EXHIBIT 10.13
DATED 1998
(1) CARDIOTECH INTERNATIONAL LIMITED
AND
(2) THE ROYAL FREE HOSPITAL SCHOOL OF MEDICINE
RESEARCH
AGREEMENT
IN RESPECT
OF
THE DEVELOPMENT OF VASCULAR GRAFTS
XXXXX & PARTNERS
XXXXXXXXX XXXXX
XXXXXXXX XXXXXX
XXXXXXX
XX0 0XX
REF: IV.CAR51.2
THIS AGREEMENT is made the day of 1998
BETWEEN:
(1) CARDIOTECH INTERNATIONAL LIMITED (Company number 3198267) whose registered
office is at 0/0 Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx, XX0 0XX ("the
Company");
(2) THE ROYAL FREE HOSPITAL SCHOOL OF MEDICINE c/o University of London,
Xxxxxxx Xxxx Xxxxxx, Xxxxxx, XX0 0XX ("the Medical School").
WHEREAS:
(A) The Company is involved in the development and manufacture of polycarbonate
urethane vascular grafts and has the benefit of the Patents (as defined);
(B) The Medical School has experience of research into vascular biology and
invitro and in-vivo evaluation of vascular grafts;
(C) The Company and the Medical School wish to combine their expertise to
further the development and evaluation of certain small diameter vascular
grafts.
NOW IN CONSIDERATION OF THE MUTUAL COVENANTS ENTERED INTO BY THE PARTIES AND SET
OUT HEREIN, IT IS AGREED as follows:
1. INTERPRETATION
--------------
1.1. DEFINITIONS
-----------
In this Agreement save where the context otherwise requires the
following terms and expressions shall have the following meanings:
"Account" the Company's designated deposit account
set up pursuant to Clause 3.3 of the Loan
Agreement.
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"Board" the board of directors of the Company from
time to time.
"Budget Costings" Appendix B to this Agreement entitled
`Schedule of Budget Costings' and setting
out in detail the agreed future application
of the monies advanced by Freemedic in
accordance with the Loan Agreement.
"business day" a day (other than a Saturday or a Sunday)
on which banks are open for business in
London.
"Capital Equipment" laboratory equipment and all other
equipment required to carry out the
Experimental Work as referred to in Clause
4 of the Loan Agreement.
"CE Xxxx" the sign of conformity with Directive
93/42/EEC- Medical Devices.
"Chronoflex" the biomaterial manufactured under the
Patents by the Company and marketed under
the same name.
"Company IPR" all Intellectual Property Rights vested in
or licensed to the Company or the Parent
including but not limited to those relating
to vascular grafts, where such Intellectual
Property Rights:-
(i) have been developed by or on behalf
of or licensed to the Company or the
Parent prior to Completion
(including, without limitation, the
Patents and any processes in
connection therewith); or
(ii) are developed by or in behalf of the
Company or the Parent at any time
independently and separately from
the Experimental Work including any
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modifications to the Intellectual
Property Rights of the Company or
the Parent; or
(iii) are developed by the Company or the
Parent in the course of the
Experimental Work.
"Completion" completion of this Agreement.
"Confidentiality the confidentiality agreement between the
Agreement" Company and Freemedic dated 4th September
1997.
"Debenture" the fixed and floating charge to be entered
into by the Company pursuant to the Loan
Agreement.
"Commencement Date" 31st March 1998.
"the Ethical Committee" the Ethical Committee of the Medical School
and the Trust.
"Experimental Work" the investigation and clinical trials
making up Project One and the programme of
research and development in respect of
Project Two both as more particularly
detailed in the Specification (including
any clinical investigation and follow up)
and intended to achieve the Purpose.
"Expert" such person as may be appointed in
accordance with Clause 10.2.
"Freemedic" Freemedic Plc (Company number 2776963)
whose registered office is at The Royal
Free Hospital School of Medicine,
University of London, Xxxxxxx Xxxx Xxxxxx,
Xxxxxx, XX0 0XX.
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"Freemedic Letter" the letter to be entered into by Freemedic
pursuant to the terms of the Loan
Agreement.
"Intellectual Property all patents, patent applications,
Rights" continuations, continuations-in-part and
divisions thereof, xxxxx patents, utility
models, supplementary protection
certificates, registered designs, trade
marks (whether registered or not), together
with the right to apply for any of the
same, copyrights, design rights, rights in
confidential or technical information,
rights in inventions, know-how and any
similar rights existing anywhere in the
world.
"Licence" means the Licence agreement to be entered
into by Freemedic the Parent in the form
more particularly set out in Schedule 2.
"Loan Agreement" the loan and option agreement between
Freemedic, the Company and the Parent in
the agreed form set out in Schedule 1.
"Managing Director" the managing director of the Company who,
at the Commencement Date is Xxxx Xxxxxxx.
"Option" the put and call option exercisable
pursuant to the Loan Agreement.
"Parent" Cardiotech International Inc., a US
corporation incorporated under the laws of
the State of Massachusetts and whose
principal place of business is at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000 X.X.X.
"Parent Guarantee" the guarantee to be entered into by the
Parent pursuant to the Loan Agreement.
"Patents" those patents and patent applications more
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particularly set out in Schedule 3.
"the Products" (i) the Chronoflex peripheral vascular
grafts investigated and clinically
tested pursuant to Project One and
the vascular grafts evaluated,
clinically investigated or developed
pursuant to Project Two; and
(ii) any kit evaluated, clinically
investigated or developed pursuant
to Project Two for the seeding of
endothelial cells onto any such
vascular grafts where such kit
incorporates any such vascular
graft.
"Project One" the project more particularly detailed in
Clause 2.1.1 and the Specification.
"Project Two" the project more particularly detailed in
Clause 2.1.2 and the Specification.
"Project IPR" all Intellectual Property Rights developed
by the Medical School or the Trust and
arising directly or indirectly from Project
Two (and which are not Company IPR)
including, without limitation, all
improvements, developments or modifications
made in the course of Project Two to any
existing Intellectual Property Rights.
"Purpose" to obtain Ethical Committee approval for
Project One and Project Two and to obtain
the CE Xxxx for the Products.
"the Specification" Appendix A to this Agreement entitled
"Development of a small diameter compliant
vascular graft for lower limb arterial
bypass"
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and setting out the timetable for
Project One and Project Two and the
roles of the Company, the Medical
School and the Trust in conducting
the Experimental Work as may be
varied or amended from time to time
in accordance with this Agreement.
"Territory" all countries in the world, and
`country' shall be construed
accordingly.
"Trust" Royal Free Hampstead NHS Trust.
1.2. Clause headings shall be for convenience only and shall not affect
interpretation.
1.3. Words and expressions defined in the Licence Agreement shall have the
same meaning herein unless otherwise specifically defined.
2. SCOPE, DURATION AND DELAYS
--------------------------
2.1. Subject to and in consideration of the completion of the Loan
Agreement in accordance with the terms set out therein and the mutual
obligations set out below, the Company and the Medical School agree
on the terms stated below to carry out and the Medical School agrees
to procure that the Trust (where indicated in the Specification as
being, or otherwise becoming the responsibility of the Trust) will
carry out the Experimental Work with a view to completing:-
2.1.1. the investigation and phase 1 clinical trials in respect of
Chronoflex peripheral vascular grafts in accordance with the
Specification; and
2.1.2. the evaluation and clinical investigation of an endothelially
seeded Chronoflex peripheral vascular graft and the
evaluation of alternative technologies relevant to peripheral
arterial bypass in accordance with the Specification.
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2.2. Unless otherwise agreed in writing by the parties hereto, this
Agreement shall be deemed to commence on the Commencement Date and
shall come to an end on the date 2 years thereafter ("the Minimum
Period").
2.3. If the Experimental Work shall not have been concluded by the expiry
of the Minimum Period, the parties hereto may agree to extend such
period (subject to those further provisions agreed by the Committee),
the cost of such extension being apportioned in such manner and upon
such terms as the parties shall agree in writing.
