Exhibit 10.9
CONFIDENTIAL TREATMENT
AGREEMENT
This Agreement (AGREEMENT) is entered into as of June 29, 2001 (EFFECTIVE DATE)
between NeoGenesis Drug Discovery, Inc., a Delaware corporation (NEOGENESIS) and
Biogen, Inc. (CUSTOMER), a Massachusetts corporation, and sets forth the terms
and conditions that will apply to the provision by NeoGenesis to CUSTOMER of
certain screening and analysis services.
BACKGROUND
CUSTOMER is interested in identifying potential pharmaceutical products for
treatment of human diseases and wishes to identify compounds that exhibit a high
degree of chemical binding and functional activity to specific protein targets.
NeoGenesis owns or controls certain technology and know-how, including screening
processes of libraries of mass-encoded small molecule compounds, relating to the
identification, discovery, validation and optimization of novel compounds which
may be useful for development of novel therapeutics employing targets implicated
in a disease process. The parties wish to pursue a collaborative screening
process to identify compounds exhibiting a high degree of chemical binding
activity to targets designated by CUSTOMER from among the NeoGenesis libraries,
or from CUSTOMER libraries, of mass-encoded small molecule compounds and which
have activity in target-specific functional assays. The terms and conditions set
forth below shall govern the performance of such collaborative effort.
1. DEFINITIONS.
1.1 DEFINED TERMS. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meaning set forth below.
AFFILIATE means with respect to either party, any Person that, directly or
indirectly, is controlled by, controls or is under common control with such
party. For purposes of this definition, CONTROL means, with respect to any
Person, the direct or indirect ownership of fifty percent (50%) or more of the
voting or income interest in such Person or the possession otherwise, directly
or indirectly, of the power to direct the management or policies of such Person.
ALIS means the Automated Ligand Identification System, an automated,
ultra-high throughput ligand selection system proprietary to NeoGenesis that is
used to identify multiple classes of chemical ligands against target protein.
APPLICABLE LAWS means all laws, statutes, regulations and ordinances of any
Regulatory Authority, including without limitation the FD&C Act.
CHEMOTYPE means a family or group of structurally-related Primary Active
Compounds (as defined in ATTACHMENT A).
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CIP means "Carriage and Insurance Paid", as that expression is defined in
INCOTERMS 2000, ICC Publishing S.A.
COMBINATION PRODUCT means a product which includes one or more active
ingredients or active components other than Licensed Product in combination with
Licensed Product.
COMMERCIALLY REASONABLE EFFORTS means, with respect to (i) any objective by
any party, reasonable, diligent, good faith efforts to accomplish such objective
as such party would normally use to accomplish a similar objective under similar
circumstances; and (ii) with respect to any objective relating to the
development or Commercialization of any Licensed Product by any party, efforts
and resources normally used by such party with respect to a product owned by
such party or to which such party has similar rights which is of similar market
potential at a similar stage in the development or life of such product, taking
into account issues of safety, efficacy, product profile, the competitiveness of
the marketplace, the proprietary position of the product, the regulatory
structure involved, profitability of the product and other relevant technical
and/or commercial factors.
COMMERCIALIZATION means any and all activities of using, importing,
exporting, marketing, promoting, distributing, offering for sale and selling a
Licensed Product. When used as a verb, COMMERCIALIZE means to engage in
Commercialization. Commercialization does not include any activities of CUSTOMER
or its Affiliates or sublicensees within the R&D Program or reasonably related
to obtaining Regulatory Approval.
CONFIDENTIAL INFORMATION means any proprietary or confidential information
of either party (including but not limited to all CUSTOMER Know-How and all
NeoGenesis Know-How) disclosed to the other party pursuant to this Agreement,
except any portion thereof which: (i) is known to the receiving party, as
evidenced by the receiving party's written records, before receipt thereof under
this Agreement; (ii) is disclosed to the receiving party by a third person who
is under no obligation of confidentiality to the disclosing party hereunder with
respect to such information and who otherwise has a right to make such
disclosure; (iii) is or becomes generally known in the trade through no fault of
the receiving party; or (iv) is independently developed by the receiving party
before receipt thereof under this Agreement, as evidenced by the receiving
party's written records, without access to such information.
