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EXHIBIT 10.12
EVALUATION AND OPTION AGREEMENT
AGREEMENT made as of the 30th day of December, 1996, by and between
the Consumer Health Care Division of Pfizer Inc. (hereinafter referred to as
"Pfizer"), a corporation organized and existing under the laws of the State of
Delaware, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
and Nastech Pharmaceutical Company Inc. (hereinafter referred to as "Nastech"),
a corporation organized and existing under the laws of the State of Delaware,
having an office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Nastech is the owner of and has the right to grant licenses
with respect to certain Know-How and Patents (as hereinafter defined); and
WHEREAS, Nastech wishes to grant to Pfizer an exclusive license to the
Know-How and Patents pertaining to the Product (as hereinafter defined) for the
purposes of, inter alia, Pfizer's commencing evaluation of the Product and
Pfizer wishes to receive such a license to evaluate the Product, on the terms
and subject to the conditions set forth herein; and
WHEREAS, Nastech shall design, undertake and complete a program of
pre-clinical and clinical study of the Product (such program is summarized in
Exhibit "A" which is attached hereto and made part of this Agreement); and
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WHEREAS, Nastech wishes to grant to Pfizer an option for an exclusive
license to the Know-How and Patents for the manufacture, use and sale of the
Product in the Territory (as hereinafter defined), and Pfizer wishes to receive
such an Option, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
provided herein, the parties hereto hereby agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following definitions shall be
applicable (it being understood that the terms defined shall include the
singular number in the plural, and the plural number in the singular):
1.1. "Affiliate" means, with respect to a party, any corporation or
other business entity directly or indirectly controlling, controlled by or
under common control with such party; as used herein, the term "control" means
possession of the power to direct, or cause the direction of the management and
policies of a corporation or other entity whether through the ownership of
voting securities, by contract or otherwise.
1.2. "Know-How" means all information, including but not limited to
the following: all chemical, pharmacological, safety, toxicological, clinical,
stability, assay, control, packaging, manufacturing, regulatory and marketing
research data and other knowledge related to the Product and its components now
or hereafter
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owned by or in the possession or control of, Nastech during the term of this
Agreement, including any improvements thereto.
1.3. "Patents" means all patents and patent applications in the
Territory which relate to the Product and which are now owned or licensed, or
hereafter issued, acquired or licensed during the term of this Agreement, by
Nastech or its Affiliates. A list of such Patents are appended hereto as
Exhibit "C" as amended from time to time, as required which is attached hereto
and made a part of this Agreement.
1.4. "Product" means a method and/or dosage form for the nasal
administration of doxylamine succinate and diphenhydramine hydrochloride for
the purpose of inducing sleep.
1.5. "Territory" means worldwide.
2. GRANT OF RIGHT AND LICENSE TO EVALUATE
2.1. Nastech hereby grants to Pfizer an exclusive (even as to
Nastech and Nastech's Affiliates) right and license to the Know-How and Patents
pertaining to the Product to evaluate for the term of the Evaluation Period (as
hereinafter defined), inter alia, the clinical efficacy, safety and regulatory
status of the Product and for the purpose of conducting or having conducted
research, analysis and testing so that Pfizer may determine whether it is
interested in acquiring further rights in the Product. Such right and license
shall include an exclusive right to use the Know-How and Patents in connection
with Pfizer's evaluation of the Product
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and for no other purpose. All such actual clinical studies and all research
described herein shall be conducted and performed by Nastech or their agents,
unless agreed to otherwise in writing.
2.2. Nastech understands and acknowledges that Pfizer's undertaking
to evaluate the Product hereunder in no way further obligates Pfizer to
exercise the Option granted to Pfizer in Paragraph 3. of this Agreement, or to
enter into any other agreement or arrangement with Nastech.
3. GRANT OF OPTION
3.1. Nastech hereby grants, exclusively to Pfizer during the term of
this Agreement and any extensions thereto, and Pfizer hereby accepts, an Option
to acquire an exclusive license to make, have made, use and sell the Product
under the Patents and Know-How according to the license agreement attached
hereto as Exhibit "B."
3.2. Pfizer may, at its sole option, at any time during the term of
this Agreement and any extension thereto, exercise the Option by sending
written notice to Nastech. Upon receipt of such notice the parties shall
execute the license agreement that is attached hereto as Exhibit "B."
3.3 If Pfizer elects, pursuant to Paragraph 3.2. herein, to
exercise the Option prior to the completion by Nastech of the Evaluation Period
(as hereinafter defined), such exercise shall not relieve Nastech of its
obligation to satisfactorily complete the Evaluation Period.
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4. DEVELOPMENT, CLINICAL EVALUATION AND PAYMENTS
4.1. On or before execution of this Agreement, Nastech has provided
or shall provide to Pfizer: (4.1.1.) a complete copy of the Investigational New
Drug application entitled Doxylamine Succinate Nasal Spray (IND: 48228)
regarding the Product; (4.1.2.) copies of all Know-How, including relevant
clinical protocols; and (4.1.3.) copies of all relevant information concerning
the Patents and Product.
4.2. In consideration for the rights granted under this Agreement,
on the first day of the first full month following the execution of this
Agreement, an eight (8) month development and pre-clinical and clinical
evaluation period, as enumerated and described in items I-VII of Exhibit "A,"
shall commence (hereinafter referred to as the "Evaluation Period"). During
the Evaluation Period, Nastech shall be responsible for the design, undertaking
and completion of Product development, clinical study and research, the sole
purpose of which shall be to permit Pfizer to ultimately evaluate the clinical
and regulatory status of the Product. The total cost of such development,
clinical study and research conducted during the Evaluation Period shall not
exceed $650,000 dollars; such expenses shall be borne by both Pfizer and
Nastech as described below.
4.2.1. Pfizer shall pay to Nastech a total of $500,000 as
follows:
(a) At completion of items I-II as enumerated in
Exhibit "A," $100,000;
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(b) At completion of Item III-V in Exhibit "A,"
$100,000;
(c) At completion of item VI in Exhibit "A," $100,000;
(d) At completion of item VII in Exhibit "A,", $200,000.
Pfizer shall not, however, be required to pay any portion of the $500,000 for
any item enumerated herein until Nastech has provided a complete report on the
activities undertaken for each item. Such report(s) shall include, inter alia,
an integrated, statistical analysis, relevant data, and appropriate
information. In no event, shall Pfizer's total payments hereunder exceed
$500,000 dollars and Pfizer shall not make any payment for any expense greater
than the actual cost incurred by Nastech;
(e) From time to time, at Pfizer's request, Nastech shall
provide a detailed written report of all actual costs.
4.2.2. Nastech agrees pay a total of $150,000 toward the
completion of the clinical development program (items I-VI) as summarized in
Exhibit "A".
4.3. Pfizer may at any time terminate the Evaluation Period and this
Agreement according to the provisions of Paragraph 9.2. hereunder. The
obligations set forth in Paragraphs 8. and 10.2. shall survive any such
termination.
4.4. At any time before or within four (4) months following
expiration of the Evaluation Period, Pfizer may extend the Evaluation Period
and the term of this Agreement: if any of items I - VII in Exhibit "A" have not
been completed to Pfizer's satisfaction; or if additional work is required as
stated in Paragraph 4.4.1.
