TEXT OMITTED AND FILED SEPARATELY
"CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 240.24B-2"
[*] RESEARCH COLLABORATION AND LICENSE AGREEMENT
BY AND BETWEEN
AGOURON PHARMACEUTICALS, INC.
AND
IBIS THERAPEUTICS,
A DIVISION OF ISIS PHARMACEUTICALS, INC.
JUNE 9, 2000
TABLE OF CONTENTS
ARTICLE 1..............................................................................................2
DEFINITIONS............................................................................................2
ARTICLE II.............................................................................................9
RESEARCH PROGRAM.......................................................................................9
2.1 GENERAL PURPOSE...........................................................................9
2.2 GENERAL RESEARCH PROGRAM ACTIVITIES.......................................................9
2.3 CONDUCT OF RESEARCH PROGRAM...............................................................9
2.4 RESEARCH WORK SITES.......................................................................9
2.5 JOINT RESEARCH COMMITTEE..................................................................9
2.6 PROJECT TEAM.............................................................................11
2.7 RECORDS AND REPORTS......................................................................11
2.8 RESEARCH PROGRAM STAFFING LEVELS.........................................................12
2.9 RESEARCH PROGRAM TERM....................................................................12
2.10 POST RESEARCH PROGRAM ACTIVITIES.........................................................13
2.11 EXCLUSIVE EFFORTS........................................................................14
ARTICLE III...........................................................................................14
CERTAIN RESEARCH PROGRAM; DEVELOPMENT AND.............................................................14
COMMERCIALIZATION ACTIVITIES..........................................................................14
3.1 SUPPLY OF AGOURON SCREENING COMPOUNDS; SELECTED COMPOUNDS; CONFIDENTIALITY...............14
3.2 REPORTING ON SCREENING ACTIVITIES........................................................15
3.3 PROCESS OF ELECTION OF RNA TARGETS FOR MEDICINAL CHEMISTRY STAGE.........................16
3.4 SELECTION OF COLLABORATION COMPOUNDS FOR ACTIVE DEVELOPMENT/COMMERCIALZATION PROGRAMS....16
3.5 COMMERCIALLY REASONABLE EFFORTS..........................................................16
ARTICLE IV............................................................................................16
LICENSE GRANTS........................................................................................16
4.1 RESEARCH AND DEVELOPMENT.................................................................16
4.2 DEVELOPMENT AND COMMERCIALIZATION........................................................17
ARTICLE V.............................................................................................17
PAYMENTS, ROYALTIES AND REPORTS.......................................................................17
5.1 LICENSE FEE..............................................................................17
5.2 RESEARCH PROGRAM FUNDING.................................................................17
5.3 MILESTONE PAYMENTS.......................................................................17
5.4 ROYALTIES................................................................................18
5.5 THIRD-PARTY TECHNOLOGY...................................................................20
5.6 REPORTS; PAYMENT OF ROYALTY..............................................................20
5.7 AUDITS...................................................................................20
5.8 PAYMENT EXCHANGE RATE....................................................................21
5.9 FOREIGN CURRENCY.........................................................................21
5.10 INCOME TAX WITHHOLDING...................................................................22
ARTICLE VI............................................................................................22
REPRESENTATIONS AND WARRANTIES........................................................................22
6.1 IBIS REPRESENTATIONS AND WARRANTIES......................................................22
6.2 AGOURON REPRESENTATIONS AND WARRANTIES...................................................22
ARTICLE VII...........................................................................................23
PATENT MATTERS........................................................................................23
7.1 [*]......................................................................................23
7.3 REPORTING AND COOPERATION................................................................23
7.4 FILING, PROSECUTION AND MAINTENANCE OF PATENTS...........................................23
7.5 PATENT ENFORCEMENT AGAINST THIRD-PARTY INFRINGERS........................................23
7.6 INFRINGEMENT OF THIRD-PARTY PATENT RIGHTS................................................24
ARTICLE VIII..........................................................................................24
[*] ................................................................................................24
8.1 [*]......................................................................................24
8.2 [*]......................................................................................24
8.3 [*]......................................................................................24
8.4 [*]......................................................................................24
8.5 [*]......................................................................................25
8.6 [*]......................................................................................25
ARTICLE IX............................................................................................25
TERM AND TERMINATION..................................................................................25
9.1 AGREEMENT TERM AND EXPIRATION............................................................25
9.2 TERMINATION..............................................................................25
9.3. DISPOSITION OF INVENTORY.................................................................27
9.4. EFFECT OF EXPIRATION OR TERMINATION......................................................27
ARTICLE X.............................................................................................27
CONFIDENTIALITY, PUBLICATION AND PUBLICITY............................................................27
10.1 NON-DISCLOSURE AND NON-USE OBLIGATIONS...................................................27
10.2 PERMITTED DISCLOSURE OF PROPRIETARY INFORMATION..........................................28
10.3 NO WRITTEN PUBLICATION AND ORAL DISCLOSURES..............................................28
10.4 PUBLIC DISCLOSURE OF AGREEMENT...........................................................28
ARTICLE XI............................................................................................28
MISCELLANEOUS.........................................................................................28
11.1 FORCE MAJEURE............................................................................28
11.2 ASSIGNMENT...............................................................................29
11.3 SEVERABILITY.............................................................................29
11.4 NOTICES..................................................................................29
11.5 APPLICABLE LAW...........................................................................30
11.6 DISPUTE RESOLUTION.......................................................................30
11.7 REGULATORY APPROVALS.....................................................................31
11.8 ENTIRE AGREEMENT.........................................................................31
11.9 HEADINGS.................................................................................31
11.10 INDEPENDENT CONTRACTORS..................................................................31
11.11 WAIVER...................................................................................32
11.12 COUNTERPARTS.............................................................................32
EXHIBITS
Exhibit A - Research Plan
Exhibit B - [*]
1
[*] RESEARCH COLLABORATION AND LICENSE AGREEMENT
This [*] Research Collaboration and License Agreement ("Agreement"), dated
June 9, 2000, is between Agouron Pharmaceuticals, Inc., a corporation
organized and existing under the laws of California and a wholly owned
subsidiary of the Xxxxxx-Xxxxxxx Company, having a principal place of
business at 00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xx Xxxxx, XX 00000-0000
("Agouron"), and Isis Pharmaceuticals, Inc., a corporation organized and
existing under the laws of Delaware, on behalf of its Ibis Therapeutics
division, having a principal place of business at 0000 Xxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 (because Isis will be conducting the work hereunder
through its Ibis Therapeutics division, Isis will hereafter be referred to as
"Ibis"; however all references to "Ibis" are intended to refer both to Isis
and Ibis, unless otherwise indicated). Agouron and Ibis may each be referred
to as a "Party" or together be referred to as the "Parties."
WHEREAS, Ibis has proprietary technology and experience in identifying
therapeutically attractive drug targets in structural RNA and in designing
and optimizing drug leads to bind to such targets;
WHEREAS, Agouron has proprietary technology and experience in discovering,
developing and commercializing drug products for human therapeutic use; and
WHEREAS, Agouron and Ibis desire to enter into a research collaboration to
discover new treatments for [*] infection using selected RNA targets [*] upon
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
For purpose of this Agreement, the following capitalized terms, whether used
in the singular or plural, will have the following meanings:
1.1 "ACTIVE DEVELOPMENT/COMMERCIALIZATION PROGRAM" means an ongoing program
for developing and commercializing a Collaboration Compound or a
Collaboration Product, including preclinical and clinical development
activities aimed at obtaining Registration for marketing, and marketing
and selling activities, for the Collaboration Product.
1.2 "ADDITIONAL IDENTIFIED COMPOUNDS" has the meaning specified in Section
3.1.3.
1.3 "AFFILIATE" of a Party means any person, organization, corporation, or
other business entity that is controlling, controlled by or under
common control with such Party. The term "control" (including, with
correlative meaning, the terms "controlled by" and "under common
control with") as used with respect to any person, organization,
corporation or other business entity, means the possession, directly or
indirectly, of the power to direct, or cause the direction of, the
management and policies of such person, organization, corporation or
entity, whether through the ownership of voting securities or by
contract or court order or otherwise. For purposes of this definition,
an entity will be deemed to
2
control another entity if it owns or controls, directly or
indirectly, at least fifty percent (50%) of the outstanding stock or
other voting rights entitled to elect directors or their equivalent.
1.4 "AGOURON FIELD" means uses resulting from the mediation or inhibition
of [*] through interaction with an RNA Target, including therapeutic,
prophylactic, diagnostic and classification uses.