CONTROL OR CONTROLLED means with respect to any (a) item of information,
including, without limitation, CUSTOMER Know-How and NeoGenesis Know-How, or (b)
intellectual property right, the possession (whether by ownership or license,
other than pursuant to this Agreement) by a party or an Affiliate thereof of the
ability to grant to the other party access or a license as provided herein under
such item or right without violating the terms of any agreement or other
arrangements, between such party or its Affiliate and any third party, existing
before or after the Effective Date.
CUSTOMER KNOW-HOW means all proprietary technical, Manufacturing and
clinical information, data and know-how, including but not limited to all
Program Intellectual Property described in clause (c) of the definition of
Program Intellectual Property, relating to: (a) the
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Targets, ligands, assays, or libraries provided by CUSTOMER, (b) the Designated
Compounds, together with, where applicable, any analogs, derivatives, fragments,
sub-cellular constituents or expression products thereof, or (c) the Licensed
Products, whether or not patentable, Controlled by CUSTOMER or its Affiliates or
sublicensees as of the Effective Date or during the term of this Agreement.
CUSTOMER Know-How includes, without limitation, all processes, formulas,
discoveries and inventions whether relating to biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical safety,
quality control and clinical data, including, without limitation, clinical study
data. CUSTOMER Know-How also includes relevant medical information relating to
the Licensed Products (such as customer questions, responses thereto and adverse
drug event history) in the possession of CUSTOMER, its Affiliates or
sublicensees. The term CUSTOMER Know-How, however, does not include the
NeoGenesis Know-How or any know-how, processes, information and data which is,
as of the Effective Date or later becomes, through no fault of NeoGenesis,
generally available to the public.
CUSTOMER PATENT RIGHTS means (a) those patents and patent applications
(other than patent applications and patents included within the NeoGenesis
Patent Rights) Controlled by CUSTOMER or any of its Affiliates at any time
during the term of this Agreement which otherwise would be infringed by the
research, development, manufacture, use, importation or sale or offer for sale
of any Designated Compound or Licensed Product and (b) all divisionals,
continuations, continuations-in-part, reissues, extensions, supplementary
protection certificates and foreign counterparts thereof.
FDA means the United States Food and Drug Administration, or any successor
thereto.
FD&C ACT means the United States Federal Food, Drug and Cosmetic Act of
1938, as amended.
FIELD means the diagnosis, prevention and/or treatment of any and all
diseases in humans.
FIRST COMMERCIAL SALE of Licensed Product(s) means any transfer for value
in an arms-length transaction to an independent third party distributor, agent
or end user in a country within the Territory after obtaining all necessary
Regulatory Approvals as may be necessary for such transfer in such country.
FORCE MAJEURE means any event beyond the control of the parties, including,
without limitation, failures of computers, computer-related equipment, hardware
or software, fire, flood, riots, strikes, epidemics, war (declared or undeclared
and including the continuance, expansion or new outbreak of any war or conflict
now in existence), embargoes and governmental actions or decrees.
FTE means the equivalent of a full time (twelve months, including normal
vacations, sick days and holidays) work of a person, carried out by one or more
employees or agents of NeoGenesis, who devotes a portion of his or her time to
performing further optimization activities as set forth in this Agreement, such
amount per FTE not to exceed [*] for the Program services specified in
paragraphs 1-7 and 9 of ATTACHMENT A (i.e., optimization of three Selected
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Compounds to a Kd value of [*] and one round of optimization on [*] Selected
Compounds); and not to exceed [*] for Program services beyond those specified in
paragraphs 1-7 and 9 of ATTACHMENT A.
GOOD CLINICAL PRACTICE means the then current standards for clinical trials
for pharmaceuticals, as set forth in the FD&C Act and applicable regulations
promulgated thereunder, as amended from time to time, and such standards of good
clinical practice as are required by the European Union and other Regulatory
Authorities in countries in which Licensed Product is intended to be sold, to
the extent such standards are not in contravention with United States Good
Clinical Practices.
GOOD LABORATORY PRACTICE means the then current standards for laboratory
activities for pharmaceuticals, as set forth in the FD&C Act and applicable
regulations promulgated thereunder, as amended from time to time, and such
standards of good laboratory practice as are required by the European Union and
other Regulatory Authorities in countries in which Licensed Product is intended
to be sold, to the extent such standards are not in contravention with United
States Good Laboratory Practices.
