with the Marketing Collaboration
Agreement, the parties shall enter into a supply agreement ("Supply Agreement")
with Ciba or their Affiliates on reasonable and customary terms with respect to
the supply arrangements contemplated in this Section 12.3 for such Collaboration
Products in Canada and USA.
ARTICLE 13
LICENSE GRANTS
13.1 Grant to Ciba. Subject to the terms and conditions of this
Agreement, Neurocrine hereby grants to Ciba an exclusive license with the right
to sublicense, under the Neurocrine Technology to manufacture, have
manufactured, develop, use, sell, import, and otherwise distribute Collaboration
Products for use within the Ciba Territory and North America. Without limiting
the foregoing, it is understood that the license granted hereunder shall extend
to the use of Collaboration Products for MS as well as any other indication
outside the Field.
13.2 Grant to Neurocrine. Unless Neurocrine elects, pursuant to
Section 8.2 above, not to establish or continue the Marketing Collaboration for
a Collaboration Product in Canada and USA, Ciba hereby grants to Neurocrine such
non-exclusive licenses under Ciba's patents and technology, as are necessary for
the Marketing Collaboration as contemplated in Article 8 above. Such licenses
shall be specified in further detail in the Marketing Collaboration Agreement.
13.3 No Rights Beyond Collaboration Products. Except as expressly
provided in Section 11.2, nothing in this Agreement shall be deemed to grant to
Ciba rights in products or technology other than the Collaboration Products or
be deemed to restrict Neurocrine's right to exploit any Neurocrine Technology,
as applicable, in products other than Collaboration Products.
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ARTICLE 14
INTELLECTUAL PROPERTY
14.1 Ownership of Inventions. Title to all inventions and other
intellectual property made solely by Ciba personnel in connection with the
Research Program or the Development Program shall be owned by Ciba. Title to all
inventions and other intellectual property made solely by Neurocrine personnel
in connection with the Research Program or the Development Program shall be
owned by Neurocrine. Title to all inventions and other intellectual property
made jointly by personnel of Neurocrine and Ciba in connection with the Research
Program or the Development Program shall be jointly owned by Ciba and
Neurocrine. Subject to the exclusive rights granted to Ciba under this
Agreement, and subject to the exclusivity of efforts described in Section 11.2,
it is understood that neither party shall have any obligation to account to the
other for profits, or to obtain any approval of the other party to license or
exploit a joint invention, by reason of joint ownership of any invention or
other intellectual property.
14.2 Patent Prosecution.
14.2.1 Neurocrine's Sole Inventions. Subject to Section 14.2.3
below, Neurocrine shall control, at its own expense (subject to 14.2.4 below),
the worldwide preparation, filing, prosecution and maintenance of the patent
applications and patents based on inventions within the Neurocrine Technology in
consultation with Ciba under 14.2.5 below, in such countries as it deems
appropriate, and conduct of any interferences, re-examinations, reissues,
oppositions or requests for patent term extensions within the Neurocrine
Technology using counsel of its choice.
14.2.2 Ciba's Sole Inventions. Subject to Section 14.2.1 above
and 14.2.3 below, Ciba shall control, at its own expense (subject to 14.2.4
below), the worldwide preparation, filing, prosecution and maintenance of patent
applications and patents owned or controlled by Ciba or its Controlled
Affiliates relating to a Collaboration Product or its manufacture, sale or use
(the "Ciba Patents") in consultation with Neurocrine under 14.2.5 below in such
countries as it deems appropriate, and conduct of any interferences,
re-examination, re-issues, oppositions or requests for patent term extensions
within the Ciba Patents using counsel of its choice.
