EXHIBIT 10.38
-------------
Cooperation Agreement
entered into as of January 12, 1998 (the "EFFECTIVE DATE" )
between
Grunenthal GmbH
Xxxxxxxxxx. 0
00000 Xxxxxx
Xxxxxxx Xxxxxxxx of Germany
- hereinafter "GRUNENTHAL" -
and
Synaptic Pharmaceutical Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
U S A
- hereinafter "SYNAPTIC" -
1
Table of Contents
Page
Article 1 Definitions 3
Article 2 Cooperation, Implementation of Projects 7
Article 3 Management and Planning Projects; 14
Reports and Exchange of Information
Article 4 Early Stage of Projects 20
Article 5 Advanced Development Stage of Projects 24
Article 6 Post-Advanced Development Stage Production and Marketing 28
Article 7 Patent Protection 29
Article 8 License Grants; Restrictions on Use of Technology
and Patent Rights 31
Article 9 Reimbursement or Other Payments of Costs 32
Article 10 Records and Reports, Inspection 33
Article 11 Confidentiality 34
Article 12 Termination of Projects 35
Article 13 Term and Termination of Agreement 36
Article 14 Effect of Termination or Expiration of Agreement 37
Article 15 Governing Law and Arbitration 39
Article 16 Concluding Provisions 39
2
Witnesseth
WHEREAS, SYNAPTIC and GRUNENTHAL are each actively conducting research
directed at discovering and developing a variety of therapeutic compounds;
WHEREAS, SYNAPTIC has expertise in the discovery and cloning of
receptor genes, the development of binding and functional assays that employ
cloned receptors for use in drug discovery programs, and the design and
discovery of compounds that act at the receptors of interest;
WHEREAS, SYNAPTIC has utilized its expertise to discover and clone
genes that code for receptors that have been implicated in pain, to develop
binding and functional assays that employ such receptors and to design and
discover compounds that are selective for such receptors;
WHEREAS, GRUNENTHAL has compounds that it would like to screen at
certain receptors cloned by SYNAPTIC, and has expertise in optimizing candidate
compounds and in evaluating them in pharmacological models, including in vivo
pain model systems;
WHEREAS, SYNAPTIC has compounds that it would like to have evaluated in
certain of GRUNENTHAL's pharmacological models, including in vivo pain model
systems, and has expertise in optimizing candidate compounds;
WHEREAS, GRUNENTHAL has expertise in preclinical and clinical testing
of candidate compounds, getting regulatory approval and in commercializing
pharmaceutical products;
WHEREAS, SYNAPTIC and GRUNENTHAL have expressed a mutual interest in
utilizing their skills and resources in a collaborative effort to discover and
develop agonists and antagonists of mutually agreed upon receptors for
alleviating pain; and
WHEREAS, SYNAPTIC and GRUNENTHAL may in the future determine to expand
their collaborative effort to discover and develop compounds that act at
molecular targets in addition to receptors.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties agree as follows:
Article 1
Definitions
1.1 ADVANCED DEVELOPMENT STAGE shall mean, with respect to each party and
each CANDIDATE resulting from a PROJECT, the stage of development
which (i) begins with the determination by the STEERING COMMITTEE to
commence PHASE III TRIALS involving such CANDIDATE (it being
understood that such determination
3
shall be made following completion
of phase IIa clinical trials) and (ii) ends on the earlier of the date
of the termination by the applicable party of the development
activities with respect to such CANDIDATE or the receipt by such
applicable party of final approval from at least one regulatory
authority that allows marketing of such CANDIDATE to begin.
1.2 ALPHA-2 PROJECT shall have the meaning set forth in Section 2.2.4.
1.3 AVAILABLE TARGETS shall mean TARGETS, including the TARGETS identified
in Schedule I, which fall into one of the categories set forth in
Section 2.2.1 as determined by the STEERING COMMITTEE. Notwithstanding
anything contained in here to the contrary, a TARGET shall cease to be
an AVAILABLE TARGET at such time as it becomes an EXCLUDED TARGET.
1.4 BACKGROUND TECHNOLOGY shall mean, with respect to either party and any
AVAILABLE TARGET which is the focus of a PROJECT, all know-how, trade
secrets, assays, inventions, experimental data, experimental
procedures, technology, biological, compounds and other materials and
other proprietary information which were discovered or developed by
such party, which relate to such TARGET and which existed prior to the
initiation of a PROJECT relating to such TARGET. In addition,
BACKGROUND TECHNOLOGY shall mean and include, with respect to
GRUNENTHAL and any other AVAILABLE TARGET, all know-how, trade secrets,
assays, inventions, experimental data, experimental procedures,
technology, biological compounds and other materials and other
proprietary information, which were discovered or developed by
GRUNENTHAL which relate to such TARGET and which existed prior to the
initiation of a PROJECT relating to such TARGET if such PROJECT is
initiated or at any time during the term of this Agreement if such
PROJECT is not initiated.
1.5 BUDGET shall have the meaning set forth in Section 3.1.3(d).
1.6 CANDIDATE shall mean a COMPOUND which is a LEAD for which the decision
to start a Good Laboratory Practices four-week toxicology studies has
been made by the STEERING COMMITTEE during a PROJECT. Such decision
will be made at such time as the STEERING COMMITTEE determines that a
LEAD satisfies the criteria established by the STEERING COMMITTEE
regarding the desired pharmacological profile, stability,
pharmacokinetic profile, bioavailability, synthesis and safety profile
(safety pharmacology, toxicology, side-effect profile) and lack of any
blocking third party patent.
1.7 COMMON STUDIES shall have the meaning set forth in Section 3.1.3(a) and
may be conducted worldwide by each party, or its subsidiaries.
1.8 COMPOUND shall mean a chemical substance with a purity of 90% or more
where the structure is characterized by standard analytical methods
(e.g., NMR, MS, IR, etc.).
1.9 EARLY DEVELOPMENT STAGE shall mean, with respect to any CANDIDATE
resulting from a PROJECT, the stage which (i) begins with the
determination of the
4
STEERING COMMITTEE to commence Good Laboratory
Practices four-week toxicology studies involving the CANDIDATE and (ii)
ends on the earlier of the date of the termination by the STEERING
COMMITTEE of the development activities with respect to such CANDIDATE
or the determination by the STEERING COMMITTEE to commence PHASE III
TRIALS involving such CANDIDATE (it being understood that any such
determination shall be made following completion of phase IIa clinical
trials).
1.10 EMEA shall mean the European Medicines Evaluation Agency.
1.11 EMEA STUDIES shall have the meaning set forth in Section 3.1.3(a) and
shall be conducted in the GRUNENTHAL TERRITORY.
1.12 EVALUATION COMMITTEE shall mean the committee formed pursuant to Section
3.3.
1.13 EXCLUDED TARGET shall mean (i) any alpha 1 adrenergic receptor, galanin
receptor, neuropeptide Y receptor (other than the Y2 and Y4 receptors)
or serotonin receptor (other than the 5HT-4 receptor), (ii) any TARGET
which was an AVAILABLE TARGET and became an EXCLUDED TARGET pursuant to
Section 2.2.7 or pursuant to a decision by the STEERING COMMITTEE prior
to the expiration of the applicable period set forth in Section 2.2.1
and (iii) any AVAILABLE TARGET which was at one time but is no longer
the focus of a PROJECT and/or is no longer the focus of ongoing drug
development activities of GRUNENTHAL pursuant to this Agreement.
1.14 EXISTING COLLABORATIVE PARTNERS shall mean Xxx Xxxxx and Company, Merck
& Co., Inc., Novartis Pharma A.G., and the Xxxxxx-Xxxxxxx Company.
1.15 FDA shall mean the United States Food and Drug Administration.
1.16 FDA STUDIES shall have the meaning set forth in Section 3.1.3(a) and
shall be conducted in the SYNAPTIC TERRITORY.
1.17 GRUNENTHAL TERRITORY shall mean Europe (including CIS and Turkey), and
all countries of Central America and South America including the
Caribbean but excluding any country or island within SYNAPTIC
TERRITORY.
1.18 HIT shall mean a COMPOUND which exhibits affinity for a and functional
activity at a TARGET and which is approved for testing in in vivo
models by the RESEARCH COMMITTEE.
1.19 LEAD shall mean a COMPOUND which (i) is or is derived from a HIT, (ii)
belongs to a patentable class of chemical entities and/or is patentable
with regard to its preparation procedure and (iii) in experimental
animal models has an in vivo therapeutic profile that satisfies
criteria set by the STEERING COMMITTEE.
5
1.20 NET SALES shall mean, with respect to any PRODUCT, the gross amount
invoiced to non-affiliated customers for sales of such PRODUCT in each
calendar year, after deduction for the following items, each of which
shall be determined in accordance with the normal accounting practices
of the party selling the PRODUCT:
(i) trade, quantity and cash discounts or rebates actually allowed
to such customers;
(ii) credits, rebates, charge-back rebates, reimbursements or
similar payments actually granted or given to such customers
for PRODUCTS previously sold;
(iii) any tax, tariff, duty or other governmental charge (other than
income or similar tax) levied on the sale, transportation or
delivery of such PRODUCT and borne by the seller thereof;
(iv) any charge for freight or insurance actually borne by the
customer; and
(v) allowances for bad debt expense.
1.21 OTHER TERRITORIES shall mean all countries in the world other than
those included in the SYNAPTIC TERRITORY or the GRUNENTHAL TERRITORY.
1.22 PAIN shall mean acute or chronic, weak, moderate to severe or severe
pain (i) generated by central and/or peripheral mediators, whose action
is blocked by analgesic and/or antiphlogistic agents or (ii) is
associated with migraine headache.
1.23 PATENT RIGHTS shall mean patent applications and patents to which
either SYNAPTIC or GRUNENTHAL have rights. Claims included in PATENT
RIGHTS which are not covered by this Agreement are excluded.
1.24 PHASE III TRIALS shall mean trials that fulfill at least the following
criteria: pivotal, confirmatory, controlled trials satisfying FDA
and/or EMEA guidelines.
1.25 PRODUCT shall mean any human pharmaceutical product for alleviating
PAIN which includes as an active ingredient a CANDIDATE.
1.26 PROJECT shall have the meaning set forth in Section 2.2..
1.27 PROJECT TECHNOLOGY shall mean, with respect to any PROJECT, all
know-how, trade secrets, assays, inventions, experimental data,
experimental procedures, technology, biological, chemical and other
materials and other proprietary information which relate to therapeutic
uses of COMPOUNDS the mechanism of action of which involves the
TARGET(S) of the PROJECT and which are discovered or developed during
the PROJECT TERM of the PROJECT or during the period following the
PROJECT TERM in which development or marketing activities with respect
to a CANDIDATE resulting from or relating to such PROJECT are being
conducted.
6
1.28 PROJECT TERM shall mean, with respect to any PROJECT, the period during
which such PROJECT is conducted pursuant to this Agreement.
1.29 RESEARCH COMMITTEE shall mean each of the joint research committee(s)
formed pursuant to Section 3.2.1.
1.30 RESEARCH STAGE shall mean, with respect to any PROJECT, the stage of
the PROJECT during which the parties seek CANDIDATES for the TARGET(S)
of the PROJECT.
1.31 STEERING COMMITTEE shall mean the joint steering committee formed pursuant
to Section 3.1.1.
1.32 SYNAPTIC TERRITORY shall mean the United States of America and its
territories, Canada and its territories and Mexico.