GOOD MANUFACTURING PRACTICE means the current standards for the manufacture
of pharmaceuticals, as set forth in the FD&C Act and applicable regulations
promulgated thereunder, as amended from time to time, and such standards of good
manufacturing practice as are required by the European Union and other
Regulatory Authorities in countries in which Licensed Product is intended to be
sold, to the extent such standards are not in contravention with United States
Good Manufacturing Practices.
IND means an investigational new drug application, as defined in the FD&C
Act and applicable regulations thereunder, or any equivalent document, filed
with the FDA and necessary for beginning clinical trials of any Licensed Product
in humans or any equivalent application or other documentation filed with any
Regulatory Authority of a country other than the United States prior to
beginning clinical trials of any Licensed Product in humans in that country.
LICENSED PRODUCT(S) means any product that: (a) includes a Designated
Compound or any derivatives, improvements and components thereof; and (b) the
development, manufacture, use, or sale of which, absent the license granted
under this Agreement, would infringe the NeoGenesis Know-How or NeoGenesis
Patent Rights or which makes use of any Program Intellectual Property that is
jointly owned by the parties.
MAJOR COUNTRY means the United States, the United Kingdom, France, Germany,
Italy or Japan, as the case may be.
MANUFACTURING means any and all activities involved in the production of a
Licensed Product to be developed and/or Commercialized under this Agreement.
When used as a verb, MANUFACTURE means to engage in Manufacturing.
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NDA means a new drug application as defined in the FD&C Act and applicable
regulations thereunder, and the foreign equivalent thereof.
NEOGENESIS KNOW-HOW means all proprietary technical information, data and
know-how, including but not limited to all Program Intellectual Property
described in clause (a) of the definition of Program Intellectual Property,
relating to: (a) the NeoMorph Screening Library, (b) the NeoMorph Focused
Libraries, (c) ALIS and QSCD, (d) the Preliminary Compounds, (e) the Primary
Active Compounds, (f) the Selected Compounds, together with, where applicable,
any analogs, derivatives, fragments, sub-cellular constituents or expression
products thereof made by NeoGenesis, and (g) any other tangible materials
provided by NeoGenesis to CUSTOMER for use in the conduct of the Program(s),
which in each case is Controlled by NeoGenesis or any of its Affiliates as of
the date of this Agreement or at any time during the term of this Agreement. The
term NeoGenesis Know-How, however, does not include (1) any CUSTOMER Know-How or
compound, (2) any know-how, processes, information and data which is, as of the
Effective Date or later becomes, generally available to the public or (3) any
general manufacturing or other know-how not specific to the Designated Compound
or Licensed Products.
NEOGENESIS PATENT RIGHTS means those (a) all patent applications (including
provisional, utility, international and design applications) (including
NeoGenesis' interest in Program Patent Rights) heretofore or hereafter filed in
any country covering the NeoGenesis Know-How which but for the licenses granted
pursuant to this Agreement would be infringed by the development, manufacture,
use, offer for sale, sale or import of Designated Compounds or Licensed
Products; (b) all patents from the applications identified in clause (a) that
have issued or in the future issue from any of the foregoing patent
applications, including without limitation utility models, design patents and
certificates of invention; and (c) all divisionals, continuations,
continuations-in-part, reissues, extensions, supplementary protection
certificates and foreign counterparts of the applications and patents identified
in clauses (a)-(b), in each case which are Controlled by NeoGenesis or any of
its Affiliates and are existing as of the Effective Date or filed or issued
during the term of this Agreement.
NEOMORPH CHEMISTRY means the process, proprietary to NeoGenesis, of forming
libraries and sub-libraries of discrete compounds by coupling a broad set of
diverse cores with diverse sets of building blocks employing proprietary
mass-coding algorithms.
NEOMORPH FOCUSED LIBRARIES means those compounds synthesized by NeoGenesis
derived from Primary Active Compounds identified by CUSTOMER in bioassays or
functional assays.
NEOMORPH SCREENING LIBRARY means the entire collection of libraries
consisting of mass-encoded small molecule organic compounds owned by NeoGenesis
and developed with NeoMorph Chemistry, comprising at least 10,000,000 different
compounds.