14.2.3 Joint Inventions. Subject to prior submission to
Neurocrine, Ciba shall have the right to file, prosecute and maintain patent
applications, patents and other intellectual property protection for inventions
that are owned jointly by Ciba and Neurocrine under Section 14.1 above, and
Neurocrine agrees to take all reasonable action to cooperate with Ciba in this
regard. Ciba shall keep Neurocrine informed of the status of each joint
invention for which patent applications have been filed and shall consult with
Neurocrine with respect to the drafting of such patent applications and
responses required during prosecution in each country wherein patent protection
is sought for such joint invention prior to submission of such patent
application(s) and/or response(s). Each party shall promptly reimburse the other
for one-half (1/2) of the reasonable out-of-pocket expenses in connection with
such activities as they are incurred, unless and until Neurocrine notifies Ciba
that
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Neurocrine will no longer reimburse Ciba for any further costs under this
Section 14.2.3 related to any patent or patent application, in which case all
right, title and interest in and to such patent or application (as the case may
be) and any patents issuing thereon shall be owned by Ciba (in which case such
patent applications and patents issuing therefrom shall be within the Ciba
Patents for purposes of this Agreement), and in such event Neurocrine shall
promptly execute any document(s) required to transfer Neurocrine's right, title
and interest in and to such patent application(s) or patent(s) subsequent to
such notification to Neurocrine. In the event Ciba elects not to take such
action or reimburse Neurocrine's costs with respect to any jointly owned
inventions in accordance with this Section 14.2, then Neurocrine shall have the
right to file, prosecute and maintain such patent applications or patents at its
sole expense, in which case all right, title and interest in and to such patent
or application (as the case may be) and any patents issuing thereon shall be
owned by Neurocrine and, in such event, Ciba shall promptly execute any
document(s) required to transfer Ciba's entire right, title and interest in and
to such patent application(s) or patent(s) upon receipt of a request from
Neurocrine to do so.
14.2.4 Sharing Other Costs. Ciba and Neurocrine shall share
equally the reasonable out-of-pocket expenses incurred by Neurocrine or Ciba
with respect to the filing, prosecution, and maintenance of patents (i) under
the Stanford License Agreement and (ii) any other patents, patent applications
or other intellectual property (including the Neurocrine Patents) owned by Ciba
or Neurocrine (except joint inventions by the said parties) or licensed to
Neurocrine or Ciba (individually or collectively, the "Third Party Technology")
which the parties reasonably agree are necessary or materially beneficial to the
commercialization of the Collaboration Products. With respect to any
interferences, re-examinations, reissues, oppositions, requests for patent term
extensions or the like, Ciba shall pay the costs thereof for the Ciba Territory,
and Neurocrine shall bear a percentage of the cost of such proceedings in [ * ]
equal to the percentage of [ * ] (i.e. [ * ]), if any, in effect at the time
such costs are incurred. With respect to any such action for which Ciba shall
pay more than one-half (1/2) of the out-of-pocket costs, Ciba shall have the
right to control such action; if in such case Ciba fails to commence the
particular action within the earlier of one hundred twenty (120) days after a
request by Neurocrine to do so, or the time by which such action must be taken
to preserve the right to do so, or Ciba thereafter fails diligently to pursue
such action, Neurocrine shall have the right to take such action at its own
expense, in which case the license granted to Ciba hereunder with respect to any
Neurocrine Patent that is the subject of such action shall thereafter become
non-exclusive, and Section 11.2 shall not apply with respect to any grant by
Neurocrine of a license thereunder.
14.2.5 Cooperation. Each of Neurocrine and Ciba shall keep the
other reasonably informed as to the status of patent matters pertaining to the
Neurocrine Patents and Ciba Patents, as applicable, including providing to the
other party copies of any significant documents that such party receives from or
sends to patent offices, such as notices of interferences, re-examinations,
oppositions or requests for patent term extensions, all as reasonably requested
by the other party. Neurocrine and Ciba shall each cooperate with and assist the
other in connection with such activities, at the other party's request and
expense, and shall use good faith efforts to consult with
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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each other regarding the prosecution and maintenance of the Ciba Patents and the
Neurocrine Patents as is reasonably appropriate.