2.4. Each of the Company and the Medical School will use their respective
reasonable endeavours to complete or procure the completion of their
respective parts, and in the case of the Medical School to procure
the completion by the Trust of its respective part, of the
Experimental Work in accordance with the Specification within the
Minimum Period but if some cause which was beyond the reasonable
control or foresight of the Company or the Medical School or the
Trust (as appropriate) shall interrupt the progress of the
Experimental Work by such party, then the Company or the Medical
School (as appropriate) shall allow the other a reasonable additional
period of time to complete or procure the completion of the relevant
part of the Experimental Work and such additional period of time
shall not be deemed to count towards the Minimum Period.
3. UNDERTAKINGS
------------
3.1. The Medical School hereby warrants, represents and undertakes to the
Company:-
3.1.1. that it will perform or will procure the performance of the
Experimental Work detailed in the Specification as being the
responsibility of the Medical School and/or the Trust with
all reasonable care and skill and to the best of its
abilities;
3.1.2. that it will use its reasonable endeavours to comply with or
procure the compliance by the Trust with the Specification;
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3.1.3. that it will act in the utmost good faith towards the
Company;
3.1.4. that it will use its reasonable endeavours to achieve the
Purpose;
3.1.5. that it will permit only those of its staff previously
approved in writing by the Committee (as defined below) to
carry out any of the Experimental Work and/or to operate any
of the Capital Equipment;
3.1.6. that it will comply at all times with all relevant laws and
regulations in the United Kingdom in respect of the conduct
of such Experimental Work;
3.1.7. that it will procure the performance of and adherence to this
Agreement by the Trust where relevant;
3.1.8. that it will prepare and make available or procure that there
is prepared and made available to the Committee all test
results arising from that proportion of the Experimental Work
which is its responsibility or that of the Trust;
3.1.9. that it will immediately bring to the attention of the
Committee any matter arising from or in respect of the
Experimental Work (including the clinical investigation and
follow up) which would or might reasonably be expected to
invalidate any of the said results or which might otherwise
make or be likely to result in any of the Products becoming
hazardous or otherwise unsafe;
3.1.10. that it will notify the Committee in writing immediately upon
receiving any written notice, or as soon as reasonably
practicable after becoming aware that the Trust has received
any written notice stating that the Experimental Work or any
part thereof or any of the Products infringes or is
reasonably likely to infringe any Intellectual Property
Rights of any third party whatsoever, but for the avoidance
of doubt the provisions of this
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clause 3.1.10 will not impose a positive duty upon the
Medical School to make specific enquiries in respect thereof.
3.2. The Company hereby warrants, represents and undertakes to the Medical
School:-
3.2.1. that it will perform that part of the Experimental Work
detailed in the Specification as being the responsibility of
the Company, with all reasonable care and skill and to the
best of its abilities;
3.2.2. that it will use its reasonable endeavours to comply with the
Specification;
3.2.3. that it will act in the utmost good faith towards the Medical
School;
3.2.4. that it will use its reasonable endeavours to achieve the
Purpose;
3.2.5. that subject always to the provisions of clause 3.1 above, it
will be responsible for evaluating all results of the
Experimental Work, testing the Products for compliance with
all relevant safety regulations, requirements and standards
and for ensuring generally that all products supplied or used
by or on behalf of the Parent, the Company or any of their
Sub-licensees are safe and non hazardous (and neither the
Medical School nor the Trust nor their respective officers,
employees or agents will have any liability to the Company or
the Parent whether in contract, tort, negligence or otherwise
for any loss or damage arising out of or in connection with
the manufacture, supply, development or use of any of the
Products by or on behalf of the Parent, the Company or any of
their Sub-licensees, save as expressly provided hereby or in
the Licence).
4. PROJECT MANAGEMENT COMMITTEE
-----------------------------
4.1. The Company and the Medical School shall each appoint two suitably
qualified employees or agents acceptable to the other to be members
of a project
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management committee ("the Committee") which shall liaise on matters
relating to the Experimental Work.
4.2. The first appointees of the Company shall be the Managing Director
and Xxxxxxx Xxxxxxx, and the first appointees of the Medical School
shall be Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxx.
4.3. During the period of this Agreement the Committee will meet formally
at intervals of not less than 3 months to discuss the progress of the
Experimental Work and the results obtained and to authorise
expenditure in respect thereof.
4.4. Subject always to Clause 4.7 below, all decisions of the Committee
shall be taken with the agreement of all members in attendance at
such duly convened meetings, and any member unable to attend and vote
at any such meeting shall be entitled to appoint another member to
act as his proxy at such meeting, such appointment to be in writing.
4.5. The Committee meetings shall be convened by the Managing Director who
shall prepare and circulate the agenda for such meeting for
agreement, along with the notice convening the meeting no less than
21 days before the proposed date therefor, unless otherwise decided
by unanimous consent of the members of the Committee.
4.6. The first meeting of the Committee will be held on or as close as
reasonably practicable to the date 3 months from the Commencement
Date. All meetings will be held at the premises of the Medical School
except as otherwise previously agreed in writing by the parties. All
decisions and minutes of the Committee shall be duly recorded by such
party as the Committee shall reasonably agree.
4.7. One of the functions of the Committee shall be to evaluate the
progress of the Experimental Work and the compliance by the parties
with the Specification. If there is any dispute between the parties
as to whether either of them has complied with its obligations under
the Specification, the Committee shall use all reasonable
10
endeavours to resolve such dispute amicably. If the dispute cannot be
resolved within 14 days of it first arising, either party shall be
entitled to refer such matter to the Expert.
4.8. Upon the presentation in a form reasonably acceptable to the
Committee of an itemised invoice from the Medical School in respect
of those proper costs incurred by it or the Trust or on their behalf
in accordance with the Budget Costings in performing the Experimental
Work undertaken during the previous three months in accordance with
the Specification, the Committee shall authorise the Company to make
payment from the Account to the Medical School or as it may direct.
All invoices so presented shall be paid within 28 days of receipt,
and if the Medical School does not receive payment of any of its
costs, incurred in accordance with the Budget Costings or with the
consent of the Committee pursuant to Clause 4.9, it having invoiced
the Company in respect of the same, then the Medical School will be
under no obligation, and the Medical School will be under no
obligation to procure the Trust to continue with any of the
Experimental Work then outstanding set out in the Specification until
receipt of such payment.
4.9. The Committee may agree to vary the frequency and nature of payments
specified in the Budget Costings and the nature of future work to be
undertaken, in accordance with the Specification and in the event of
a conflict or discrepancy between the decision of the Committee and
the Budget Costings or Specification, the decision of the Committee
shall prevail.
4.10. The Medical School shall furnish both the Company and the Committee
with copies of all technical reports on, and full details of the
progress of the Experimental Work which shall be prepared at monthly
intervals. The first of the technical reports shall be presented at
the first meeting of the Committee. The Medical School shall, upon
request also supply all other information and reports reasonably
required by the Company in order to enable the Company to comply
11
with all statutory and other regulatory requirements necessary for or
otherwise in connection with the Purpose.
4.11. Upon the conclusion of the Experimental Work the Medical School shall
provide the Committee with a final detailed report summarising the
findings and outcome of the Experimental Work and containing such
other information as may reasonably be required by the
representatives of the Company.
4.12. The parties hereto will procure that subject always to Clause 4.13
below, the monies standing to the credit of the Account (but
excluding any interest thereon) shall be used solely to pay those
costs authorised by the Committee and properly incurred in accordance
with the Budget Costings, by the Medical School or on its behalf in
undertaking the Experimental Work in accordance with the
Specification.
4.13. Notwithstanding any other provision of this Agreement, any and all
monies standing to the credit of the Account upon the termination of
this Agreement or the cessation of the Experimental Work for whatever
reason and not otherwise properly due to the Medical School under
this Clause 4 shall vest absolutely in the Company, which shall be
entitled to use such monies in such manner and for such purpose as it
shall in its absolute discretion think fit.
5. INTELLECTUAL PROPERTY
---------------------
5.1. The provisions of this Clause 5 shall be in addition to and not in
substitution for those terms set out in the Licence. In the event of
a conflict between the provisions of this Clause 5 and the terms of
the Licence, the terms of the Licence shall prevail.