1.33 TARGET shall mean a gene product (e.g., receptor, transporter, enzyme,
transcription factor, etc.).
1.34 TERRITORIES shall mean (i) with respect to SYNAPTIC, the SYNAPTIC
TERRITORY and the OTHER TERRITORIES, (ii) with respect to GRUNENTHAL,
the GRUNENTHAL TERRITORY and the OTHER TERRITORIES, and (iii) with
respect to both parties, the SYNAPTIC TERRITORY, the GRUNENTHAL
TERRITORY and the OTHER TERRITORIES.
The plural includes the singular and vice versa when the context so
admits.
Article 2
Cooperation, Implementation of Projects
2.1 Field. During the term of this Agreement, the parties shall engage in a
cooperation focused on the identification and development of
pharmaceutical products for the alleviation of PAIN in humans.
2.2 Implementation.
2.2.1 Categorization and Reservation of Targets. Any TARGET
identified by SYNAPTIC which falls into any of the following
categories as determined by the STEERING COMMITTEE, including
each of the TARGETS set forth in Schedule I attached hereto,
shall automatically be an AVAILABLE TARGET and shall be
exclusively reserved for this cooperation with respect to the
identification and development of COMPOUNDS for the
alleviation of PAIN for a period according to its category as
set forth below:
7
i) Category I:
Any TARGET with in-vivo evidence for mediation of PAIN, with
COMPOUNDS available that have a minimum affinity for such
TARGET as defined by the STEERING COMMITTEE. These TARGETS
shall be AVAILABLE TARGETS for a period of one year after
their identification by the STEERING COMMITTEE as Category I
TARGETS, unless subsequently recategorized by the STEERING
COMMITTEE, or determined by the STEERING COMMITTEE to be
EXCLUDED TARGETS.
ii) Category II:
Any TARGET with in-vitro and/or theoretical evidence for
mediation of PAIN, with COMPOUNDS available that have a
minimum affinity for such TARGET as defined by the STEERING
COMMITTEE. These TARGETS shall be AVAILABLE TARGETS for a
period of three years after their identification by the
STEERING COMMITTEE as Category II TARGETS, unless subsequently
recategorized by the STEERING COMMITTEE, or determined by the
STEERING COMMITTEE to be EXCLUDED TARGETS.
iii) Category III:
Any speculative TARGETS identified within tissue (meaning
tissue as listed in Schedule II) known to be involved in the
transmission or inhibition of PAIN, with COMPOUNDS available
that have a minimum affinity for such TARGET as defined by the
STEERING COMMITTEE. These TARGETS shall be AVAILABLE TARGETS
for a period of five years after their identification by the
STEERING COMMITTEE as Category III TARGETS, unless
subsequently recategorized by the STEERING COMMITTEE, or
determined by the STEERING COMMITTEE to be EXCLUDED TARGETS.
iv) Category IV:
Any speculative TARGET identified within tissue (meaning
tissue as listed in Schedule II) known to be involved in the
transmission or inhibition of PAIN, with no COMPOUNDS
available. These TARGETS shall be AVAILABLE TARGETS for the
term of this Agreement, unless subsequently recategorized by
the STEERING COMMITTEE, or determined by the STEERING
COMMITTEE to be EXCLUDED TARGETS.
Any AVAILABLE TARGET may be switched by determination of the
STEERING COMMITTEE from one category to another and
accordingly be an AVAILABLE TARGET for a different period of
time.
In addition, an AVAILABLE TARGET may by determination of the
STEERING COMMITTEE become an EXCLUDED TARGET prior to the
expiration of the period of time applicable to the category in
which such TARGET falls.
8
Notwithstanding anything in the contrary set forth in the
first paragraph of this Section 2.2.1, if, within 90 days
following the date that GRUNENTHAL is first notified in
writing of the identification by SYNAPTIC of a new TARGET,
GRUNENTHAL provides written notice to SYNAPTIC that it is
rejecting such TARGET as an AVAILABLE TARGET, then such TARGET
shall not become an AVAILABLE TARGET and thereafter neither
party shall have any obligation to the other party with
respect to such TARGET.
2.2.2 Evaluation of Available Targets. The EVALUATION COMMITTEE
shall, on a regular basis, review the list of the AVAILABLE
TARGETS, as well as the data relating to such TARGETS that are
available at the time, and formulate for consideration by the
STEERING COMMITTEE recommendations regarding the initiation of
new PROJECTS and the appropriate prioritization of AVAILABLE
TARGETS based upon their perceived value as potential targets
of pharmaceutical products for the alleviation of PAIN. In an
effort to generate data regarding AVAILABLE TARGETS, each
party shall be obliged to perform High Throughput Screening
for a minimum number of AVAILABLE TARGETS per year as
determined by the STEERING COMMITTEE. It shall be SYNAPTIC's
responsibility to attempt to develop pharmacological tools or
design leads for Category IV TARGETS. While GRUNENTHAL
acknowledges and agrees that SYNAPTIC may seek the help of a
third party in developing the pharmacological tools and design
leads contemplated by the preceding sentence, SYNAPTIC
acknowledges and agrees that GRUNENTHAL shall have no
obligation, financial or otherwise, with respect thereto.
2.2.3 Initiation of Projects. In furtherance of the
cooperation, during the term of this Agreement, the STEERING
COMMITTEE shall, on a quarterly basis, consider the
recommendations of the EVALUATION COMMITTEE and determine
whether to initiate new joint research and development
projects with one or more AVAILABLE TARGETS as their focus.
The purpose of any such project will be to identify and
develop jointly, up to the commencement of PHASE III TRIALS,
CANDIDATES that (i) alleviate PAIN in humans and (ii) have
primary mechanism of action involving the TARGET(S). For
convenience of reference, each research and development
project initiated as contemplated by this Section 2.2 is
referred to herein as a "PROJECT". It is contemplated by the
parties that at any point in time they may be conducting
several PROJECTS pursuant to this Agreement.
The parties agree that all TARGETS and COMPOUNDS listed in
Schedule I and Schedule III shall be provided exclusively from
SYNAPTIC to GRUNENTHAL under the terms of this Agreement,
subject to any limitations imposed or contemplated by this
Agreement, including, without limitation, such limitations
imposed or contemplated by Section 2.2.1, 2.4 and/or 8.1.1.
GRUNENTHAL acknowledges and agrees that SYNAPTIC has
agreements with its EXISTING COLLABORATIVE PARTNERS which
relate to EXCLUDED TARGETS. The parties agree that EXCLUDED
TARGETS
9
as defined in Section 1.13 (i) are not part of this
Agreement but available to SYNAPTIC's EXISTING COLLABORATIVE
PARTNERS.
SYNAPTIC warrants that nothing in the agreements with its
EXISTING COLLABORATIVE PARTNERS contradicts to any provision
of this Agreement, however, GRUNENTHAL acknowledges that
pursuant to such agreements, SYNAPTIC is not granting, and
will not in the future grant (unless in the future it is in a
position to do so), GRUNENTHAL a license to use its technology
to develop compounds that bind any TARGET with an affinity
which is less than ten times greater than their affinity for
any galanin receptor, any serotonin receptor (other than 5
HT-4 receptor), any alpha 1 adrenergic receptor or any
neuropeptide Y receptor (other than the Y 2 or Y 4 receptor).
The STEERING COMMITTEE, in initiation PROJECTS, in designating
CANDIDATES and in fulfillment of its other responsibilities
under this Agreement, shall act in a manner consistent with
the foregoing.
2.2.4 Initial Project. The parties have determined by mutual
agreement that the alpha-2a, -2b and -2c adrenergic receptors
are of particular interest to their cooperation and have,
accordingly, selected such receptors as the TARGETS of their
initial PROJECT. Such PROJECT (the,,ALPHA 2 PROJECT") shall be
initiated beginning as of the EFFECTIVE DATE. Set forth on
Schedule III attached hereto is a list of SYNAPTIC COMPOUNDS
and a list of GRUNENTHAL COMPOUNDS, in each case identified by
code number which may be active at one or more of such
receptors and which, as of the EFFECTIVE DATE, are, in the
judgment of each party, available as pharmacological tools or
design leads for use in the ALPHA-2 PROJECT. Also set forth in
said Schedule III is a complete list of GRUNENTHAL's and
SYNAPTIC's present PATENT RIGHTS, if any, concerning ALPHA 2
PROJECTS.
2.2.5 Other Available Targets. Schedule I attached hereto sets forth
a list of the AVAILABLE TARGETS, as of the EFFECTIVE DATE. As
of the EFFECTIVE DATE such AVAILABLE TARGETS are not to
SYNAPTIC's knowledge, covered by issued patents of third
parties and as of such date could therefore be considered by
the parties as the potential subjects of additional PROJECTS.
At such time, if ever, as any such AVAILABLE TARGET becomes an
EXCLUDED TARGET, Schedule I shall be deemed amended by
deleting such TARGET therefrom.
In case a third party patent covering an AVAILABLE TARGET is
issued to such third party by the patent office in the United
States, The European Patent Office or the patent office in
Japan, SYNAPTIC and GRUNENTHAL shall consult on the further
proceedings with respect to such AVAILABLE TARGET.
2.2.6 Other Potential Sources of Available Targets. The parties have
discussed possible sources for AVAILABLE TARGETS that could
provide the basis for additional PROJECTS, and agree that
SYNAPTIC shall present new, if any,
10
AVAILABLE TARGETS to the
STEERING COMMITTEE for categorization every six month period
following the EFFECTIVE DATE. Such AVAILABLE TARGETS may
result from SYNAPTIC's molecular biology efforts. In addition,
the parties, through their representatives on the STEERING
COMMITTEE, may (a) identify AVAILABLE TARGETS which, based
upon the scientific literature, are known to exist
pharmacologically but have not yet been cloned or have been
cloned by a third party but are not proprietary to a third
party and (b) direct SYNAPTIC to attempt to clone such
receptors. Finally, it is contemplated that such AVAILABLE
TARGETS may result from certain genomics efforts on the part
of SYNAPTIC focused on spinal and supraspinal tissues.
2.2.7 Available Targets becoming Excluded Targets. In the event that
during the periods set forth in Section 2.2.1 for each
AVAILABLE TARGET the parties do not initiate a new PROJECT
with such AVAILABLE TARGET as its focus, then SYNAPTIC shall
be free to convert such AVAILABLE TARGET to an EXCLUDED TARGET
by giving GRUNENTHAL written notice. Thereafter SYNAPTIC shall
have the right to exploit such TARGET independently or with
one or more third parties in each case without further
liability or other obligation, financial or otherwise, to
GRUNENTHAL, and GRUNENTHAL's right to exploit such TARGET
using SYNAPTIC BACKGROUND TECHNOLOGY and PROJECT TECHNOLOGY
shall immediately and indefinitely cease to exist and
GRUNENTHAL's right to exploit such TARGET without the use of
such SYNAPTIC BACKGROUND TECHNOLOGY and SYNAPTIC PROJECT
TECHNOLOGY shall immediately cease to exist for a period of
two years. 2.3 Structure. Each PROJECT shall include a
RESEARCH STAGE and may include an EARLY DEVELOPMENT STAGE with
respect to one or more CANDIDATES identified during the
RESEARCH STAGE. Following the conclusion of the EARLY
DEVELOPMENT STAGE with respect to a CANDIDATE, the parties,
through the STEERING COMMITTEE, may determine to initiate an
ADVANCED DEVELOPMENT STAGE with respect to the CANDIDATE. The
rights and obligations of the parties during each of these
stages, as well as their rights and obligations with respect
to the production and marketing of each PRODUCT relating to or
arising out of a PROJECT, are described herein.