14.3 Defense of Third Party Infringement Claims. If the production, sale
or use of any Collaboration Product pursuant to this Agreement results in a
claim, suit or proceeding (collectively, "Actions") alleging patent infringement
against Neurocrine or Ciba (or their respective Affiliates or Sublicensees),
such party shall promptly notify the other party hereto in writing. The party
subject to such Action shall have the exclusive right to defend and control the
defense of any such Action using counsel of its own choice, and the Action,
subject to Article 17, shall be at such party's own expense; provided, however,
that the other party may participate in the defense and/or settlement thereof at
its own expense with counsel of its choice. Except as agreed in writing by Ciba
and Neurocrine, the party named in the Action shall not enter into any
settlement relating to a Collaboration Product, if such settlement admits the
invalidity or unenforceability of any patent within the Neurocrine Patents or
the Ciba Patents, as applicable, of the other party. The party in the Action
agrees to keep the other party hereto reasonably informed of all material
developments in connection with any such Action.
14.4 Enforcement. Subject to the provisions of this Section 14.4, in the
event that Neurocrine or Ciba reasonably believes that any Neurocrine Patents or
Ciba Patents necessary for the manufacture, use or sale of a Collaboration
Product is infringed or misappropriated by a third party or is subject to a
declaratory judgment action arising from such infringement in such country, in
each case with respect to the manufacture, sale or use of a product within the
Field, Ciba or Neurocrine (respectively) shall promptly notify the other party
hereto. The party whose patent is so allegedly infringed or misappropriated, or
is subject to such declaratory judgment action, (for purposes of this Section
14.4, the "Owner") shall have the initial right (but not the obligation) to
enforce such patent or defend any declaratory judgment action with respect
thereto (for purposes of this Section 14.4, an "Enforcement Action").
14.4.1 Initiating Actions. In the event that the Owner fails to
initiate an Enforcement Action to enforce the Neurocrine Patents or the Ciba
Patents, as applicable, against a commercially significant infringement by a
third party in a country, which infringement consists of the manufacture, sale
or use of a product within the Field in such country, within one hundred eighty
(180) days of a request by the other party to this Agreement ("Other Party") to
initiate such Enforcement Action, such Other Party may initiate an Enforcement
Action against such infringement at its own expense with the Owner's prior
written approval, which approval shall not be unreasonably withheld. The Owner
shall cooperate in such Enforcement Action at the Other Party's expense,
provided that the Other Party indemnifies the Owner against any liability to
other parties to the litigation arising therefrom. The party initiating or
defending any such Enforcement Action shall keep the Other Party hereto
reasonably informed of the progress of any such Enforcement Action, and such
Other Party shall have the right to participate with counsel of its own choice
at its own expense.
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14.4.2 Recoveries. The party initiating the Enforcement Action
under this Section 14.4 shall have the right to retain any recoveries therein
but shall reimburse the Other Party all the cost and expenditure as documented
which the latter may have reasonably incurred at the initiating party's request
in the context of the infringement.
14.5 Third Party Rights. The foregoing provisions of this Article 14
shall be subject to and limited by any Third Party Agreements pursuant to which
Neurocrine and Ciba, as the case may be, acquired any particular Neurocrine
Patents or Ciba Patents.
ARTICLE 15
REPRESENTATIONS AND WARRANTIES
15.1 Neurocrine Warranties. Neurocrine warrants and represents to Ciba
that (i) it has the full right and authority to enter into this Agreement and
grant the rights and licenses granted herein; (ii) it has not previously granted
and will not grant any rights in conflict with the rights and licenses granted
herein; (iii) to its knowledge and belief and after diligent search, Neurocrine
has not received from a third party notice that the manufacture, sale or use of
a product in the Field would infringe any intellectual property rights of such
third party and no action, suit or claim has been initiated or threatened
against Neurocrine with respect to the Neurocrine Technology or its right to
enter into and perform its obligations under this Agreement; (iv) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to the Neurocrine Technology, or any portion
thereof, to manufacture, sell or use a Collaboration Product that is in conflict
with the rights or licenses granted under this Agreement; and (v) the agreements
listed in Exhibit A is a complete and accurate list of all agreements between
Neurocrine and third parties pertaining to the Collaboration Products that are
in existence as of the Effective Date.