5.2. During the continuance hereof, the Company hereby grants to each of
the Medical School and the Trust such non-exclusive, royalty free
licence to use the Company IPR as may be necessary for the purpose of
carrying out the Experimental Work in
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accordance with the terms of this Agreement. All Company IPR shall at
all times remain vested in the Company or the Parent, as appropriate.
5.3. The Company hereby warrants that it is the registered proprietor or
the licensee under the Patents. The Company hereby warrants that to
the best of its knowledge and belief but without having made any
enquiries, investigations and searches, the Medical School and the
Trust will not infringe the Intellectual Property Rights of any third
party in using such Patents in the performance of the Experimental
Work in accordance with the terms of this Agreement. Notwithstanding
any other provision of this Agreement, the Company hereby warrants
that it is entitled to grant the Licence of the Patents included in
Clause 5.2 and that the consent of Thermedics Inc. or any other third
party that owns an interest in the Patents is not required to enable
the Medical School or the Trust to use the Patents in undertaking the
Experimental Work or to enable Freemedic to grant the Licence.
5.4. All Project IPR shall vest in and be the exclusive property of
Freemedic. The Company shall promptly notify the Medical School in
writing of any Intellectual Property Rights of which it is or becomes
aware to which Freemedic may be entitled by virtue of this Clause
5.4.
5.5. Any Project IPR shall be subject to the Licence. In the event that
the Parent wishes to take a licence of the Project IPR, the Company
shall notify the Medical School in writing. Upon receipt of any such
notice, the Medical School will procure that Freemedic shall offer to
the Parent a licence of the Project IPR in accordance with and
subject to the provisions of the Licence and the Company shall
procure that the Parent shall execute the Licence on the agreed
terms. If, for any reason, the Parent decides not to seek a licence
of the Project IPR or refuses to enter into a licence in respect of
the Project IPR in accordance with the terms of the Licence,
Freemedic shall be entitled to grant a licence of the Project IPR to
any person for the purpose envisaged in the Licence.
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5.6. Save as aforesaid (or as provided in the Licence) the Company shall
acquire no right title or interest in or to the Project IPR or to any
other Intellectual Property Rights properly vesting in the Medical
School, the Trust or Freemedic.
5.7. Neither the Medical School nor the Trust shall do or permit any act
which might prejudice the novelty of an invention, process or
development covered by this Clause 5.
5.8. Each party shall, if reasonably required by any other party thereto,
procure that its employees, agents, or subcontractors enter into a
corresponding undertaking as set out herein.
6. COMMERCIAL EXPLOITATION
-----------------------
In the event that the Purpose has been achieved, the Company and the
Medical School will take all practical measures and give all assistance and
information as may be reasonably necessary to enable the Company to obtain
those consents and fulfil those requirements at the Company's expense,
whether statutory or otherwise which are necessary to allow the commercial
development and exploitation of the Products by the Company and/or the
Parent. The Company shall for the avoidance of doubt be the sole
beneficiary and recipient of any income arising directly or indirectly from
the exploitation of the Products tested pursuant to Project One. The terms
of exploitation of any Product tested or developed pursuant to Project Two
shall be governed by the Licence.
7. CONFIDENTIALITY
---------------
The provisions of this Clause 7 shall be in addition to and not in
substitution for the restrictions, obligations and undertakings contained
in the Confidentiality Agreement.
7.1. Each of the parties hereto shall take all reasonable practical
measures to ensure that access to the premises where the Experimental
Work is conducted is restricted to such individuals as are taking
part in the Experimental Work or as otherwise reasonably require
access to such premises, that materials use in and data obtained
14
from the Experimental Work are kept in a secure manner and that,
subject to the provisions of this Clause 7, data obtained from the
Experimental Work is not made publicly available.
7.2. Save as expressly provided in this Clause 7, except with the other
party's prior written agreement or as required by operation of law or
in accordance with any other regulatory requirements in respect
thereof, neither party shall disclose or permit the disclosure to any
third party of any information obtained from the other party (or from
the Parent, the Trust or Freemedic as appropriate) in any document or
correspondence marked "Confidential" or any know how, data, technical
trade or business information obtained from the other (or from the
Parent, the Trust or Freemedic as appropriate) in connection with
this Agreement including any such information obtained by either
party during a visit to the other's (or the Trust's or the Parent's)
place of business work offices or laboratories.
7.3. The Medical School will disclose to the Company all trial results,
data and information arising exclusively from Project One. The
Company shall be free to use and disclose any such results, data or
information as it thinks fit, including the for purpose of obtaining
any necessary product approvals. The Medical School will, and will
procure that the Trust will, retain all such results, data and
information in confidence and will not use the same other than for
the purpose of Experimental Work or with the prior written consent of
the Company or the Parent.
7.4. The Company shall at all times retain in confidence the Project IPR,
including all data and technical information relating thereto and the
Company and the Parent shall use the same only where licensed to do
so by Freemedic in accordance with the terms of the Licence. The
Medical School will and will procure that Freemedic and the Trust
will retain all such Project IPR in confidence to the extent that the
same applies to the Products. Notwithstanding any other provision
15
of this Agreement, the Medical School and the Trust shall be entitled
to use all such Project IPR in connection with their academic
research and the Medical School, the Trust and Freemedic shall be
entitled to disclose any of the same to any third party or permit any
third party to use any of the same in connection with matters
unrelated to the development, manufacture or sale of the Products,
subject to any such third party entering into corresponding
obligations of confidentiality in respect of such Project IPR.
7.5. Either party shall be entitled to disclose all information, data or
know-how properly disclosed to it pursuant to this Agreement to its
employees, agents and sub-contractors, the Company shall be entitled
to disclose all such information, data or know-how to the Parent and
the Medical School shall be entitled to disclose all such
information, data or know-how to the Trust and Freemedic, and each
party shall procure that all such persons to whom all such
information, data or know-how is disclosed keep the same confidential
in accordance with the terms of this Clause 7 and, if so required by
the other, the Company or the Medical School will procure that their
employees, agents and sub-contractors or the Parent or the Trust and
Freemedic (as appropriate) enter into a corresponding confidentiality
undertaking with the party disclosing such information, data or know-
how.
7.6. The obligation in Clauses 7.1 to 7.5 (inclusive) shall be in force
from the Commencement Date and shall remain in force after expiry or
termination of this Agreement without limitation in time except where
the party seeking relief from the obligation can show that the data,
know-how or information was public knowledge and known to that party
at the time it was obtained from the disclosing party or that since
the data, know-how or information was obtained it has become public
knowledge without the fault of any other party hereto.
7.7. Each of the parties hereto recognises that the other may wish to
publish in a reputable journal scientific papers containing data
obtained from the Experimental
16
Work. Accordingly the parties hereto shall have the right to publish
such papers provided that before they submit any such paper to such
journal, the relevant party shall submit the paper to the Committee
which shall scrutinise the paper to ensure that no information is
disclosed in the paper which would prejudice the commercial interest
of the other party in the data or the novelty of any invention to
which such party is entitled under this Agreement. The Committee
shall give its decision within 1 month of the date on which the paper
is submitted to it for scrutiny. Where the Parent or the Trust wish
to publish any such papers, they shall be so entitled subject to the
Company or the Medical School submitting any such papers to the
Committee for scrutiny in accordance with this Clause 7.7.
8. ENTRY AND INSPECTION
--------------------
Subject always to Clause 7, the parties hereto permit (or procure that
there is permitted) on request any duly authorised representative of the
other party to enter at all reasonable times and upon reasonable notice
into and upon that party's premises where any of the Experimental Work or
any research and development in respect thereof is being carried out for
the purpose of ascertaining that the provisions of this Agreement and the
Specification are being complied with by such party.
9. TERMINATION
-----------
9.1. This Agreement may be terminated at any time by the Company giving
written notice to the Medical School specifying the relevant breach
if the Medical School shall have committed a material breach of any
obligation or duty owed under this Agreement to the Company and (if
such breach is capable of rectification) shall have failed to rectify
the breach within 30 days of the written notice requiring the
rectification.
9.2. This Agreement may be terminated at any time by the Medical School
giving written notice to the Company specifying the relevant breach
if the Company shall have committed a material breach of any
obligation or duty owed under this
17
Agreement to the Medical School and (if such breach is capable of
rectification) shall have failed to rectify the breach within 30 days
of the written notice requiring the rectification.