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If said Evaluation Period and term are not so extended, this Agreement will
terminate at the end of the four (4) month period following the Evaluation
Period. Upon such termination, Pfizer shall have no further obligation to
Nastech, except for the confidentiality and indemnification obligations set
forth in Paragraphs 8. and 10.2., and except for payments accrued for actual
completed work prior to termination and remaining unpaid by Pfizer.
4.4.1. Notwithstanding any provision contained in Paragraph
4.4., if Pfizer extends the Evaluation Period solely because it has determined
that additional work, not within the purview of items I - VII of Exhibit "A" is
required, the parties shall agree to the duration of any such extension and a
payment schedule for such additional work.
5. NEW INFORMATION AND TECHNICAL ASSISTANCE
5.1. Nastech shall promptly and regularly during the term of this
Agreement and any extensions thereto, inform Pfizer of any new Know-How and
Patent information concerning the Product, or such other information or facts
that could materially adversely affect the rights granted by Nastech to Pfizer
herein, including but not limited to, information it obtains or develops
regarding the safety (including toxicity), efficacy or government regulatory
status of the Product.
5.1.1. Each party agrees to report to the other, within [48]
hours from receipt of the information, any serious adverse event which is
reported to
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occur as a result of use of the Product. Such events must be reported in as
much detail as possible, whether or not there is proof of a causal connection
between the events and use of the Product. A serious adverse event includes
any experience relating to the Product which is reasonably regarded to be
medically significant. Each party also agrees to provide to the other copies
of all reports that are made to governmental health authorities concerning
material safety, efficacy or quality matters with respect to the Products.
5.2. In connection with the furnishing of Know-How, Nastech shall
provide written bi-monthly status reports regarding all activities herein
undertaken.
5.2.1. Allow personnel of Pfizer, at Pfizer's expense, to
visit the research sites and to consult with Nastech personnel, at mutually
agreeable times, to discuss and review the Know-How solely for the purposes
provided hereunder.
5.2.2. At the request of Pfizer, Nastech shall send
personnel to Pfizer's facilities to assist and instruct in the evaluation of
the Know-How. The reasonable costs of any such visit shall be borne by Pfizer.
6. REGULATORY STATUS OF PRODUCTS
The Product is not presently marketed in the Territory pursuant to any
regulatory authority. An IND, as hereinbefore noted, has been filed. The
Parties agree that upon completion of the Evaluation Period a determination
shall be made by Pfizer as to whether an NDA filing will be commenced in
connection with Pfizer exercising the Option. The Parties also agree that
Pfizer shall make the sole
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determination of the best regulatory strategy, including clinical development,
with the advice of Nastech.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1. Nastech represents, warrants and covenants that:
7.1.1. Nastech is a corporation duly organized, existing and
in good standing under the laws of the State of Delaware, with full right,
power and authority to enter into and perform this Agreement and to grant all
of the rights, powers and authorities herein granted.
7.1.2. Nastech is and shall be the sole and exclusive owner
of the Product and Patents all of which are and shall be unencumbered by any
liens, security interest or other rights or claims of any third party, and no
other person or entity has or shall have any claim of ownership with respect to
the Product whatsoever.
7.1.3. Making, having made, using or selling the Product in
the Territory does not infringe any patent, or any rights of any third party.
7.1.4. The execution, delivery and performance of this
Agreement do not conflict with, violate or breach any agreement to which
Nastech is a party, or Nastech's articles of incorporation or bylaws.
7.1.5. This Agreement has been duly executed and delivered by
Nastech and is a legal, valid and binding obligation enforceable against
Nastech in accordance with its terms.
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7.1.6. Nastech knows of no fact which materially adversely
affects or could materially adversely affect the rights granted to Pfizer under
this Agreement.
7.1.7. As of the date hereof, Nastech has delivered to
Pfizer all the information specified in Paragraph 4.1. hereof.
7.2. Pfizer represents, warrants and covenants that:
7.2.1. Pfizer is a corporation duly organized, existing and
in good standing under the laws of the State of Delaware, with full right,
power and authority to enter into and perform this Agreement and to grant all of
the rights, powers and authorities herein granted.
7.2.2. The execution, delivery and performance of this
Agreement do not conflict with, violate or breach any agreement to which Pfizer
is a party, or Pfizer's certificate of incorporation or bylaws.
7.2.3. This Agreement has been duly executed and delivered
by Pfizer, and is a legal, valid and binding obligation enforceable against
Pfizer in accordance with its terms.
8. CONFIDENTIAL INFORMATION
8.1. During the term of this Agreement and for a period of five (5)
years after expiration or termination hereof, each party shall keep
confidential and not disclose to others or use for any purpose other than as
authorized herein, any confidential information supplied by the other party or
its employees or
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representatives and identified by the disclosing party as confidential in
writing ("Confidential Information"); provided, however, that these obligations
of confidentiality and non-use shall not apply to the extent that the receiving
party can establish that information is not the other party's Confidential
Information, including but not limited to establishing that the information:
(8.1.1.) entered the public domain without the receiving party's breach of
any obligation owed to the disclosing party; (8.1.2.) had become known to the
receiving party prior to the disclosure of such information and that such prior
knowledge may be demonstrated by written documentation; (8.1.3.) was permitted
to be disclosed by the prior written consent of the disclosing party; (8.1.4.)
had become known to the receiving party from a source other than the disclosing
party other than by breach of a confidentiality obligation owed to the
disclosing party and that such prior knowledge may be demonstrated by written
documentation; (8.1.5.) was disclosed by the disclosing party to a third party
without restrictions on its disclosure; or (8.1.6.) was independently developed
by the receiving party without breach of this Agreement and such prior
independent development can be demonstrated by written documentation. In
addition, each party shall have the right to disclose Confidential Information
supplied by the other party to third parties under a secrecy agreement with
essentially the same confidentiality provisions provided herein, solely in
connection with the exercise of its rights under this Agreement. Further,
disclosure may be made by either party to government agencies to the
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extent required to secure regulatory approvals, and to preclinical and clinical
investigators when necessary for their information in connection with the
filing of applications for such approvals.
8.2. Upon termination of this Agreement, and in the event Pfizer
does not exercise the Option granted hereunder, the parties shall each, upon
the written request of the other, return or destroy all materials, copies and
extracts obtained from the other party that contain any Confidential
Information, except for one archival copy to be retained by the receiving party
only for the purpose of determining its continuing obligations hereunder.
9. TERM AND TERMINATION
9.1. This Agreement shall be effective upon execution and shall
remain in effect, unless terminated earlier by Pfizer according to Paragraph
9.2. of this Agreement, until four (4) months following expiration of the
Evaluation Period, unless Pfizer has extended the term of this Agreement
pursuant to Paragraph 4.3.
9.2. Notwithstanding anything in this Agreement to the contrary,
Pfizer shall have the right, at any time, with or without cause at its sole
discretion and upon (30) days' prior written notice to Nastech, to terminate
this Agreement wherein the Option shall also terminate. Provided, however, if
Pfizer terminates without cause, Pfizer shall forfeit payments previously made
to Nastech for completed work up to the point of termination if Pfizer
terminates with cause,
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Pfizer shall not be obligated to pay for costs associated with activities
completed or commenced post the breach, or for any cost associated with the
breach.