15.2 Ciba Warranties. Ciba warrants and represents to Neurocrine that
(i) it has the full right and authority to enter into this Agreement and grant
the rights and licenses granted herein; (ii) it has not previously granted and
will not grant any rights in conflict with the rights and licenses granted
herein; (iii) to its knowledge and belief and after diligent search, Ciba has
not received from a third party notice that the manufacture, sale or use of a
product in the Field would infringe any intellectual property rights of such
third party and no action, suit or claim has been initiated or threatened
against Ciba with respect to the Ciba Technology or its right to enter into and
perform its obligations under this Agreement; (iv) it has not previously
granted, and will not grant during the term of this Agreement, any right,
license or interest in or to the Ciba Technology, or any portion thereof, to
manufacture, sell or use a Collaboration Product that is in conflict with the
rights or licenses granted under this Agreement; and (v) as of the Effective
Date, Ciba has not entered into an agreement with any third party to acquire
rights to any patent or technology which Ciba believes is reasonably necessary
to allow the manufacture, use or sale of a Collaboration Product in any country
and which would require the payment of royalties on Net Sales of such
Collaboration Product.
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15.3 Disclaimer of Warranties. NEUROCRINE AND CIBA EXPRESSLY DISCLAIM
ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH
RESPECT TO THE RESEARCH, PRODUCT DEVELOPMENT, AND THE NEUROCRINE AND CIBA
INTELLECTUAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY
OF NEUROCRINE OR CIBA TECHNOLOGY, PATENTED OR UNPATENTED, AND NONINFRINGEMENT OF
THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 16
CONFIDENTIALITY
16.1 Confidential Information. Except as expressly provided herein,
the parties agree that, for the term of this Agreement and for seven (7) years
thereafter, the receiving party shall not publish or otherwise disclose and
shall not use for any purpose any information furnished to it by the other party
hereto pursuant to this Agreement which if disclosed in tangible form is marked
"Confidential" or with other similar designation to indicate its confidential or
proprietary nature or if disclosed orally is confirmed in writing within a
reasonable time after such disclosure to be confidential or proprietary by the
party disclosing such information at the time of such disclosure ("Confidential
Information"). Notwithstanding the foregoing, Confidential Information shall not
include information that, in each case as demonstrated by written documentation:
(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became 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; or
(d) was subsequently lawfully disclosed to the receiving party
by a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
16.2 Permitted Disclosures. Notwithstanding the provisions of Section
16.1 above, each party hereto may disclose the other party's Confidential
Information to the extent such disclosure is reasonably necessary to exercise
the rights granted to it under this Agreement (including the right to grant
sublicenses, as applicable), in filing or prosecuting patent applications,
prosecuting or defending litigation, as required by law or applicable
governmental regulations, submitting
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information to tax or other governmental authorities, or conducting clinical
trials hereunder with respect to Collaboration Products, provided that if a
party is required by law or applicable governmental regulations, to make any
such disclosure of the other party's Confidential Information, to the extent it
may legally do so, it will give reasonable advance notice to the latter party of
such disclosure and, save to the extent inappropriate in the case of patent
applications or otherwise, will use its reasonable efforts to secure
confidential treatment of such information prior to its disclosure (whether
through protective orders or otherwise). If the party whose Confidential
Information is to be disclosed has not filed a patent application with respect
to such Confidential Information, it may require the other party to delay the
proposed disclosure (to the extent the disclosing party may legally do so), for
a reasonable period of time to allow for the filing of such an application.
