THE SYMBOL '**' IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT A PORTION OF
THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
EXHIBIT 10.2
------------
July 11, 1996
Xx. Xxxx X. Xxxxx
President and Chief Executive Officer
DepoMed, Inc.
0000 X Xxxxx Xxxxx
Xxxxxx Xxxx, XX 00000-0000
Dear Dr. Shell:
This Letter Agreement ("Agreement") sets forth the terms and conditions under
which Xxxxxxx-Xxxxx Squibb Company ("BMS") and DepoMed, Inc. ("DepoMed") will
collaborate in a joint research project (the "Research") to determine optimal
conditions for the production of a product (the "Product") consisting of
formulations of the chemical compound known as [**] ("[**]") incorporated in the
DepoMed GR System (the "DP System"). The specific terms and conditions of this
Agreement are as follows:
1. THE RESEARCH
------------
A. DepoMed agrees to use its diligent efforts to implement and complete
the Research Plan attached herewith and fully incorporated herein as
Appendix A. Specific milestones and targets of the Research Plan are
also summarized in Appendix A. Said milestones and targets may be
modified, but only by mutual written agreement of BMS and DepoMed (the
"Parties") at any time during the term of this Agreement.
B. BMS agrees to collaborate with and assist DepoMed in the
implementation and completion of the Research Plan set forth in
Appendix A by providing to DepoMed:
1. Bulk [**] in sufficient quantities to perform the Research Plan;
2. Appropriate analytical and handling procedures for [**]; and
3. Such other technology and expertise possessed by BMS which may be
deemed necessary, by subsequent mutual agreement of the Parties,
to achieve the objectives of this Agreement.
C. All [**] shall remain the sole property of BMS. DepoMed agrees not to
make any modifications of the BMS Materials provided by BMS hereunder,
except as required in the performance of the Research Plan.
D. The [**] shall be used solely to conduct the Research Plan, and not
for any other purpose. The [**] shall not be made available to anyone
other than employees of DepoMed working in furtherance of the Research
Plan, shall not be transferred to any other persons outside of DepoMed
for any purpose, and shall not be transferred to another institution
or company without the prior written consent of
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 2
BMS, except to authorize subcontractors as provided in Article I.H
hereinbelow. The [**] shall not be used by DepoMed for research,
testing or treatment involving human subjects or for making any
decisions relating to human diagnosis or care.
E. Nothing herein shall create or imply any license in intellectual
property rights related to [**] owned or controlled by BMS to DepoMed,
except for the non-exclusive license to use the [**] for the research
purposes expressly set forth herein.
F. Upon conclusion of the Research Plan, or upon request by BMS, DepoMed
shall discontinue use of the [**] and will arrange for the return to
BMS of all unused [**].
G. DepoMed will take appropriate steps to inform all Research Plan
personnel of their obligations under this Agreement and to obtain
their agreement to abide by the terms and conditions of this Agreement
in the same manner as DepoMed.
H. DepoMed shall have no right to subcontract portions of the Research
Plan to be performed by it without the prior written consent of BMS,
except for the gastric retention study described in Appendix A,
Section II.B2; provided, however, that (a) any such subcontracts shall
-------- -------
not involve the transfer of confidential information of BMS to the
subcontracted third party; (b) the subcontracted third party shall
enter into a written confidentiality agreement with DepoMed adequate
to preserve the confidentiality of [**] formulations developed
pursuant to the Research Plan and DepoMed Project Proprietary
Information, and the rights granted to BMS under this Agreement; and
(c) promptly after entering into such subcontract, DepoMed shall give
written notice thereof to BMS.
II. TERM
----
A. This Agreement is effective as of April 15, 1996, and shall continue
in effect for a period of eight and one-half months, until December
31, 1996, or until DepoMed notifies BMS in writing that the milestones
and targets set forth in Appendix A have been realized, if earlier.