2.4 No Independent Research or Research with Third Parties within Field. It
is the intent of the parties that they be exclusive partners in the
identification and/or development of COMPOUNDS for alleviating PAIN in
humans to the extent that such COMPOUNDS act through one or more
TARGETS that are the focus of one or more PROJECTS or subsequent drug
development or marketing activities pursuant to this Agreement.
Accordingly, without the approval of the other party, during the
PROJECT TERM of any PROJECT and the period following the PROJECT TERM
in which development or marketing activities with respect to a
CANDIDATE resulting from or relating to such PROJECT are being
conducted, neither party shall conduct, either independently or with a
third party, any research directed toward the identification and/or
development of COMPOUNDS for alleviating PAIN in humans to
11
the extent
that any of the TARGETS through which such COMPOUNDS act is (i) the
same as a TARGET of such a PROJECT, (ii) the same as a TARGET through
which the CANDIDATE acts, or (iii) is an AVAILABLE TARGET provided,
however, that the foregoing prohibition shall not apply to the
collaborative project being conducted by SYNAPTIC and The DuPont Merck
Pharmaceutical Company pursuant to the Collaborative Research Agreement
dated February 5, 1996; provided further, however, that the foregoing
prohibition shall not apply to SYNAPTIC's research relating to the
identification and development of pharmaceutical products that act at
one or more of the EXCLUDED TARGETS.
2.5 In-Licensing Opportunities. If, during the PROJECT TERM of any PROJECT
or during the period following the PROJECT TERM in which development or
marketing activities with respect to a CANDIDATE resulting from or
relating to such PROJECT are being conducted, either party shall become
aware of any opportunity to in-license for potential development of a
pharmaceutical product for alleviating PAIN in humans a compound the
mechanism of action of which involves a TARGET of such PROJECT or any
other AVAILABLE TARGET, such party shall inform the other party.
Neither party may consummate an agreement with respect to such compound
unless both parties agree on the terms under which the agreement will
be consummated.
2.6 Disclosure of Background Technology and Project Technology; Use of
Background Technology and Project Technology Outside Cooperation.
2.6.1 Disclosure of Background Technology and Project Technology.
If, during the PROJECT TERM of any PROJECT or during the
period following the PROJECT TERM in which development or
marketing activities with respect to a CANDIDATE resulting
from or relating to such PROJECT are being conducted, either
party should discover or develop BACKGROUND TECHNOLOGY or
PROJECT TECHNOLOGY, such party shall disclose such BACKGROUND
TECHNOLOGY or PROJECT TECHNOLOGY to the other party.
2.6.2 Use of Grunenthal Background Technology and Grunenthal Project
Technology Relating to Targets for which an Indication other
than the Alleviation of Pain has been Identified. If
GRUNENTHAL is the discovering or developing party referred to
in Section 2.6.1 and such BACKGROUND TECHNOLOGY and/or PROJECT
TECHNOLOGY was not previously known by SYNAPTIC and relates to
the use of a TARGET for an indication other than the
alleviation of PAIN (a,,new indication"), then, SYNAPTIC shall
have exclusive rights to pursue the discovery independently or
with a third party, and to seek and pursue patent protection
thereon if GRUNENTHAL has not yet filed a patent application.
In the event that SYNAPTIC independently commercializes a
product based upon such discovery and which is covered by an
issued PATENT RIGHT of GRUNENTHAL, it shall pay GRUNENTHAL a
royalty of 3 % of the NET SALES of the product for the new
indication in countries in which such issued GRUNENTHAL PATENT
RIGHT exists. In the event that SYNAPTIC licenses such issued
GRUNENTHAL PATENT RIGHT to a third party,
12
SYNAPTIC shall pay
GRUNENTHAL 33 % of any royalty which SYNAPTIC receives from
the third party in respect of any such PATENT RIGHT in
countries in which such GRUNENTHAL PATENT RIGHT exists. For
COMPOUNDS provided by GRUNENTHAL Section 2.6.4 shall apply in
lieu of this Section 2.6.2.
2.6.3 Use of Grunenthal Background Technology and Project Technology
Relating to Excluded Targets for Pain. If GRUNENTHAL is the
discovering or developing party referred to in Section 2.6.1
and such BACKGROUND TECHNOLOGY or PROJECT TECHNOLOGY relates
to the use for PAIN of a TARGET which thereafter became an
EXCLUDED TARGET, then SYNAPTIC shall have exclusive rights to
pursue the discovery independently or with a third party, and
to pursue patent protection thereon, with no further
obligation to GRUNENTHAL, financial or otherwise. For
COMPOUNDS provided by GRUNENTHAL Section 2.6.4 shall apply in
lieu of this Section 2.6.3.
2.6.4 Use of Compounds Included in Grunenthal Background Technology
or Grunenthal Project Technology. In connection with the
exercise of its rights under Section 2.6.2 and/or Section
2.6.3 above, SYNPATIC shall be permitted to use COMPOUNDS
included in GRUNENTHAL BACKGROUND TECHNOLOGY and/or GRUNENTHAL
PROJECT TECHNOLOGY and to commercialize any products resulting
therefrom, without compensation to GRUNENTHAL, financial or
otherwise; provided, however, that if any such product
incorporates the compound covered by an issued GRUNENTHAL
PATENT RIGHT, SYNAPTIC shall pay GRUNENTHAL a royalty (a) 3 %
of the NET SALES of such product in countries in which such
issued GRUNENTHAL PATENT RIGHT exists if SYNAPTIC
independently commercializes such product and (b) 33 % of any
royalty which SYNAPTIC receives from a third party in respect
of any such PATENT RIGHT if SYNAPTIC licenses the issued
GRUNENTHAL PATENT RIGHT to a third party.
2.6.5 Use of Synaptic Background Technology and Synaptic Project
Technology Relating to Chemistry. GRUNENTHAL shall be
permitted to use SYNAPTIC BACKGROUND TECHNOLOGY and SYNAPTIC
PROJECT TECHNOLOGY relating to chemistry for the purpose of
developing compounds useful for the alleviation of PAIN, the
mechanism of action of which involves a TARGET which is
neither an EXCLUDED TARGET nor an AVAILABLE TARGET. In the
event that any product which incorporates any of such SYNAPTIC
BACKGROUND TECHNOLOGY or SYNAPTIC PROJECT TECHNOLOGY, whether
or not patented or patentable by SYNAPTIC, is proposed to be
commercialized, GRUNENTHAL shall promptly inform SYNAPTIC and
shall negotiate with SYNAPTIC in good faith appropriate
compensation to be paid to SYNAPTIC in respect of such
TECHNOLOGY, based upon its relative contribution and
importance to such product. In case the parties are not able
to agree within 180 days on appropriate compensation SYNAPTIC
shall be free to offer such rights on such products to
13
third
parties, and any right that GRUNENTHAL may have had under this
Section 2.6.5 and any right that GRUNENTHAL may have to market
such product shall automatically be forfeited thereafter.
2.6.6 Request for Access to Blocking Technology and Patent Rights.
Prior to entering into a collaboration with a third party to
develop compounds which (a) have as their mechanism of action
a TARGET that is the focus of a PROJECT and(b) are for an
indication other than the alleviation of PAIN SYNAPTIC shall
use all reasonable efforts to seek from such party the right
to use, and to permit GRUNENTHAL to use, technology resulting
from such collaboration and related patent rights for the
development of compounds for the alleviation of PAIN. At the
time that SYNAPTIC and any such third party begin negotiating
an agreement covering such a collaboration, SYNAPTIC shall
inform GRUNENTHAL and shall thereafter regularly consult with
GRUNENTHAL regarding such negotiation as it relates to the
foregoing. SYNAPTIC shall obtain the same rights and
conditions as for itself also for GRUNENTHAL's use in the
GRUNENTHAL TERRITORY or OTHER TERRITORIES for the alleviation
of PAIN. Any costs associated with GRUNENTHAL's obtaining or
exercising such right to use such technology shall be borne by
GRUNENTHAL.
2.6.7 The rights granted in Section 2.6.2, 2.6.3, 2.6.4, 2.6.5 shall
be granted as long as such technology or PATENT RIGHTS exists
and shall survive the termination or expiration of this
Agreement regardless of the reason of termination or
expiration provided however, that the respective party has
complied with its payment obligation in connection with such
rights. In case the respective party is in breach of such
payment obligation Section 13.2 shall apply.
Article 3
Management and Planning of Projects;
Reports and Exchange of Information
3.1 Steering Committee; Management Committee.
3.1.1 Formation; Composition. A STEERING COMMITTEE shall be formed
promptly following the EFFECTIVE DATE, but in no event later
than 30 days thereafter. Each party shall be entitled to
appoint three members of its staff to act as its
representatives on the STEERING COMMITTEE. Each party may from
time to time change its representation on the STEERING
COMMITTEE, but shall notify the other party promptly in
writing of any such change.
3.1.2 Responsibilities. The STEERING COMMITTEE shall be responsible for
the following:
(a) designating AVAILABLE TARGETS to the categories set
forth in Section 2.2.1, designating which new
PROJECTS shall be initiated,
14
determining the timing
for each PROJECT, deciding which AVAILABLE TARGET may
become an EXCLUDED TARGET prior to the applicable
time periods set forth in Section 2.2.1 and
determining the minimum number of AVAILABLE TARGETS
in category IV with respect to which each party is
obliged to perform High Throughput Screening as
contemplated in Section 2.2.2;
(b) devising, in collaboration with the RESEARCH
COMMITTEE for each PROJECT, an initial research plan
for the PROJECT setting forth the principal goals to
be achieved during the RESEARCH STAGE of the PROJECT,
the principal activities to be conducted during such
STAGE, the relative priorities of the parties and the
proposed timetables for achieving the goals and
conducting the activities;
(c) establishing criteria regarding pharmacological
profile, stability, pharmacokineticprofile,
bioavailability, synthesis and safety profile which
must be satisfied in order for a LEAD to become a
CANDIDATE;
(d) establishing criteria regarding the in vivo
therapeutic profile which must be satisfied in order
for a COMPOUND to be considered a LEAD;
(e) preparing such procedures and mechanisms as may be
necessary for the STEERING COMMITTEE and each
RESEARCH COMMITTEE to operate in a manner which will
ensure the efficient conduct of each PROJECT
hereunder;
(f) deciding to start Good Laboratory Practices four-week
toxicology studies with respect to a LEAD, thereby
rendering such LEAD a CANDIDATE;
(g) monitoring and directing the activities of each
RESEARCH COMMITTEE;
(h) preparing, for review and approval by each party, a
detailed schedule of activities proposed to be
conducted during the EARLY DEVELOPMENT STAGE with
respect to each CANDIDATE, as well as a proposed
budget of costs associated with certain of such
activities (such proposed budget to be prepared in
accordance with Section 3.1.3 below); and
(i) monitoring and directing the activities conducted
during the EARLY DEVELOPMENT STAGE with respect to
each CANDIDATE and, if determined to be appropriate,
proposing for consideration and approval by each
party, revisions to any previously approved schedule
of activities and/or budget. The STEERING COMMITTEE
shall not, in any year, withhold its approval of any
increases in a previously approved BUDGET proposed
by one party so long as the aggregate of such
15
increases is less than 50% of the entire BUDGET for
such year. To the extent that the aggregate of
proposed increases in any year exceed 50% of the
entire BUDGET for such year, the STEERING COMMITTEE
shall not unreasonably withhold its approval
thereof.