ARTICLE 17
INDEMNIFICATION
17.1 Indemnification of Neurocrine. Ciba shall indemnify each of
Neurocrine and its Affiliates and the directors, officers, and employees of
Neurocrine and such Affiliates and the successors and assigns of any of the
foregoing (the "Neurocrine Indemnitees"), and hold each Neurocrine Indemnitee
harmless from and against any and all liabilities, damages, settlements, claims,
actions, suits, penalties, fines, costs or expenses (including, without
limitation, reasonable attorneys' fees and other expenses of litigation) (any of
the foregoing, a "Claim") incurred by any Neurocrine Indemnitee, arising from or
occurring as a result of (a) claims relating to any Collaboration Product(s)
used, sold or otherwise distributed by Ciba, its Affiliates or Sublicensees,
except to the extent such claim is caused by the negligence or willful
misconduct of a Neurocrine Indemnitee and/or breach of Neurocrine's
representations and warranties under Article 15; or (b) subject to Section 9.4.2
above, infringement claims brought by third parties with respect to the
manufacture, sale or use of Collaboration Products hereunder or the conduct of
the Research Program or Development Program.
17.2 Indemnification of Ciba. Neurocrine shall indemnify each of Ciba
and its Affiliates and the directors, officers, and employees of Ciba and such
Affiliates and the successors and assigns of any of the foregoing (the "Ciba
Indemnitees"), and hold each Ciba Indemnitee harmless from and against any and
all liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses (including, without limitation, reasonable attorneys' fees and
other expenses of litigation) (any of the foregoing, a "Claim") incurred by any
Ciba Indemnitee, arising from or occurring as a result of (i) the negligence or
willful misconduct of Neurocrine, or (ii) breach by Neurocrine's representations
and warranties under Article 15.
17.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees or agents intend to claim such indemnification,
and, except for matters
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described in Section 17.1(b) above, the Indemnitor shall have sole control of
the defense and/or settlement thereof. The indemnity agreement in this Article
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article but the omission so to deliver written notice to the Indemnitor
shall not relieve the Indemnitor of any liability that it may have to any
Indemnitee otherwise than under this Article. The Indemnitee under this Article,
its employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigation of any action, claim or liability
covered by this indemnification.
ARTICLE 18
TERM AND TERMINATION
18.1 Term. This Agreement shall become effective as of the Effective
Date and, unless earlier terminated pursuant to the other provisions of this
Article 18, shall continue in full force and effect on a product-by-product and
country-by-country basis, until the later of: (i) such time as neither the
manufacture, sale nor use of the particular Collaboration Product would infringe
a Valid Claim in such country; or (ii) ten (10) years after the first commercial
sale of such Collaboration Product in such country.
18.2 Termination for Cause. Either party to this Agreement may terminate
this Agreement in the event the other party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for sixty (60) days after written notice
thereof was provided to the breaching party by the non-breaching party. Any
termination shall become effective at the end of such sixty (60) day period
unless the breaching party (or any other party on its behalf) has cured any such
breach or default prior to the expiration of the sixty (60) day period.
18.3 Termination Upon Notice. Ciba may terminate this Agreement upon six
(6) months written notice to Neurocrine; provided, however, that such notice may
not be delivered prior to December 30, 1997.
18.4 Termination For Infeasibility. Ciba may terminate this Agreement
according to the procedure defined in Section 9.1.2 above upon the occurrence of
any Infeasibility Event referring to all Collaboration Products under
development; provided that such termination shall not take effect prior to
January 1, 1998.
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18.5 Effect of Termination.
18.5.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination nor preclude either party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.
18.5.2 Survival. Articles 1, 16, 18, 19 and 20, Sections 5.1.1,
10.2, 10.3, 10.4, 10.5, 13.3, 14.1 and 14.2.3 of this Agreement shall survive
expiration or termination of this Agreement for any reason. In addition:
(a) It is understood that following an expiration (but not
an earlier termination, except as provided in this Section 18.5), this Agreement
shall not be deemed to prevent Ciba from continuing to commercialize
Collaboration Products in the Ciba Territory without obligation to Neurocrine,
other than with respect to paying any royalties or other obligations owed to
third parties as a result of such commercialization under any Third Party
Agreement(s).