1.5 "AGOURON SCREENING COMPOUNDS" means compounds from proprietary
libraries or collections of chemical compounds [*].
1.6 "ANNUAL EXTENSION PERIOD" has the meaning specified in Section 2.9.2.
1.7 "CALENDAR YEAR" means a period of 12 months commencing on January 1 and
ending on December 31.
1.8 "COLLABORATION COMPOUND(S)" means Program Compound(s) and/or Derived
Compound(s).
1.9 "COLLABORATION PATENT RIGHTS" means Patent Rights, Controlled by either
Party or both Parties, filed anywhere in the world after the Effective
Date, having any claims covering any of the following: (a)
Collaboration Compounds; (b) Collaboration Products; or (c) any
Collaboration Technology that is conceived or reduced to practice by
either Party or both Parties during the Research Program Term.
1.10 "COLLABORATION PRODUCT" means any preparation in final form (e.g.,
final-dosage form for sale by prescription, over-the-counter or another
method) containing at least one Collaboration Compound, for use in the
Agouron Field, including for use in treating or preventing infections
caused by [*] or for diagnosing or classifying [*] infection. If a
Collaboration Product containing a specific Collaboration Compound is
useful in the Agouron Field and a preparation in final form containing
such Collaboration Compound is also useful in treating, preventing,
diagnosing or classifying any human diseases or conditions other than
[*], such preparation in final form containing such Collaboration
Compound for such other use outside the Agouron Field will also be
deemed a Collaboration Product.
1.11 "COLLABORATION TECHNOLOGY" means Technology, other than Collaboration
Compounds and Collaboration Products, Controlled by either Party or
both Parties that is necessary or useful to make, have made, use,
import or sell Collaboration Compounds or Collaboration Products,
including processes of making Collaboration Compounds or Collaboration
Products, or methods for using Collaboration Compounds or Collaboration
Products. Collaboration Technology will exclude [*].
1.12 "COMBINATION PRODUCT" means any Collaboration Product in any final form
that contains, in addition to a Collaboration Compound, one or more
other active ingredients having [*] activity.
1.13 "CONTROLLED" OR "CONTROLLING" means possession, now or in the future,
of the ability to grant a license or sublicense of rights as provided
for herein without violating the terms or any agreement or arrangement
with, or the rights of, any Third Party.
3
1.14 "DERIVED COMPOUND" means any chemical compound having [*].
1.15 "DESIGNATED [*]" means A [*] potential RNA Target(s) suitable for the
Research Program.
1.16 "EARLY TERMINATION" has the meaning specified in Section 2.9.1.
1.17 "EC APPROVAL" means the approval of a Collaboration Product for
marketing in the European Union by the European Commission ("EC"), or
any future equivalent approval process.
1.18 "EFFECTIVE DATE" means July 1, 2000.
1.19 "ELECTED RNA TARGET" has the meaning specified in Section 2.10.
1.20 "ELECTED RNA TARGET LIST" has the meaning specified in Section 2.10(b).
1.21 "EMEA FILING" means filing an application with the European Medicines
Evaluation Agency ("EMEA"), or any successor agency having
substantially the same regulatory functions, to obtain EC Approval.
1.22 "ENFORCEABLE CLAIM" means a claim included in an issued and unexpired
patent that has not been: (i) abandoned or disclaimed; (ii) declared
invalid or unenforceable by a decision of a court or other governmental
agency of competent jurisdiction, which decision is unappealable or
unappealed within the time allowed for appeal; or (iii) admitted by the
Party owning or Controlling such patent to be invalid.
1.23 "FDA" means the United States Food and Drug Administration, or any
successor agency having substantially the same regulatory functions.
1.24 "FTE RATE" means the compensatory rate to be paid per full-time
equivalent ("FTE") scientist.
1.25 "FIRST COMMERCIAL SALE" means the initial transfer in title of a
quantity of Collaboration Product to a Third Party purchaser by
Agouron, its Affiliates or Sublicensees for consideration, or the
initial use of a Collaboration Product by a Third Party in a country,
following governmental approval in such country for such transfer or
use, whichever occurs first. First Commercial Sale will not include
transfer of reasonable quantities of any free samples Collaboration
Product and/or the reasonable quantities transferred for development
purposes, such as for use in experimental studies or clinical trials.
1.26 "IBIS EXISTING TECHNOLOGY" means all Technology, Controlled by Ibis as
of the Effective Date, that is necessary or useful for the conduct of
the Research Program, [*]; (b) genetic databases; and (c) biological
materials and chemical compounds. Ibis Existing Technology will exclude
[*].
1.27 "IBIS EXISTING TECHNOLOGY PATENT RIGHTS" means any Patent Rights
Controlled by Ibis, filed anywhere in the world, containing any claims
covering any Ibis Existing Technology. Ibis Existing Technology Patent
Rights will exclude [*].
1.28 "INITIAL OPTION LICENSE FEE" means the license fee for the [*].
4
1.29 "INITIAL RESEARCH TERM" has the meaning set forth in Section 2.9.
1.30 "JAPANESE APPROVAL" means the approval of a Collaboration Product for
marketing in Japan by the Japanese Ministry of Health and Welfare, or
any future equivalent approval process.
1.31 "JAPANESE REGISTRATION FILING" means filing an application with the
Japanese Ministry of Health and Welfare, or any successor agency having
substantially the same regulatory functions, to obtain Japanese
Approval.
1.32 "JOINT RESEARCH COMMITTEE" or "JRC" means the committee described in
Section 2.5.
1.33 [*].
1.34 [*] means: (a) the patents and patent applications identified in
Exhibit B hereto, and all patents and patent applications based on,
corresponding to, or claiming the priority date(s) of any of the
foregoing, and any reissues, term extensions (or other governmental
actions which provide exclusive rights to the patent holder in the
patented subject matter beyond the original patent expiration date),
substitutions, confirmations, registrations, validations,
re-examinations, additions, continuations, continued prosecutions,
continuations-in-part, or divisions of or to any of the foregoing; and
(b) any other Patent Rights Controlled by Ibis directed to Technology
necessary or relating to the practice of [*].
1.35 [*] means Technology: (a) Controlled by Ibis during the Research
Program Term that is necessary or relates to the performance of
multi-target affinity specificity screening ("MASS"); or [*].
1.36 "MEDICINAL CHEMISTRY STAGE" means [*]
1.37 "MEDICINAL CHEMISTRY STAGE LIST" has the meaning specified in Section
2.10(c).
1.38 "NDA APPROVAL" means the approval of a Collaboration Product for
marketing in the United States by the FDA, or any future equivalent
approval process.
1.39 "NDA FILING" means the filing of a new drug application or other
application ("NDA") with the FDA, to obtain NDA Approval.
1.40 "NET SALES REVENUE" means the total invoiced amount of all worldwide
sales of Collaboration Product(s) by Agouron, its Affiliates or
Sublicensees, to a Third Party, less (a) customary trade, quantity, or
cash discounts and commissions allowed and taken by brokers or agents,
(b) amounts repaid or credited by reason of rejection or returns, as
well as rebates, chargebacks, retroactive price reductions and
allowances, (c) sales, use and/or other taxes, import and/or export
customs duties, and other similar governmental charges paid, but not
including income taxes, and (d) to the extent separately stated on
purchase orders, invoices, or other documents of sale, insurance costs
and outbound transportation charges prepaid or allowed related to
shipment of Collaboration Product(s). Net Sales Revenue excludes: (a)
the transfer of reasonable and customary quantities of free samples of
Collaboration Product(s), (b) the transfer of Collaboration Product(s)
as clinical trial materials, other than for subsequent resale; and (c)
use by Agouron, its
5
Affiliates or Sublicensees of Collaboration Product for any purpose
connected with the securing of regulatory approval or validating of
a manufacturing process or the obtaining of other necessary
marketing approvals for Collaboration Product (unless such
Collaboration Product is subsequently sold).
1.41 [*]
1.42 [*].
1.43 "PATENT RIGHTS" means: (a) patent applications (including applications
for certificates of invention); (b) any patents issuing from such
patent applications (including certificates of invention); (c) all
patents and patent applications based on, corresponding to, or claiming
the priority date(s) of any of the foregoing; and (d) any reissues,
term extensions (or other governmental actions which provide exclusive
rights to the patent holder in the patented subject matter beyond the
original patent expiration date), substitutions, confirmations,
registrations, validations, re-examinations, additions, continuations,
continued prosecutions, continuations-in-part, or divisions of or to
any of the foregoing.
1.44 "PHASE I CLINICAL STUDY" means the initial testing of a Collaboration
Product in humans, whether the primary endpoint is safety,
pharmacokinetics or any combination thereof.