10. INDEMNIFICATION
10.1. Nastech shall at all times during and after the term of this
Agreement be responsible for, and shall defend, indemnify and hold Pfizer
harmless from and against any and all losses, claims, suits, proceedings,
expenses, recoveries and damages, including reasonable legal expenses and
costs, including attorneys' fees, arising out of any claim by a third party
relating to the Product, or any aspect of the performance of this Agreement, to
the extent such liability results from a patent infringement claim, from a
product liability claim or from the negligence or willful misconduct of
Nastech, or any breach of a representation or warranty given herein by Nastech.
10.2. Pfizer shall at all times during and after the term of this
Agreement be responsible for, and shall defend, indemnify and hold Nastech
harmless from and against any and all losses, claims, suits, proceedings,
expenses, recoveries and damages, including reasonable legal expenses and
costs, including attorneys' fees, arising out of any claim by a third party
relating to the Product or any aspect of the performance of this Agreement, to
the extent such liability results from the negligence or willful misconduct of
Pfizer, or any breach of a representation or warranty given herein by Pfizer.
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11. MISCELLANEOUS
11.1. Entire Agreement - This Agreement sets forth the entire
agreement and understanding between the parties and supersedes all previous
agreements, promises, representations, understandings and negotiations, whether
written or oral, between the parties with respect to the subject matter hereof;
none of the terms of this Agreement shall be amended or modified except in
writing signed by the parties hereto.
11.2. Assignment - Neither party may assign any right or obligation
hereunder without the written consent of the other party, except if such
assignment arises under a transaction in which the assigning party is selling
its entire business or a line of business to which this Agreement relates or
that party is being acquired or merging with a third party. This Agreement
shall be binding upon and inure to the benefit of the parties' respective
successors and assigns. Any attempted assignment in violation of this
provision shall be void and of no effect.
11.3. Severability - If and solely to the extent that any provision
of this Agreement shall be invalid or unenforceable, or shall render this
entire Agreement to be unenforceable or invalid, such offending provision shall
be of no effect and shall not affect the validity of the remainder of this
Agreement or any of its provisions; provided, however, the parties shall use
their respective reasonable efforts to renegotiate the offending provisions to
best accomplish the original intentions of the parties.
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11.4. Waivers - A waiver by either party of any term or condition of
this Agreement in any one instance shall not be deemed or construed to be a
waiver of such term or condition for any similar instance in the future or of
any subsequent breach hereof. All rights, remedies, undertakings, obligations
and agreements contained in this Agreement shall be cumulative and none of them
shall be a limitation of any other remedy, right, undertaking, obligation or
agreement.
11.5. Further Documents - Each party hereto agrees to execute such
further documents and take such further steps as the other party reasonably
determines may be necessary or desirable to effectuate the purposes of this
Agreement.
11.6. Compliance with Law - Each party hereto shall comply with all
applicable laws, rules, ordinances, guidelines, consent decrees and regulations
of any federal, state or other governmental authority.
11.7. Force Majeure - No party shall be liable for failure to perform
or delay in performing obligations set forth in this Agreement, and no party
shall be deemed in breach or default of its obligations, if, to the extent and
for so long as, such failure, delay, breach or default is due to natural
disasters or any similar causes reasonably beyond the control of such party.
Any party desiring to invoke the protection of Force Majeure shall promptly
notify the other party of such desire and shall use reasonable efforts to
resume performance of its obligations.
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11.8. Governing Law - This Agreement is deemed to have been entered
into in the State of New York, and its interpretation, construction, and the
remedies for its enforcement or breach are to be applied pursuant to and in
accordance with the laws of the State of New York.
11.9. Notices - Any notice, consent or approval permitted or required
under this Agreement shall be in writing sent by registered or certified
airmail, postage pre-paid, or by overnight courier or by facsimile (confirmed
by mail) and addressed as follows:
If to PFIZER:
Pfizer Inc
Consumer Health Care Division
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: President
Consumer Health Care Group
with a copy to the General Counsel
Pfizer Inc
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Nastech:
Nastech Pharmaceutical Company Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
All notices shall be deemed to be effective on the date of mailing. In case
any party changes its address at which notices are to be received written
notice of such change shall be given s soon as practicable to the other party.
11.10. Headings - Headings in this Agreement are included for
ease of reference only and shall have no legal effect.
11.11. Relationship of the Parties - The relationship hereby
established between Pfizer and Nastech is solely that of independent
contractors; this Agreement shall not create an agency, partnership, joint
venture or employer/employee relationship, and nothing hereunder shall be
deemed to authorize either party to act for, represent or bind the other except
as expressly provided in this Agreement.
11.12. Publicity - Nastech may at any time release the press
release attached hereto as Exhibit "D", but shall not issue any other or
further press release or other publicity materials, or make any presentation
with respect to the existence of this Agreement or the terms and conditions
hereof without the prior written consent of Pfizer. Nastech, however, may make
disclosures required by the Securities Act of 1933, as amended, and the
Securities and Exchange Act of
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1934, with prior written consent of Pfizer, which shall not be unreasonably
withheld.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their duly authorized
officers.
PFIZER INC NASTECH PHARMACEUTICAL
CONSUMER HEALTH CARE GROUP COMPANY INC.
By: /s/ [sig] By: /s/ [sig]
------------------------ -------------------------
Vice President Chairman
Pfizer Inc.
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EXHIBIT "A"
NASAL DOXYLAMINE SUCCINATE
SUMMARY OUTLINE OF CLINICAL DEVELOPMENT PROGRAM
ACTIVITY DESCRIPTION
-------- -----------
1. IND FILING IND submitted to Pfizer
(IND Number 48,228)
II. PRODUCT DEFINITION Define the following:
type of dosage form (e.g. spray,
gel, etc.) dose strength, dosing
duration, device characteristics,
and packaging characteristics.
III. FORMULATION DEVELOPMENT Formulation work to assess the nasal
absorption profile of doxylamine
succinate. The Objective is to
develop a formulation that will
achieve A blood level profile of
doxylamine succinate that will result
in an earlier induction of sleep and
possibly reduce the incidence of
"hang over" effects.
IV. LIMITED NASAL TOXICITY Depending upon the matrix of the
STUDIES (OPTIONAL) new formulation(s) developed, a single
dose pre-clinical nasal toxicity trial
may be needed to allow the single dose
testing of the formulation(s) in humans
to assess nasal absorption.
V. HUMAN ABSORPTION SCREEN New Formulations will be screened in
(PILOT PHASE I humans for single dose nasal absorption
CLINICAL TRIAL) profiles under IND Number 48,228.
Four to six healthy volunteers will
be used per formulation group.
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VI. FORMAL Nasal TOXICITY STUDIES Nasal toxicity studies similar to those
done for the IND filing will be
conducted on the formulation selected
for further clinical testing. The study
will be done over a 14 day dosing
period in rats and dogs.
VII. PHASE I CLINICAL TRIAL AND The formulation selected from the
PILOT PHASE II/III CLINICAL screen studies will be evaluated for
TRIAL tolerance, safety, efficacy, and
pharmacokinetic profile in healthy human
volunteers. Number of subjects per
group to be determined based on results
of pilot Phase I clinical. These will
be single dose studies and will include
active (oral) and/or nasal placebo
control groups.