(b) Upon the expiration, but not an earlier termination, of
this Agreement, any Marketing Collaboration formed with respect to a
Collaboration Product shall survive, and the provisions of Section 8.2, 8.3,
8.4, 8.5, 9.1.1, 9.1.3, 9.4.3, 12.3 and Article 10, applicable to such
Collaboration Product shall also survive. In the event that Neurocrine has
elected not to enter into or continue or in the event that Neurocrine elects not
to continue a Marketing Collaboration for a Collaboration Product this Agreement
shall not be deemed to prevent Ciba from continuing respectively from starting
to commercialize such Collaboration Product in Canada and USA without obligation
to Neurocrine other than with respect to paying any royalties or other
obligations owed to third parties as a result of such commercialization and any
Third Party Agreements(s).
(c) In the event of a termination by Ciba under Section 18.2
by reason of a material breach by Neurocrine, Ciba shall have an exclusive,
worldwide license, with the right to grant and authorize sublicenses, under the
Neurocrine Technology to make, have made, develop, use and sell the
Collaboration Products and in addition to the other Articles surviving as set
forth above, Sections 8.3, 9.1.3, 9.2, 9.3, 9.4, 9.5, 14.3, 14.4 and 14.5, and
Article 10, shall also survive provided that (i) any royalties thereafter
payable by Ciba to Neurocrine with respect to sales of such Collaboration
Product shall be reduced by [ * ] of the amounts stated in Article 9 above.
(d) In the event of a termination of this Agreement by
Neurocrine under Section 18.2 by reason of a material breach by Ciba, or by
reason of a termination of this Agreement by Ciba under Section 18.3 or 18.4:
(i) Ciba's obligations and Neurocrine's rights (but not Ciba's rights or
Neurocrine's obligations) under Section 5.2 and Sections 5.1.1 and 7.1 shall
also survive; (ii) Neurocrine shall have an exclusive, worldwide license, with
the right to grant and authorize sublicenses under any Ciba Patents (as defined
in 14.2.2 above), to import, export, make, use and
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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sell Collaboration Products; (iii) Neurocrine shall have the right to use and
disclose to third parties for any purpose the items and information described in
Sections 5.1.1 and 7.1, or provided to Neurocrine as described below (including
without limitation the right to reference any regulatory filings made with
respect to Collaboration Products); and (iv) with respect to a termination by
Ciba under Section 18.4, Neurocrine's obligations under Section 9.1.2 shall also
survive. In any such event, Ciba shall provide to Neurocrine within thirty (30)
days of such termination all data, including all clinical data developed or
obtained by Ciba pursuant to the Development Program; and any regulatory
documents prepared for submission or submitted by Ciba to any health regulatory
agency with respect to any Collaboration Product. Upon any termination described
in this part 18.5.2(d), Ciba shall diligently proceed in good faith to assign to
Neurocrine all governmental filings, including all INDs, PLAs, NDAs and the like
(and any foreign equivalents thereof) with respect to Collaboration Products and
to otherwise assist Neurocrine as Neurocrine may reasonably request to enable
Neurocrine or its designee to commercialize the Collaboration Product(s) in an
expeditious manner. In the event that Neurocrine elects to exercise the license
granted to it under (ii) above with respect to a Collaboration Product (it being
understood that Neurocrine may terminate such license with respect to any
particular Ciba Patent(s) or Collaboration Products(s) by so notifying Ciba),
Neurocrine shall pay to Ciba a reasonable royalty on net sales by Neurocrine of
such Collaboration Product the sale of which would, but for such license,
infringe a valid claim of an issued patent within the Ciba Patents in the
country for which such Collaboration Product is sold; such royalty shall not
exceed [ * ] of the royalties specified in Section 9.2 above, applied on a
worldwide basis. If the parties are unable to agree upon such royalty the matter
shall be resolved, consistent with the foregoing, pursuant to Section 19.2
below, except that the arbitration shall be completed within sixty (60) days
after the appointment of the Panel.
(e) It is understood that upon a termination by Ciba under
Section 18.3 or 18.4 above, Ciba's obligation to make payments under Section 6.2
above shall continue until the effective date of such termination. In addition,
in such event, Ciba shall reimburse Neurocrine for any noncancellable
commitments that were pre-approved by the Steering Committee. In the event of
such a termination, the parties shall agree upon a reasonable plan to wind-down
Ciba's activities under the Development Program.