1.45 "PHASE II STUDY COMPLETION" means completion of the first human
clinical study in patients [*]. Initiation of a Pivotal Quality
Clinical Study will be deemed to be a Phase II Study Completion,
whether or not a Phase II Study is ongoing.
1.46 "PIVOTAL QUALITY CLINICAL STUDY" means a human clinical trial of a
Collaboration Compound or Collaboration Product designed to demonstrate
statistically significant treatment effect so as to achieve
Registration. Initiation of a Phase III clinical study will be deemed
to be initiation of a Pivotal Quality Clinical Study.
1.47 "POST RESEARCH PROGRAM TERM"
(a) Reserved RNA Target: The Post Research Program Term for a
Reserved RNA Target means the [*] following the end of the
Research Program Term.
(b) Elected RNA Target:
(i) The Post Research Program Term for an Elected RNA
Target on the Elected Target List means the [*]
period after the end of the Research Program Term; if
such Elected RNA Target enters Medicinal Chemistry
Stage on or before the [*] anniversary of the end of
the Research Program Term, then its Post-Research
Term will continue until a date which is [*] after
the date upon which such Elected RNA Target entered
Medicinal Chemistry Stage; provided further that if
an Elected RNA Target continues in a Medicinal
Chemistry Stage pursuant to Subsection 2.10(d)(ii),
then the Post Research Program Term will continue
until such Elected RNA Target completes the Medicinal
Chemistry Stage.
(ii) Notwithstanding the foregoing, the Post Research
Program Term for any Elected RNA Target will
automatically end when such Elected RNA
6
Target ceases to be an Elected RNA Target pursuant
to the provisions of Section 2.10.
1.48 "PROGRAM COMPOUND" means any Selected Compound having Threshold
Activity against an Elected RNA Target, [*].
1.49 "PROPRIETARY INFORMATION" means any and all proprietary or confidential
scientific, clinical, regulatory, marketing, financial and commercial
information or data, whether communicated in writing, orally or by any
other means, provided by one Party to the other Party in connection
with this Agreement. Proprietary Information will not include
information, as documented by written records, that:
(a) is known by the receiving Party at the time of its receipt, and
not through a prior disclosure by the disclosing Party;
(b) is in the public domain without the fault of the receiving Party
or its Affiliates or agents;
(c) is subsequently disclosed to a receiving Party by a Third Party
who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party; or
(d) is developed by the receiving Party independently of Proprietary
Information received from the other Party.
1.50 "REGISTRATION" means the official approval by the government or health
authority in a country (or supra-national organization, such as the
European Commission) that is required for a product to be offered for
sale in such country, including approval of a marketing application
such as an NDA, and such other authorizations as may be required for
the production, importation, pricing, reimbursement and sale of such
product, and for subsequent regulatory filings, including filings for
line extensions and/or additional indications of such product.
1.51 "RESEARCH PLAN" means the plan of goals and activities for the Research
Program agreed to by the Parties and attached as Exhibit A, as may be
amended from time-to-time in accordance with the terms of this
Agreement.
1.52 "RESEARCH PROGRAM" means the research activities of the Parties to
discover and develop RNA Targets and identify and discover
Collaboration Compounds, which activities are outlined in Article II
and in the Research Plan attached as Exhibit A. While the primary
purpose of the Research Program is to discover RNA Targets for use in
conducting drug discovery in the Agouron Field and to discover
Collaboration Compounds against such RNA Targets for use in treating
[*], the Parties acknowledge that Collaboration Compounds may also have
use [*], and that activities aimed at developing Collaboration
Compounds for such [*] use are within the scope of the Research
Program.
1.53 "RESEARCH PROGRAM TECHNOLOGY" means any Technology (a) Controlled by
Ibis and/or Agouron, (b) specifically concerning [*], RNA Targets or
other research tools or procedures for discovering, identifying,
selecting, and validating RNA Targets or for screening or assaying
compounds, (c) developed or acquired by or on behalf of Ibis and/or
Agouron after the Effective Date during the Research Program Term, and
(d)
7
necessary or useful for the conduct of the Research Program. The
Research Program Technology will exclude any chemical compounds,
including Agouron Screening Compounds and Collaboration Compounds.
Research Program Technology will also exclude Ibis Existing Technology,
Collaboration Technology, and Mass Spectrometry Screening Technology.
1.54 "RESEARCH PROGRAM TECHNOLOGY PATENT RIGHTS" means any Patent Rights
Controlled by Ibis and/or Agouron filed anywhere in the world after the
Effective Date, containing any claims covering any Research Program
Technology conceived or reduced to practice in the Research Program by
either Party or both Parties during the Research Program Term. Research
Program Technology Patent Rights will exclude Collaboration Patent
Rights, Mass Spectrometry Screening Patent Rights, and Ibis Existing
Patent Rights.
1.55 "RESEARCH PROGRAM TERM" means the term of the Research Program, as set
forth in Section 2.9.
1.56 "RESERVED RNA TARGET" has the meaning specified in Section 2.10(a).
1.57 "RNA TARGET" means a specific site within a [*], the binding to which
mediates or inhibits [*].
1.58 "SELECTED COMPOUND" means any Agouron Screening Compound, or any
proprietary compound of either Party supplied for screening in the
Research Program against an RNA Target, and determined to have
Threshold Activity against an RNA Target, and for which compound
Agouron has provided the structural information to Ibis pursuant to
Section 3.1.3.
1.59 "SUBLICENSEE" means any Third Party to which Agouron grants a
sublicense in connection with the development, manufacture, or
commercialization of a Collaboration Compound or a Collaboration
Product, as the case may be. A Third Party who is given only the right
to sell a Collaboration Product (such as a wholesaler or a distributor)
will not be considered a Sublicensee.
1.60 "TECHNOLOGY" means inventions (whether or not patentable), know-how,
trade secrets, research tools, materials, and technical information,
including but not limited to information in the form of research data,
databases, experimental procedures, designs, formulas, process
information, and expert opinions.
1.61 "TERRITORY" means the world.
1.62 "THIRD PARTY" means any party other than Ibis or Agouron and their
respective Affiliates.
1.63 "THRESHOLD ACTIVITY" means an [*], which may be adjusted by the JRC as
appropriate to meet the goals of the Research Program, considering the
threshold [*] value deemed necessary for a compound to have potential
utility in the Research Program and the percentage of compounds
screened found to meet such threshold value.
1.64 "UNITED STATES" or "U.S." means the United States of America and its
territories, possessions, and protectorates (including Puerto Rico) and
the District of Columbia.
8
ARTICLE II
RESEARCH PROGRAM
2.1 GENERAL PURPOSE.
During the Research Program Term, Ibis and Agouron will cooperate
exclusively to use the Mass Spectrometry Screening Technology, Ibis
Existing Technology and Research Program Technology to discover and
develop RNA Targets and to conduct activities to discover Collaboration
Compounds in the Agouron Field, upon the terms and conditions set forth
in this Agreement. The specific activities to be undertaken in the
course of the Research Program are set forth in this Article II and in
the Research Plan (Exhibit A), which may be amended from time to time
as mutually agreed in writing by the Parties.
2.2 GENERAL RESEARCH PROGRAM ACTIVITIES.
During the Research Program Term, the Parties will use Mass
Spectrometry Screening Technology, Ibis Existing Technology and
Research Program Technology as necessary or useful to achieve the
overall purpose and goals of the Research Program and to conduct their
respective activities according to the Research Plan. Such activities
are contemplated by the Parties to include, but not be limited to, the
following: [*].
2.3 CONDUCT OF RESEARCH PROGRAM.
Ibis and Agouron each will conduct its activities in the Research
Program in compliance in all material respects with all requirements of
applicable laws, rules and regulations and all applicable standard
laboratory practices, and attempt to achieve their objectives
efficiently and expeditiously. Ibis and Agouron each will proceed
diligently with the work set out in the Research Plan, using their
respective good faith efforts.
2.4 RESEARCH WORK SITES.
Each Party will provide appropriate work sites for carrying out its
respective activities pursuant to the Research Plan.
2.5 JOINT RESEARCH COMMITTEE.
The Parties hereby establish a JRC to direct and monitor the Research
Program as follows:
2.5.1 COMPOSITION OF THE COMMITTEE.
The Research Program will be conducted under the direction of
the Joint Research Committee, which will be comprised of three
representatives of Agouron and three representatives of Ibis.
Each Party will provide the other with a written list of its
representatives within thirty (30) days of the Effective Date.