NET SALES means the aggregate amounts invoiced for sales or transfers for
value of Licensed Products by CUSTOMER, its Affiliates or any of its
sublicensees to an independent third party distributor, agent or end user in the
Territory (other than sales of Licensed Products at cost by CUSTOMER, its
Affiliates or sublicensees to a third party for use in a clinical study prior to
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Regulatory Approval of such Licensed Product) LESS deductions selected as
appropriate from: (a) credits, refunds, allowances and price adjustments
separately and actually credited to customers for defective, spoiled, damaged,
outdated, and returned Licensed Products, (b) offered and taken trade and cash
discounts, rebates, chargebacks and allowances in amounts customary to the
trade, (c) sales, excise, value added, turnover, use, and other like taxes, and
customs duties, paid, absorbed or allowed excluding net income tax, (d)
allowances for bad debt in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) consistently applied, and (e) special outbound packing,
transportation, insurance and handling charges separately billed to the customer
or prepaid. Net Sales shall not include amounts received by CUSTOMER (or any of
its Affiliates) from transactions with an Affiliate or sublicensee, where the
Licensed Product in question will be resold by such Affiliate or sublicensee to
an independent third-party distributor, agent or end user and such amounts
received by the Affiliate or sublicensee from such resale is included in Net
Sales in accordance with Section 4.3.
For purposes of this Agreement, "sale" means any transfer or other
distribution or disposition, but shall not include transfers or other
distributions or dispositions of Product, at no charge, for preclinical,
clinical or regulatory purposes or in connection with patient assistance
programs or other charitable purposes or to physicians or hospitals for
promotional purposes. Product shall be considered "sold" when billed or
invoiced.
In the event that Licensed Product is sold in the form of a Combination
Product, Net Sales for the Combination Product shall be determined by
multiplying actual Net Sales of the Combination Product (determined by reference
to the definition of Net Sales set forth above) during the royalty payment
period by the fraction A/A+B where A is the average sale price of Licensed
Product when sold separately in finished form and B is the average sales price
of the other active ingredients and components when sold separately in finished
form, in each case during the applicable royalty payment period in the country
in which the sale of the Combination Product was made, or if sales of both the
Licensed Product and the other active ingredients and components did not occur
in such period, then in the most recent royalty payment period in which sales of
both occurred. Where the Licensed Product is sold separately in finished form
but the other ingredients and components are not, Net Sales for the Combination
Product shall be determined by multiplying actual Net Sales of the Combination
Product (determined by reference to the definition of Net Sales set forth above)
during the royalty payment period by the ratio of the average per-unit sale
price of Licensed Product when sold separately in finished form to the average
per-unit Net Sales of the Combination Product, in each case during the
applicable royalty payment period in the country in which the sale of the
Combination Product was made. Where the other active ingredients and components
are sold separately in finished form but the Licensed Product is not, Net Sales
for the Combination Product shall be determined by multiplying actual Net Sales
of the Combination Product (determined by reference to the definition of Net
Sales set forth above) during the royalty payment period by the difference
obtained by subtracting from 1 the ratio of the average per-unit sale price of
the other active ingredients and components when sold separated in finished form
to the average per-unit Net Sales of the Combination Product, in each case
during the applicable royalty reporting period in the country in which the sale
of the Combination Product was made. In the event that such average sales price
cannot be determined for either of the Licensed Product or for all other active
ingredients and components included in
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the Combination Product, Net Sales for purposes of determining payments under
this Agreement shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction C/C+D where C is the standard fully-absorbed
cost of the Licensed Product portion of the Combination Product and D is the sum
of the standard fully-absorbed costs of all other active ingredients and
components included in the Licensed Product, in each case as determined in
accordance with GAAP consistently applied; provided, however that the parties
mutually agree that such approach is valid in light of the particular
circumstances, which agreement shall not be unreasonably withheld or delayed.
PATENT RIGHTS means all U.S. and foreign issued patents and patent
applications, including but not limited to provisionals, divisionals,
continuations, continuations-in-part, and patents issuing therefrom, reissues,
reexaminations, substitutions, renewals, restorations, additions, registrations,
and foreign counterparts thereof, as well as extensions and supplementary
protection certificates based thereon.
PERSON means any individual, corporation, association, partnership (general
or limited), joint venture, trust, estate, limited liability company, limited
liability partnership, unincorporated organization, government (or any agency or
political subdivision thereof) or other legal entity or organization.