VIII. PHASE II/III CLINICAL TRIALS Two pivotal clinical efficacy trials
against placebo and/or a positive control
will be conducted. Both trials may
include 100 patients. Plan of study and
number of subjects will be discussed
with the FDA at an appropriate time.
IX. NDA FILING Nastech will start compiling all relevant
information from the start of the project
subject to terms and conditions of the
Evaluation and Option Agreement.
All such studies, clinical evaluations and research shall be conducted
and performed according to all applicable federal, state and local regulations
as well as the Good Laboratory Practices standards. Compliance with all such
regulations and standards shall be the sole responsibility of Nastech.
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EXHIBIT "B"
LICENSE AGREEMENT
AGREEMENT made as of the _____ day of ______, 1997, by
and between the Consumer Health Care Group of Pfizer Inc. (hereinafter referred
to as "Pfizer"), a corporation organized and existing under the laws of the
State of Delaware, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ U.S.A., and Nastech Pharmaceutical Company Inc. (hereinafter referred to
as "Nastech"), A corporation organized and existing under the laws of the State
of Delaware, having an office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, by an Evaluation and Option Agreement dated as of
_______________ between Nastech and Pfizer, Pfizer obtained an option to
acquire a license under certain Patents and Know-How (as hereinafter defined),
and Pfizer desires to exercise said option;
WHEREAS, Nastech is the owner of and has the right to grant licenses
with respect to certain Patents and Know-How (as hereinafter defined) regarding
certain Products (as hereinafter defined); and
WHEREAS, Nastech wishes to grant to Pfizer an exclusive license to
certain Patents and Know-How to make and have made Products in the Territory
for use and sale in the Territory (as hereinafter defined), and Pfizer wishes
to receive such a license, on the terms and subject to the conditions set forth
herein;
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements provided herein, Pfizer and Nastech hereby agree as follows:
I. DEFINITIONS
For purposes of this Agreement, the following definitions
shall be applicable (it being understood that the terms defined shall include
the singular number in the plural, and the plural number in the singular):
A. "Affiliate" means, with respect to a party, any corporation or
other business entity directly or indirectly controlling, controlled by or
under common control with such party; as used herein, the term "control" means
possession of the power to direct, or cause the direction of the management and
policies of a corporation or other entity whether through the ownership of
voting securities, by contract or otherwise.
B. "FDA" means the United States Food and Drug Administration or
any successor agency thereof.
C. "Patents" means all patents and patent applications in the
Territory which covers the Product and which are now owned or licensed, or
hereafter issued, acquired or licensed during the term of this Agreement, by
Nastech or its Affiliates. A list of such Patents are appended hereto as
Exhibit "A" which is attached hereto and made a part of this Agreement. From
time to time the list may be amended, as required.
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D. "National Commercial Launch" means the first shipment of a
Product by Pfizer or any of its Affiliates or sublicensees on a commercial
basis to a third party, unless the shipment is for the primary purpose of
evaluating consumer acceptance.
E. "Net Sales" shall mean the actual gross invoice price of
products sold by Pfizer, its Affiliates and sublicensees to third parties less,
to the extent included therein, the total of (i) ordinary and customary trade
discounts, (ii) sales and excise taxes, and other similar taxes, customs duty
and compulsory payments to governmental authorities actually paid or deducted
and related to the sale, and (iii) credits given to customers for rejects or
returns of the product.
F. "NDA" means a New Drug Application covering a Product filed
with the FDA pursuant to Paragraph 505 of the United States Federal Food, Drug,
and Cosmetic Act, or any regulations thereunder.
G. "Payment Computation Period" means a three (3) month calendar
quarter ending on the last day of March, June, September or December of a given
year.
H. "Product" means solely and only a method and/or dosage form for
the nasal administration of doxylamine succinate and diphenhydramine
hydrochloride for the purpose of inducing sleep.
I. "Know-How" means all information, including but not limited to
the following: all chemical, pharmacological, safety, toxicological, clinical,
stability, assay, control, packaging, manufacturing, regulatory and marketing
research data and other
24
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knowledge related to the Product and its components now or hereafter owned by
or in the possession or control of, Nastech during the term of this Agreement,
including any improvements thereto.
J. "Territory" means Worldwide.
K. "Competitive Product" - means all nasally administered dosage
forms of sleep-aids that contain doxylamine succinate or diphenhydramine
hydrochloride or any combination thereof, marketed in the Territory by a third
party.
II. GRANT OF LICENSE
A. Subject to the terms of this Agreement, Nastech hereby grants,
and Pfizer hereby accepts, an exclusive license, including the right to grant
sublicenses, under the Patents and Know-How to make, have made, use and sell
the Products in the Territory.
B. Pfizer acknowledges and agrees that: (i) the use of a
sublicensee shall not relieve Pfizer of any of its obligations, duties or
limitations under this Agreement; (ii) any action or omission of a sublicensee
shall have the same consequence or effect as if such action or omission was
Pfizer's own; and (iii) any sublicense agreement shall contain a
confidentiality obligation, binding on the sublicensee, which is comparable to
the confidentiality provision of this Agreement, at Paragraph VIII.
25
-5-
III. LICENSE FEES AND ROYALTIES
A. In consideration of the license granted to Pfizer under this
Agreement, Pfizer shall pay to Nastech license fees as follows:
1. a one-time payment of three hundred thousand Dollars
($300,000) upon the execution of this Agreement; and
2. a one-time payment of one hundred-twenty-five thousand
Dollars ($125,000) upon the filing of an NDA for the Product, only if filed on
or before June 30, 1998. In addition, for each full month that the NDA is
filed earlier than June 30, 1998, Pfizer shall pay twenty-five thousand dollars
($25,000) up to a total amount not to exceed one hundred-twenty-five thousand
dollars ($125,000).
3. in addition, subject to the terms of Paragraph III.A.4.,
after the first National Commercial Launch by Pfizer of a Product in a country
in the Territory, Pfizer shall pay to Nastech for the life of the Patent in the
country in the Territory, royalties of nine percent (9%) of Net Sales of
Products if such Products are sold as prescription drugs; or five percent (5%)
of Net Sales of Products if such Products are sold as over-the-counter ("OTC")
drugs. For the Payment Computation Period in which Pfizer's royalty payment
obligation under this Paragraph terminates for any reason, royalty payments
shall be payable only for that portion of the Payment Computation Period during
which Pfizer's royalty obligation is in effect.
26
-6-
4. notwithstanding anything to the contrary contained in
Paragraph III.A.3. herein, the royalty rate stated in Paragraph III.A.3. shall
be reduced to the following after the first National Commercial Launch by
Pfizer of a Product in a country in the Territory where: (i) there is no
Patent; and (ii) where Competitive Products are marketed: five percent (5%) of
Net Sales of Products if such Products are sold as prescription drugs; three
percent (3%) of Net Sales of Products if such Products are sold as OTC drugs
for the life of the Patent in the United States.
5. in any circumstances where Pfizer is paying royalties on
the Net Sales of Products in any country in the Territory where no patent for
the Products has issued, Pfizer's royalty obligations pursuant to Paragraph
III.A. shall remain in effect only for the life of the Patent in the United
States.