Agouron and Ibis may change one or more of its representatives
upon written notice to the other Party of such change. Each
Party's representatives should have appropriate technical
credentials and experience and ongoing familiarity with the
activities in the Research Program.
9
2.5.2 MEETINGS AND DECISIONS.
(a) The Joint Research Committee will meet quarterly
during the Research Program Term at locations
determined by the Joint Research Committee, with the
first such meeting to be held within 45 days of the
Effective Date. Each Party will bear its own expenses
related to attendance of such meetings by its
representatives. The Joint Research Committee may
meet by means of teleconference, videoconference or
other similar communications equipment. Additional
employees of Ibis or Agouron (or its Affiliates) may,
by mutual consent of the Parties, be invited to
attend Joint Research Committee meetings.
(b) The chairmanship of the JRC will alternate on a
quarterly basis between the representatives of the
Parties, with an Agouron representative chairing the
first quarter. The chairperson will chair the
meetings and will be responsible for preparing agenda
and circulating agenda to the other JRC members prior
to the meetings.
(c) The Joint Research Committee will confer and make
decisions regarding oversight of the Research Program
and the activities of the Parties in carrying out the
Research Plan and will also advise the Parties on
issues arising during the Research Program Term
regarding any technical, budgetary or economic
matters relating to the Research Program. After the
expiration of the Research Program Term, the Parties
will appoint a successor committee which will
function for so long as is necessary to perform the
responsibilities assigned to the JRC under the terms
of this Agreement.
(d) Each Party will have one vote on the JRC regardless
of the number of representatives of each Party on the
JRC. All of the decisions of the JRC regarding the
Research Plan must be unanimous in order for a JRC
matter to be resolved. In the event of a deadlocked
vote on an issue, Ibis and Agouron will each appoint
a designee to discuss such issue in good faith and
use their best efforts to find a resolution to the
deadlock. If, after good faith efforts, no resolution
is found within thirty (30) days, or such longer
period of time as agreed upon by the JRC, then such
issue will be resolved pursuant to Section 11.6.
2.5.3 RESPONSIBILITIES.
The responsibilities of the JRC will be, among others, to: (i)
approve and implement the Research Plan and any modifications
or amendments thereof, consistent with the terms of this
Agreement; (ii) advise the Parties regarding the overall
strategy, status and direction of the Research Program; (iii)
review and monitor all results of the work performed under the
Research Plan, and provide oversight and direction regarding
such work in accordance with the Research Plan; (iv) prepare
and circulate progress reports to the Parties; (v) decide
whether to designate [*]; (vi) review and monitor the RNA
Target advancement process, and maintain a list of RNA
Targets, including Elected RNA Targets; and (vii)
10
perform any additional functions as specified in this
Agreement. The Parties acknowledge that decisions
pertaining to matters beyond the scope of the Research
Program are not the responsibility of the JRC, and that
Agouron will have the sole discretion to make decisions
such as: (i) which RNA Targets will become Elected RNA
Targets, and when and if those Elected RNA Targets will be
entered into [*]; (ii) which Collaboration Compounds, if
any, will be entered by Agouron into an Active
Development/Commercialization Program; and (iii) which
Collaboration Products will be commercialized by Agouron or
its Affiliates.
2.5.4 JRC RECORDS.
The JRC will maintain accurate records to document the
discussions and decisions at each meeting. Meeting minutes or
summaries will be prepared by its chairperson in accordance
with procedures established by the JRC at its first meeting
and will be distributed to all members of the JRC after
approval of drafts by the designated representatives of the
Parties.
2.6 PROJECT TEAM.
2.6.1 RESPONSIBILITIES.
The Project Team will conduct research activities as necessary
to achieve the objectives of the Research Program in
accordance with the Research Plan, as such Research Plan may
be modified by the JRC. The Project Team will provide written
reports of its activities to the JRC.
2.6.2 COMPOSITION.
The Project Team will include representatives from both Ibis
and Agouron as necessary for the proper conduct of the
Research Program in accordance with the Research Plan, with
such representatives to be designated at the sole discretion
of each Party, provided that the designated representatives
are qualified to carry out their respective activities in the
Research Program and are generally familiar with the Research
Program activities being conducted at their site.
2.6.3 MEETINGS.
The Project Team will meet monthly, in person or by telephone
or videoconference, unless the JRC directs a different meeting
schedule. Project Team meetings will alternate between the
sites of the Parties. Expenses of a Party's representatives
attending Project Team meetings will be borne by such Party.
2.7 RECORDS AND REPORTS.
2.7.1 RECORDS.
11
Ibis and Agouron will each maintain its records in sufficient
detail and in good scientific manner appropriate for patent
and regulatory purposes, which records will be complete and
accurate and will fully and properly reflect all work done and
results achieved by it in the performance of the Research
Program.
2.7.2 COPIES AND INSPECTION OF RECORDS.
Agouron will have the right, during normal business hours and
upon reasonable notice, to inspect and copy all such records
of Ibis referred to in Section 2.7.1. Agouron will maintain
such records and the information disclosed therein in
confidence in accordance with Sections 10.1 and 10.2. Agouron
will have the right to arrange for its employees, agents and
outside consultants, and the employees, agents and outside
consultants of its Affiliates, to visit Ibis at its offices
and laboratories during normal business hours and upon
reasonable notice, and to discuss the Research Program and its
results in detail with the technical personnel of Ibis.
2.8 RESEARCH PROGRAM STAFFING LEVELS.
Ibis and Agouron will conduct the research activities necessary to
maintain progress on the objectives of the Research Program as set
forth in the Research Plan. To achieve these goals, Ibis will designate
and assign qualified FTEs based upon the Research Plan staffing
schedule set by and subject to approval by the JRC. Ibis will dedicate
the efforts of at least [*] FTEs during the first year, and [*] FTEs
during each of the second and third years, of the Research Program
Term. During each year of the Research Program, Agouron will dedicate
the efforts of the number of FTEs that it determines in its sole
discretion is appropriate to perform its responsibilities under the
Research Program as set forth in the Research Plan. The JRC will have
the discretion to increase or decrease the minimum level of FTE support
at Ibis to that level deemed reasonably necessary to implement the
Research Plan.
2.9 RESEARCH PROGRAM TERM.
The Research Program Term will include the Initial Research Term and
any Annual Extension Periods thereof pursuant to Section 2.9 below. The
Initial Research Term will commence upon the Effective Date and
continue for a period of [*] years, unless the Research Program Term is
terminated prior thereto in accordance with the Early Termination
provisions set forth below.
2.9.1 EARLY TERMINATION.
If Agouron determines that sufficient scientific progress has
not been made during the Initial Research Term, Agouron may
terminate the Research Program Term upon written notice given
at least [*] months prior to the completion of the [*] year of
the Research Program Term ("Early Termination"). Such Early
Termination will be effective immediately prior to the [*]
anniversary of the Effective Date. In such event: (i) Agouron
will be liable for funding of the
12
Research Program under Section 5.2.1 until such [*]
anniversary date, but any other payment obligations not due
and owing as of the Early Termination date will terminate;
and (ii) Agouron will have no further rights with respect
to [*] Ibis Existing Technology.
2.9.2 ANNUAL EXTENSION PERIOD.
If Agouron agrees to continue to fund FTE support and Core
Research Support for Ibis a level agreed upon by the JRC, then
Agouron may extend the Research Program Term beyond the
Initial Research Term on a year-to-year basis ("Annual
Extension Period"). The Research Program will continue to
operate under the terms and conditions of the Agreement,
provided, however, [*].
2.10 POST RESEARCH PROGRAM TERM ACTIVITIES.
The Parties acknowledge that, in order to maximize the chances that a
commercializable Collaboration Compound arises out of the
collaboration, Agouron will need to continue certain activities
following the end of the Research Program Term and during the
Post-Research Program Term. To facilitate such activities, the Parties
have agreed to the following procedures:
(a) [*].
(b) [*]
(c) [*]
(d) [*]
(e) [*]
(f) [*]
i. [*];
ii. [*];
iii. [*];
iv. [*]
v. [*].
[*].
g) If a Collaboration Compound is determined to actively bind to
an RNA Target in addition to the Elected RNA Target to which
it was previously determined to bind, and such RNA Target is
not, at that time, an Elected RNA Target, Agouron
13
may cause such RNA Target to become an Elected RNA Target
by written notice to Ibis, as long as Ibis has not
independently previously initiated a drug discovery
program, aimed at such RNA Target, of the same scope and
magnitude as Ibis's efforts during the course of the
Research Program. Upon receipt of Agouron's written notice
that it desires to cause such RNA Target to become an
Elected RNA Target, Isis will respond within 10 days in
writing with either a confirmation that such RNA Target can
become an Elected RNA Target (with no independent
requirement to enter such Elected RNA Target into Medicinal
Chemistry Stage) or with a certification that Ibis has
independently, prior to the date of receipt of such notice,
initiated a drug discovery program aimed at such RNA Target
as described above, in which case such RNA Target will not
become an "Elected RNA Target." If Ibis fails to timely
respond to Agouron's written notice, then such RNA Target
can become an Elected RNA Target.