PROGRAM means the program(s) described in ATTACHMENT A as the same may be
amended during the term of this Agreement by mutual agreement of the parties
acting through the Steering Committee (as defined below). Each Program will be
directed toward the discovery and development of Primary Active Compounds and
Selected Compounds for a particular Target.
PROGRAM INTELLECTUAL PROPERTY means individually and collectively all
discoveries, inventions, know-how, techniques, methodologies, modifications,
improvements, works of authorship, designs and data (whether or not protectable
under patent, copyright, trade secrecy or similar laws) that are conceived,
created, discovered, developed, or reduced to practice or tangible medium of
expression (a) solely by one or more employees or consultants of NeoGenesis
(other than consultants also affiliated with CUSTOMER in connection with the
Program) at any time in the course of the Program; (b) jointly by one or more
employees or consultants of NeoGenesis and one or more employees or consultants
of CUSTOMER at any time in the course of the Program; or (c) solely by one or
more employees or consultants of CUSTOMER (other than consultants also
affiliated with NeoGenesis in connection with the Program) at any time in the
course of the Program.
PROGRAM PATENT RIGHTS shall mean, collectively, (a) all patent applications
hereafter filed in any country which specifically claim and only to the extent
they claim Program Intellectual Property; (b) all patents that have issued or in
the future issue from any of the foregoing patent applications, including
without limitation utility models, design patents and certificates of invention;
and (c) all divisionals, continuations, continuations-in-part, reissues,
renewals, extensions, supplementary protection certificates or additions to any
such patents and patent applications.
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QSCD means Quantized Surface Complimentary Diversity, a model proprietary
to NeoGenesis, in terms of which discrete chemical compliments to the surfaces
of a target are defined.
R&D PROGRAM means on a Designated Compound-by-Designated Compound and
country-by-country basis the activities necessary or desirable to be undertaken
in connection with the research and development of such Designated Compound
prior to obtaining Regulatory Approval for a Licensed Product in such country
(regardless of the country in which such activities are conducted).
REGULATORY APPROVALS means, for any country in the Territory, those
authorizations by the appropriate Regulatory Authority(ies) required for the
manufacture, importation, marketing, promotion, pricing and sale of the Licensed
Product(s) in such country.
REGULATORY AUTHORITY means any national, supra-national, regional, state or
local regulatory agency, department, bureau, commission, council or other
governmental entity in the Territory, including, without limitation, the FDA.
SAMPLE means any compound or mixture of compounds supplied by CUSTOMER to
NeoGenesis for the purpose of ALIS screening under activities in Attachment A,
PARA 10.
SOP means a standard operating procedure which is optimized for ALIS
screening of a given CUSTOMER Target.
TARGET means a specific protein target(s) selected by CUSTOMER for which
NeoGenesis will perform the Program. CUSTOMER shall have the right to designate
up to four Targets (which for purposes hereof shall not include Targets which
are unavailable or are rejected by NeoGenesis because of their unavailability)
during the term of this Agreement. The Target(s) will be added to ATTACHMENT B
as and when designated by CUSTOMER.
TERRITORY means all the countries of the world.
VALID CLAIM means a claim of a Patent Right that has not been canceled,
withdrawn, or rejected and has not elapsed or become abandoned or declared
invalid or unenforceable or been revoked by a court or agency of competent
jurisdiction from which no appeal can be or has been taken and, with respect to
a claim of a patent application within Patent Rights, has not been pending for
more than ten years.