9.3. In addition, this Agreement may be terminated at any time by the
Medical School giving written notice specifying the event to the
Company if the Company shall have committed an Event of Default under
the Loan Agreement or an event has occurred which under the terms of
the Debenture confers on Freemedic the right to enforce the
Debenture.
9.4. This Agreement may be terminated by the Company forthwith if either
Freemedic or the Medical School goes into liquidation either
compulsory or voluntary (except for the purpose of reconstruction or
amalgamation) or passes a resolution for winding up or if a receiver,
administrative receiver or administrator is appointed in respect of
the whole or any part of its assets or if either party makes an
assignment for the benefit of or composition with its creditors
generally or threatens to do any of these things or any similar
occurrence under any jurisdiction which affects such party.
9.5. This Agreement maybe terminated by the Medical School forthwith if
either the Company or the Parent goes into liquidation either
compulsory or voluntarily (except for the purpose of reconstruction
or amalgamation) or passes a resolution for winding up or if a
receiver, administrative receiver or administrator is appointed in
respect of the whole or any part of its assets or if either party
makes an assignment for the benefit of or composition with its
creditors generally or threatens to do any of these things or any
similar occurrence under any jurisdiction which affects such party.
9.6. In the event that this Agreement is terminated by reason of the
default or insolvency of either Freemedic or the Medical School in
accordance with this Clause 9, then notwithstanding any other term of
this Agreement, no monies shall become repayable to Freemedic under
the Loan Agreement whether in
18
respect of capital or interest until the first business day following
the second anniversary of the completion of such Loan Agreement. All
monies then owed by the Company to Freemedic pursuant to such
Agreement will be paid forthwith to Freemedic by the Company in
accordance with the relevant terms set out in Clause 15 of the Loan
Agreement.
9.7. In the event that this Agreement is terminated by reason of the
default or insolvency of either the Company or the Parent in
accordance with this Clause 9, then all monies then owed by the
Company or the Parent to Freemedic pursuant to the Loan Agreement
will be paid forthwith to Freemedic by the Company or the Parent as
the case may be in accordance with the terms set out in Clause
15 thereof.
9.8. Provided that the proposed merger of the Medical School and
University College London (or any other organisation in the
University of London) shall not, for the avoidance of doubt in itself
confer a right of termination on any of the parties hereto.
9.9. In the event that this Agreement is terminated by the Company
pursuant to 9.1 or 9.4 above, then without prejudice to any rights it
may have in respect of such breach the Company shall be entitled to
require Freemedic to enter (and the Medical School will procure that
Freemedic so enters) into the Licence in respect of such of the
Project IPR which exists as at the date of such termination.
9.10. Save as otherwise agreed in writing by the parties, or as expressly
provided herein, this Agreement will automatically terminate on the
expiry of the Minimum Period.
9.11. Upon termination or expiry of this Agreement, all rights and
obligations of either of the parties shall automatically terminate,
save that termination or expiry of this Agreement shall not affect
the accrued rights of either party and the following provisions shall
stay in full force and effect:- Clause 1, 3.2.5, 4.8, 5.3, 5.5, 5.6,
7, 9.6, 9.7, 9.9, 9.11, 10 and 11.
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10. DISPUTES, PROPER LAW AND JURISDICTION
-------------------------------------
10.1. The parties hereto shall strive to resolve on an amicable basis any
dispute that may arise between them relating to the terms of this
Agreement.
10.2. In the event that the parties cannot settle any dispute between them
arising pursuant to the matters referred to in Clause 4.7, either
party shall be entitled to refer the matter to the Expert who shall
be an independent third party scientific expert appointed by the
parties or, in the absence of the agreement, by the President for the
time being of the Royal College of Surgeons. The Expert shall act as
an expert and not as an arbitrator and his or her decision in respect
of any matter referred to him or her shall be final and binding on
the parties. All costs incurred by the Expert in resolving any
dispute shall be borne in such proportions as the Expert shall
determine. The parties shall comply with such directions as the
Expert may give in respect of such dispute.
10.3. This Agreement shall be governed by the laws of England, save as
provided in Clause 10.2, the parties hereby submit to the exclusive
jurisdiction of the English courts.
11. MISCELLANEOUS
-------------
11.1. Save as expressly permitted pursuant to the terms of this Agreement,
no announcement, advert or other circular in respect of the subject
matter of this Agreement or the result(s) of the Experimental Work
may be made or issued either directly or indirectly by any party
hereto without the nature, extent and content thereof being given the
prior written consent of the other party hereto, such consent not to
be unreasonably withheld or delayed.
11.2. This Agreement is personal to the parties hereto, neither of whom may
assign its rights or obligations under it in whole or in part without
the other party's prior written agreement except that the Medical
School shall be entitled, with the Company's prior written agreement,
such agreement not to be unreasonably
20
withheld or delayed, to assign the rights and benefits under this
Agreement to University College London (or any other organisation in
the University of London) or any company owned by University College
London (or such other organisation) in connection with the proposed
merger of the Medical School with University College London (or any
such other organisation), provided that in the event of any such
merger, save where statutorily inappropriate, the Medical School, the
Company and University College, London (or any such other
organisation) will enter into an agreement novating the obligations
of the Medical School hereunder to University College, London (or
such other organisation).
11.3. Neither party shall be bound by any variation or amendment of or
addition to this Agreement except where that party has agreed
expressly in writing to be so bound.
11.4. This Agreement shall not constitute a partnership between the
parties.
11.5. Any notice given under this Agreement shall be in writing either
delivered personally at or posted in the case of notice served on the
Company, to its registered office or in the case of notice served by
the Company, to the registered office or place of business of the
Medical School sent (if posted) by recorded delivery or registered
first-class post. If such notice is served personally it shall be
deemed to have been received at the time of delivery. If such notice
is sent by post it shall be deemed to have been received 48 hours
after being correctly addressed, stamped and posted.
11.6. Each of the parties hereto undertakes that it is fully empowered to
enter into this Agreement and to become bound in accordance with its
terms.
11.7. No failure by either party to exercise and no delay in exercising any
right power or privilege under this Agreement shall operate as a
waiver nor shall any single or partial exercise of any right power or
privilege preclude any further exercise of it or the exercise of any
other right power or privilege. The rights and remedies
21
provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
11.8. If any term of this Agreement or its application is judicially or
otherwise held invalid or unenforceable or if the parties mutually
agree in writing to any variation or revision of this Agreement the
remainder of this Agreement and its application shall not be affected
and this Agreement shall remain in full force and effect.
11.9. This Agreement, the Confidentiality Agreement, the Debenture, the
Loan Agreement, the Parent Guarantee and the Freemedic Letter
constitute the entire agreement between the parties hereto, and each
party hereby confirms that it has not relied upon any representation,
warranty or undertaking other than those expressly set out herein.
Without prejudice to the foregoing, the parties waive any right they
may have to any damages or rescission for any misrepresentation which
is not contained in these Agreements, or for breach of any warranty
not contained in these Agreements, unless and to the extent such
misrepresentation or warranty was made fraudulently.
AS WITNESS the hands of the parties hereto the day and year first above written.
EXECUTED by a duly authorised )
representative of CARDIOTECH )
INTERNATIONAL LIMITED )
in the presence of )
EXECUTED by a duly authorised )
representative of THE ROYAL FREE )
HOSPITAL SCHOOL OF MEDICINE )
in the presence of )
22
SCHEDULE 1
----------
LOAN AGREEMENT
--------------
23
SCHEDULE 2
----------
LICENCE
-------
24
SCHEDULE 3
----------
PATENTS AND PATENT APPLICATIONS
-------------------------------
1. Patent Applications
---------------------
(i) European Patent Application 973032626
(Publication No. 0 807 425) "Making an Access Graft"
Priority : GB 9610273.6, 16/th/ May 1996
Filed: 13/th/ May 1997
Published: 19/th/ November 1997 (with search report)
(ii) US Patent Application No. 08/655317
"Method of Making an Access Graft and a Vascular Prosthesis"
Priority: GB 91165639 1st August 1991
Filed: 1/st/ February 1994 (continuation of Serial No.