(j) determining to commence PHASE III TRIALS, it being
understood that such determiantion shall be made
following the completion of phase II a clinical
trials and no party shall block such determination.
In addition, the STEERING COMMITTEE shall have such other
responsibilities as are set forth herein or contemplated hereby.
3.1.3 Three Types of Studies; Preparation of Budget Covering Common
Studies Only.
(a) It is contemplated by the parties that three types
of studies may be conducted during the EARLY
DEVELOPMENT STAGE with respect to a CANDIDATE: (i)
those studies which both parties agree should be
conducted as part of phase I and phase IIa clinical
trials with respect to the CANDIDATE in order
ultimately to satisfy both FDA and EMEA requirements
(the,,COMMON STUDIES"); (ii) those studies which
SYNAPTIC believes should be conducted as part of
phase I and phase IIa clinical trials with respect
to the CANDIDATE in order ultimately to satisfy FDA
requirements but which GRUNENTHAL does not believe
need to be conducted in order ultimately to satisy
EMEA requirements (the,,FDA STUDIES"); and (iii)
those studies which GRUNENTHAL believes should be
conducted as part of phase I and phase IIa clinical
trials with respect to the CANDIDATE in order
ultimately to satisfy EMEA requirements but which
SYNAPTIC does not believe need to be conducted in
order ultimately to satisfy FDA requirements
(the,,EMEA STUDIES").
(b) The proposed budget of costs to be prepared by the
STEERING COMMITTEE for the EARLY DEVELOPMENT STAGE
with respect to a CANDIDATE pursuant to Section 3.1.2
(i) and (h) above shall include the total estimated
cost of conducting the COMMON STUDIES only, as well
as a detailed breakdown of the costs which the
parties expect to incur in conducting the COMMON
STUDIES during the first 12 months of the EARLY
DEVELOPMENT STAGE.
(c) Within 60 days prior to the end of each 12-month
period during the EARLY DEVELOPMENT STAGE (or, if the
12-month period commences in January, then within 90
days prior to the end of such period), the STEERING
COMMITTEE shall prepare a new detailed budget of
costs expected to be incurred in conducting the
COMMON STUDIES during the subsequent 12-month period
and shall submit it to each party for its review and
approval.
16
(d) The budget with respect to each CANDIDATE, as the
same may be modified from time to time and approved
by the parties as provided in this Section 3.1.3 or
in Section 3.1.2 above, shall be referred to herein
as the ,,BUDGET."
3.1.4 Initial Meetings; Initial Research Plans. The STEERING
COMMITTEE shall meet promptly following the EFFECTIVE DATE,
but in no event later than 30 days thereafter (a) to devise,
in collaboration with the RESEARCH COMMITTEE, the initial
research plan for the ALPHA-2 PROJECT and (b) to review the
available scientific data relating to the AVAILABLE TARGETS
identified in Schedule I attached hereto, so as to categorize
such TARGETS as contemplated by Section 2.2.1. The STEERING
COMMITTEE shall also meet promptly following the determination
by the parties to initiate each new PROJECT as contemplated by
Section 2.2 to devise, in collaboration with the RESEARCH
COMMITTEE for such PROJECT, the initial research plan for the
PROJECT. The initial research plan for each PROJECT shall be
subject to review and approval by each party. Modifications to
any initial research plan shall be made in accordance with
Section 3.6.
3.1.5 Additional Meetings; Agendas and Minutes. The STEERING
COMMITTEE shall meet at least quarterly and shall prepare
agendas and minutes for each of its meetings.
3.1.6 Actions; Resolution of Issues by Management Committee. All
actions taken and decisions made by the STEERING COMMITTEE
shall be made in accordance with Section 3.4. Any issues which
cannot be resolved by the STEERING COMMITTEE shall be referred
to a MANAGEMENT COMMITTEE, comprising one individual from
SYNAPTIC and one individual from GRUNENTHAL, for resolution.
The members of the MANAGEMENT COMMITTEE are currently, from
SYNAPTIC: Xxxxxxxx X. Xxxxxxxx, Chairman, President and Chief
Executive Officer; and from GRUNENTHAL: Dr. E.P. Paques. Each
of SYNAPTIC and GRUNENTHAL may from time to time change its
representation on the MANAGEMENT COMMITTEE, but shall notify
the other party promptly in writing of any such change.
3.2 Research Committees.
3.2.1 Formation; Composition. A RESEARCH COMMITTEE for the ALPHA-2
PROJECT shall be formed promptly following the EFFECTIVE DATE,
but in no event later than 30 days thereafter. With respect to
each additional PROJECT initiated by the parties as
contemplated by Section 2.2, a RESEARCH COMMITTEE shall be
formed promptly, but in no event later than 30 days following
the determination by the parties to initiate such PROJECT.
Each party shall be entitled to appoint three members of its
staff to act as its representatives on each RESEARCH
COMMITTEE. Each party may from time to time change its
representation on the RESEARCH COMMITTEE(S), but shall notify
the other party promptly of any such change.
17
Each RESEARCH
COMMITTEE shall report to and operate under the overall
direction of the STEERING COMMITTEE.
3.2.2 Responsibilities. Each RESEARCH COMMITTEE shall be responsible
for the following:
(a) monitoring and directing the activities of the
scientists working on its PROJECT;
(b) elaborating and coordinating action plans;
(c) the economic use of capacities;
(d) the fulfillment of the research plan for such
PROJECT; and
(e) approving COMPOUNDS which exhibit affinity for, and
functional activity at, a TARGET which is the focus
of a PROJECT for testing in in vivo models.
In addition, each RESEARCH COMMITTEE shall have such other
responsibilities as are set forth herein or contemplated hereby.
3.2.3 Initial Meetings; Initial Research Plans. The RESEARCH
COMMITTEE for the ALPHA-2 PROJECT shall meet promptly
following the EFFECTIVE DATE, but in no event later than
thirty days thereafter, to devise, in collaboration with the
STEERING COMMITTEE, the initial research plan for the PROJECT.
The RESEARCH COMMITTEE shall also meet promptly following the
determination by the parties to initiate each new PROJECT as
contemplated by Section 2.2 to devise, in collaboration with
the STEERING COMMITTEE, the initial research plan for the
PROJECT. Modifications to any such plan shall be made in
accordance with Section 3.5.
3.2.4 Additional Meetings; Agendas and Minutes. Each RESEARCH
COMMITTEE shall meet at least quarterly. Each RESEARCH
COMMITTEE shall prepare agendas and minutes for each of its
meetings.
3.2.5 Actions. All actions taken and decisions made by the RESEARCH
COMMITTEE shall be made in accordance with Section 3.4. Any
issues which cannot be resolved by the RESEARCH COMMITTEE
shall be referred to the STEERING COMMITTEE.
3.3 Evaluation Committee.
3.3.1 Formation; Composition; An EVALUATION COMMITTEE shall be formed
promptly following the EFFECTIVE DATE. Each party shall appoint one
member of its staff to act as its representative. Each party may from
time to time change its representation on the EVALUATION COMMITTEE, but
shall notify the other party
18
promptly of any such change. The
EVALUATION COMMITTEE shall report to and operate under the overall
direction of the STEERING COMMITTEE.
3.3.2 Responsibilities; The EVALUATION COMMITTEE shall with respect to
each AVAILABLE TARGET prior to the initiation of a PROJECT with such
AVAILABLE TARGET as its focus, be responsible for the following:
(a) monitoring and directing the activities of the scientists
working on the evaluation of any AVAILABLE TARGET;
(b) elaborating and coordinating action plans;
(c) the economic use of capacities;
(d) the fulfillment of the evaluation plan for each AVAILABLE TARGET;
(e) selecting COMPOUNDS which exhibit affinity for, and/or functional
activity at, an AVAILABLE TARGET for testing in in vivo models;
(f) preparation of yearly reviews on the AVAILABLE TARGETS including
recommendations to the STEERING COMMITTEE as to which AVAILABLE
TARGET may become an EXCLUDED TARGET and
(g) recommending to the STEERING COMMITTEE on a quaterly basis which
AVAILABLE TARGETS, if any, should be switched from one category to
another.
In addition the EVALUATION COMMITTEE shall have such other
responsibilities as are set forth herein or contemplated hereby.
3.4 Meetings.
All actions and decisions by the MANAGEMENT COMMITTEE, the STEERING
COMMITTEE each RESEARCH COMMITTEE and the EVALUATION COMMITTEE
(together referred to as ,,COMMITTEE(S)") shall be taken or made only
if (i) at least one member of the respective COMMITTEE of each party is
present and acting on behalf of such party and (ii) only by unanimous
agreement of all the COMMITTEE members present. However, it is
envisaged by the parties that all of the members of a COMMITTEE shall
be available at each meeting. The COMMITTEES may meet by telephone or
in person, as determined by the respective members of such committees;
provided, however, that at least two meetings of the RESEARCH COMMITTEE
shall be held in person each year. Attendance at meetings shall be at
the respective expenses of the participating parties. The parties shall
alternate the right to determine the location of each meeting.
19
3.5 Personnel and Resources.
Each party shall commit such personnel, facilities, expertise and other
resources to each PROJECT as it may determine to be necessary to
perform its obligations under the research plan for such PROJECT, as
the same may be modified from time to time in accordance with the
provisions of this Agreement.
3.6 Modification of Research Plan(s).
The STEERING COMMITTEE will review the research plan for each ongoing
PROJECT at least quarterly and may approve any proposed changes thereto
which are not material in nature. Any material changes that the
STEERING COMMITTEE determines to be appropriate in light of changing
priorities of the PROJECT or experience gained in the course of the
PROJECT shall be subject to review and approval by each party.
3.7 Conduct of Studies.
All studies done in connection with the PROJECT(S) shall be carried out
in strict compliance with all applicable laws, regulations and
guidelines governing the conduct of research at the site where such
studies are being conducted.
Article 4
Early Stage of Projects
4.1 Research Stage.
4.1.1 SYNAPTIC Activities. During the RESEARCH STAGE of each
PROJECT, SYNAPTIC will conduct such of the following
activities as the STEERING COMMITTEE determines to be
appropriate:
(a) make its in vitro assay systems relating to the
TARGET(S) of such PROJECT available for testing
COMPOUNDS provided by GRUNENTHAL and/or SYNAPTIC as
part of the PROJECT;
(b) profile and characterize such COMPOUNDS to the extent
possible by the scope of its assay systems; and
(c) in conjunction with GRUNENTHAL attempt to generate LEADS.
4.1.2 GRUNENTHAL Activities. During the RESEARCH STAGE of each
PROJECT, GRUNENTHAL will conduct such of the following
activities as the STEERING COMMITTEE determines to be
appropriate:
(a) make its in vitro assay systems relating to the
TARGET(S) of such PROJECT available for testing
COMPOUNDS provided by GRUNENTHAL and/or SYNAPTIC as
part of the PROJECT;
20
(b) profile and characterize such COMPOUNDS to the extent
possible by the scope of its assay systems;
(c) evaluate the profile (e.g., stability, side effects,
etc.) of such COMPOUNDS in its in vivo assay systems
in PAIN; and
(d) generate LEADS.