2.11 EXCLUSIVE EFFORTS.
2.11.1 DURING THE RESEARCH PROGRAM TERM.
During the Research Program Term, Ibis will work exclusively
in collaboration with Agouron to discover and develop products
useful in the Agouron Field.
2.11.2 AFTER THE RESEARCH PROGRAM TERM.
After the end of the Research Program Term, Ibis will not
collaborate with any other party to discover and develop
products that bind to any Reserved RNA Target or an Elected
RNA Target during the Post-Research Program Term for any
Reserved RNA Target or Elected RNA Target.
2.11.3 IBIS RETAINED RIGHTS.
Notwithstanding the foregoing, Ibis retains the right to:
(a) [*]
(b) [*]
(c) [*]
ARTICLE III
CERTAIN RESEARCH PROGRAM; DEVELOPMENT AND
COMMERCIALIZATION ACTIVITIES
3.1 SUPPLY OF AGOURON SCREENING COMPOUNDS; SELECTED COMPOUNDS;
CONFIDENTIALITY.
3.1.1 SUPPLY OF AGOURON SCREENING COMPOUNDS.
[*]
14
3.1.2 SCREENING OF AGOURON SCREENING COMPOUNDS.
[*]
3.1.3 IDENTIFICATION OF AGOURON SCREENING COMPOUNDS.
[*]
3.1.4 CONFIDENTIALITY OF IDENTITY.
Ibis agrees and warrants that it will not attempt to
characterize or determine the chemical identity or structure
of any Agouron Screening Compound, including Additional
Identified Compounds, or Selected Compound, except as
expressly authorized by this Agreement. Ibis further agrees
that it will not distribute, or provide any Ibis employee with
access to any Agouron Screening Compound, including Additional
Identified Compounds, or Selected Compounds, except on a
"need-to-know" basis in connection with the performance of the
Research Program. Further, Ibis will not provide Agouron
Screening Compounds, including Additional Identified
Compounds, or Selected Compounds to employees of any other
division of Isis Pharmaceuticals, any Isis Affiliate, or any
Third Party. At the end of the Research Program Term, Ibis
will return to Agouron all samples of Agouron Screening
Compounds, if requested to do so by Agouron.
3.1.5 NO OWNERSHIP BY IBIS.
Ibis acknowledges that it will have no ownership or other
rights in any Agouron Screening Compound, including Additional
Identified Compounds, or any Selected Compound, except as
expressly provided in this Agreement, and is expressly
prohibited from incorporating information pertaining to any
Agouron Screening Compound, including Additional Identified
Compounds, in any database of Ibis or any Affiliate or Third
Party. Ibis further acknowledges that Agouron will retain at
all times the right to research, develop, and commercialize
any Agouron Screening Compounds for applications outside the
Agouron Field, including the [*] by means other than through
interaction with RNA Targets, or for any human or animal
therapeutic, diagnostic, prophylactic or classification
application, except as expressly provided herein.
3.2 REPORTING ON SCREENING ACTIVITIES.
On a regular basis (not less than once per month), Ibis will provide
Agouron with an updated report on its RNA Target screening activities
on all compounds screened in the Research Program. Such report will
identify each compound by chemical structure, if available to Ibis, its
proprietary designation, and summarize the screening activities for
each such compound, including a description of the results of any
screening activities against any RNA Targets. Prior to each JRC
meeting, the Project Team will provide the
15
JRC with a list of Selected Compounds for which it has conducted such
screening activities, and a written summary of the results thereof.
3.3 PROCESS OF ELECTION OF RNA TARGETS FOR MEDICINAL CHEMISTRY STAGE.
3.3.1 PERMITTED PRE-ELECTION MEDICINAL CHEMISTRY STAGE ACTIVITIES.
[*]
3.3.2 ELECTED RNA TARGETS.
[*]
3.4 SELECTION OF COLLABORATION COMPOUNDS FOR ACTIVE
DEVELOPMENT/COMMERCIALZATION PROGRAMS.
Following the end of the Research Program Term, Agouron will provide
Ibis annually with a written list of all Collaboration Compounds or
Collaboration Products that are the subject of any Active
Development/Commercialization Programs, as well as the Elected RNA
Targets for such Collaboration Compounds or Collaboration Products, a
written summary of the nature of each Active
Development/Commercialization Program, the progress made in the prior
year, and an estimate of planned progress. Whether or not there is an
Active Development/Commercialization Program for a specific
Collaboration Compound or Collaboration Product will be reasonably
determined by Agouron, based on the level of resources applied to the
program compared the level of resources applied to other programs with
a similar likelihood of success and similar stage of development.
3.5 COMMERCIALLY REASONABLE EFFORTS.
For each Active Development/Commercialization Program, Agouron will use
reasonable efforts, consistent with the usual practice followed by
Agouron in pursuing the commercialization and marketing of
pharmaceutical products, to develop and commercialize Collaboration
Product(s) on a commercially reasonable basis in such countries in the
Territory where it is commercially viable to do so.
ARTICLE IV
LICENSE GRANTS
4.1 RESEARCH AND DEVELOPMENT.
[*]
Agouron hereby grants to Ibis a non-exclusive license, without the
right to sublicense, under the Research Program Technology Patent
Rights Controlled by Agouron to use the Research Program Technology,
during the Research Program Term, to conduct activities to the extent
necessary or useful for Ibis to perform its obligations in the Research
Program throughout the Territory.
16
4.2 DEVELOPMENT AND COMMERCIALIZATION.
Ibis hereby grants to Agouron and its Affiliates an exclusive license
(even as to Ibis), with the right to sublicense, under Collaboration
Patent Rights and to use Collaboration Technology Controlled by Ibis,
to develop, make, have made, use, offer for sale, sell, and import
Collaboration Compounds and Collaboration Products.
ARTICLE V
PAYMENTS, ROYALTIES AND REPORTS
5.1 LICENSE FEE.
In consideration for Ibis's commitment to perform its obligations under
the Research Program and for [*] and Ibis Existing Technology under the
licenses granted hereunder, Agouron will pay to Ibis a non-refundable
license fee totaling [*] within [*] of the Effective Date.
5.2 RESEARCH PROGRAM FUNDING.
In consideration for Ibis's performance of its obligations under the
Research Program:
5.2.1 FTE FUNDING.
(a) [*]
(b) [*]
5.2.2 CORE PROJECT SUPPORT FEES.
[*]
5.2.3 RESEARCH PROGRAM PROGRESS MILESTONES.
Ibis will also be entitled to the following Research Program
validation progress milestone payments upon achievement of the
indicated milestones:
(a) [*]
(b) [*]
5.3 MILESTONE PAYMENTS.
Subject to the terms and conditions contained in this Agreement,
Agouron will pay to Ibis the following non-refundable milestone
payments for each Collaboration Product:
(a) [*]
(b) [*]
17
(c) [*]
(d) [*]
(e) [*]
(f) [*]
(g) [*]
(h) [*]
(i) [*]
(j) [*]
[*]
5.4 ROYALTIES.
Subject to the terms and conditions of this Agreement, for each
Collaboration Product, Agouron will pay to Ibis royalties on Net Sales
Revenue on a worldwide basis as follows:
5.4.1 ROYALTY RATE.
(i) [*]
(ii) [*]
5.4.2 ROYALTY SCHEDULE.
------------------------------------------------------------------------
[*]
------------------------------------------------------------------------
5.4.3 ROYALTY PERIOD.
Agouron's obligation to pay royalties to Ibis under Section
5.4 will begin upon the date of the First Commercial Sale in a
country of a Collaboration Product, and will end based upon
the following schedule, as appropriate:
(a) [*]
(b) [*]
5.4.4 METHOD OF CALCULATION.
The calculation of the amount of annual royalties due under
the provisions of Section 5.4 will be subject to and in
accordance with the following provisions:
18
(a) FREQUENCY. Royalties will be calculated on a
Calendar-Year basis. Royalties will be payable only
once with respect to a given unit of Collaboration
Product, regardless of the number of Enforceable
Claims of the Collaboration Patent Rights pertaining
to such Collaboration Product.