B. The term of this Agreement may be extended at the same rate of
compensation as is then in effect (pro rated) for up to six (6) months
at BMS' election, if the aforementioned milestones and targets are not
realized at the end of the Agreement term. This election shall be
made by written notice to DepoMed at least fifteen (15) days prior to
December 31, 1996, specifying the desired term of the extension. The
term of this Agreement may also be extended by an amendment in writing
executed by both Parties.
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 3
III COSTS/PAYMENTS
--------------
A. DepoMed agrees to perform and complete the Research Plan for a total
fee of one hundred ninety-seven thousand, seven hundred seventy-eight
dollars ($197,778.00) in accordance with this Paragraph 3.
B. BMS therefore agrees to make the following payments to DepoMed as full
and complete consideration for the performance and completion of the
Research Plan by DepoMed:
1. A payment of seventy thousand dollars ($70,000.00) which shall be
paid to DepoMed by BMS within thirty (30) days of the complete
execution of this Agreement by the Parties.
2. A second payment of seventy thousand dollars ($70,000.00) which
shall be paid to DepoMed by BMS upon completion by DepoMed of the
work described in Appendix A, Section II.
3. A final payment of fifty-seven thousand, seven hundred seventy-
eight dollars ($57,778.00), payable upon release by BMS of
formulation for a clinical pharmacokinetic study.
C. BMS and DepoMed understand that developments, unforeseen circumstances
beyond the reasonable control of DepoMed or changes in the scope of
the Research or DepoMed's responsibilities for the Research may
increase the funding requirements for the Research. BMS will consider
requests for additional funding should such a need arise. The
decision to supply such additional funding shall be in the sole
discretion of BMS.
IV. PROGRESS REPORTS/JOINT MEETINGS
-------------------------------
A. Commencing with the first day of the first month following the
effective date of this Agreement, and for each subsequent month for
the duration of the term of this Agreement, DepoMed shall submit to
BMS monthly progress reports containing summaries of all Research Plan
tasks completed or still in progress at the date of such progress
report. The Parties agree that information contained in the
aforementioned progress reports shall be general rather than detailed
in nature. All of such information contained in such progress reports
shall be and shall remain non-enabling proprietary information ("Non-
Enabling Project Proprietary Information"). It is the express intent
of the Parties that all Non-Enabling Project Proprietary Information
provided to BMS by DepoMed shall be in such reasonable detail as shall
permit BMS to assess DepoMed's progress versus the Research Plan and
milestones and targets but shall not contain such information or
detail as might reasonably be expected to enable BMS to reproduce or
utilize in any way (other than the assessment as aforesaid) DepoMed's
Enabling Project Proprietary Information (as defined in Paragraph V,
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 4
hereinbelow). Progress reports submitted to BMS by DepoMed may also
contain and address any conclusions, problems or issues, which, in the
opinion of DepoMed are significant matters requiring the attention of
BMS and, if appropriate, recommendations for necessary action by BMS.
B. At least twice during the term of this Agreement and at more frequent
intervals if deemed necessary by mutual agreement, representatives of
BMS and DepoMed shall meet at mutually acceptable times and places to
discuss and evaluate the status and progress of the Research which is
the subject of this Agreement.
V. PROPRIETARY/CONFIDENTIAL INFORMATION
------------------------------------
A. DepoMed and BMS agree that, with the exception of Non-Enabling Project
Proprietary Information (as defined in Paragraph IV.A, hereinabove),
any and all data, information, materials and technology produced,
developed or generated by DepoMed as a result of the Research which
specifically relates to the DepoMed technology for the formulation of
[**] shall be enabling proprietary information of DepoMed ("DepoMed
Enabling Project Proprietary Information"). DepoMed agrees to fully
disclose to BMS any and all DepoMed Enabling Project Proprietary
Information referred to in Appendix A, and upon written request from
BMS, any and all additional DepoMed Enabling Project Proprietary
Information to BMS.