4.1.3 Responsibility for Costs. Each party shall be responsible for
its own costs incurred in connection with a PROJECT during the
RESEARCH STAGE of such PROJECT.
4.2 Early Development Stage.
4.2.1 Coordination of Activities to be Conducted.
(a) All activities to be conducted with respect to a CANDIDATE
during the EARLY DEVELOPMENT STAGE shall be subject to
monitoring and direction by the STEERING COMMITTEE. GRUNENTHAL
shall be responsible for conducting all such activities, which
may include (but shall not be limited to) the following:
(i) production of the necessary amount of Good
Manufacturing Practices (,,GMP") and non-GMP material
for safety pharmacological, toxicological and
pharmacokinetic studies, COMMON STUDIES and EMEA
STUDIES;
(ii) optimization of the synthesis route in order to allow
further clinical development and commercial
production;
(iii) development of suitable application forms;
(iv) conducting the necessary safety pharmacological,
toxicological and pharmacokinetic studies, all
according to the European guidelines, taking into
account requirements of the FDA as far as possible in
order to enable safety (i.v. and/or p.o.) trials to
enter into dose finding efficacy studies; and
(v) conducting all phase I and phase IIa COMMON STUDIES,
EMEA STUDIES and FDA STUDIES necessary for the
commencement of PHASE III TRIALS (and activities
relating thereto) .
(b) In addition to the activities referred to in subparagraph (a)
above, at SYNAPTIC's expense (as provided in Section 4.2.2
below), GRUNENTHAL will conduct at its discretion, in
accordance with FDA requirements, FDA STUDIES and related
activities requested by SYNAPTIC. Such activities may
21
include
(but shall not be limited to) production of the necessary
amount of GMP and non-GMP material necessary to conduct such
FDA STUDIES.
4.2.2 Responsibility for Costs. Subject to Section 4.2.3, each party
shall be responsible for 50% of any costs incurred pursuant to
the BUDGET for a PROJECT. GRUNENTHAL shall be responsible for
100% of any costs incurred in connection with conducting EMEA
STUDIES and related activities. SYNAPTIC shall be responsible
for 100% of any costs incurred in connection with conducting
FDA STUDIES and related activities.
4.2.3 Election to Cease Participation. In case one party (the
,,nonparticipating party") determines after the identification
of a CANDIDATE by the STEERING COMMITTEE and prior to or
during the EARLY DEVELOPMENT STAGE with respect to such
CANDIDATE that it no longer desires to participate in the
development of the CANDIDATE, it may elect, by providing
written notice (the ,,nonparticipation notice") to the other
party (the ,,participating party"), to terminate its
participation, whereupon the following shall apply:
(a) The nonparticipating party shall cease to be
obligated pursuant to Section 4.2.2 for any costs
incurred in connection with the CANDIDATE following
such notification;
(b) The participating party may continue its development
activities with respect to such CANDIDATE, but shall
inform the nonparticipating party of the progress of
such activities in writing no less frequently than
quarterly. Such activities may also be performed in
the exclusive TERRITORIES of the nonparticipating
party;
(c) Subject to the other provisions of this Section 4.2.3
and Section 4.2.4, the nonparticipating party shall
cease to have any marketing or other rights with
respect to such CANDIDATE, and the participating
party shall be free to exploit the CANDIDATE in the
TERRITORIES of the nonparticipating party; and
(d) The participating party shall pay the
nonparticipating party with respect of any PRODUCT
comprising such CANDIDATE
(i) in the nonparticipating party's exclusive
part of the TERRITORY a royalty of 4 % of the
NET SALES or in the event the participating
party licenses such product to a third party,
33,3 % of any compensation payable to the
participating party by such third party
whichever is higher (determined on a
country-by-country basis) and/or
(ii) in the OTHER TERRITORIES a royalty of 2 % of the
NET SALES or in the event the participating
party licenses such product
22
to a third party,
16,65 % of any compensation payable to the
participating party by such third party
whichever is higher (determined on a
country-by-country basis). Section 5.1.2.5 shall
apply mutatis mutandis.
4.2.4 Election to Recommence Participation. If, during the course of
the development of a CANDIDATE by the participating party, the
nonparticipating party wants to join in again, this shall be
possible against a reimbursement of 50% of the costs incurred
by the participating party following its receipt of the
nonparticipation notice, plus a surcharge on such costs
determined in accordance with Schedule A, plus interest on
such costs for the period from the date of the
nonparticipation notice to the date of reentry at the discount
rate, as long as the nonparticipating party's right of first
refusal has not been activated pursuant to Section 4.2.5. Such
right shall be deemed activated when the participating party
provides the notification contemplated thereby to the
nonparticipating party.
4.2.5 Right of First Refusal. In the event the participating party
negotiates an agreement with a third party pursuant to which
such third party will license the CANDIDATE with respect to
which the nonparticipating party ceded its rights pursuant to
Section 4.2.3, it shall notify the nonparticipating party of
the principal terms of such agreement and provide it with a
right of first refusal. The nonparticipating party shall have
90 days following such notification within which to provide
notice to the participating party of its acceptance of such
principal terms. In the event the nonparticipating party
provides such notice of acceptance, the parties shall use
their best efforts to conclude an agreement within 180 days
thereafter. Should this right of first refusal not be
exercised within the 90-day period or should an agreement not
be concluded within the 180-day period, the participating
party shall be free to license the CANDIDATE to the third
party on substantially the same terms provided in the
notification, subject to the payment to the nonparticipating
party of
(i) in the nonparticipating party's exclusive part of the
TERRITORY a royalty of 4 % of the NET SALES or in the
event the participating party licenses such product to
a third party, 33,3 % of any compensation payable to
the participating party by such third party whichever
is higher (determined on a country-by-country basis)
and/or
(ii) in the OTHER TERRITORIES a royalty of 2 % of the NET
SALES or in the event the participating party licenses
such product to a third party, 16,65 % of any
compensation payable to the participating party by such
third party whichever is higher (determined on a
country-by-country basis).
Section 5.1.2.5 shall apply mutatis mutandis.
23
4.2.6 Access to Data Generated in Connection with Phase I, Phase IIa
or Phase IIb Clinical Trials.
(a) All data generated pursuant to COMMON STUDIES
conducted during the EARLY DEVELOPMENT STAGE or the
ADVANCED DEVELOPMENT STAGE with respect to a
CANDIDATE and all information relating to
manufacturing and formulation of such CANDIDATE and
generated prior to the commencement of the ADVANCED
DEVELOPMENT STAGE shall be provided to both parties
in the available data format at no charge.
(b) All data generated pursuant to FDA STUDIES conducted
during the EARLY DEVELOPMENT STAGE or the ADVANCED
DEVELOPMENT STAGE with respect to a CANDIDATE shall
(i) if reasonably necessary to ensure completeness
of a registration package for such CANDIDATE in
Europe and if not generated pursuant to FDA STUDIES,
be provided to GRUNENTHAL at GRUNENTHAL's request in
the available data format at no charge and (ii) if
not reasonably necessary to ensure completeness of a
registration package for such CANDIDATE in Europe
and if generated pursuant to FDA STUDIES, be
provided to GRUNENTHAL at GRUNENTHAL's request in
the available data format against reimbursement of
50% of the costs of conducting such studies, plus a
surcharge of 10%.
(c) All data generated pursuant to EMEA STUDIES
conducted during the EARLY DEVELOPMENT STAGE or the
ADVANCED DEVELOPMENT STAGE with respect to a
CANDIDATE shall (i) if reasonably necessary to
ensure completeness of a registration package for
such CANDIDATE in the United States and if not
generated pursuant to EMEA STUDIES, be provided to
SYNAPTIC at SYNAPTIC's request in the available data
format at no charge and (ii) if not reasonably
necessary to ensure completeness of a registration
package for such CANDIDATE in the United States or
if generated pursuant to EMEA STUDIES, be provided
to SYNAPTIC at SYNAPTIC's request in the available
data format against reimbursement of 50% of the
costs of conducting such studies, plus a surcharge
of 10%.
Article 5
Advanced Development Stage of Projects
5.1 Conduct of Activities During Advanced Development Stage.
5.1.1 Activities directed towards pursuing Regulatory Approval;
During the ADVANCED DEVELOPMENT STAGE with respect to a
CANDIDATE, GRUNENTHAL in the GRUNENTHAL TERRITORY and SYNAPTIC
either independently or with a third party in the SYNAPTIC
TERRITORY shall be
24
responsible for diligently conducting
activities, including PHASE III TRIALS, directed towards
pursuing regulatory approval for a PRODUCT, comprising such
CANDIDATE.
The parties shall use commercially reasonable efforts to
achieve the approval for commencement of PHASE III TRIALS from
the EMEA or the FDA respectively, and thereafter to commence
such PHASE III TRIALS in Europe or the United States
respectively.
In the event SYNAPTIC intends to seek a licensee for the above
mentioned activities, it shall use commercially reasonable
efforts to cause any such licensee to commence PHASE III
TRIALS - as contemplated above - as promptly as possible,
recognizing that if any such licensee is going to undertake
manufacturing of materials or if SYNAPTIC or its licensees
commission a TOLL MANUFACTURER to manufacture such material
for such PHASE III TRIALS, certain delays may occur as a
result. Such delay shall not invoke the consequences of
Section 5.1.2, provided however, such delay is in no case
longer than 12 months following the end of the two-year period
referred to in Section 5.1.2.
GRUNENTHAL undertakes to support SYNAPTIC in its search for a
TOLL MANUFACTURER or licensee.
5.1.2 Timeframe; Consequences of Delay to Commence Phase III
Clinical Trials. In the event one party (the ,,delayed party")
has not commenced and pursued diligently PHASE III TRIALS in
its TERRITORY with respect to a CANDIDATE as contemplated in
Section 5.1.1. within two years following the commencement of
PHASE III TRIALS ("PHASE III COMMENCEMENT DATE") by the other
party (the ,,timely party") in its TERRITORY with respect to
such CANDIDATE as contemplated in Section 5.1.1. the following
shall apply:
The delayed party shall lose its rights in its exclusive
TERRITORY and the OTHER TERRITORIES for the respective
PRODUCT, giving the timely party the option to receive
worldwide exclusive rights for such PRODUCT against
5.1.2.1 reimbursement of the accumulated costs incurred by
the delayed party with respect to such PRODUCT; and
5.1.2.2 a royalty of 6 % on the NET SALES of the PRODUCT in
the exclusive TERRITORY of the delayed party; and
5.1.2.3 a royalty of 4 % on the NET SALES of the PRODUCT in
the OTHER TERRITORIES.
5.1.2.4 In the event that the timely party licenses such
PRODUCT to a third party, the delayed party shall
receive the amount calculated pursuant to Section
5.1.2.1 and either
25
(i) the amounts calculated according to
Section 5.1.2.2 and Section 5.1.2.3 above
or
(ii) of any compensation which the timely party
may become entitled to receive from the third
party for such license, either 33,3 % if it
concerns a license in the delayed party's
exclusive part of the TERRITORY or 22,2 % if
it concerns a license in the OTHER
TERRITORIES whichever is higher (determined
on a country-by-country basis).