(b) COMBINATION PRODUCTS. In calculating royalties with
respect to any Combination Product, the Parties will
enter into good-faith negotiations regarding the
percentage of the Net Sales Revenue of such
Combination Product to be used in calculating
royalties payable with respect to such Combination
Product, on a country-by-country basis. If the
Parties are unable to agree upon such percentage of
Net Sales Revenue for Combination Products, then such
percentage will be equal to a fraction whose
numerator is Agouron's, its Affiliates' or
Sublicensees' published sales price in such country
for equivalent dosages of all active ingredients that
are Collaboration Compounds contained in a given
Combination Product, and whose denominator is
Agouron's, its Affiliates' or Sublicensees' published
sale price in such country for equivalent dosages of
all active ingredients contained therein. If the
numerator and denominator cannot be determined in the
manner set forth above, then they will be determined
reasonably by Agouron based on the relative
contributions to the prophylactic or therapeutic
effect of the Combination Product of the active
ingredients.
(c) [*]
(d) COMPULSORY LICENSES.
(i) [*]
(ii) [*]
(e) Sales to Third Parties. No sales will be deemed to
have occurred as the result of sales between and
among Agouron, its Affiliates and Sublicensees; it
being understood that sales occur when made to
Third-Party purchasers. If Agouron, its Affiliates or
Sublicensees intend to use a Collaboration Product
rather than resell it, the sales price for such
Collaboration Product will be calculated based on the
average of the sales prices of Collaboration Product
to Third Parties during the period in which such
Collaboration Product is used by Agouron, its
Affiliate or Sublicensee, and included in Net Sales
Revenue as if sold to a Third Party at such price
during such period.
(f) SALES UPON INVOICING. A sale of a Collaboration
Product will be deemed to have occurred upon the
invoicing of such Collaboration Product for value to
a Third-Party purchaser; or if not invoiced, then
when delivered, shipped, or paid for, whichever is
first, provided, however, that if a sale of a
Collaboration Product occurs in a country (e.g.,
Spain or Italy) or to a category of customer (e.g.,
hospitals) where the customary payment terms exceed
ninety (90) days from the date of invoicing, the sale
of a
19
Collaboration Product in such country or to such
category of customer will be deemed to have occurred
upon the date of receipt of payment for such sale
and will be reported as a sale for the calendar
quarter in which such date of receipt occurred.
(g) OTHER CONSIDERATION. In the case of a sale or other
disposal of a Collaboration Product for value other
than in an arm's-length transaction exclusively for
money, such as barter or counter-trade, the amount of
such sale will be calculated using the fair market
value of such Collaboration Product (if higher than
the stated sales price) in the country of
disposition.
5.5 THIRD-PARTY TECHNOLOGY.
[*]
5.6 REPORTS; PAYMENT OF ROYALTY.
Following the First Commercial Sale of a Collaboration Product and
during the term of the Agreement, Agouron will furnish to Ibis a
quarterly written report showing all Net Sales Revenue of Collaboration
Products sold by Agouron, its Affiliates and its Sublicensees in the
Territory during the reporting period and the royalties payable under
this Agreement. Reports will be due on the 60th day following the close
of each quarterly period. Royalties shown to have accrued by each
royalty report will be due and payable on the date such royalty report
is due. Agouron will keep complete and accurate records in sufficient
detail to enable the royalties payable hereunder to be determined.
5.7 AUDITS.
5.7.1 AUDIT RIGHTS.
Upon the written request of Ibis, and not more than once in
each Calendar Year, Agouron will permit an independent
certified public accounting firm of nationally recognized
standing selected by Ibis and reasonably acceptable to
Agouron, to have access during normal business hours to such
of the records of Agouron as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder for any
year ending not more than 24 months prior to the date of such
request. The accounting firm will disclose to Ibis only
whether the royalty reports are correct or incorrect and the
specific details concerning any discrepancies. Upon the
expiration of 24 months following the end of any year, the
calculation of royalties payable with respect to such year
will be binding and conclusive upon Ibis, and Agouron, its
Affiliates, and its Sublicensees will be released from any
liability or accountability with respect to royalties for such
year.
5.7.2 AUDIT FEES.
If such accounting firm concludes that additional royalties
were owed during such period, Agouron will pay the additional
royalties within 30 days of the date Ibis delivers to Agouron
such accounting firm's written report. If Agouron disagrees
with the report, then the parties will resolve such
disagreement pursuant to the provisions of Section 11.6. The
fees charged by such accounting firm will be paid
20
by Ibis unless the additional royalties owed by Agouron
exceed 5% of the royalties paid for the royalty period subject
to the audit, in which case Agouron will pay the reasonable
fees of the accounting firm.
5.7.3 SUBLICENSEE REPORTS.
Agouron will include in each sublicense granted by it pursuant
to this Agreement a provision requiring the Sublicensee to
make reports to Agouron, and to keep and maintain records of
sales made pursuant to such sublicense. Ibis's independent
accountant will be granted access to such reports as part of
the above-referenced audit.
5.7.4 CONFIDENTIALITY.
Ibis will treat all financial information subject to review
under this Section 5.7 or under any sublicense agreement in
accordance with the confidentiality provisions of this
Agreement, and will cause its accounting firm to enter into an
acceptable confidentiality agreement with Agouron obligating
it to retain all such financial information in confidence
pursuant to such confidentiality agreement.
5.8 PAYMENT EXCHANGE RATE.
All payments to Ibis under this Agreement will be made in United States
dollars by bank wire transfer in immediately available funds to such
bank account in the United States designated in writing by Ibis from
time to time. Any required conversion of Net Sales Revenue to U.S.
dollars will be made using the monthly average of the rates of exchange
for each day in the calendar month in which the sale of a Collaboration
Product occurred. The rate of exchange to be used will be the rate of
exchange used by Agouron in its worldwide accounting system in the
quarterly period to which such payments relate. If Agouron has no
designated rate, the rate quoted in the Los Angeles edition of the WALL
STREET JOURNAL will be used.
5.9 FOREIGN CURRENCY.
When royalties or other payments are due for Net Sales Revenue in a
country where, for reasons of currency, tax or other regulations,
transfer of foreign currency from such country is prohibited, Agouron
will have the right to deposit the royalties owed to Ibis in the
applicable country's currency in a bank account in such country in the
name of and under the sole control of Ibis; provided, however, that the
bank selected is reasonably acceptable to Ibis and Agouron promptly
informs Ibis in writing of the location, account number, amount, and
currency of the monies deposited therein. After Ibis has been so
notified, those monies will be considered as royalties duly paid to
Ibis, and will be completely controlled by Ibis, and Agouron will have
no further responsibility with respect thereto.
21
5.10 INCOME TAX WITHHOLDING.
If laws, rules or regulations require withholding of income taxes or
other taxes imposed upon payments set forth in this Article V, Agouron
will make such withholding payments as required and subtract such
withholding payments from the payments set forth in this Article V.
Agouron will submit appropriate proof of payment of the withholding
taxes to Ibis within a reasonable period of time.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 IBIS REPRESENTATIONS AND WARRANTIES.
Ibis represents and warrants to Agouron that as of the date of this
Agreement:
(a) it has the full right, power and authority to enter into this
Agreement, to perform the Research Plan and to grant the
licenses granted under Article IV hereof;
(b) to the best of its knowledge, the licenses granted under
Article IV hereof will fully enable the performance of the
Research Plan by the Parties, and there are no other licenses
required from any Third Party, including from any nonprofit
institutions, the U.S. Government, or to any agency thereof,
including the U.S. Department of Commerce or the U.S.
Department of Defense, to enable Parties to perform the
Research Plan activities contemplated hereunder without
interference;
(c) to the best of its knowledge, Ibis has not previously
assigned, transferred, conveyed or otherwise encumbered its
right, title and interest in the [*], including to any
nonprofit institutions, the U.S. Government, or to any agency
thereof, including the U.S. Department of Commerce or the U.S.
Department of Defense, so as to interfere with Ibis's ability
to perform the Research Plan activities or grant the licenses
contemplated hereunder, or so as to interfere with Agouron's
ability to freely develop, manufacture, or commercialize
Collaboration Products; and
(d) Ibis has not taken nor will not take any action which would,
in Ibis's good faith judgment, interfere with any obligations
of Ibis set forth in this Agreement, including but not limited
to the obligation to grant Agouron the licenses described in
Article IV.
6.2 AGOURON REPRESENTATIONS AND WARRANTIES.
Agouron represents and warrants to Ibis that as of the date of this
Agreement it has the full right, power and authority to enter into this
Agreement, to perform the Research Plan and to grant to Ibis the
licenses described in Article IV.