08/182,156)
2. Patents
-------
(i) Belgium (EP) 0 286 220
Switzerland (EP) 0 286 220-7
Germany 3 879 741-0
Austria (EP) 0 286 220
Denmark 000000
Xxxxx (EP) 0 286 220
France (EP) 0 286 220
Great Britain (EIP) 0 286 220
Greece 3008 181
Ireland 00000
Xxxxx (EP) 0 286 220
25
Japan 1813534
Luxembourg (EP) 0 286 220
Netherlands (EP) 0 286 220
Portugal 00000
Xxxxxx 88301722-0
USA 5132066
(ii) Germany 69024658-7
France (EP) 0495 869
Great Britain (EP) 0 495 869
USA 5549860
(iii) US Patent 5,254,662
Biostable Polyurethane
Product Co-owned and
Cross Licensed with Thermedics Inc
(iv) US Patent Application 08/920-662
Hydrolytically and Proteolytically
Stable Polycarbonate Polyurethane
Silicone Copolymers
(v) US Patent Applicant - Biocompatable Devices
26
APPENDIX A
----------
SPECIFICATIONS
--------------
00
XXXXXXXX X
----------
BUDGET COSTINGS
---------------
28
EXHIBIT 10.13
EXHIBIT A
---------
THE DEVELOPMENT OF A SMALL DIAMETER
COMPLIANT VASCULAR GRAFT FOR LOWER LIMB
ARTERIAL BYPASS
MR. G XXXXXXXX, MB, CHB, D.OBS RCOG, FRCS
CONSULTANT GENERAL AND VASCULAR SURGEON
UNIVERSITY DEPARTMENT OF SURGERY
ROYAL FREE HOSPITAL
XXXX XXXXXXX
MANAGING DIRECTOR
CARDIOTECH INTERNATIONAL LTD.
EXECUTIVE SUMMARY
This is an application to support the investigation of a small diameter
compliant vascular prosthesis. The application would be in patients presenting
with critical limb ischemia (threatened limb loss due to poor circulation) which
affects 1 in 2,500 of the population.
The best material for this procedure is autologous saphenous vein. However, in
30% of patients the vein cannot be used and an alternative conduit must be
sought.
The market is worth some (Pounds)100 million per annum. It is dominated by
American-manufactured products utilizing expanded P.T.F.E., the use of which is
limited by the diameter of the grafts being more than or equal to 6 mm, with
poor results in critical applications. There is therefore a need for a 4-5 mm
internal diameter prosthetic vascular graft for this type of distal arterial
reconstruction.
The programme will bring together the commercial, technical and development
resources of the commercial partner with the research, scientific and surgical
resources of the department of vascular surgery at The Royal Free Hospital
Medical School who have considerable specialist experience and international
recognition in this field.
The development process will encompass a new approach to the design of vascular
grafts in that we intend to address the main reasons for graft failure by
utilising technologies to overcome the failure modes. For example, the graft
will have anti-thrombogenic flow lining which could be provided by a layer of
endothelial cells or alternative technologies. The graft will also be compliant
to match the physical and mechanical characteristics of a native blood vessel
enabling the transmission of pulsatile blood flow.
The project will last two years and is divided into a series of tasks. These
tasks take the programme from investigation of a polycarbonate urethane vascular
graft developed by CardioTech for haemodialysis access through a series of steps
to pilot clinical evaluation by the University partner for peripheral vascular
bypass. Additional methods or technologies which could potentially enhance
graft performance will be investigated.
2
SECTION 1
THE NEED
The United Kingdom Vascular Society recently reported on the prevalence of
patients presenting to vascular surgeons with critical limb ischaemia
(threatened limb loss due to poor circulation) to be 1 in 2,500 of the
population. The peak occurrence is between 70 and 79 years of age. This burden
on the NHS is expected to increase as the population ages. To avoid
amputation, peripheral arterial bypass surgery is required, usually to a small
artery in the calf or foot. Successful revascularisation has been clearly shown
to be considerably less expensive than amputation and subsequent rehabilitation.
The best material for this procedure is autologous saphenous vein. However, in
30% of patients the vein cannot be used and an alternative conduit must be
sought. There is therefore a need for a 4-5 mm internal diameter prosthetic
vascular graft for this type of distal arterial reconstruction.
THE PROBLEM
Below knee prosthetic grafting is currently restricted by unacceptably poor
patency rates achieved with existing products.
The principal causes of graft failure are:
. Early thrombosis at less than one month due to the inherent
thrombogenicity of current prosthetic materials.
. Diameter mismatch between artery and graft.
. Low compliance and major compliance mismatch of current prosthetic
materials resulting in inadequate flow rates.
. Neo-intimal hyperplasia between one and twelve months.
. Disease progression usually beyond the distal anastomosis.
. Inadequate inflow.
3
THE SOLUTION
To develop a small diameter synthetic vascular graft with the potential for
improved clinical performance by bringing together several technologies and a
multidisciplinary team who have the relevant background and skills to undertake
and complete the project.
This is a new approach to the research and design of vascular grafts.
Historically, the development of vascular grafts has been directed at one
factor, such as material characteristics, kink resistance or thrombogenicity,
etc. Graft failure is however a multifactorial issue. Performance and clinical
outcome will not be substantially improved without addressing the major issues
which contribute to graft failure in combination with novel technologies which
can improve performance.
An antithrombotic surface to inhibit thrombus formation and form an interface
with blood flowing through the graft can be enabled by endothelial cell lining
of the graft surface. This is considered a likely successful route to achieving
such an interface. However, several new technologies are available to modify
the flow surface of the graft and achieve a low thrombotic flow lining without
the need for biological materials to be introduced.
Neo-intimal hyperplasia, which causes later graft failure, tends to occur when
the endothelium is damaged, although this can be inhibited by restoration of the
cell monolayer by cell seeding. An alternative route would be in bonding
certain pharmaceutical or biotechnology products onto the graft surface which
could minimise the potential for hyperplasia development.
Arteries display a characteristic known as compliance which in lay terms can
best be expressed as elasticity (but not in the scientific sense). This
property gives the artery elastic recoil which takes place after each arterial
pulse has passed, and thus enhances blood flow. This property is particularly
marked in low blood pressure states, thus enhancing blood flow even further.
All prosthetic grafts to date have very low compliance, i.e. they are rigid and
non-elastic. Enhancing the compliance of a small calibre prosthetic graft would
be expected to improve the low flow often seen in this situation. Furthermore a
compliance prosthetic graft would reduce the mismatch in compliance between
graft and native artery. Low graft compliance and compliance mismatch are
recognized as important factors in failure of small calibre prosthetic grafts.
Design and development of a compliant vascular graft should remove this cause of
graft failure.
The design criteria will be to mimic the mechanical and physical properties of a
natural artery allowing the maintenance of pulsatile flow and compliance in
combination with an antithrombotic flow lining. This will allow patency to be
maintained in smaller diameters even with low blood flow.
4
THE BENEFITS
PATIENT
For the patient, successful bypass allows resumption of a normal lifestyle,
relief from pain, ulceration and/or gangrene, and avoidance of amputation.
Improved graft performance would reduce the rates of secondary reconstructions
and amputation, with their attendant risks for the generally elderly population.
NHS
For the NHS, it has been clearly shown that limb salvage, at an estimated
(Pounds)7,500 per patient, with its attendant patient benefits, is significantly
less expensive than amputation and the subsequent support requirements,
conservatively estimated at (Pounds)25,000 per patient. This would offer a
potential saving of around (Pounds)66 million per annum even if only 25% of
patients are able to benefit. Reduction in expensive revisional surgery, a
reduction in the burden of community care services, and an increase in the case
load throughput and bed occupancy rates are among the major benefits.
COMMERCIAL
The development of a successful small bore vascular graft could bring several
diverse benefits
. major capital investment and job creation in a high technology manufacturing
company
. improved performance by the UK health care sector in international markets
. international recognition that collaborative medical implant programmes can
be successfully completed in the UK
5
SECTION 2
PARTICIPANTS
The project is proposed by CardioTech International Ltd, the only UK based
company manufacturing polycarbonate urethane vascular access grafts, and the
University Department of Vascular Surgery at the Royal Free Hospital School of
Medicine, London.