5.1.2.5 In the event that the commercialization of such
PRODUCT in the exclusive part of the TERRITORY of
the delayed party or in the OTHER TERRITORY is
dependent on intellectual property rights of another
party, then 33,3 % of any compensation payable to
such other party shall be borne by the delayed party
and 66,7 % of such compensation shall be borne by
the timely party.
The consequences set forth in this Section 5.1.2 shall not
apply in either of the following cases:
(i) Within one year following the PHASE III COMMENCEMENT
DATE, SYNAPTIC requests that GRUNENTHAL produce FDA
conformed materials pursuant to Section 5.1.3.3,
GRUNENTHAL notifies SYNAPTIC within 90 days after such
request that it will produce such materials for
SYNAPTIC, GRUNENTHAL fails to provide such materials
to SYNAPTIC prior to the second anniversary of the
PHASE III COMMENCEMENT DATE and, as a consequence,
SYNAPTIC is unable to commence PHASE III TRIALS prior
to such second anniversary; or
(ii) The delayed party fails to commence PHASE III TRIALS
prior to the second anniversary of the PHASE III
COMMENCEMENT DATE due to circumstances beyond its
control, including, without limitation, acts or
omissions of any governmental authority such as the
FDA or the EMEA.
5.1.3 Production of FDA-Conformed Materials. In order to fulfill the
obligations described in the preceding paragraphes of this Article ,
SYNAPTIC shall be required to produce FDA-conform material of any
CANDIDATE in GMP-quality and in sufficient quantity necessary for
diligently conducting PHASE III TRIALS in SYNAPTIC TERRITORY either
5.1.3.1 independently; or
5.1.3.2 with exclusive licensee, or
26
5.1.3.3 with GRUNENTHAL. In the event that SYNAPTIC offers
GRUNENTHAL to produce such material, GRUNENTHAL shall have
an option - to be exercised within 90 days after receipt of
notice to produce exclusively such material until the
approval of such PRODUCT comprising such CANDIDATE in the
United States. SYNAPTIC shall purchase from GRUNENTHAL such
PRODUCT against reimbursement of cost of production plus 20
% surcharge. For the purpose of this Agreement, "cost of
production" shall be calculated in accordance with standard
accounting procedures.
In case GRUNENTHAL has exercised such option, GRUNENTHAL
shall produce such FDA-material of any CANDIDATE in
GMP-quality and in sufficient quantity as mentioned in
Section 5.1.2 above, using all reasonable efforts to achieve
the upscaling of the production from the existing level to
production scale in reasonable time. 50 % of the cost of
such upscaling shall be borne by SYNAPTIC, it being
understood that such cost shall not include costs incurred
in building a facility or other building improvements.
5.1.3.4 In the event that GRUNENTHAL does not exercise such option
and SYNAPTIC desires to seek a toll manufacturer to produce
such materials, SYNAPTIC shall use best efforts to seek a
toll manufacturing organization which is under the
obligation
(i) to keep all nonpublic information relating to the
manufacturing and formulation process strictly
confidential for an unlimited period of time, and
(ii) not to produce the product for the benefit of any
person or entity other than SYNAPTIC and its
licensees
defined herewith as ,,TOLL MANUFACTURER". SYNAPTIC shall use
best efforts to seek - in cooperation with GRUNENTHAL - an
agreement for any such TOLL MANUFACTURER not to produce the
PRODUCT for any person or entity other than SYNAPTIC or its
licensees until the expiration of the fifth anniversary of
the expiration of the last blocking patent relating to the
PRODUCT in the United States.
The parties agree that the time period between the
notification pursuant to Section 5.1.3.3 and GRUNENTHAL's
decision whether to exercise such option or not shall be
added to the period refered to in Section 5.1.2.
5.1.4 Geographic Limitation on Conduct of Activities. Neither party
shall conduct any activities with respect to a CANDIDATE
outside its exclusive TERRITORY without the prior consent of
the other party.
5.2 Responsibility for Costs. Each party shall be responsible for its own
costs incurred during the ADVANCED DEVELOPMENT STAGE with respect to
any CANDIDATE. The parties recognize the possibility that the ADVANCED
DEVELOPMENT STAGE with respect to a CANDIDATE shall commence following
27
completion of phase IIa clinical trials but before commencement or
completion of phase II clinical trials. As a consequence, phase II
clinical trials with respect to a CANDIDATE could occur during or after
the ADVANCED DEVELOPMENT STAGE with respect to the CANDIDATE.
Notwithstanding the first sentence of this Section 5.2, costs incurred
in connection with any phase II clinical trials shall be borne by the
parties in accordance with Section 4.2.2 above.
5.3 Access to Data Generated in Connection with Phase III Clinical Studies.
Each party shall keep the other party reasonably apprised of the
results of any PHASE III TRIALS and any other activities conducted by
or on behalf of such party without the participation of the other party
during the ADVANCED DEVELOPMENT STAGE with respect to a CANDIDATE. All
data generated pursuant to such studies shall be provided to the other
party at the other party's request in the available data format against
reimbursement of 50% of the costs of conducting such studies, plus a
surcharge of 10%; provided, however, that clinical safety data shall be
provided to the other party in the available data format free of
charge.
5.4 Information on Status of Phase III Trials. The parties shall keep each
other informed on the status of their preparation and conduct of PHASE
III TRIALS on a half-yearly basis, starting six months after the
commencement of the ADVANCED DEVELOPMENT STAGE.
Article 6
Post-Advanced Development Stage Production and Marketing
6.1 SYNAPTIC Territory.
SYNAPTIC will have exclusive rights for production - if not transferred
to GRUNENTHAL according to Section 5.1.3 - and marketing in the
SYNAPTIC TERRITORY.
6.2 GRUNENTHAL Territory.
GRUNENTHAL will have exclusive rights for production and marketing in
the GRUNENTHAL TERRITORY.
6.3 Sublicensing Rights in Exclusive Territories.
Each party shall have the right to license to third parties its rights
with respect to the production and marketing of PRODUCTS in any country
within its exclusive TERRITORY.
6.4 Other Territories.
With respect to each country within the OTHER TERRITORIES both parties
shall cooperate as closely as possible in seeking regulatory approvals
for CANDIDATES but each party shall have an independent right to
produce and market PRODUCTS without obligation, financial or otherwise,
to the other party; provided, however, that prior to
28
the filing by one
party of regulatory approval to market a PRODUCT in each such country,
the parties shall discuss the possibility of entering such country
together, rather than proceeding independently; provided further,
however, that neither party shall market any PRODUCT in any such
country under more than one trademark or sublicense its marketing
rights to more than one party without the prior written consent of the
other party. In case of sublicense in any country within the OTHER
TERRITORIES the respective licensor shall be excluded from marketing
such PRODUCT in such country.
With respect to Japan - due to the peculiarities of the process of
regulatory approval in Japan the following shall apply: As soon as one
party starts seeking regulatory approval for a CANDIDATE, it shall
promptly inform the other party in order to allow the other party
within 90 days from such notice to establish a relationship with a
Japanese Clinical Research Organization which in close cooperation with
the first party will conduct all activities for a second regulatory
approval for such CANDIDATE. Such second regulatory approval shall be
transferred to the licensee of the second party. If the other party has
not established such a relationship the one party shall be entitled to
proceed with its activities.
6.5 Coordination of Marketing Strategy.
Each party will, to the extent reasonably practicable, take into
account the marketing strategy of the other party in formulating its
own marketing strategy.
6.6 Exchange of Information.
Each party shall provide to the other party, free of charge, all safety
data generated with respect to a CANDIDATE following the ADVANCED
DEVELOPMENT STAGE. In addition, each party shall keep the other party
reasonably apprised of any other data generated in connection with the
further development of an approved CANDIDATE as far as these data may
be relevant for registration purposes in the other party's TERRITORIES.
Such additional data shall be provided to the other party at the other
party's request in the available data format against reimbursement of
50% of the costs incurred in generating such data, plus a surcharge of
10%.
Article 7
Patent Protection
7.1 Patent Rights.
7.1.1 Inventions by Either Party. Each party shall own BACKGROUND
TECHNOLOGY and PROJECT TECHNOLOGY, including inventions, made
solely by its employees. The party which owns an invention
shall promptly inform the other party about the invention and
shall have the right to file a patent application covering
such invention. All expenses relating to the preparation,
filing, prosecution, extension and maintenance of such
application and any patent granted thereon shall be borne by
such party. In the event that
29
such party determines (a) not to
file a patent application for such an invention in the
TERRITORIES, (b) not to continue prosecution or maintenance
thereof in the TERRITORIES or (c) not to extend any patent
granted thereon in the TERRITORIES, it shall promptly notify
the other party and the other party shall be given the
opportunity to seek and pursue patent protection on such
invention in such territory at its own expense. In the event
the other party pursues such patent protection, ownership of
the PATENT RIGHTS for such invention in such territories shall
be assigned to such other party.
7.1.2 Joint Inventions. An invention made jointly by employees of
SYNAPTIC and employees of GRUNENTHAL shall be owned jointly by
SYNAPTIC and GRUNENTHAL. In such case, the preparation of the
priority patent application shall be carried out by counsel
mutually agreeable to the parties, with the expenses incurred
in connection with such preparation being shared by the
parties on a 50:50 basis. Each of SYNAPTIC and GRUNENTHAL,
respectively, shall be responsible for selecting counsel to
file, prosecute and ensure maintenance of such patent
applications under its name in its exclusive TERRITORIES and
for the costs associated therewith. The parties shall jointly
select counsel to file, prosecute and ensure maintenance of
such patent applications in their names in the OTHER
TERRITORIES and shall share on a 50:50 basis the costs
associated therewith. In the event a party decides not to file
a patent application or to maintain the PATENT RIGHTS in any
OTHER TERRITORIES, the other party shall have the right to
file a patent application or to maintain the PATENT RIGHTS
under its name in such territory at its own expense.
7.1.3 Assistance. If so requested by the party pursuing patent
protection in accordance with the foregoing provisions of this
Section 7.1, the other party shall provide the necessary
declarations and reasonable assistance to such party in order
to obtain the patent protection for any invention.
7.2 Availability of License to Other Party's Inventions Made during or
after Advanced Development Stage and Related Patent Rights.
Each process, formulation or new use invention relating to a CANDIDATE
made by one party during or after the ADVANCED DEVELOPMENT STAGE with
respect to such CANDIDATE, and PATENT RIGHTS relating thereto in the
other party's exclusive TERRITORIES and in the OTHER TERRITORIES, shall
be made available for license to such other party against payment of a
royalty on the NET SALES of the PRODUCT comprising such CANDIDATE in
such TERRITORIES, such royalty to be determined in accordance with the
formula set forth in Schedule B.
30
Article 8
License Grants; Restrictions on Use of Technology and Patent Rights
8.1 License Relating to Products.
8.1.1 Grant by SYNAPTIC. Subject to any limitations set forth in
Section 8.1.3, SYNAPTIC grants to GRUNENTHAL an exclusive
license to use SYNAPTIC PROJECT TECHNOLOGY and SYNAPTIC
BACKGROUND TECHNOLOGY, and PATENT RIGHTS relating thereto, in
GRUNENTHAL TERRITORY and the OTHER TERRITORIES for the sole
purpose of carrying out PROJECTS initiated pursuant to this
Agreement and discovering, developing, manufacturing, having
manufactured, using and selling PRODUCTS resulting from such
PROJECTS.