B. BMS and DepoMed agree that all DepoMed Project Proprietary
Information (i.e. Non-Enabling Project Proprietary Information and
Enabling Project Proprietary Information) transferred to BMS shall
be governed by the provision of the [**] Confidentiality Agreement
dated February 8, 1996, among the Xxxxxxx-Xxxxx Squibb
Pharmaceutical Research Institute, DepoMed, Inc., and [**]
(hereinafter, the "Prior Agreement"). DepoMed understands and agrees
that all DepoMed Project Proprietary Information transferred to BMS
may be transferred by BMS to [**] pursuant to the provisions of the
Prior Agreement.
C. The transfer of all confidential information of the Parties other than
DepoMed Project Proprietary Information shall be governed by the
provisions of the Prior Agreement.
D. Notwithstanding anything to the contrary contained in this Agreement
or the Prior Agreement, DepoMed shall have no right to disclose any
DepoMed Project Proprietary Information to any third party, or use
such DepoMed Project Proprietary Information for any purpose other
than for the purpose of collaborating with BMS.
VI. OPTION
------
A. DepoMed hereby grants to BMS an option (on terms provided or to be
negotiated in accordance with Paragraph VI.B) for two (2) years
following completion of the
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 5
clinical pharmacokinetic study referred to in Article III.B.3
hereinabove, but in no event later than three (3) years from the date
of this Agreement, to obtain an exclusive, worldwide license under the
DepoMed Project Proprietary Information and DepoMed Intellectual
Property (i.e., any patents, patent applications, know-how, trade
secrets, licenses or any other intellectual property rights of
whatever nature, owned or controlled by DepoMed, including without
limitation DepoMed Patent Rights as defined below) to make, have made,
use, import, offer for sale and sell the Product incorporating
formulations of [**]. Such license shall include the right of BMS to
sublicense any license granted to BMS under DepoMed Project
Proprietary Information and DepoMed Intellectual Property. Such
license shall also include the right of BMS to utilize any
improvements to DepoMed Project Proprietary Information and DepoMed
Intellectual Property developed by DepoMed during the two (2) years
following the completion of work under the Research Plan.
B. The terms and conditions of any license acquired by BMS from DepoMed
under the option provided for in Paragraph VI.A., above, shall be as
agreed by BMS and DepoMed in good faith negotiations regarding the
terms and conditions of a definitive license agreement consistent with
this Article VI.B which shall commence upon DepoMed's receipt of BMS'
written notice of its intention to exercise its option and acquire
said license. Any license agreement entered into by BMS and DepoMed
shall be in a form reasonably acceptable to DepoMed and BMS, and shall
be consistent with industry standards and permit BMS to fully exploit
the licensed rights in a manner consistent with this Agreement. Any
license agreement entered into between BMS and DepoMed shall provide
for the following:
1. BMS shall be required to pay to DepoMed the following royalty
amounts:
a. [**] of net sales of Licensed Product sold by BMS, its
affiliates or sublicensees for the first [**] of net sales
of Licensed Product per calendar year within the United
States, and [**] of net sales of Licensed Product sold by
BMS, its affiliates or sublicensees for net sales of
Licensed Product greater than [**] per calendar year within
the United States; and
b. [**] of net sales of Licensed Product sold by BMS, its
affiliates or sublicensees for the first [**] of net sales
of Licensed Product per calendar year outside of the United
States, and [**] of net sales of Licensed Product sold by
BMS, its affiliates or sublicensees for net sales of
Licensed Product greater than [**] per calendar year outside
of the United States.
"Licensed Product" shall mean a Product, the manufacture, use or sale
of which is covered within a country by a claim of an issued and
unexpired patent included within the DepoMed Intellectual Property
licensed to BMS by DepoMed which has not been
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 6
held permanently revoked, unenforceable or invalid by a decision of a
court or other government agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal and
which has not been abandoned, or admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise. The
obligation to pay royalties will expire on a country-by-country basis
upon the expiration, invalidity or abandonment of all patents included
within the DepoMed Intellectual Property covering any such Licensed
Product within such a country, and not withstanding the number of
patents included within the DepoMed Intellectual Property licensed to
BMS by DepoMed, only a single royalty will be due with respect
thereto.