6. the following minimum payments, which are fully creditable
against royalties, shall be paid by Pfizer as follows: twelve (12) months after
first National Commercial Launch in the United States, or twenty-four months
(24) after NDA approval, whichever is later; two-hundred-fifty-thousand Dollars
($250,000); in each full year following the initial payment, there shall be a
payment of two-hundred-fifty-thousand Dollars ($250,000). These minimum
payments shall remain in effect as long as Pfizer's royalty obligations are in
effect.
7. if Pfizer enters into a sub-license that as part of its
terms includes payments (sub-licensing fees) to Pfizer that are fully
creditable against royalties, Pfizer shall pay one-half (1/2)
27
-7-
of those payments (sub-licensing fees) to Nastech. Such payments shall be
payable by Pfizer to Nastech within ninety (90) days from the date Pfizer
receives payment from its sub-licensee, and such payments shall be fully
creditable against Pfizer's royalty obligations hereunder.
B. Following Pfizer's final royalty payment due in a country under
Paragraph III.A. Pfizer shall be deemed to have an exclusive fully paid-up
irrevocable license, including the right to grant sublicenses, under the
Patents and Know-How to make, have made, use and sell the Products in the
Territory in that country.
C. The parties shall design, undertake and complete any further or
additional clinical studies or research including but not limited to: two
pivotal clinical efficacy trials against placebo and/or a positive control.
Both trials may include 100 patients. The plan of study and number of subjects
will be discussed with the FDA at an appropriate time, and Nastech will compile
all relevant information from the start of the project. Such additional
clinical studies or research shall be completed by Nastech at a total cost to
Pfizer of not to exceed 1.6 million Dollars. To the extent more than two
pivotal clinical efficacy trials are required or the number of participants
substantially exceeds 100 persons per trial, the parties shall negotiate
additional payments in excess of 1.6 million Dollars.
D. Notwithstanding anything to the contrary contained in this
Agreement, Pfizer shall make the sole determination of the
28
-8-
best regulatory strategy, including clinical development with the advice of
Nastech.
IV. PRODUCT DEVELOPMENT, CLINICAL TESTING AND REGULATORY AFFAIRS
A. The parties shall use reasonable efforts to carry out all
product development, including, without limitation, regulatory and clinical
work, testing or studies relating to Products reasonably required for obtaining
all regulatory approvals needed to import, market, sell or use the Products
within the Territory (collectively "Approval").
B. Pfizer shall use its reasonable efforts to prepare, file,
prosecute and maintain, during the term of this Agreement, all necessary and
appropriate applications, submissions and filings, to the appropriate
governmental authorities, to obtain Approval in each country within the
Territory in which Pfizer decides to commercialize the Product.
C. Nastech shall consult with and assist Pfizer as reasonably
requested concerning the development of Products. Nastech will assist in
making any necessary submissions or filings for Approval within the Territory,
including, without limitation, the provision of such documents and information
as will enable Pfizer to make the submissions or filings, to the extent such
documents or information are in the possession of, or can be reasonably
obtained by, Nastech without incurring material costs. The parties shall meet
at mutually agreed upon intervals to review
29
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and discuss the progress and/or results of the development work hereunder.
D. If Nastech has, at the request of Pfizer, sought any government
or regulatory approvals for the Products and has received such approvals,
Nastech shall immediately assign such approvals to Pfizer.
E. Pfizer shall use its reasonable efforts to commercialize
Products in the United States within twelve (12) months of receiving final NDA
Approval from the FDA.
V. ADVERSE EVENT REPORTING
Each party agrees to report to the other, within 48 hours from receipt
of the information, any serious adverse event which is reported to occur as a
result of use of the Products. Such events must be reported in as much detail
as possible, whether or not there is proof of a causal connection between the
events and use of the Products. A serious adverse event includes any
experience relating to the Products which is reasonably regarded to be
medically significant. Each party also agrees to provide to the other copies
of all reports that are made to governmental health authorities concerning
material safety, efficacy or quality matters with respect to the Products.
VI. PAYMENT PROCEDURES, RECORDS, AUDITING
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A. Pfizer shall pay to Nastech all fees and royalties as set forth
in Paragraph III. within sixty (60) days after the end of each Payment
Computation Period, and will provide a report identifying the Products, Net
Sales, and the computation of the royalties payable to Nastech.
B. Payments shall be in United States Dollars, remitted to Nastech
at its address specified herein. Any conversion from other currency shall be
made at the exchange rate prevailing at the close of the last business day of
that Payment Computation Period, as published the next day in The Wall Street
Journal.
C. Pfizer shall keep full and accurate books and records setting
forth gross sales, Net Sales and any other information sufficient in detail to
allow the calculation of royalties to be paid by Pfizer. Pfizer shall permit
Nastech, at Nastech's expense (except as otherwise provided in Paragraph
VI.D.), by independent certified public accountants employed by Nastech and
reasonably acceptable to Pfizer, to examine relevant books and records at any
reasonable time, within five (5) years of the rendering of the books and
records. Such accountants shall not disclose to Nastech any of Pfizer's cost
data relating to marketing, distribution or sales.
D. If it is determined that there was an underpayment of royalties
due Nastech, without prejudice to any other rights Nastech may have, Pfizer
shall promptly pay to Nastech the balance of the royalties due. Pfizer shall
also reimburse Nastech for the cost of such verification examination.
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VII. DISCLOSURE OF NEW INFORMATION, DEVELOPMENTS AND IMPROVEMENTS
A. Nastech shall keep Pfizer fully informed of all relevant
information concerning the Products. Toward such end, Nastech shall freely
provide Pfizer with all technical information or other Know-How, trade secrets,
inventions, data, technology and information acquired or developed by Nastech
or its Affiliates during the term of this Agreement, relating to the Products.
B. In connection with the furnishing by Nastech of Know-How,
Nastech agrees, at the request and expense of Pfizer, to (1) allow Pfizer
personnel to visit Nastech's manufacturing and research facilities and to
consult with Nastech personnel at mutually agreeable times, to discuss and
review the Know-How for the purposes contemplated by this Agreement; and (2)
send Nastech personnel to visit Pfizer's manufacturing and research facilities
at mutually agreeable times, to similarly discuss and review such Know-How.
VIII. CONFIDENTIAL INFORMATION
A. During the term of this Agreement and for a period of five (5)
years after expiration or termination hereof, each party shall keep
confidential and not disclose to others or use for any purpose other than as
authorized herein, any confidential information supplied by the other party or
its employees or representatives and identified by the disclosing party as
confidential in writing ("Confidential Information"); provided,
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-12-
however, that these obligations of confidentiality and non-use shall not apply
to the extent that the receiving party can establish that information is not
the other party's Confidential Information, including but not limited to
establishing that the information: (i) entered the public domain without the
receiving party's breach of any obligation owed to the disclosing party; (ii)
had become known to the receiving party prior to the disclosure of such
information and that such prior knowledge may be demonstrated by written
documentation; (iii) was permitted to be disclosed by the prior written consent
of the disclosing party; (iv) had become known to the receiving party from a
source other than the disclosing party other than by breach of a
confidentiality obligation owed to the disclosing party and that such prior
knowledge may be demonstrated by written documentation; (v) was disclosed by
the disclosing party to a third party without restrictions on its disclosure;
or (vi) was independently developed by the receiving party without breach of
this Agreement and such prior independent development can be demonstrated by
written documentation. In addition, each party shall have the right to
disclose Confidential Information supplied by the other party to third parties
under a secrecy agreement with essentially the same confidentiality provisions
provided herein, solely in connection with the exercise of its rights under
this Agreement. Further, disclosure may be made by either party to government
agencies to the extent required to secure regulatory approvals, and to
preclinical and clinical investigators when necessary for their
33
-13-
information in connection with the filing of applications for such approvals.