8.1.2 Grant by GRUNENTHAL. GRUNENTHAL grants to SYNAPTIC an
exclusive license to use the GRUNENTHAL PROJECT TECHNOLOGY and
GRUNENTHAL BACKGROUND TECHNOLOGY, and PATENT RIGHTS relating
thereto, in SYNAPTIC TERRITORY and the OTHER TERRITORIES for
the sole purpose of carrying out PROJECTS initiated pursuant
to this Agreement and discovering, developing, manufacturing,
having manufactured, using and selling PRODUCTS resulting from
such PROJECTS.
8.1.3 Limitations on License Grant of Section 8.1.1.
(a) With respect to the alpha 2 adrenergic receptors, SYNAPTIC has
granted to The DuPont Merck Pharmaceutical Company (,,DUPONT
MERCK") a nonexclusive license. As a consequence, the license
grant to GRUNENTHAL pursuant to Section 8.1.1 to use BACKGROUND
TECHNOLOGY relating to such receptors shall be nonexclusive for
so long as DUPONT MERCK continues to have such license. The
DUPONT MERCK license will expire on February 5, 1998, unless
DUPONT MERCK notifies SYNAPTIC prior to such date that it has
decided to undertake optimization and development efforts with
respect to a compound screened against such receptors. As of the
EFFECTIVE DATE, SYNAPTIC had not received any such notification
from DUPONT MERCK and shall notify GRUNENTHAL in the event it
receives any such notification.
(b) Certain of SYNAPTIC's PATENT RIGHTS relating to alpha-2 agonists
overlap with patent rights of Procter & Xxxxxx. As a consequence,
GRUNENTHAL's license with respect to such alpha-2 agonists cannot
be defined at the present time. In the event SYNAPTIC negotiates
with Procter & Xxxxxx to license such PATENT RIGHT to Procter &
Xxxxxx, it shall use all reasonable efforts to seek from Procter
& Xxxxxx the rights to develop and rights to permit
31
GRUNENTHAL to
develop such alpha-2 agonists for the alleviation of PAIN.
SYNAPTIC shall obtain the same rights and conditions with respect
to development of such compounds for the alleviation of PAIN as
for itself also for GRUNENTHAL's use in the GRUNENTHAL TERRITORY
or OTHER TERRITORIES for the allevation of PAIN. Any costs
associated with GRUNENTHAL's obtaining or exercising such rights
shall be borne by GRUNENTHAL.
8.2 Sublicense Relating to Products.
Each party shall have the right to grant sublicenses of the rights
granted to it under Section 8.1 with respect to each PRODUCT commencing
at any time after the beginning of the ADVANCED DEVELOPMENT STAGE with
respect to the CANDIDATE comprised by such PRODUCT provided, however,
that in any country of the TERRITORIES a party is only using one of
such rights either for itself or for its sublicensee. If any party
grants any such sublicense, it shall promptly provide written
notification thereof to the other party.
8.3 The rights granted in Section 8.1.1, 8.1.2 and 8.2 shall be granted as
long as such technology or PATENT RIGHTS exists and shall survive the
termination or expiration of this Agreement regardless of the reason of
termination or expiration provided however, that the respective party
has complied with its payment obligation in connection with the rights.
In case the respective party is in breach of any such payment
obligation Section 13.2 shall apply.
Article 9
Reimbursement or Other Payment of Costs
9.1 Calculation of Costs. For all purposes of this Agreement, ,,costs"
shall be calculated in accordance with the applicable party's standard
method for computing costs, applied in a manner consistent with all
other activities carried out by such party.
9.2 Reimbursement of Ongoing Costs. (a) Costs incurred pursuant to the
BUDGET for a PROJECT during the EARLY DEVELOPMENT STAGE with respect to
a CANDIDATE shall in the first instance be paid by GRUNENTHAL. At the
end of the first six months of each 12-month period for which detailed
costs are provided in any such BUDGET, SYNAPTIC shall pay GRUNENTHAL
25% of the total amount of such detailed costs. Within 60 days after
the end of each such 12-month period, GRUNENTHAL will provide to
SYNAPTIC an invoice for 50% of the total costs incurred by it during
such year pursuant to the BUDGET, net of the amount previously paid by
SYNAPTIC in respect of such BUDGET during such year, together with a
detailed accounting of all of such costs. Within 30 days after its
receipt of the invoice, SYNAPTIC shall pay GRUNENTHAL the balance due
GRUNENTHAL. In no event, however, shall SYNAPTIC be required with
respect to any year to pay GRUNENTHAL more than 50% of the total amount
of the detailed costs for such year
32
reflected in the BUDGET unless
SYNAPTIC shall have approved modifications thereto.
(b) If, prior to any date as of which SYNAPTIC is required to reimburse
GRUNENTHAL for costs incurred with respect to a CANDIDATE pursuant to
Section 9.2 (a), SYNAPTIC provides written notification to GRUNENTHAL
that it is in good faith actively attempting to identify a third party
to which to license its production and marketing rights with respect to
such CANDIDATE, then SYNAPTIC's reimbursement obligations with respect
to costs associated with such CANDIDATE shall be suspended for the
period from the date of such notification until the earlier of (i) the
30th day following the consummation by SYNAPTIC of a licensing
arrangement with a third party or (ii) the first anniversary of such
notice.
9.3 Payment of Royalties. Any royalties that may be payable hereunder shall
be paid within sixty days after the close of each calendar quarter.
With each such quarterly payment, the paying party shall furnish the
other party with a royalty statement, setting forth on a
country-by-country basis the total number of units of each Product
made, used and/or sold during the calendar quarter with respect to
which the royalty payment is being made.
9.4 Other Reimbursements and Payments. Any other reimbursements or payments
which one party is required to make to the other party shall be made
within 60 days following receipt by the paying party of an invoice
therefor.
Article 10
Records and Reports, Inspection
10.1 Maintenance of Records; Provision of Reports.
The parties agree to keep accurate records of each PROJECT. Each party
shall also keep, and shall require its permitted sublicensees to keep,
accurate books and accounts of record in connection with the
manufacture, use and/or sale by or for it of any PRODUCTS with respect
to which royalties may be payable hereunder in sufficient detail to
permit accurate determination of all figures necessary for verification
of royalty obligations.
10.2 Inspection of Records.
Each party agrees to allow an independent chartered accountant
designated by the other party and reasonably acceptable to such party
(a) to examine such party's records of each PROJECT in order to verify
the fulfillment of such party's obligations under this Agreement and
(b) to examine such party's records for the purpose of verifying
royalty statements. Such examinations shall not be conducted more
frequently than once a year.
33
The chartered accountant shall be obliged to keep his findings in
strict confidence and shall inform its client only about whether the
obligations of the other party have been met and whether the royalty
amounts have been verified.
Only in case the chartered accountant finds reasonable proof of the
fact that obligations of this Agreement have not been adhered to or
that royalty payments made were less than amounts properly due shall he
provide further information.
The costs of such chartered accountant shall be borne by his client
unless the accountant establishes a violation of an obligation under
this Agreement or an underpayment of royalties, in which case the costs
shall be borne by the other party.
Article 11
Confidentiality
11.1 Obligations.
Each of SYNAPTIC and GRUNENTHAL shall use its best efforts to retain in
confidence and not use, except as provided in this Agreement, all
information received from the other party pursuant to or in connection
with this Agreement. All third parties involved, licensees,
sublicensees or TOLL MANUFACTURER shall be bound accordingly and each
party shall be responsible for the conduct of such parties. Such
information may, however, be disclosed in order to allow either party
to defend against litigation with a third party (subject, where
possible, to adequate safeguards for confidentiality), in connection
with either party's filing and prosecution of patent applications and
in order to enable either party to comply with laws and governmental
regulations.
11.2 Waiver of Confidentiality Obligation.
The obligation of confidentiality set forth in Section 11.1 shall be
deemed waived as to information which (a) is in the public domain, (b)
comes into the public domain through no fault of the party claiming
waiver, (c) the party claiming waiver can show by written records was
known by it prior to disclosure hereunder, (d) is disclosed to the
party claiming waiver without obligation of confidentiality by a third
party having a legal right to make such disclosure or (e) is required
to be disclosed by law.
11.3 Disclosure of Agreement.
Except as required by law, neither party shall release to any third
person or publish in any way any non-public information relating to the
terms of this Agreement or to any PROJECT, without the prior written
consent of the other party, which consent shall not be unreasonably
withheld.
34
11.4 Publicity.
The text of any press release relating to this Agreement or the
transactions contemplated hereby shall be reviewed in advance by both
parties and may not, except as required by law, be published without
the prior written approval of both parties.
11.5 Scientific Publications.
Neither party shall make any scientific publication concerning the
results of its studies carried out under this Agreement without the
prior approval of the other party. Each party shall provide the other
party with the opportunity to review any proposed manuscripts or
abstracts which relate to any PROJECT at least 30 days prior to their
intended submission to any scientific publisher and shall not submit
any such manuscript or abstract without the written authorization of
the reviewing party, which shall not be unreasonably withheld.
Article 12
Termination of Projects
12.1 Termination of Projects by Mutual Agreement.
The parties may at any time, by mutual agreement, terminate any
PROJECT. The rights and obligations of the parties with respect to the
subject matter of such PROJECT shall be set forth in a separate written
agreement at the time of such termination, and shall supercede in their
entirety the rights and obligations of the parties with respect to such
subject matter set forth in this Agreement.
12.2 Termination of Projects Due to Impasse at the Management Committee
Level.
In the event that pursuant to Section 3.1.6 the MANAGEMENT COMMITTEE is
presented with, but is unable within 180 days after such presentation
to resolve, an issue relating to the direction or conduct of a PROJECT,
such PROJECT shall automatically terminate. Upon any such termination,
neither party shall, at any time during the five year period
thereafter, undertake any further research or development activities
focused on the identification of any compound the primary mechanism of
action which involves any TARGET that was the focus of such PROJECT for
the alleviation of PAIN.
12.3 Termination of Project during the Research Stage.
In case one party (the ,,nonparticipating party") determines during the
RESEARCH STAGE of a PROJECT that it no longer desires to participate in
such PROJECT, it may elect, by providing written notice (the
,,nonparticipation notice") to the other party (the ,,participating
party"), to terminate its participation in the PROJECT, whereupon
35
such PROJECT shall immediately terminate. In the event of any
such termination, the following shall apply:
(a) The nonparticipating party shall cease to be
obligated to conduct any activities contemplated by
either Section 5.1 or the research plan for such
PROJECT to be conducted by it following such
notification;
(b) The participating party may continue its activities
with respect to the PROJECT and shall continue to
have the right to use (i) any TARGET that is the
focus of such PROJECT, (ii) COMPOUND, (iii)
BACKGROUND TECHNOLOGY and/or (iv) PROJECT TECHNOLOGY
in connection therewith. Such activities may be
performed in any TERRITORY, including any TERRITORY
of the nonparticipating party;
(c) The nonparticipating party shall cease to have the
right to use any TARGET that is the focus of such
PROJECT, any COMPOUND the mechanism of action of
which involves such TARGET and the related BACKGROUND
TECHNOLOGY and PROJECT TECHNOLOGY for the purpose of
identifying and developing COMPOUNDS for alleviating
PAIN in humans; and
(d) The participating party shall have no liability or
other obligation, financial or otherwise, to the
nonparticipating party in respect of any PRODUCT
resulting from such PROJECT.