CARDIOTECH
COMPANY STRUCTURE
CardioTech was created in May of 1996 as a spin-off from PolyMedica Industries
Inc. into a stand-alone company. The company comprises CardioTech International
Inc. which is quoted on the American Stock Exchange and specialises in the
development, production and marketing of advanced polymer biomaterials for the
medical device industry, and CardioTech International Ltd which is undertaking a
programme of small diameter vascular graft development which is a continuation
of the work undertaken over the last three years by PolyMedica Industrioe.
Our vascular graft programme is principally based in the UK. Research,
development, testing and production of vascular grafts is being carried out at
our premises near Xxxxxxx.
COMPETENCIES
Staff employed by CardioTech (previously at Polymedica) have already developed a
polycarbonate Vascular Access Graft used for haemodialysis. We have therefore
carried out a considerable programme of process development, in vitro and in
vivo research into the biodurability of our material ChronoFlex and the
ChronoFlex vascular access graft which has enter clinical trials in both Holland
and France. The information generated by CardioTech during graft development
will be used to support an application to the Ethics Committee to commence
limited clinical evaluation.
MATERIALS
ChronoFlex will be used to produce the new graft. It is a biodurable
polycarbonate based polyurethane which comprises the following components:
. polycarbonate polyol
. methylene diisocyanate
. ethylene diamaine
. 1,3 diaminocyclohexane
6
CardioTech holds USA patent 6254662 for ChronoFlex. The inventor of
ChronoFlex, Xx. X. Xxxxxxx, is Chairman of the company and Chief Technical
Officer. CardioTech holds a perpetual worldwide license from PolyMedica to
manufacture and use ChronoFlex for medical applications.
VASCULAR GRAFT PRODUCTION
Our patented process involved what we term "low temperature cast coagulation".
In this system we gently extrude polymer solution onto the smooth surface of a
mandrel. The polymer solution comprises a solution grade ChronoFlex, a water
soluble filler of between 10 and 60% by weight and a surfactant in an amount
between 1 and 10% by weight. The mandrel and extrusion head rotate in
synchronization, minimising shear and residual stress, whilst a pair of 2.5
metre long mandrels are drawn through the twin extrusion heads into a coagulant
maintained at 40 degrees C. During phased coagulation the fillers prevent
collapse of the structure as the solvent disperses and the filler dissolves into
the coagulant, resulting in a single layer uniform microporous structure which
avoids the danger of delamination and subsequent loss of strength, maintaining
cross section.
By manipulating the process conditions, it is possible for grafts to be produced
with different physical and mechanical characteristics; an example would be a
very porous graft allowing rapid cellular ingrowth which could be suited to
venous applications.
CardioTech owns European patent 0286220, USA patent 0000000 and Japanese patent
0000000 covering aspects of graft production.
ROUTE TO MARKET
When the graft is ready for introduction, the Medical Device Directives will be
mandatory. The peripheral graft will obviously require a CE xxxx and as a class
11b implant able device it will require clinical data to comply with the
essential requirements. This information is expected to come from limited
clinical investigations carried out by the academic partner.
DISTRIBUTION
There are three possible methods:
1. Direct via staff employed by CardioTech
2. Indirect via distributors engaged by CardioTech
3. Creating a strategic alliance to access an existing international marketing
and sales network with a major health care company
It is too early to decide which option will be favoured. However, by mid 1997
our vascular access graft will become a commercial product and we will have a
distribution in place which may be suitable for the peripheral graft.
7
OPPORTUNITY
The UK market is estimated at (Pounds)1.5 million per annum, the total EU market
at (Pounds)40 million and the global business (Pounds)125 million per annum.
The market is growing at 10% per annum and is dominated by American-manufactured
products. The EU has suspended import duty on certain categories of vascular g
rafts because there is no EU manufacturer.
THE UNIVERSITY DEPARTMENT OF SURGERY AT THE ROYAL FREE HOSPITAL
The Department is recognised for its research into several aspects of vascular
biology, in particular the role of compliance in vascular grafting. Vascular
biological research here has also focused on neo-intimal hyperplasia and
endothelial cell graft seeding. The head of Department has been involved in
compliance research initially at Harvard and over the last seven years at the
Royal Free Hospital School of Medicine. The Department has a Principal
Biophysicist, a specialist in vascular flow dynamics and measurement who has
developed a highly accurate method of compliance measurement using digital x-ray
angiographic techniques. For the first time this method allows accurate
compliance measurement of implanted grafts and native arteries in patients. In
addition there is an experienced cell culture technician and a vascular fellow
of two years experience of research into compliance and vascular flow
measurement. The department is set up with a vascular Haemodynamic laboratory
for in vitro and in vivo vascular graft studies. This department has great
expertise in the field of compliance in vascular surgery.
The methodologies of immunohistochemistry, autoradiography and electron
microscopy are in routine use in this Department. The methodology of in vitro
study of prosthetic grafts over the long term (i.e. longer than 24 hours) under
physiological conditions is well developed. There are superb facilities for
large animal studies focused on the pig with established prosthetic graft
evaluation within this context.
The IRC of Biomaterials Research headed by Professor Xxxxxx Xxxxxxx is housed
within the University Department of Surgery. In collaboration there has been
research into the use of non-thrombogenic biomaterials in lining prosthetic
graft materials both in vitro and using a carotid interposition model in sheep.
8
SECTION 3
PROJECT PLAN OUTLINE
Research and experimental work will be carried out by the Department of Vascular
Surgery at The Royal Free Hospital Medical School. CardiTech will manufacture
polycarbonate urethane grafts for the project at its facilities near Xxxxxxx.
The present polycarbonate graft which has been developed for vascular access by
CardioTech will be studied in vitro by the academic partner to ascertain its
suitability to meet the more demanding requirements in peripheral vascular
bypass grafting.
The results from evaluation will be combined with study results and other
development information from CardioTech International Ltd to allow an
application to be made to an Ethics Committee leading to a pilot clinical
investigation with the objective of determining the short term clinical
performance of the grafts, providing the clinical information required to comply
with the essential requirements of the EU Medical Devices Directive. The
clinical investigation will commence no later than May 1998.
In parallel to this work evaluation of alternative adjunctive technologies will
be instigated. In particular endothelial cell seeding of the ChronoFlex will be
undertaken to reduce the thrombogenicity of the graft surface.
Grafts will go through a selection process of physical and mechanical testing by
CardioTech (ISO/DS 7198 Tubular Vascular Grafts) and in vitro and in vivo
research at the laboratories of the academic partner leading to clinical
evaluation.
The project will consist of a series of tasks which are described in outline as
follows:
9
--------------------------------------------------------------------------------
PROJECT 1 IN VITRO INVESTIGATION OF POLYCARBONATE URETHANE GRAFT FOR
TASKS 1.1 - 1.4 LOWER LIMB ARTERIAL BYPASS
--------------------------------------------------------------------------------
Objective: Research the compliance and pulsatile flow
characteristics
Responsible: Royal Free Hospital, dept. of vascular surgery
Description of Work: Peripheral arterial bypass grafts have to pass
over the knee joint and there is concern for
possible kinking of the graft at flexion points.
CardioTech will add to the existing access graft
an external supporting layer to improve the
anti-kinking properties of the graft for
peripheral use. The reinforced peripheral
graft will be made in both 4 and 5 mm internal
diameters to provide a closer match to the
natural vessels.
Grafts will be manufactured by CTI for
evaluation of the compliance
characteristics of the polycarbonate
urethane grafts in vitro by using
oohotracker and angiographic methods,
obtaining compliance, diameter and
pressure curves for a range of
physiological flow rates.
Initially research the compliance and
shear stress characteristics of human
artery in vivo and in vitro at
physiological flow conditions by
echotracker and angiographic methods.
This will establish the physical
characteristics of a blood voocol and
generate a range of compliance and
pressure curves at different pulsatile
blood flow waveforms for human artery
and compliant graft.
Objective: Research the ability of the graft to tolerate
low blood flow.