1.2 OTHER DEFINED TERMS. The following terms shall have the meanings set forth
in the section appearing opposite such term:
BANKRUPTCY CODE Section 3.1
CLAIM NOTICE Section 6.6
COMPONENT ATTACHMENT A
COMPOUNDS ATTACHMENT A
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DESIGNATED COMPOUND Section 2.6
DISCRETE COMPOUND ATTACHMENT A
GENERIC PATENT RIGHTS Section 3.3
ICC Section 9.1
INDEMNIFYING PARTY Section 7.4
INDEMNIFIED PARTY(IES) Section 7.3
IPO Section 4.8
FINAL TARGET REPORT ATTACHMENT A
LICENSED TECHNOLOGY Section 3.1
LOSSES Section 7.2
PHASE II CLINICAL TRIALS Section 4.2
PMA Section 4.2
PRELIMINARY COMPOUND ATTACHMENT A
PRELIMINARY SAMPLE ATTACHMENT A
PRIMARY ACTIVE COMPOUNDS ATTACHMENT A
PRIMARY ACTIVE COMPOUNDS REPORT ATTACHMENT A
SCREENING PERIOD Section 2.2
SELECTED COMPOUND(S) ATTACHMENT A
STEERING COMMITTEE Section 2.5
2. SCREENING PROGRAM; R&D PROGRAM; COMMERCIALIZATION
2.1 DELIVERY OF TARGET PROTEINS. CUSTOMER shall have up to [*] following the
Effective Date to designate and deliver up to [*] Targets to NeoGenesis for
screening. CUSTOMER shall provide Targets in the quantities and formats
specified in ATTACHMENT A. CUSTOMER shall also provide NeoGenesis at the time of
delivery with a written description of the concentration and volume of the
Target. CUSTOMER shall deliver the Targets CIP to NeoGenesis's Cambridge, MA
facility.
2.2 SCREENING PROGRAM. The parties agree that the first Target shall be TGF beta
receptor Type I. Upon designation of any additional Target by CUSTOMER,
NeoGenesis will have [*] to agree to conduct the control and follow up control
experiments of para. 2 of ATTACHMENT A with that Target or to reject (because of
its unavailability) the Target. Upon such agreement, CUSTOMER shall within [*]
deliver all necessary reagents with respect to such Target to NeoGenesis.
NeoGenesis shall within [*] of receipt of such reagents conduct the control and
follow-up experiments of para. 2 of ATTACHMENT A with respect to the Target. It
will also establish an SOP as provided under that paragraph. The Program for a
given Target will remain in effect for a period of [*] from the time of transfer
of reagents by CUSTOMER to NeoGenesis, with an option by CUSTOMER to renew the
Program for such Target for an additional [*] period on terms and conditions,
including level of support, that are mutually agreeable. CUSTOMER shall notify
NeoGenesis whether CUSTOMER wishes to extend the Program for a given Target for
an additional [*], no later than [*] prior to termination of the initial term.
NeoGenesis will apply its ALIS method to screen the NeoMorph Screening Library
for activity with respect to each Target for purposes of identifying potentially
useful chemical compounds for further
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evaluation and development. Alternatively, NeoGenesis shall apply ALIS screening
of libraries provided by CUSTOMER as described in ATTACHMENT A. Screening will
be performed pursuant to the screening protocol for the Program set forth in
ATTACHMENT A. NeoGenesis shall conduct the screening and deliver a Final Target
Report as described in ATTACHMENT A, but in any event within [*] following the
date that the applicable Target is delivered to NeoGenesis, unless the parties
agree in writing to extend the period for performance of the Program (the
SCREENING PERIOD).
2.3 GRANT OF RESEARCH LICENSE. CUSTOMER hereby grants NeoGenesis a nonexclusive,
nontransferable, royalty-free license to use CUSTOMER Know-How and CUSTOMER
Patent Rights solely for purposes of conducting the Program and performing
NeoGenesis's obligations to CUSTOMER under the Program. NeoGenesis will not use
CUSTOMER Know-How or CUSTOMER Patent Rights for any other purpose, without
CUSTOMER's prior written permission. NeoGenesis shall not (a) grant, or attempt
to grant, a sub-license to use CUSTOMER Know-How or CUSTOMER Patent Rights to
any Person without the express written consent of CUSTOMER, (b) perform any
tests on any of the Targets or using CUSTOMER assays or libraries that are
outside the scope of the Program, or (c) modify the Targets supplied by
CUSTOMER, including, without limitation, the making of any derivatives, analogs
or components thereof. In the event that NeoGenesis does not consume all of the
Targets, assays or libraries supplied by CUSTOMER in performance of the Program,
NeoGenesis will upon completion of the Program promptly, return to CUSTOMER any
quantities of such Target(s) and any derivatives, analogs or components thereof
as well as assays and CUSTOMER supplied Samples related thereto.