Article 13
Term and Termination of Agreement
13.1 Term.
This Agreement enters into force as of the EFFECTIVE DATE and continues
in full force for a period of five years thereafter, unless terminated
earlier pursuant to the other provisions of this Article 13.
Thereafter, it shall be automatically renewed every two years for an
additional period of two years, unless one party gives the other party
written notice at least 6 months prior to the expiration of the
original five-year period or the next subsequent two-year period of its
desire not to renew, in which case this Agreement shall terminate
effective upon the expiration of such period.
13.2 Termination for Breach.
If either party shall be in material default of any of its obligations
under this Agreement and shall fail to remedy such default within 90
days after written notice thereof specifying the nature of such
default, then, notwithstanding anything to the contrary contained in
this Agreement, the party not in default shall have the option of
terminating this Agreement by giving written notice of termination to
the party in
36
default, which option, if it is to be exercised, must be
exercised within 60 days following the expiration of the 90 days
allowed to correct the default.
13.3 Termination due to change of control.
13.3.1 GRUNENTHAL may terminate this Agreement upon 180 days'
written notice in case any single person or entity (or group
of affiliated entities) becomes the owner directly or
indirectly of more than 50 % of shares of SYNAPTIC or acquires
otherwise comparable dominating influence on SYNAPTIC and
GRUNENTHAL has reasons to believe that the change has a
negative impact on the cooperation. The aforementioned right
to terminate shall not apply,
(i) in case Xx. Xxxxxxxx becomes 50 % owner of the
shares of SYNAPTIC or obtains otherwise comparable
dominating influence, or
(ii) in case of an acquisition by an affiliate of SYNAPTIC
in which SYNAPTIC owns more than 50 % of shares or
(iii) in case a financial institution is acquiring such
shares or dominating influence.
13.3.2 SYNAPTIC may terminate this Agreement upon 180 days'
written notice in case a third party becomes owner of directly
or indirectly more than 50 % of shares of GRUNENTHAL or
acquires otherwise comparable dominating influence on
GRUNENTHAL and SYNAPTIC has reasons to believe that the change
has a negative impact on the cooperation.The Xxxxx-family or
companies belonging or controlled by members of the
Xxxxx-family shall not be considered as third parties.
Article 14
Effect of Termination or Expiration of Agreement
14.1 Termination or expiration of this Agreement shall not affect the rights
and obligations of the parties under provisions which by their meaning
or intent have an effect beyond the duration of this Agreement. Such
provisions shall, except to the extent expressly limited by their
terms, survive any such termination or expiration. In addition, the
liabilities of the parties for any breach of this Agreement shall
survive expiration or termination hereof. Without in any way limiting
the foregoing, but subject to Section 14.2, PROJECTS and drug
development activities relating to CANDIDATES resulting from PROJECTS
shall not be affected by any termination of this Agreement pursuant to
Article 13 and any provisions of this Agreement relating thereto shall
survive any such termination.
14.2 The parties are aware that termination or expiration of this Agreement
has an impact on the development of PROJECTS and needs special
considerations. The parties therefore agree in clarification of Section
14.1 above on the following:
37
14.2.1 Termination during Research Stage pursuant to Section 13.1,
13.2 and 13.3. At least 90 days prior to termination of this
Agreement, with regard to any PROJECT which has not at such
time progressed beyond the RESEARCH STAGE, the parties shall
discuss in good faith whether or not to continue jointly such
PROJECT. If the parties cannot agree in such discussions to
continue such PROJECT jointly within the above mentioned 90
days, such PROJECT shall terminate and then
14.2.1.1 each party shall be entitled to continue on its
own to attempt to identify and develop compounds
whose mechanism of action is the TARGET of such
PROJECT for the alleviation of PAIN and to use in
connection therewith any BACKGROUND TECHNOLOGY,
PROJECT TECHNOLOGY and PATENT RIGHTS of the other
party which exist at the time of termination,
14.2.1.2 neither party shall have any obligation to provide
any additional data or other information relating
to such TARGET or its continuing efforts to
identify and develop such compounds to the other
party and
14.2.1.3 neither party shall have any financial obligation
to the other party with respect to any product
which may result from its efforts or with respect
to its use of any technology, rights or other data
or information referred to in this Section 14.2.1.
14.2.2 Termination during Early Development Stage pursuant to Section
13.1 or Section 13.3. Upon termination due to Section 13.1 or
Section 13.3 of this Agreement with regard to any PROJECT
which has progressed at such time to the EARLY DEVELOPMENT
STAGE the parties shall continue the development of the
CANDIDATE resulting from such PROJECT until the end of phase
II a clinical trials. Thereafter Article 5 and all other
applicable provision of this Agreement shall apply. With
respect to any such PROJECT Section 12.2 shall survive if the
termination is pursuant to Section 13.1 but shall not survive
if the termination is pursuant to Section 13.3.
14.2.3 Termination during Early Development Stage pursuant to
Section 13.2
Upon termination of this Agreement pursuant to Section 13.2
with regard to any PROJECT which has progressed at such time
to the EARLY DEVELOPMENT STAGE each party shall be entitled to
continue to develop and to market on its own and any product
resulting therefrom in its exclusive TERRITORY and in the
OTHER TERRITORIES. The parties shall not be obliged to further
collaborate during this EARLY DEVELOPMENT STAGE or at any time
thereafter.
Thereafter each party shall be entitled to continue on its own
and all other applicable provisions of this Agreement shall
apply and the party shall be entitled to use in connection
therewith any BACKGROUND TECHNOLOGY, PROJECT TECHNOLOGY and
PATENT RIGHTS of the other party which
38
exists at the time of
termination. The right to terminate this Agreement pursuant to
Section 13.2 shall not prevent the terminating party to claim
further damage. With respect to any such PROJECT Section 12.2
shall not survive.
Article 15
Governing Law and Arbitration
15.1 Governing Law.
This Agreement shall be exclusively governed by the laws of Switzerland
(without regard to principles of conflicts of laws).
15.2 Arbitration.
Any controversy or claim arising out of or relating to this Agreement
shall be finally settled by arbitration in accordance with the Rules of
the International Chamber of Commerce (ICC). The arbitration hearings
shall be held in Zurich, Switzerland, in English language.
Article 16
Concluding Provisions
16.1 No Agency.
It is understood and agreed that SYNAPTIC and GRUNENTHAL shall each
have the status of an independent contractor under this Agreement and
that nothing in this Agreement shall be construed as authorization for
either party to act as agent for the other party.
16.2 Notices.
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be sent by first class certified or registered
mail, postage prepaid, or by express courier services, addressed to the
party to be notified at its address shown below or such other address
as may have been furnished in writing to the notifying party.
39
If to SYNAPTIC:
Synaptic Pharmaceutical Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Chairman, President and CEO
If to GRUNENTHAL:
Grunenthal GmbH
Xxxxxxxxxx. 0
00000 Xxxxxx
Xxxxxxx Xxxxxxxx of Germany
Attention: Xx. Xxxx Xxxxxx, Geschaftsfuhrung
Any notice hereunder shall be deemed given as of the actual date of
receipt by SYNAPTIC or GRUNENTHAL.
16.3 Force Majeure.
No failure or omission by either party in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement
or create any liability if the same shall have arisen from any cause or
causes beyond the control of the party, including, without limitation,
any of the following: an act of God; acts or omissions of any
government; any rules, regulations or orders issued by any governmental
authority or by any officer, department, agency or instrumentality
thereof; a fire; a storm; a flood; an earthquake; an accident; a war; a
rebellion; an insurrection; a riot; an invasion; a strike; and a
lockout, provided, in each case, that such failure or omission is cured
as soon as is practicable following the occurrence of such event.
16.4 Amendment; Waiver.
This Agreement may not be amended, supplemented or otherwise modified,
except by a written instrument signed by both parties. Any obligation
of either party may be waived by a written instrument signed by the
other party. Any delay or omission on the part of any party in the
exercise of its rights hereunder will not impair such rights, nor will
it constitute a renunciation or waiver of such rights. The waiver by
either party of any term or condition of this Agreement in any one
instance shall not be deemed or construed to be a waiver of such term
or condition for any other instance in the future (whether similar or
dissimilar) or of any subsequent breach thereof.
40
16.5 Indemnification.
Each party (the ,,indemnifying party") shall indemnify the other party
for, and defend and hold such other party harmless from and against,
any and all losses, claims, liabilities, costs and expenses whatsoever
(including reasonable attorneys' fees) that may be imposed upon or
asserted against such other party as a result of a wilful or negligent
conduct of the indemnifying party in testing, making, using or selling
any PRODUCT or CANDIDATE which not reasonably could have been detected
by such other party.
16.6 Assignment.
This Agreement shall not be assigned wholly or in part to third parties
or to the legal successor by either party without the prior written
consent of the other party; provided, however, that, subject to the
other party's right to terminate pursuant to Section 13.3, either party
may assign this Agreement in connection with the sale of its business
without the consent of the other party.
16.7 No Strict Construction.
This Agreement has been prepared jointly and shall not be strictly
construed against either party.
16.8 Counterparts.
This Agreement may be executed in one or two counterparts, each of
which shall be an original, but both of which together shall constitute
one and the same instrument.
16.9 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all prior
agreements, understandings and arrangements, whether oral or written,
of the parties with respect thereto.
16.10 Headings.
The headings of the sections of this Agreement are for general
information and reference only, and this Agreement shall not be
construed by reference to such headings.
41
16.11 Severability.
In the event that any provision of this Agreement is or becomes
ineffective, the validity of the remaining provisions shall thereby not
be affected. In place of the ineffective provision the parties shall
find a provision being the nearest legally possible approach to that
which the parties have decided in consideration of the spirit and
object of this Agreement.
Date: January 12, 1998 Date: January 12, 1998
GRUNENTHAL GMBH SYNAPTIC PHARMACEUTICAL CORPORATION
/s/ Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxx /s/ Xxxxxxxx X. Xxxxxxxx
42
Schedule A
Surcharge Pursuant to Section 4.2.4
Surcharge
If nonparticipation notice
provided prior to phase I Completion 10%
If nonparticipation notice
provided Post-phase I Completion 20%
43
Schedule B
Royalties for Licenses to Certain Patent Rights
Applicable Royalty
Payable only with respect to NET SALES in the years during which the market
exclusivity has been extended if the PATENT RIGHTS relate to:
Process 2 %
Formulation 3 %
New Use 3 %
The maximum cummulative percentage on two or more of the above items shall be
4%.
44
Schedule I
Available Targets
1. Neuropeptide Y2 receptor
2. Neuropeptide Y4 receptor
3. Glycine transporter
4. GAT-2 transporter
5. GAT-3 transporter
6. Taurine transporter
7. Betaine transporter
8. 5HT-4 receptor
9. Orphan transporter
10. Hp 15a (orphan receptor)
11. HL-18a (orphan receptor)
12. FB41a (orphan receptor)
45
Schedule II
Tissues Known to be Involved
in Transmission or Inhibition of Pain
Dorsal Root Ganglia (DRG)
Spinal Cord especially Dorsal-Horns
Thalamus
Periaqueductal Xxxx Matter (PAG)
Medulla especially Nucleus Raphe Magnus (NRM)
Locus coerulus
Trigeminal Ganglion
Sp 5 (Spinal trigeminal ganglion)
46
Schedule III
Alpha 2 Compounds
and Alpha 2 Patent Rights
[**]
47
[** CONFIDENTIAL TREATMENT REQUESTED]