2. BMS shall be required to pay to DepoMed the following milestone
payments upon the first occurrence of each event set forth below:
a. [**] upon complete execution by DepoMed and BMS of the
license agreement;
b. [**] upon filing by BMS with the United States Food and Drug
Administration or the successor thereto of the first New
Drug Application for a Licensed Product; and
c. [**] upon receipt by BMS of the required marketing approval
from the United States Food and Drug Administration or the
successor thereto of the first New Drug Application for a
Licensed Product.
3. Except for such royalties and milestone payments as provided in
this Agreement, no other payments, royalties, or other
consideration will be payable with respect to any license granted
to BMS by DepoMed. Such royalty and milestone payments shall be
reduced by the amount of any fees, royalties or other
consideration (not to exceed [**] of such royalties and milestone
payments payable to DepoMed) payable by BMS to any third parties
having dominant rights to DepoMed Project Proprietary Information
or to DepoMed Intellectual Property.
4. BMS shall have the right to terminate any license agreement upon
sixty (60) days prior written notice to DepoMed. Termination of
any such license agreement shall not relieve BMS of the
obligation to make payments of royalties or milestone payments
accruing prior to the effective date of such termination.
C. Notwithstanding anything to the contrary contained in this Agreement,
in the event that BMS does not elect to exercise its option as
aforesaid, or in the event the parties are unable to reach agreement
on license terms, DepoMed shall have no right, whether by itself or
with or by any affiliate or third party, to make, have made, use,
import, offer for sale, sell, develop or otherwise commercialize any
formulations of [**] developed pursuant to this Agreement, any DepoMed
Project Proprietary
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 7
Information related solely to [**], or any Inventions related solely
to [**].
D. The decision as to whether to proceed with the preclinical and
clinical development and marketing of any Product containing
formulations of [**] developed pursuant to this Agreement shall be in
the sole discretion of BMS. Nothing contained in this Agreement shall
be interpreted as requiring BMS to develop or market any such
formulations of [**].
VII. PATENTS
-------
A. All rights, title and interest to inventions, discoveries or
improvements first conceived or made as a result of the performance of
the Research Plan ("Inventions")
(i) shall belong solely to DepoMed, if made solely by DepoMed or its
employees,
(ii) shall be jointly owned by DepoMed and BMS, if made jointly by
DepoMed or one or more employees of DepoMed and by one or more
employees of BMS ("Joint Inventions"), and
(iii) shall belong solely to BMS, if made solely by BMS.
Determinations of inventorship shall be made in accordance with U.S.
law. DepoMed's interest in any Inventions and patent rights
pertaining thereto described under (i) and (ii) above is referred to
hereinafter as "DepoMed Patent Rights." BMS's interest in any
Inventions and patent rights pertaining thereto described under (ii)
and (iii) above shall not be subject to the terms and conditions of
this Agreement.
B. DepoMed represents and warrants to BMS that any Inventions that may be
made by its employees in the performance of the Research Plan are
owned by and shall be assigned to DepoMed, wholly and completely.
C. DepoMed will promptly notify BMS in writing of any Inventions that
relate solely to [**], including without limitation formulations of
[**], conceived and/or made by DepoMed as a result of the performance
of the Research Plan. Such notice shall describe the substance of any
such Invention in writing in sufficient detail so as to enable BMS to
determine if a patentable Invention has been made.
D. BMS shall have the sole right to have prepared, filed and prosecuted
the necessary papers for obtaining patent protection for any
Inventions that relate solely to [**], including without limitation
formulations of [**], in any and all countries of the world which BMS,
in its sole judgment, determines are of sufficient interest to merit
such filing. BMS shall bear all costs incurred in connection with the
preparation, filing, prosecution, issuance and maintenance of any such
U.S.