ARTICLE 19
DISPUTE RESOLUTION
19.1 Disputes. If the parties are unable to resolve any dispute
between them arising out of this Agreement, either party may, by written notice
to the other, have such dispute referred to the Chief Executive Officer of
Neurocrine and a member of the Management Committee of the Pharmaceutical
Division of Ciba, for attempted resolution by good faith negotiations within
twenty-one (21) days after such notice is received. Unless otherwise mutually
agreed, the negotiations between the designated officers should be conducted by
telephone, with three (3) days and times
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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within the period stated above offered by the designated officer of Ciba to the
designated officer of Neurocrine for consideration.
19.2 Full Arbitration. Any dispute, controversy or claim arising out
of or relating to the validity, construction, enforceability or performance of
this Agreement, including disputes relating to alleged breach or to termination
of this Agreement shall be settled by binding arbitration in the manner
described in this Section 19.2. The arbitration shall be conducted pursuant to
the Commercial Rules and Supplementary Procedures for Large, Complex Disputes of
the American Arbitration Association then in effect. Notwithstanding those
rules, the following provisions shall apply to the arbitration hereunder:
19.2.1 Arbitrators. The arbitration shall be conducted by a
single arbitrator; provided that at the request of either party, the arbitration
shall be conducted by a panel of three (3) arbitrators, with one (1) arbitrator
chosen by each of Neurocrine and Ciba and the third appointed by the other two
(2) arbitrators. If the parties are unable to agree upon a single arbitrator, or
the third arbitrator in case of a panel of three (3), such single or third
arbitrator (as the case may be) shall be appointed in accordance with the rules
of the American Arbitration Association. In any event, the arbitrator or
arbitrators selected in accordance with this Section 19.2.1 are referred to
herein as the "Panel."
19.2.2 Proceedings. The parties and the arbitrators shall use
their best efforts to complete the arbitration within six (6) months after the
appointment of the Panel under Section 19.2.1 above, unless a party can
demonstrate to the Panel that the complexity of the issues or other reasons
warrant the extension of one or more of the time tables. In such case, the Panel
may extend such time table as reasonably required. The Panel shall, in rendering
its decision, apply the substantive law of the State of New York, without regard
to its conflict of laws provisions, except that the interpretation of and
enforcement of this Article 19 shall be governed by the U.S. Federal Arbitration
Act. The proceeding shall be conducted in English and shall take place in New
York, New York. The fees of the Panel shall be paid by the losing party which
party shall be designated by the Panel. If the Panel is unable to designate a
losing party, it shall so state and the fees shall be split equally between the
parties. Neither party shall initiate an arbitration hereunder unless it has
attempted to resolve the matter in accordance with Section 19.1 above. Any award
with respect to late payments due hereunder shall include interest at
commercially reasonable rates from the date such payments were due.
ARTICLE 20
MISCELLANEOUS
20.1 Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the State of New York, without reference to
conflicts of laws principles or the U.N. Convention on the Sale of Goods.
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20.2 Force Majeure. Nonperformance of any party shall be excused to
the extent that performance is rendered impossible by strike, fire, earthquake,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control of the
nonperforming party.
20.3 No Implied Waivers; Rights Cumulative. No failure on the part of
Neurocrine or Ciba to exercise and no delay in exercising any right under this
Agreement, or provided by statute or at law or in equity or otherwise, shall
impair, prejudice or constitute a waiver of any such right, nor shall any
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
20.4 Independent Contractors. Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute Neurocrine or Ciba as
partners in the legal sense. No party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other party or to bind any other party to any contract, agreement or
undertaking with any third party.