B. Upon termination of this Agreement the parties shall each, upon
the written request of the other, return or destroy all materials, copies and
extracts obtained from the other party that contain any Confidential
Information, except for one archival copy to be retained by the receiving party
only for the purpose of determining its continuing obligations hereunder.
IX. REDUCTION OF ROYALTIES
Royalties payable by Pfizer to Nastech under Paragraph III. hereof
shall be reduced as follows:
A. In the event of any patent infringement, royalties shall be
reduced as provided in Paragraph X.
B. If Pfizer is required in a country within the Territory, by a
final court order from which no appeal can be taken, to make changes in
Products or to obtain and pay a royalty under a license to a third party under
any patent in order to make, have made, use or sell the Products in that
country, Pfizer's obligations in the country to pay royalties to Nastech shall
be reduced by the amount of the cost to Pfizer for the changes and additional
royalty; provided, however, that no more than one-half (1/2) of any royalties
thereafter due to Nastech in any Payment Computation Period may be offset. Any
credit remaining shall be applied by Pfizer against royalties due in the next
succeeding Payment Computation Periods.
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C. If a third party obtains, by order, decree or grant from a
competent governmental authority in any country in the Territory, a compulsory
license under the Patents authorizing such third party to make, have made, use
or sell any Product in such country, Nastech shall give prompt notice to
Pfizer. During the effective period of such compulsory license, Pfizer's
obligations to pay royalties with respect to Net Sales in such country under
this Agreement shall be no more than the rate payable to Nastech by said third
party.
D. As stated in Paragraph III.A.4.
X. PATENTS
A. Maintenance of Patents
Nastech shall take all reasonable, necessary steps and pay all
necessary expenses to obtain patent protection in the Territory for patentable
inventions conceived or made before or during the term of this Agreement, and
to maintain for the full life thereof all Patents, relating to the Products and
improvements thereto. Pfizer shall have the right, upon consultation with
Nastech, to file on behalf of and as agent for Nastech all applications and
filings, and to take all actions necessary to obtain the benefits under the
Drug Price Competition and Patent Term Restoration Act of 1984 and any
amendments thereto Supplementary Protection Certificates in Europe and Patent
Extensions in Japan. Nastech agrees to sign any authorizations and instruments
and to take any further actions reasonably requested by Pfizer to implement the
foregoing.
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Pfizer hereby agrees to ▇▇▇▇ the Products with the proper legend
concerning patent coverage, in accordance with the laws of each respective
country within the Territory.
B. Defense of Patent Litigation
If any patent infringement action is brought in a country in the
Territory against Pfizer or its Affiliate or sublicensee because of actual or
anticipated manufacture, use or sale of the Products, Pfizer shall promptly
notify Nastech and send Nastech copies of all papers that have been served.
Nastech shall promptly defend against such infringement action, once notified
by Pfizer. Pfizer shall cooperate with Nastech, and continue to pay to Nastech
any applicable royalties during the pendency of the action and any appeals.
If as a result of such action, Pfizer or its Affiliate or sublicensee
is required to make changes in the Products or make payments to any third
parties, Pfizer can offset such payments against royalty payments otherwise due
to Nastech, as provided in Paragraph IX. of this Agreement.
If Nastech fails to defend such infringement action after being
notified by Pfizer, Pfizer shall have the right but not the obligation to
defend the action itself. If Pfizer does undertake such defense, Nastech shall
cooperate with Pfizer and Pfizer shall be entitled to select counsel. Any
reasonable costs and expenses incurred by Pfizer, including settlement costs,
damages assessed against Pfizer and reasonable outside attorney fees, shall be
36
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offset against royalty payments otherwise due hereunder, as provided in
Paragraph IX.
C. Response To Infringement Of Patents
By Third Parties
If, during the term of this Agreement, either party becomes aware of
any third party infringement or threatened infringement of any Patent in the
Territory, the following provisions shall apply:
1. The party having such knowledge shall promptly give notice to
the other party, with all available details.
2. Nastech shall have the right, but not the obligation, to bring
suit in its name, or in the name of Pfizer if necessary, at its
own expense to restrain such infringement and to recover profits and
damages. Pfizer agrees to being joined as a party plaintiff and to
cooperate in the prosecution thereof as is reasonably necessary, at
Nastech's expense. If Nastech decides to undertake such suit, then
Nastech shall have the sole right to control prosecution, and the
right to settle and compromise such action with Pfizer's prior written
consent, which shall not be unreasonably withheld.
3. If Nastech fails to take action within [(sixty (60)] days after
becoming aware of such infringement, in the first instance or by
notice from Pfizer, then Pfizer, at any time prior to Nastech
thereafter filing an action, shall have the right but not the
obligation to take such action in its own name or in the name of
Nastech as it deems necessary or appropriate. Nastech shall cooperate
with Pfizer as is
37
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reasonably necessary in any such action brought by Pfizer. If Pfizer
brings legal action, Pfizer shall have the sole right to control
prosecution, and the right to settle and compromise such action with
Nastech's prior written consent, which shall not be unreasonably
withheld.
4. In the event any monetary recovery in connection with such
infringement action is obtained, such recovery shall be applied in the
following priority: first, to reimburse Nastech and Pfizer by the
proportion and up to the extent of their out-of-pocket expenses
(including reasonable attorneys' fees) in prosecuting such
infringement; second, to be shared by the proportion and up to the
extent of any damages established, including but not limited to
Pfizer's lost profits and Nastech's lost royalties; third, the
balance, if any, to be shared one-half by Nastech and one-half by
Pfizer.
XI. REPRESENTATIONS, WARRANTIES AND COVENANTS
A. Nastech represents, warrants and covenants that:
1. Nastech is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware, with full right, power
and authority to enter into and perform this Agreement and to grant all of the
rights, powers and authorities herein granted.
2. Nastech is and shall be the sole and exclusive owner of
the Product and Patents all of which are and shall be unencumbered by any
liens, security interest or other rights or
38
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claims of any third party, and no other person or entity has or shall have any
claim of ownership with respect to the Product whatsoever.
3. Making, having made, using or selling the Product in the
Territory does not infringe any patent, or any rights of any third party.
4. The execution, delivery and performance of this Agreement
do not conflict with, violate or breach any agreement to which Nastech is a
party, or Nastech's articles of incorporation or bylaws.
5. This Agreement has been duly executed and delivered by
Nastech and is a legal, valid and binding obligation enforceable against
Nastech in accordance with its terms.
6. Nastech knows of no fact which materially adversely
affects or could materially adversely affect the rights granted to Pfizer under
this Agreement.
7. Nastech represents and warrants the Patents are valid and
believes that the Patents are enforceable.