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 8
and foreign patent applications. DepoMed agrees that it will
cooperate and do whatever is necessary to assist BMS in obtaining and
maintaining such patent rights at the request and expense of BMS. In
the event that BMS, in its sole discretion, decides it is not
appropriate to file a patent application which constitutes a DepoMed
Patent Right that relates solely to [**], including without limitation
formulations of [**], DepoMed shall have no right to file any patent
applications thereon.
E. Except as provided in Article VII.D hereinabove, DepoMed shall have
the sole right to have prepared, filed and prosecuted the necessary
papers for obtaining patent protection for any Inventions that relate
to the DP System in any and all countries of the world which DepoMed,
in its sole judgment, determines are of sufficient interest to merit
such filing. DepoMed shall bear all costs incurred in connection with
the preparation, filing, prosecution, issuance and maintenance of any
such U.S. and foreign patent applications.
VIII. PUBLICITY
---------
A. Neither BMS or DepoMed shall disclose any material terms of this
Agreement or any of the information contained in the Appendix to this
Agreement to any third party other than their professional advisors
and third parties whose rights are or may be affected thereby
without the prior written permission of the other Party, except
where such disclosure is required by law. [**]. Such permission
shall not be unreasonably withheld or delayed, and shall be deemed
given unless the party from whom permission is requested responds to
a request with consent or specific reasons for objection within
fourteen (14) days after the request is received.
B. Neither BMS nor DepoMed shall use the name of the other Party in any
advertising or promotional context in any medium, provided, that upon
execution of this Agreement by both Parties, a mutually agreeable
press release may be jointly published by the Parties.
IX. COVENANT AND WARRANTY
---------------------
DepoMed hereby covenants that it will use its diligent efforts to conduct
and complete the Research Plan set forth in Appendix A in accordance with
the milestones and targets set forth therein. DepoMed hereby warrants, as
of the date hereof, and covenants that (a) it has all necessary rights and
is legally entitled to grant the rights it has agreed to grant to BMS
hereunder, and (b) its entry into this Agreement and its performance of its
obligations hereunder do not and will not conflict with any other
restrictions or obligations of whatsoever nature by which DepoMed is bound.
** CONFIDENTIAL TREATMENT REQUESTED
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 9
X. ASSIGNMENT
----------
This Agreement may not be assigned by either party without the prior
written consent of the other Party. No obligations or rights under this
Agreement may be assigned or delegated by DepoMed without the prior written
consent of BMS. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Parties hereto and their respective
heirs, legal and personal representatives, successors and permitted
assigns.
XI. NOTICES
-------
All notices permitted or required under this Agreement shall be deemed
effective upon receipt by the Party to whom it is addressed, if made in
writing and deposited, postage prepaid in a facility for the collection of
mail maintained by the United States Post Office or if deposited with
Federal Express or any other generally recognized expedited delivery
service, or if personally delivered, or if transmitted by fax, addressed as
follows:
To Xxxxxxx-Xxxxx Squibb Company:
-------------------------------
A. Scientific and Technical Matters:
Xx. Xxxxx Xxxxxxx
Director, International Development Laboratories
Xxxxxxx-Xxxxx Squibb Pharmaceutical Research Institute
Reeds Lane, Moreton, Wirral
Xxxxxxxxxx X00 0XX, Xxxxxxx
FAX: 000-00-000-000-0000
B. All Business and Other Matters:
Xx. Xxxx Xxxxxxx
Director, Business Development, U.S.
Xxxxxxx-Xxxxx Squibb Company
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
FAX: (000) 000-0000
To DepoMed:
----------
A. Scientific and Technical Matters:
Xx. Xxxx X. Xxxxx
President and Chief Executive Officer
DepoMed, Inc.