Description of Work: Grafts are placed in a pulsatile flow circuit to
simulate human femoral artery conditions. Flow
and pressure rates are modified to establish
conditions prevalent in a range of diseased
femoral artery conditions and by gross and
microscopic methods to investigate the ability
of surface to tolerate low blood flow. This
would be assessed over one week at sterillised
conditions. The aim is to access the physical
characteristics over time in a condition similar
to in vivo.
Deliverable: An analysis of the peripheral vascular graft to
provide the
10
justification required to commence experimental
implants.
11
--------------------------------------------------------------------------------
PROJECT 1 IN VIVO RESEARCH AND EVALUATION OF POLYCARBONATE GRAFT
TASKS 1.5, 1.8 FOR LOWER LIMB ARTERIAL BYPASS
--------------------------------------------------------------------------------
Objective: Research into the effect of anastomotic
technique and materials on compliance.
Responsible: Royal Free Hospital, dept. of surgery.
Description of Work: In vivo acute studies of anastomotic compliance
will be performed to research the effects of
commonly used suture materials, i.e. proline and
novafil sutures (this is a more elastic or
compliant suture material provided by Xxxxx &
Xxxx) and suture technique, i.e. continuous and
interrupted on the in situ rentention of
compliance.
The haemodynamic effect of anastomotic angle
will also be studied (including the
configuration used in clinical practice).
Measurements at the anastomosis will include
shear stress, shear rate and turbulence.
Objective: Long term in vivo compliance and performance
study.
Having identified the best anastomotic
methodology and materials by actue in
vivo experimental investigation we will
begin research into the acute and
chronic in vivo compliance of the graft.
This will be done by implanting grafts
into a porcine model. Compliance will be
measured at implant and at predetermined
intervals using an angiographic
technique.
At explant, in addition to compliance
and performance measurements, the grafts
will be perfused-fixed and studied by
autoradiograpy, and
immunohistochemistry, and electron
microscopy. Redial tensile strength and
molecular weight determination are also
undertaken on the explants to
demonstrate biodurability.
Deliverable: Analysis of biological response to the implant,
retention of compliance characteristics, and
performance information needed to justify
limited clinical evaluation and recommendations
for implantation technique.
12
--------------------------------------------------------------------------------
PROJECT 1 CLINICAL INVESTIGATION OF POLYCARBONATE URETHANE GRAFT FOR
TASKS 1.7 - 1.9 LOWER LIMB ARTERIAL BYPASS
--------------------------------------------------------------------------------
Objective: Investigate the short term clinical performance
of the peripheral vascular graft.
Responsible: Clinical investigation - Royal Free Hospital,
dept. of vascular surgery and other
investigators to be determined Regulatory -
CardioTech International Ltd.
Objective: Twenty patients requiring lower limb arterial
bypass in whom saphenous vein is not available
will be recruited into the study Graft patency
to be assessed non-invasively using Duplex
scanning at regular intervals.
In addition, ultrasound measurements of the
graft lumen will be performed at operation and
at regular intervals to monitor the compliance
characteristics.
Description of Work: Design clinical evaluation to EN540.
Prepare clinical investigation documentation.
Obtain ethical committee approval.
Obtain approval from the Competent Authority
Deliverable: Justification to enable extended pre-marketing
clinical evaluation to take place at other
hospitals and clinical information required to
complete CE marking process.
13
--------------------------------------------------------------------------------
PROJECT 2 EVALUATION OF GRAFT SEEDED WITH ANDOTHOLICAL CELLS
TASKS 2.1 - 2.9
--------------------------------------------------------------------------------
Objective Investigate possibility of creating a non-
thrombogenic luminal surface, by seeding the
graft with endothelial cells.
Responsible Royal Free hospital, department of surgery.
Description of Work a. Assessment of endothelial cell attachment
beyond 24 hours: Grafts will be seeded to
confluence with micro vascular endothelial
cells will be placed onto the circuit of an
Acusyct R., Endotronics this system allows
perfusion at 37C for up to one week with
physiological solutions appropriately
oxygenated, and buffered, with viscosity
similar to that of human blood. This system
is already established in this laboratory.
a.i Segments of grafts seeded to confluences
will be perfused for two days, four days
and seven days respectively. Human
platelets labelled with 111 Indium-oxine
will be injected at the end of the
perfusion period and circulated for sixty
minutes. Endothelial cell covering will be
assesssed using this method of
thrombogenicity assessment (thrombogenicity
index). At the end of the study the graft
will be removed and endothelial coverage
assessed in addition by scanning electron
microscopy.
a.ii Compliance measurement of endothelialised
grafts: Compliance profiles using the
echotracker will be generated from each of
the graft segments after two, four and
seven days of perfusion in this system.
b. Long term in vivo study on graft
compliance: Endothelial five centimetre
segments of grafts will be inserted into
the carotid circulation of 5 large white
pigs and compliance measured immediately
after implantation. Compliance studies
using the angiographic technique will be
performed at implant and at pre-determined
intervals. This group will form a cohort
for long term study for a minimum period of
one year and ideally for eighteen months in
order to assess any long-term effects.
b.i At explanation in addition to compliance
measurements the grafts will be perfused-
fixed,
14
studied by immunohistochemistry,
autoradiography and E.M.
15
--------------------------------------------------------------------------------
PROJECT 2 EVALUATION OF ALTERNATIVE TECHNOLOGIES RELEVANT TO
peripheral arterial bypass
--------------------------------------------------------------------------------
Objective: Investigate available surface modification
treatments and or other technologies that could
enhance the properties of the graft and
potentially contribute to improved performance
and/or convenience of use of the graft
Responsible Royal Free Hospital, dept of surgery and
CardioTech Ltd.
Description of Work This would start as mostly desk research via
literature searches, patent databases or
commercial contacts, evaluation of information
available from vendors.
Select the most promising alternative
technologies and obtain grafts treated or
modified by selected treatments and research the
improvements/benefits brought by the modified
surface using steps described in Task 1.
Deliverable: Provide initial justification to adopt a
particular treatment for additional evaluation
and comparison against existing peripheral
graft.
16
--------------------------------------------------------------------------------
Project 1 + 2 Regulatory Matters
--------------------------------------------------------------------------------
Objective Establishment and maintaining of regulatory
files required for CE (European) marking and
(USA) F.D.A. application.
Responsible CardioTech Internationa Ltd.
Description of Work D____ compliance with ISO 719 Tubular Vascular
Grafts
Generate quality system documentation
Document compliance with essential requirements
Undertake risk analysis
Set up technical file
Contact and negotiations with notified body and
competent authority
Clinical investigation protocol and
documentation to EN540
Application to USA F.D.A. for Investigational
Device Status
Deliverable Regulatory files and development records in
place throughout the programme.
17
ROYAL FREE HOSPITAL & SCHOOL OF MEDICINE
UNIVERSITY OF LONDON
Vascular Unit
----------------------------------------
University Department of Surgery
The Royal Free Hospital, Pond Street, London NW3 2QG, U.K.
Tel: 0000 000 0000
Fax: 0000 000 0000
STAFF
1. Vascular Surgical Fellow (Xx. Xxxxxxx Xxxxxxxxxxxxx) is a fully qualified
surgeon. He will work on experimental and clinical side of the project.
2. Biophysicist (need to be appointed). The Diaphysicist will work on
compliance and cell seeding of vascular graft in vitro and in vivo.
3. Research Fellow (Xx. Xxxxx Xxx) will set up and maintain the cell bank,
investigate human endothelial cell recovery rates from fat. He will work
experimental and clinical side of project.
Management of the project will be by Mr. Xxxxxx Xxxxxxxx and Xx. Xxxxxxxxx
Seifalian, University Department of Surgery, RFH&SM.
ON MANAGEMENT
Overall management of the project will be provided by a quarterly meeting of the
RFH&SM (Xx. Xxxxxx Xxxxxx, Mr. Xxxxxx Xxxxxxxx & Xx. Xxxxxxxxx Seifalian) and
CTI (Mr. Xxxx Xxxxxxx and Xx. Xxxxxxx Xxxxxxx). A summary report will be
produced for each quarterly meeting, and this will be made available on demand
to Freemedic and CTI.