20.5 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other parties hereto:
Ciba: Ciba-Geigy Limited
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇-▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attn: Head, Pharma Licensing
cc: Legal Department, Pharma Counsel
Neurocrine: Neurocrine Biosciences, Inc,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, President, CEO
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
20.6 Assignment. This Agreement shall not be assignable by either
party to any third party hereto without the written consent of the other party
hereto; except that either party may assign this Agreement without the other
party's consent to a Controlled Affiliate and/or an entity that acquires
substantially all of the business or assets of the assigning party, in each case
whether by merger, acquisition, or otherwise; provided that in the case of an
assignment to a Controlled Affiliate, the
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assigning party shall remain fully responsible for all of its obligations
hereunder. It is understood that Ciba or its successor may assign this Agreement
to an entity that acquires substantially all of its pharmaceutical business and
assets.
20.7 Modification. No amendment or modification of any provision of
this Agreement shall be effective unless in writing signed by all parties
hereto. No provision of this Agreement shall be varied, contradicted or
explained by any oral agreement, course of dealing or performance or any other
matter not set forth in an agreement in writing and signed by all parties.
20.8 Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any jurisdiction, the parties shall negotiate in
good faith a valid, legal and enforceable substitute provision that most nearly
reflects the original intent of the parties and all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.
20.9 Publicity. Each of the parties hereto agrees not to disclose to
any third party the terms of this Agreement without the prior written consent of
the other party hereto, except to advisors, investors and others on a strict
need-to-know basis, or to the extent required by law. Notwithstanding the
foregoing, the parties shall agree upon a press release to announce the
execution of this Agreement, together with a corresponding Question & Answer
outline for use in responding to inquiries about the Agreement; thereafter, Ciba
and Neurocrine may each disclose to third parties the information contained in
such press release and Question & Answer outline at the agreed date and time and
thereafter without the need for further approval by the other.
20.10 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and all of which
together, shall constitute one and the same instrument.
20.11 Headings. Headings used herein are for convenience only and
shall not in any way affect the construction of or be taken into consideration
in interpreting this Agreement.
20.12 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of Neurocrine and Ciba are subject to prior compliance
with United States and foreign export regulations and such other United States
and foreign laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the governments of
the United States and foreign jurisdictions. Neurocrine and Ciba shall cooperate
with each other and shall provide assistance to the other as reasonably
necessary to obtain any required approvals.
20.13 Entire Agreement. This Agreement and the Exhibits hereto
constitute the entire agreement, both written or oral, with respect to the
subject matter hereof, and supersede all prior or contemporaneous understandings
or agreements, including but not limited to the Letter Agreement
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dated January 19, 1996, whether written or oral, between Neurocrine and Ciba
with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in duplicate originals as of the date first above
written.
NEUROCRINE BIOSCIENCES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇
-----------------------------
Title: President/CEO
----------------------------
CIBA-GEIGY LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Head, Pharma Licensing
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Division Counsel
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EXHIBIT A
NEUROCRINE THIRD PARTY AGREEMENTS
1. Agreement pertaining to "Peptide Determinant Associated with Immunity"
dated as of November 30, 1994 between Neurocrine and The Board of Trustees
of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Junior University;
2. Cooperative Research and Development Agreement between Neurocrine and the
National Institutes of Health, Neuroimmunology Branch executed as of June
30, 1995.
Any provisions of such Third Party Agreements that are required to be included
in this Agreement are hereby incorporated by reference.
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EXHIBIT B
DIRECT MANUFACTURING COSTS
As used in Section 1.16, and subject to Section 1.34, "direct costs"
shall mean the following items:
[ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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EXHIBIT C
OTHER OPERATING COSTS
As used herein, "Other Operating Costs" shall mean a reasonable allocation for
Ciba's overhead costs associated with the following items to the manufacture and
sale of a Collaboration Product in the United States or Canada, which allocation
shall be made in accordance with generally accepted cost accounting principles
consistently applied by Ciba across all similar pharmaceutical operations:
[ * ]
[ * ]
* not allocated elsewhere
** no allocation shall be made for manufacturing operations if the
Collaboration Product is manufactured by a Third Party
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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EXHIBIT D
DIRECT COSTS INCURRED BY CIBA
PERFORMING THE DEVELOPMENT PROGRAM
As used in Section 1.27, and subject to Section 1.34, "direct costs"
shall mean the following items:
[ * ]
* Certain information on this page has been omitted anf filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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