2.4 SCIENTIFIC REPORTS. (a) NeoGenesis will keep and maintain adequate records
containing laboratory data generated in the course of the Program to enable it
to furnish complete and accurate information to CUSTOMER regarding the Program
activities and results, including but not limited to all Preliminary Compounds,
Primary Active Compounds and NeoMorph Focused Libraries identified or used in
the Program and all NeoGenesis Program Intellectual Property developed during
the Program. All such written records of NeoGenesis shall be open to inspection
by CUSTOMER during normal business hours upon reasonable prior written notice.
(b) NeoGenesis shall provide CUSTOMER with reasonably-detailed written
reports describing the results of the research performed pursuant to the Program
including but not limited to all Preliminary Compounds, Primary Active
Compounds, Selected Compounds and NeoMorph Focused Libraries identified or used
in the Program. Such reports shall be delivered to CUSTOMER at least monthly
during the Program. NeoGenesis will deliver a Primary Active Compounds Report
with respect to the Program work performed on each Target. NeoGenesis will also
deliver a Final Target Report on each Selected Compound after optimization and
screening of the NeoMorph Focused Libraries.
2.5 STEERING COMMITTEE. (a) A Steering Committee (STEERING COMMITTEE) shall be
responsible for day-to-day management of each Program. The Steering Committee
shall consist of four members, two members to be appointed by each of NeoGenesis
and CUSTOMER and such members may be appointed on a Target-by-Target basis. Each
party may with notice to the
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other substitute any of its members serving on the Steering Committee. The
initial CUSTOMER members shall be Xxxxxxxx Xxxxxx and Xxxxxxx Xxxxxx and the
initial NeoGenesis members shall be ____________ and _____________. Each
member of the Steering Committee will have one vote and all decisions of the
Steering Committee will be by unanimous agreement.
(b) The Steering Committee shall be responsible for the management and
conduct of the Program and shall in particular: (i) consider, review and amend
the Program from time to time in such manner as may be appropriate; (ii) monitor
progress of the Program; (iii) report regularly to the management of both
parties upon the progress of the Program; (iv) be the initial medium for
transfer of information between the parties; and (v) approve the allocation of
FTEs for Program services beyond those specified in paragraphs 1-7 and 9 of
ATTACHMENT A (i.e., optimization of [*] Selected Compounds to a Kd value of [*]
and one round of optimization on [*] Selected Compounds).
(c) The Steering Committee shall hold meetings as mutually agreed by the
parties (but in no event less than three (3) times during the Screening Period)
to review the Program. The first meeting of the Steering Committee shall be held
within forty-five (45) days of each Target being designated and shall be held in
Cambridge, MA. Thereafter, meetings may be held by telephone or video conference
if requested by either party in writing to the other, PROVIDED THAT the parties
shall meet in person at least two (2) times during the Screening Period. Minutes
of all meetings setting forth decisions of the Steering Committee relative to
the Screening Program shall be prepared by the host party and circulated to both
parties within fifteen (15) days after each meeting, but minutes shall not
become official until approved by both parties (which approval the parties shall
use reasonable efforts to give within thirty (30) days of receipt of such
minutes).
(d) The quorum for Steering Committee meetings shall be two, provided there
are at least one member from each of NeoGenesis and CUSTOMER present. The
Steering Committee will render decisions by unanimous vote. Disagreements among
the Steering Committee regarding the Program will be resolved via good-faith
discussions; PROVIDED, that in the event of a disagreement that cannot be
resolved within thirty (30) days after the date on which the disagreement arose,
the matter shall be referred to CUSTOMER's Vice President Research and
NeoGenesis's Chief Scientific Officer or their respective designees. Thereafter,
if any such disagreement is not resolved within sixty (60) days, then CUSTOMER
shall have the right to make the final decision.
2.6 DESIGNATED COMPOUNDS. (a) Within [*] following the delivery of the Primary
Active Compounds Report for a Target by NeoGenesis in accordance with Section
2.4 and ATTACHMENT A, CUSTOMER shall notify NeoGenesis whether it will classify
any Primary Active Compounds as a Selected Compound for further study or
optimization. If CUSTOMER does not identify any Selected Compound(s) within such
period, the license granted CUSTOMER under Section 3.1 shall terminate with
respect to the applicable Target and be of no further force or effect with
respect to such Target, and no further payment from CUSTOMER shall be due with
respect to such Target.