B. Pfizer represents, warrants and covenants that:
1. Pfizer is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware, with full
right, power and authority to enter into and perform this Agreement
and to grant all of the rights, powers and authorities herein granted.
2. The execution, delivery and performance of this Agreement
do not conflict with, violate or breach any
39
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agreement to which Pfizer is a party, or Pfizer's certificate of
incorporation or bylaws.
3. This Agreement has been duly executed and delivered by
Pfizer, and is a legal, valid and binding obligation enforceable
against Pfizer in accordance with its terms.
XII. TERM AND TERMINATION
A. This Agreement shall be effective as of the date first set
forth above and shall remain in effect as long as Pfizer is obligated to make
royalty payments to Nastech, unless earlier terminated as provided herein. The
provisions of Paragraphs III.C., IV.A., V., VI., VIII., X.C., XI. and XIII.
hereof shall survive the expiration or termination of this Agreement, except as
otherwise provided herein.
B. At any time after the execution of this Agreement, Pfizer shall
have the right, with or without cause, at Pfizer's sole discretion, to
terminate this Agreement upon ninety (90) days' written notice to Nastech.
C. If either Pfizer or Nastech breaches or defaults in the
performance or observance of any of the material provisions of this Agreement,
and such breach or default is not cured within ninety (90) days after the
giving of notice by the other party specifying such breach or default, the
non-defaulting party shall have the right to terminate this Agreement,
effective without further notice to the defaulting party. The non-defaulting
party shall thereafter be free to seek any and all appropriate remedies.
40
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D. Except as otherwise provided in this Agreement, upon
termination of this Agreement (unless by Pfizer under Paragraph XII.C.):
1. All rights, privileges and licenses shall terminate and
revert to Nastech, and Pfizer shall not thereafter make any use
whatsoever of any Know-How or Patents.
2. Subject to subparagraph 6. below, Pfizer shall promptly
return or provide to Nastech all Know-How and other similar
information regarding the Products, including any information relating
to the regulatory and clinical work and filings, in connection with
any Approval, not previously supplied to Nastech.
3. Subject to subparagraphs 5. and 6. below, Pfizer shall
promptly transfer or destroy, at Nastech's election, all marketing,
labeling or advertising materials relating to the Products.
4. Pfizer shall promptly execute whatever documents are
necessary and take whatever steps are necessary to transfer to Nastech
or its designee, free of charge except for out-of-pocket expense, all
of Pfizer's, its Affiliates' and sublicensees' right, title and
interest in and to any NDAs and Approvals, including product licenses,
drug identification numbers, or other health registration approvals in
effect in the Territory.
5. Nastech, at its election, shall:
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▇. ▇▇▇▇▇ Pfizer sufficient time, but not less than eighteen
(18) months, to sell off its existing stocks of the Products, provided
that Nastech shall continue to receive any royalty payable thereon as
provided in this Agreement; or
b. Purchase from Pfizer, at Pfizer's cost, any stock of
Products held by Pfizer or returned to Pfizer within the following
three (3) months in the normal course of trade.
6. Notwithstanding anything herein to the contrary, Pfizer's
Legal Division shall be entitled to retain one archival copy of all
materials covered by Paragraph VIII., for the sole purpose of
determining Pfizer's ongoing confidentiality obligations.
E. Termination of this Agreement for any reason shall be without
prejudice to and shall not affect the right of either party to recover any and
all damages to which it may be entitled, or exercise any other remedies which
it may otherwise have.
XIII. INDEMNIFICATION
A. Nastech shall at all times during and after the term of this
Agreement be responsible for, and shall defend, indemnify and hold Pfizer
harmless from and against any and all losses, claims, suits, proceedings,
expenses, recoveries and damages, including reasonable legal expenses and
costs, including attorneys' fees, arising out of any claim by a third party
relating to the Product, or any aspect of the performance of this Agreement, to
the extent such liability results from a patent infringement claim or from the
42
-22-
negligence or willful misconduct Of Nastech, or any breach of a representation
or warranty given herein by Nastech.
B. Pfizer shall at all times during and after the term of this
Agreement be responsible for, and shall defend, indemnify and hold Nastech
harmless from and against any and all losses, claims, suits, proceedings,
expenses, recoveries and damages, including reasonable legal expenses and
costs, including attorneys' fees, arising out of any claim by a third party
relating to the Product or any aspect of the performance of this Agreement, to
the extent such liability results from the negligence or willful misconduct of
Pfizer, or any breach of a representation or warranty given herein by Pfizer.
XIV. BANKRUPTCY
All rights and licenses granted under or pursuant to this Agreement by
Nastech to Pfizer are, and shall 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(56) of the Bankruptcy Code. The parties
agree that Pfizer, as a licensee of such rights and licenses, shall retain and
may fully exercise all of its rights and elections under the Bankruptcy Code.
The parties further agree that, in the event that any proceeding shall be
instituted by or against Nastech seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to
43
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bankruptcy, insolvency or reorganization or relief of debtors, or seeking an
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property or it shall
take any action to authorize any of the foregoing actions (each a
"Proceeding"), Pfizer shall have the right to retain and enforce its rights
under this Agreement, including but not limited to the following rights:
A. the right to a complete duplicate of (or complete access to, as
appropriate) all Patents, Know-How and documentation and other supporting
materials related to the Products, Patents, and Know-How, and all embodiments,
versions and derivatives thereof; the same, if not already in Pfizer's
possession, shall be promptly delivered to Pfizer (i) upon any such
commencement of a Proceeding upon written request therefor by Pfizer, unless
Nastech elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of Nastech, upon written request therefor by Pfizer;
and
B. the right to continue to use the Patents, and Know-How and all
versions and derivatives thereof, and all documentation and other supporting
material related thereto, in accordance with the terms and conditions of this
Agreement.
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XV. MISCELLANEOUS
A. Entire Agreement - This Agreement, and Paragraph 3.3 of the
Evaluation and Option Agreement dated ______________, to the extent applicable,
sets forth the entire agreement and understanding between the parties and
supersedes all previous agreements, promises, representations, understandings
and negotiations, whether written or oral, between the parties with respect to
the subject matter hereof; none of the terms of this Agreement shall be amended
or modified except in writing signed by the parties hereto.
B. Assignment - Neither party may assign any right or obligation
hereunder without the written consent of the other party, except if such
assignment arises under a transaction in which the assigning party is selling
its entire business or a line of business to which this Agreement relates or
that party is being acquired or merging with a third party, or if such
assignment is to a Pfizer Affiliate. This Agreement shall be binding upon and
inure to the benefit of the parties' respective successors and assigns. Any
attempted assignment in violation of this provision shall be void and of no
effect.
C. Severability - If and solely to the extent that any provision
of this Agreement shall be invalid or unenforceable, or shall render this
entire Agreement to be unenforceable or invalid, such offending provision shall
be of no effect and shall not affect the validity of the remainder of this
Agreement or any of its provisions; provided, however, the parties shall use
their respective reasonable efforts to renegotiate the offending
45
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provisions to best accomplish the original intentions of the parties.