22
ARTICLE VII
PATENT MATTERS
7.1 [*]
[*]
7.2 OWNERSHIP OF INVENTIONS.
[*]
7.3 REPORTING AND COOPERATION.
[*]
7.4 FILING, PROSECUTION AND MAINTENANCE OF PATENTS.
7.4.1 [*]
(a) [*]
(b) [*]
7.4.2 RESEARCH PROGRAM TECHNOLOGY PATENT RIGHTS.
(a) [*]
(b) [*]
7.4.3 COLLABORATION PATENT RIGHTS.
(a) [*]
(b) [*]
7.5 PATENT ENFORCEMENT AGAINST THIRD-PARTY INFRINGERS.
7.5.1 IBIS [*] AND IBIS EXISTING PATENT RIGHTS.
(a) [*]
(b) [*]
7.5.2 RESEARCH PROGRAM TECHNOLOGY PATENT RIGHTS.
(a) [*]
(b) [*]
23
7.5.3 COLLABORATION PATENT RIGHTS.
(a) [*]
(b) [*]
7.5.4 COOPERATION BETWEEN PARTIES.
[*]
7.5.5 [*]
(a) [*]
(i) [*]
(ii) [*]
(b) [*]
(i) [*]
(ii) [*]
7.5.6 SETTLEMENT.
[*]
7.6 INFRINGEMENT OF THIRD-PARTY PATENT RIGHTS.
[*]
ARTICLE VIII
[*]
8.1 [*]
[*]
8.2 [*]
[*]
8.3 [*]
[*]
8.4 [*]
[*]
24
8.5 [*]
[*]
8.6 [*]
[*]
(a) [*]
(b) [*]
(c) [*]
(d) [*]
ARTICLE IX
TERM AND TERMINATION
9.1 AGREEMENT TERM AND EXPIRATION.
This Agreement will be effective as of the Effective Date and, unless
terminated earlier pursuant to Section 9.2, the term of this Agreement
will continue in effect until expiration of all licenses and royalty
obligations hereunder.
9.2 TERMINATION.
9.2.1 TERMINATION FOR MATERIAL DEFAULT.
(a) This Agreement will be terminable upon the material
default of either Party. In the event of such default
by a Party ("Defaulting Party"), the other Party
("Non-Defaulting Party") will give the Defaulting
Party written notice of the default and its election
to terminate this Agreement at the expiration of a
cure period ninety (90) days from the date of the
notice. If the Defaulting Party fails to resolve the
default during the cure period by: (a) curing the
default, (b) providing a written explanation
satisfactory to the Non-Defaulting Party that a
default has not occurred, or (c) entering into a
written agreement with the Non-Defaulting Party for
the cure or other resolution of the default, then the
Non-Defaulting Party may terminate this Agreement by
giving fifteen days prior written notice to the
Defaulting Party. The termination will be effective
fifteen days after Defaulting Party's receipt of such
notice. All termination rights will be in addition to
and not in substitution for any other remedies that
may be available to the Non-Defaulting Party.
Termination pursuant to this section will not relieve
the Defaulting Party from liability and damages to
the Non-Defaulting Party for default. Waiver by
either Party of a single default or a succession of
defaults will not deprive such Party of any right to
terminate this Agreement arising by reason of any
subsequent default.
25
(b) If Agouron or Ibis terminate this Agreement pursuant
to Section 9.2.1(a), all rights and licenses granted
hereunder will terminate. However, if there is a
material breach of this Agreement by Ibis and such
breach is not cured by Ibis during the period
stipulated in Section 9.2.1(a), but Agouron
nevertheless wishes to retain its rights granted by
the terms of this Agreement with respect to
Collaboration Compounds or Collaboration Products,
then Agouron may elect not to terminate this
Agreement but may terminate only the licenses granted
to Ibis and will not be obligated to make any
payments to Ibis to compensate Ibis for performance
that was the subject of the material breach. In
addition Agouron may pursue an action for damages or
other relief arising as a result of such material
breach. If there is a material breach of this
Agreement by Agouron and such breach is not cured by
Agouron during the period stipulated in Section
9.2.1(a), but Ibis nevertheless does not wish to
terminate this Agreement, then Ibis will be entitled
to pursue an action for damages or other relief
arising as a result of such material breach.
9.2.2 TERMINATION UPON BANKRUPTCY.
(a) Any Party may terminate this Agreement by notice to
the other Party upon the filing or institution of
bankruptcy, reorganization, liquidation or
receivership proceedings, or upon an assignment of a
substantial portion of the assets for the benefit of
creditors by the other Party; provided, however, in
the case of any involuntary bankruptcy proceeding
such right to terminate will only become effective if
the Party consents to the involuntary bankruptcy or
such proceeding is not dismissed within 90 days after
the filing thereof.
(b) If Agouron terminates this Agreement under Section
9.2.2(a) or this Agreement is otherwise terminated
under 9.2.2(a), all rights and licenses granted
pursuant to this Agreement are, and will otherwise be
deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(35A) of the
Bankruptcy Code. The Parties agree that Agouron, as a
licensee of such rights under this Agreement, will
retain and may fully exercise all of its rights and
elections under the Bankruptcy Code. The Parties
further agree that, in the event of the commencement
of a bankruptcy proceeding by or against Ibis under
the Bankruptcy Code, Agouron will be entitled to a
complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all
embodiments of such intellectual property upon
written request therefor by Agouron. Such
intellectual property and all embodiments thereof
will be promptly delivered to Agouron (i) upon any
such commencement of a bankruptcy proceeding upon
written request therefore by Agouron, unless Ibis
elects to continue to perform its respective
obligations under this Agreement or (it) if not
delivered under (i) above, upon the rejection of this
Agreement by or on behalf of Ibis, as the case may
be, upon written request therefor by Agouron.
26
9.2.3 TERMINATION BY AGOURON'S NOTICE.
Notwithstanding anything contained herein to the contrary,
after expiration of the Research Program Term, Agouron will
have the right to terminate this Agreement at any time by
giving 90 days advance written notice to Ibis.
9.3. DISPOSITION OF INVENTORY.
If any license rights of Agouron are terminated with respect to a
Collaboration Product that is on the market, then Agouron may sell its
inventory of such Collaboration Product for up to six months after the
date of such termination, provided that required royalty payments, if
any, are made to Ibis in connection therewith.
9.4. EFFECT OF EXPIRATION OR TERMINATION.
(a) Expiration or termination of this Agreement will not relieve
the Parties of any obligation accruing prior to such
expiration or termination, and Agouron will be obligated to
pay and will pay to Ibis, within 30 calendar days of such
expiration or termination, all payments and royalties due or
accrued pursuant to the terms of Article V herein. The
provisions of Article X will survive the expiration or
termination of this Agreement and will continue in effect for
7 years from the date of expiration or termination. Any other
provisions that from their nature are apparently intended to
remain in force will also survive the expiration or
termination of this Agreement. Any expiration or early
termination of this Agreement will be without prejudice to the
rights of any Party against the others accrued or accruing
under this Agreement prior to termination, including Agouron's
obligation to pay royalties to Ibis on Net Sales Revenue for
Collaboration Products. If Agouron continues to develop and/or
commercialize Collaboration Compounds and/or Collaboration
Products after the termination of this Agreement, then such
development and/or commercialization will be subject to the
provisions of Article V, with the exception of Sections 5.1
and 5.2 thereof.
(b) [*]
ARTICLE X
CONFIDENTIALITY, PUBLICATION AND PUBLICITY
10.1 NON-DISCLOSURE AND NON-USE OBLIGATIONS.
All Proprietary Information disclosed by one Party to the other Party
hereunder will be maintained in confidence by the receiving Party and
will not be disclosed by it to any Third Party or used for any purpose
(except as expressly permitted herein) without the prior written
consent of the disclosing Party.
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10.2 PERMITTED DISCLOSURE OF PROPRIETARY INFORMATION.
Notwithstanding Section 10.1, a Party receiving Proprietary Information
of the other Party may disclose such Proprietary Information:
(a) to governmental or other regulatory agencies in order to
obtain Patent Rights as provided for in this Agreement, or to
gain approval to conduct clinical trials or to market any
Collaboration Product pursuant to this Agreement, provided
that receiving Party notifies the disclosing Party of its
intent to disclose such Proprietary Information and limits the
disclosure to only that Proprietary Information reasonably
necessary to obtain such Patent Rights or authorizations;
(b) by Agouron to its permitted sublicensees, agents, consultants,
Affiliates and/or other Third Parties for the research and
development, manufacturing and/or marketing of any
Collaboration Compounds or Collaboration Products (or for such
parties to determine their interest in performing such
activities) in accordance with this Agreement on the condition
that such Third Parties agree to be bound by the
confidentiality obligations contained in this Agreement; or
(c) if required to be disclosed by law or court order, provided
that advance written notice is delivered to the non-disclosing
Party so as to provide such Party a reasonable opportunity to
challenge or limit the disclosure obligations.