0000 X Xxxxx Xxxxx
Xxxxxx Xxxx, XX 00000-0000
FAX: (000) 000-0000
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 10
B. All Business and Other Matters:
Xx. Xxxx X. Xxxxx
President and Chief Executive Officer
DepoMed, Inc.
0000 X Xxxxx Xxxxx
Xxxxxx Xxxx, XX 00000-0000
FAX: (000) 000-0000
XII. GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey. Caption and paragraph headings are for
convenience only and shall not form an interpretive part of this
Agreement. This Agreement shall not be strictly construed against either
Party hereto.
XIII. TERMINATION
-----------
A. This Agreement may be terminated by BMS, with or without cause, upon
thirty (30) days written notice to DepoMed.
B. Upon any material breach by a party to the Agreement, the other party
may terminate this Agreement by thirty (30) days written notice to
the breaching party, specifying the material breach, default or other
defect. The termination becomes effective, at the option of the non-
breaching party, at the end of the thirty (30) day period unless the
breaching party cures the breach during the thirty (30) day period.
C. Upon expiration or termination of this Agreement, the provisions of
Articles I.F, V, VI, VII, VIII, IX and XII shall continue in full
force and effect, as well as any other provision herein which, by its
intent or meaning, is intended to survive such expiration or
termination.
D. Any expiration or early termination of this Agreement shall not
affect the rights and obligations of the parties accruing under this
Agreement prior to the effective date of such expiration or
termination, including, but not limited to, any rights and
obligations accruing under Articles I.F, V, VI, VII, VIII, IX and
XII.
XIV. INDEPENDENT CONTRACTOR
----------------------
For purposes of this Agreement, and in the performance of all services
hereunder, the relationship of BMS to DepoMed is, and shall be deemed to
be, one of independent contractors and not as agents or employees of one
to the other.
XV. SEVERABILITY
------------
Xx. Xxxx X. Xxxxx
DepoMed, Inc.
July 11, 1997
Page 11
The provisions of this Agreement are severable. If any item or provision
of this Agreement shall to any extent be invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby, and each term
and provision of this Agreement shall be valid and shall be enforced to the
fullest extent permitted by law.
XVI. ENTIRE AGREEMENT
----------------
This Agreement and the Prior Agreement constitute the entire agreement
between BMS and DepoMed with respect to the subject matter hereof and
supersede any and all previous understandings or agreements between the
Parties, whether written or verbal. No terms or provisions of this
Agreement may be varied or modified by the parties hereto except by a
written instrument specifically referring to and executed in the same
manner as this Agreement. No provision of this Agreement may be waived by
any act, omission or knowledge of a Party or its agents or employees,
except by a writing expressly waiving such provision and signed by the
waiving Party. The failure of a Party at any time or times to require
performance of any provision hereof shall in no manner affect its rights at
a later time to enforce the same. No waiver by a Party of any condition,
remedy or term in any one or more instance shall be construed as a
continuing waiver of such condition, remedy or term or any other condition,
remedy or term on any successive occasion. Any inconsistency between the
terms of this Agreement and any Appendix shall be resolved in favor of the
text of this Agreement.
If this Letter correctly sets forth the terms and conditions of our Agreement,
please indicate the acceptance thereof by DepoMed in the space provided below
and return an original counterpart of this Agreement to the address first shown
above. The other original counterpart should be retained in your files. Thank
you.
Sincerely,
XXXXXXX-XXXXX SQUIBB COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President, Biopharmaceutics R&D
------------------------------------------
Accepted and agreed this 15th
day of July, 1996
DEPOMED, INC.
By: /s/ Xxxx X. Xxxxx
----------------------
Title: President
----------------------
Appendix A
Page 1 of 2
RESEARCH PLAN
[**] FORMULATION DEVELOPMENT
[**]
** CONFIDENTIAL TREATMENT REQUESTED
[**]
** CONFIDENTIAL TREATMENT REQUESTED