D. Waivers - A waiver by either party of any term or condition of
this Agreement in any one instance shall not be deemed or construed to be a
waiver of such term or condition for any similar instance in the future or of
any subsequent breach hereof. All rights, remedies, undertakings, obligations
and agreements contained in this Agreement shall be cumulative and none of them
shall be a limitation of any other remedy, right, undertaking, obligation or
agreement.
E. Further Documents - Each party hereto agrees to execute such
further documents and take such further steps as the other party reasonably
determines may be necessary or desirable to effectuate the purposes of this
Agreement.
F. Compliance With Law - Each party hereto shall comply with all
applicable laws, rules, ordinances, guidelines, consent decrees and regulations
of any federal, state or other governmental authority.
G. Force Majeure - No party shall be liable for failure to perform
or delay in performing obligations set forth in this Agreement, and no party
shall be deemed in breach or default of its obligations, if, to the extent and
for so long as, such failure, delay, breach or default is due to natural
disasters or any similar causes reasonably beyond the control of such party.
Any party desiring to invoke the protection of Force Majeure shall promptly
46
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notify the other party of such desire and shall use reasonable efforts to
resume performance of its obligations.
H. Governing Law - This Agreement is deemed to have been entered
into in the State of New York, and its interpretation, construction, and the
remedies for its enforcement or breach are to be applied pursuant to and in
accordance with the laws of the State of New York.
I. Notices - Any notice, consent or approval permitted or required
under this Agreement shall be in writing sent by registered or certified
airmail, postage pre-paid, or by overnight courier or by facsimile (confirmed
by mail) and addressed as follows:
If to PFIZER: Pfizer Inc
Consumer Health Care Group
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: President
Consumer Health Care Group
with copy to: General Counsel
Pfizer Inc
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Nastech: Nastech Pharmaceutical Company Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President
with a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
All notices shall be deemed to be effective on the date of mailing. In case any
party changes its address at which notices are to be
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received, written notice of such change shall be given as soon as practicable
to the other party.
J. Headings - Headings in this Agreement are included for ease of
reference only and shall have no legal effect.
K. Relationship of the Parties - The relationship hereby
established between Pfizer and Nastech is solely that of independent
contractors; this Agreement shall not create an agency, partnership, joint
venture or employer/employee relationship, and nothing hereunder shall be
deemed to authorize either party to act for, represent or bind the other except
as expressly provided in this Agreement.
L. Publicity - Nastech shall not issue any press release or other
publicity materials, or make any presentations with respect to the existence of
this Agreement or the terms and conditions hereof without the prior written
consent of Pfizer. Nastech, however, may make disclosures required by the
Securities Act of 1933, as amended, and the Securities and Exchange Act of
1934, with prior written consent of Pfizer, which shall not be unnecessarily
withheld.
M. Additional Opportunities - Nastech shall negotiate exclusively
with Pfizer, in good faith, for a period of four months, the terms of a license
agreement for a method and/or dosage form for the nasal administration of an
OTC substance, drug or product for the purpose of alleviating motion sickness.
An equity investment in Nastech will be considered by Pfizer, a significant
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portion of which would be dedicated to the project, if such an investment were
made.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their duly authorized
officers.
PFIZER INC NASTECH PHARMACEUTICAL
CONSUMER HEALTH CARE GROUP COMPANY INC.
By: By:
---------------------------- ----------------------------
49
EXHIBIT "A"
NASTECH PATENTS
U.S. PATENTS
United States Patent No. 4,749,700
FOREIGN PATENTS
*Austrian Patent No. 75400
*Australian Patent No. 8550638
*Australian Patent No. 8815061
*Australian Patent No. 596741
*Brazilian Patent No. 8507008
*Canadian Patent No. 1265056
*Canadian Patent No. 1309023
*German Patent No. 358952
*European Patent No. 201537
*Japanese Patent No. ▇▇▇▇▇▇▇▇
*Japanese Patent No. ▇▇▇▇▇▇▇▇
*Subject to verification of claim coverage.
50
EXHIBIT "C"
NASTECH PATENTS
U.S. PATENTS
United States Patent No. 4,749,700
FOREIGN PATENTS
*Austrian Patent No. 75400
*Australian Patent No. 8550638
*Australian Patent No. 8815061
*Australian Patent No. 596741
*Brazilian Patent No. 8507008
*Canadian Patent No. 1265056
*Canadian Patent No. 1309023
*German Patent No. 358952
*European Patent No. 201537
*Japanese Patent No. ▇▇▇▇▇▇▇▇
*Japanese Patent No. ▇▇▇▇▇▇▇▇
*Subject to verification of claim coverage.
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EXHIBIT "D"
PRESS RELEASE
NASTECH ENTERS INTO DRUG DEVELOPMENT PACT
Hauppauge, NY (-date-) Nastech Pharmaceutical Company Inc. (NASDAQ NSTK) today
announced that it has entered into a drug development agreement with a
multi-national healthcare company.
Nastech is developing a new formulation for a convenient nasal delivery route
of administration and has filed an Investigational New Drug (IND) application
with the U.S. Food and Drug Administration.
The initial phase of this agreement, signed yesterday, covers pre-clinical
studies and the initial Phase I clinical testing. Additional payments may be
made to Nastech following successful Phase I trials and with a continued
commitment to move forward in clinical testing. If milestones are met and a
New Drug Application is filed with FDA, the parties will enter into a licensing
agreement. Today's agreement also includes a provision to negotiate possible
further alliances for other compounds in a separate product category.
"We are extremely pleased to be working with a leading healthcare company in
the development of a nasally delivered dosage forms," commented ▇▇. ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, President and Chief Executive Officer of Nastech. "Our work to date
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52
points to a faster rate of absorption of nasally administered drugs than an
oral formulation."
Nastech's agreement follows last month's announcement by the company that it
has entered into an agreement with Ciba-Geigy Corporation to begin work on a
nasal formulation of nicotine for smoking cessation.
Nastech Pharmaceutical Company specializes in developing new formulations of
widely-used compounds that are safe and effective when delivered transnasally.
For many patients and products, the nasal route of delivery offers significant
advantages over oral or injected medications; absorption is rapid, resulting in
swift onset of therapeutic activity, nasally administered drugs tend to avoid
liver firstpass and gastrointestinal metabolism, allowing for potentially lower
dosages which can lead to reduced adverse side effects; additionally, patients
are able to treat themselves at home, thereby saving the time and expense of
receiving injections by a health care professional.
In addition to this agreement, Nastech has agreements with ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb
Company for the nasal delivery of butorphanol tartrate, currently marketed as
Stadol(R) NS(TM), a potent pain relief medication; DuPont Merck Pharmaceutical
Company for nasal delivery of nalbuphine, a narcotic analgesic; Ciba-Geigy
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Corporation for nasally delivered nicotine; and with Ribogene, Inc., for
intranasal delivery of metoelpramide, for nausea and emesis following
chemotherapy treatment, and propranolol, for the treatment of migraine headache
pain.
Nastech Pharmaceutical Company Inc., based in Hauppauge, New York, is a
research and development company focused exclusively on developing nasal
formulations of widely-used pharmaceuticals. The company has been issued and
has pending patents in the U.S. and internationally on nasal delivery
formulations of a portfolio of pharmaceuticals. These include narcotic
analgesics, antinauseant/antiemetics, beta blockers and anti-anemia
pharmaceutical products.
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