Research and Development management of the project will be provided by a monthly
meeting of the Xx. X. Xxxxxxxx and Xx. X. Xxxxxxxxx and three researchers. A
summary report will be produced by the researchers in preparation for each
monthly meeting.
Informal gatherings between members of the group in the department will be held
at least once a week.
Xx. X. Xxxxxxxx Dr. A. M. Seifalian
18
EXHIBIT B
---------
ROYAL FREE HOSPITAL & SCHOOL OF MEDICINE
University of London
Vascular Unit
----------------------------------------
University Department of Surgery
The Royal Free Hospital, Pond Street, London NW3 2QG, U.K.
Tel: 0000 000 0000
Fax: 0000 000 0000
------------------------------------------------------------------------------------------------------------------------
COST YEAR 1 YEAR 2
------------------------------------------------------------------------------------------------------------------------
CAPITAL COST
------------------------------------------------------------------------------------------------------------------------
LDA (Pounds)8,000
------------------------------------------------------------------------------------------------------------------------
Intravascular (Pounds)41,000
ultrasound
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
STAFF Vascular Surgeon
------------------------------------------------------------------------------------------------------------------------
Salary (Pounds)20,710
------------------------------------------------------------------------------------------------------------------------
LW (Pounds)1,448
------------------------------------------------------------------------------------------------------------------------
Total (Pounds)25,158
------------------------------------------------------------------------------------------------------------------------
10.5% NI (Pounds)2,642
------------------------------------------------------------------------------------------------------------------------
Total cost (Pounds)27,800 (Pounds)27,800
------------------------------------------------------------------------------------------------------------------------
Biophysicist
------------------------------------------------------------------------------------------------------------------------
Salary (Pounds)17,000
------------------------------------------------------------------------------------------------------------------------
LW (Pounds)1,448
------------------------------------------------------------------------------------------------------------------------
Total (Pounds)18,448
------------------------------------------------------------------------------------------------------------------------
10.5%NI (Pounds)1,937
------------------------------------------------------------------------------------------------------------------------
Total Cost (Pounds)20,385 (Pounds)20,385 (Pounds)21,404
------------------------------------------------------------------------------------------------------------------------
Research Fellow
------------------------------------------------------------------------------------------------------------------------
Salary (Pounds)17,000
------------------------------------------------------------------------------------------------------------------------
LW (Pounds)1,448
------------------------------------------------------------------------------------------------------------------------
Total (Pounds)18,448
------------------------------------------------------------------------------------------------------------------------
10.6%NI (Pounds)1,937
------------------------------------------------------------------------------------------------------------------------
Total Cost (Pounds)20,385 (Pounds)20,385 (Pounds)21,404
------------------------------------------------------------------------------------------------------------------------
OVERHEADS AT (Pounds)27,428 (Pounds)17,123
40%
------------------------------------------------------------------------------------------------------------------------
ADMINISTRATION Administration (Pounds)7,120 (Pounds)7,120 (Pounds)7,120
------------------------------------------------------------------------------------------------------------------------
TRAVEL Travelling to (Pounds)1,000 (Pounds)1,000
company
------------------------------------------------------------------------------------------------------------------------
CONSUMMABLE (Pounds)23,200 (Pounds)17,072
------------------------------------------------------------------------------------------------------------------------
CTI LEGAL (Pounds)12,500
------------------------------------------------------------------------------------------------------------------------
TOTAL (Pounds)188,818 (Pounds)85,124
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Grand Total (Pounds)273,942
------------------------------------------------------------------------------------------------------------------------
Xx. X. Xxxxxxxx Dr. A. M. Seifalian
19
RFH&SM-CTI DEVELOPMENT PROGRAMME
-----------------------------------------------------------------------------------------------------------------------------------
ID Task Name Year 1
------------------------------------------------------------------------------------------------------------------------------------
--> PROJECT 1 1 2 3 4 5 6 7 8 9 10 11 12 1
------------------------------------------------------------------------------------------------------------------------------------
1.1 Review CTI data -- -- --
------------------------------------------------------------------------------------------------------------------------------------
1.2 In vitro investigation of CPU grafts -- -- -- -- -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
1.3 Delivery of analysis of the in vitro -- -- -- -- --
experimental work on CPU graft
------------------------------------------------------------------------------------------------------------------------------------
1.4 Preparation of in vivo application -- -- --
and submission
------------------------------------------------------------------------------------------------------------------------------------
1.5 In vivo, animal implants of CPU grafts -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
1.6 Delivery analysis of biological response to the -- -- -- --
implant, retention of compliance characteristics
------------------------------------------------------------------------------------------------------------------------------------
1.7 Preparation of Ethical Committee applications -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
1.8 Clinical study reinforced CPU graft (subject -- -- --
to ethical approval)
------------------------------------------------------------------------------------------------------------------------------------
1.9 Report and follow up on clinical study
-----------------------------------------------------------------------------------------------------------------------------------
--> PROJECT 2
------------------------------------------------------------------------------------------------------------------------------------
2.1 Review literature -- -- --
------------------------------------------------------------------------------------------------------------------------------------
2.2 Set up call bank from porcine cells -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
2.3 Evaluation of Graft seeded with endothellal -- -- -- -- -- -- -- -- -- --
cells in vitro
------------------------------------------------------------------------------------------------------------------------------------
2.4 in vivo animal implants CPU seeded grafts -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
2.5 Delivery analysis of biological response to -- -- --
the implant of seeded grafts
------------------------------------------------------------------------------------------------------------------------------------
2.6 Human endothellal Cell harvesting -- -- -- -- -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
2.7 Preparation of Ehtical Committee application -- -- --
------------------------------------------------------------------------------------------------------------------------------------
2.8 Clinical study of CPU seeded graft
(subject to ethical approval)
------------------------------------------------------------------------------------------------------------------------------------
2.9 Report and followup on clinical study
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
ID Task Name Year 2
-------------------------------------------------------------------------------------------------------------------------
--> PROJECT 1 2 3 4 5 6 7 8 9 10 11 12
-------------------------------------------------------------------------------------------------------------------------
1.1 Review CTI data
-------------------------------------------------------------------------------------------------------------------------
1.2 In vitro investigation of CPU grafts --
-------------------------------------------------------------------------------------------------------------------------
1.3 Delivery of analysis of the in vitro
experimental work on CPU graft
-------------------------------------------------------------------------------------------------------------------------
1.4 Preparation of in vivo application
and submission
-------------------------------------------------------------------------------------------------------------------------
1.5 In vivo, animal implants of CPU grafts
-------------------------------------------------------------------------------------------------------------------------
1.6 Delivery analysis of biological response to the
implant, retention of compliance characteristics
-------------------------------------------------------------------------------------------------------------------------
1.7 Preparation of Ethical Committee applications
-------------------------------------------------------------------------------------------------------------------------
1.8 Clinical study reinforced CPU graft (subject -- -- -- -- -- -- -- -- -- --
to ethical approval)
-------------------------------------------------------------------------------------------------------------------------
1.9 Report and follow up on clinical study -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
--> PROJECT 2
-------------------------------------------------------------------------------------------------------------------------
2.1 Review literature
-------------------------------------------------------------------------------------------------------------------------
2.2 Set up call bank from porcine cells
-------------------------------------------------------------------------------------------------------------------------
2.3 Evaluation of Graft seeded with endothellal -- -- --
cells in vitro
-------------------------------------------------------------------------------------------------------------------------
2.4 in vivo animal implants CPU seeded grafts
-------------------------------------------------------------------------------------------------------------------------
2.5 Delivery analysis of biological response to
the implant of seeded grafts
-------------------------------------------------------------------------------------------------------------------------
2.6 Human endothellal Cell harvesting -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
2.7 Preparation of Ehtical Committee application
-------------------------------------------------------------------------------------------------------------------------
2.8 Clinical study of CPU seeded graft -- -- -- -- -- -- --
(subject to ethical approval)
-------------------------------------------------------------------------------------------------------------------------
2.9 Report and followup on clinical study -- --
-------------------------------------------------------------------------------------------------------------------------
1. Project 1 is the experimental and clinical investigation of the
ChronoFlex vascular graft.
2. Project 2 is development and experimental and clinical investigation
of cell seeded ChronoFlex vascular Graft.
20