10.3 NO WRITTEN PUBLICATION AND ORAL DISCLOSURES.
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10.4 PUBLIC DISCLOSURE OF AGREEMENT.
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ARTICLE XI
MISCELLANEOUS
11.1 FORCE MAJEURE.
No Party will be held liable or responsible to the other Party nor be
deemed to have defaulted under or breached the Agreement for failure or
delay in fulfilling or performing any term of the Agreement (except
payment obligations) when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party
including, but not limited to, fire, flood, embargo, war, acts of war
(whether war be declared or not), insurrection, riot, civil commotion,
strike, lockout or other labor disturbance, act of God or act, omission
or delay in acting by any governmental authority or the other Party,
provided that for the duration of such force majeure the affected Party
continues to use all reasonable efforts to overcome such force majeure.
The affected Party will notify the other Party of such force majeure
circumstances as soon as reasonably practical.
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11.2 ASSIGNMENT.
The Agreement may neither be assigned or otherwise transferred, nor,
except as expressly provided hereunder, may any right or obligations
hereunder be assigned or transferred, by a Party without the consent of
the other Party; provided however, that any Party may, without such
consent, assign the Agreement and its rights and obligations hereunder
to (a) an Affiliate; (b) in connection with the transfer or sale of all
or substantially all of its assets or business, including the
applicable Patent Rights and Technology and other assets relating to
the subject matter of this Agreement, or (c) in the event of its merger
or consolidation or change in control or similar transaction. Any
permitted assignee will assume all obligations of its assignor under
this Agreement.
11.3 SEVERABILITY.
In the event that any of the provisions contained in this Agreement are
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby, unless the
absence of the invalidated provision(s) adversely affect the
substantive rights of the Parties. The Parties will replace the
invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s), which, insofar as practical, implement the
purposes of this Agreement.
11.4 NOTICES.
All notices or other communications which are required or permitted
hereunder will be in writing and deemed to be effective (a) on the date
of delivery if delivered in person and written confirmation of delivery
is provided, (b) on the date of faxing or other electronic
transmission, provided such transmission is acknowledged in writing by
the Party receiving the transmission, (c) on the day following date of
deposit with an overnight courier if a receipt confirming delivery by
overnight courier is provided, or (d) three days after mailing if
mailed by first-class certified mail, postage paid, to the respective
addresses given below, or to another address as it will designate by
written notice given to the other Party.
if to Ibis, to: Isis Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: 000-000-0000
with a copy to: Attention- CFO
Facsimile No.: 000-000-0000
if to Agouron, to: Agouron Pharmaceuticals, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
Attention: Director, Business Development
Facsimile No.: 000-000-0000
29
with a copy to: Attention: General Counsel
Facsimile No.: 000-000-0000
11.5 APPLICABLE LAW.
The Agreement will be governed by and construed in accordance with the
laws of the State of California, as applied to contracts executed and
performed entirely within the state, without reference to any rules of
conflict of laws or renvoi, provided, however, that issues concerning
the validity and construction of patents, trademarks and other
intellectual property rights will be determined in accordance with the
laws of the country under which such intellectual property rights were
granted.
11.6 DISPUTE RESOLUTION.
(a) PRE-ARBITRATION EFFORTS. In the event of any controversy or
claim arising from or relating to any provision of this
Agreement, or any term or condition hereof, or the performance
by a Party of its obligations hereunder, or its construction
or its actual or alleged breach, the Parties will try to
settle their differences amicably between themselves. If the
representatives of the Parties are unable to reach agreement
on any such issue, the issue will be submitted for
consideration, in the case of Agouron, to its Corporate Vice
President, Head of Research, or its designee, and in the case
of Ibis, to its Managing Director, or its designee. If such
representatives are unable to agree within fourteen (14) days,
then the issue will be submitted for consideration to, in the
case of Agouron, to its President, Global Commercial
Operations, and, in the case of Ibis, to its Chief Executive
Officer. If such representative are unable to agree within
fourteen (14) days, then any disputes remaining unresolved
between the Parties, except as otherwise provided in this
Agreement, will be finally resolved by binding arbitration, as
set forth below.
(b) ARBITRATION JURISDICTION. Any dispute or controversy arising
out of or relating to this Agreement not able to be resolved
between the Parties will be finally decided by arbitration in
accordance with the then-current Licensing Agreement
Arbitration Rules of the American Arbitration Association;
provided, however, that the California Code of Civil Procedure
will apply to any such proceeding. Any arbitration proceeding
will be conducted in San Diego, California. The Parties agree
that any arbitration panel will include members knowledgeable
as to evaluation of biopharmaceutical technology.
(c) ARBITRATION PROCEDURES. Whenever a Party decides to institute
arbitration proceedings, it will give written notice to the
other Party. A single arbitrator mutually chosen by the
Parties will conduct the arbitration. If the Parties cannot
agree upon a single arbitrator within fifteen (15) days after
the institution of the arbitration proceeding, then the
arbitration will be conducted by a panel of three arbitrators
appointed in accordance with applicable AAA rules; provided,
however, that each Party will within thirty (30) days after
the institution of the arbitration proceedings appoint one
arbitrator, with the third arbitrator being chosen by the
other two arbitrators. If only one Party appoints an
arbitrator, then
30
such arbitrator will be entitled to act as the sole arbitrator to
resolve the controversy. All arbitrator(s) eligible to conduct the
arbitration must agree to render their opinion(s) within thirty (30)
days of the final arbitration hearing. The arbitrator(s) will have
the authority to grant injunctive relief and specific performance,
and to allocate between the Parties the costs of arbitration in an
equitable manner; provided, however, that each Party will bear its
own costs, attorneys fees and witness fees. Notwithstanding the terms
of this Section, a Party will also have the right to obtain, prior to
the arbitrator(s) rendering the arbitration decision, provisional
remedies, including injunctive relief or specific performance, from a
court having jurisdiction thereof. The arbitrator(s) will, upon the
request of either Party, issue a written opinion of the findings of
fact and conclusions of law and will deliver a copy to each of the
Parties. Decisions of the arbitrator(s) will be final and binding on
the Parties. Judgment upon the award rendered may be entered in the
highest court or forum, state or federal, having jurisdiction;
provided, however, that the provisions of this Section will not apply
to decisions on the validity of patent claims or to any dispute or
controversy as to which any treaty or law prohibits such arbitration.
In no event will a demand for arbitration be made after the date when
institution of a legal or equitable proceeding based on such claim,
dispute or other matter in question would be barred by the applicable
statute of limitations.
11.7 REGULATORY APPROVALS.
The expenses for all approvals and licenses sought by Agouron for
importation, marketing and selling of Collaboration Products in any
country throughout the world will be borne by Agouron. Agouron will
have sole title to and ownership of any such approvals and licenses it
obtains.
11.8 ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the Parties with
respect to the subject matter hereof. All express or implied agreements
and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement. This Agreement
may be amended, or any term hereof modified, only by a written
instrument duly executed by the Parties hereto.
11.9 HEADINGS.
The captions to the Articles and Sections hereof are not a part of the
Agreement, but are merely guides or labels to assist in locating and
reading the several Articles and Sections hereof.
11.10 INDEPENDENT CONTRACTORS.
It is expressly agreed that the Parties will be independent contractors
and that the relationship between the Parties will not constitute a
partnership, joint venture or agency. No Party will have the authority
to make any statements, representations or commitments
31
of any kind, or to take any action, which will be binding on the other
Party, without the prior consent of such other Party.
11.11 WAIVER.
The waiver by a Party hereto of any right hereunder or the failure to
perform or of a breach by another Party will not be deemed a waiver of
any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
11.12 COUNTERPARTS.
The Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will
constitute one and the same instrument.
32
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date set forth below.
AGOURON PHARMACEUTICALS, INC. ISIS PHARMACEUTICALS, INC.
BY:__________________________ BY:____________________________
Name: Xxxxx X. Quart, Pharm.D. Name: B. Xxxxx Xxxxxxxx
Title: President, Agouron Research and Title: Executive Vice President
Development
Date:________________________ Date:__________________________
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EXHIBIT A
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EXHIBIT B
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