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11
(b) Within [*] following delivery of the Final Target Report for a Target
by NeoGenesis in accordance with Section 2.4 and ATTACHMENT A, CUSTOMER shall
notify NeoGenesis whether it will classify any of the Selected Compounds as a
"DESIGNATED COMPOUND" for further research and development in the CUSTOMER'S R&D
Program; PROVIDED, that CUSTOMER may not select more than [*] Designated
Compounds in respect of each Target. If CUSTOMER does not identify any
Designated Compound(s) within such period, the license granted CUSTOMER with
respect to the applicable Target shall terminate and be of no further force or
effect with respect to the applicable Target, and no further payment from
CUSTOMER shall be due with respect to such Target. Notwithstanding the
foregoing, CUSTOMER may at any time during CUSTOMER's R&D Program designate a
compound from a CUSTOMER supplied library as a Designated Compound and subject
to the milestone payments payable pursuant to Section 4.2(b) and royalty
payments pursuant to Section 4.3(b), shall continue to have the license granted
CUSTOMER pursuant to Section 3.1.
(c) Within [*] following receipt of notification from CUSTOMER identifying
Designated Compounds, NeoGenesis shall amend ATTACHMENT C to identify any
applicable NeoGenesis Patent Rights not previously identified to CUSTOMER.
Thereafter, NeoGenesis shall update ATTACHMENT C as necessary to identify any
applicable NeoGenesis Patent Rights not previously identified to CUSTOMER
2.7 PRODUCT DEVELOPMENT. CUSTOMER, at its sole expense, shall be solely
responsible for conducting the R&D Program related to Designated Compounds and
Licensed Products and shall do so using Commercially Reasonable Efforts.
CUSTOMER shall conduct the R&D Program in accordance with all Applicable Laws,
Good Laboratory Practices and Good Clinical Practices. It is understood that
CUSTOMER shall have no further obligation to develop, optimize or Commercialize
any Designated Compound or Licensed Product; PROVIDED, that CUSTOMER shall
notify NeoGenesis promptly following CUSTOMER's determination that it will
suspend or abandon efforts to conduct the R&D Program or to obtain Regulatory
Approvals or to Commercialize any Designated Compounds or Licensed Products.
2.8 MANUFACTURE OF PRODUCT. CUSTOMER shall be solely responsible, at its sole
expense, for and shall use its Commercially Reasonable Efforts to Manufacture
the Licensed Products in accordance with the Regulatory Approvals, Applicable
Laws, Good Laboratory Practices and Good Manufacturing Practices.
2.9 REGULATORY MATTERS. CUSTOMER, at its sole expense, shall use Commercially
Reasonable Efforts to prepare and file, in its own name, with the appropriate
Regulatory Authorities, all documents that are necessary to conduct clinical
studies of Licensed Products and Regulatory Approval applications that are
necessary to market and sell Licensed Products. CUSTOMER shall use Commercially
Reasonable Efforts to file Regulatory Approval applications in the Major
Countries, it being understood that CUSTOMER may determine that it is not
commercially reasonable to pursue Regulatory Approvals in particular countries
in cases where the difficulty and expense of obtaining Regulatory Approvals for
such countries cannot be justified in comparison to the profits that sales of
Licensed Products in such country are likely to yield. CUSTOMER shall notify
NeoGenesis when it makes such regulatory filings.
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12
CUSTOMER shall be solely responsible for reporting all adverse events associated
with any Licensed Product to the appropriate Regulatory Authorities in
accordance with Applicable Laws.
2.10 MARKETING AND SALE. CUSTOMER, at its sole expense, shall be solely
responsible for the Commercialization of Licensed Products in the Territory and
shall use Commercially Reasonable Efforts to Commercialize each Licensed Product
in the Major Countries, it being understood that CUSTOMER may determine that it
is not commercially reasonable to pursue Commercialization in particular
countries in cases where the difficulty and expense of doing so cannot be
justified in comparison to the profits that sales of Licensed Products in such
country are likely to yield. CUSTOMER shall be solely responsible for
establishing the price of each Licensed Product sold by or on behalf of it
pursuant to this Agreement.
2.11 THIRD PARTY LICENSES. CUSTOMER shall be solely responsible for (a)
obtaining any and all licenses from third parties necessary or desirable to
perform its activities under the R&D Program and/or to Commercialize any
Licensed Product and (b) any and all consideration payable with respect to such
licenses. Notwithstanding the foregoing, in the event that CUSTOMER obtains one
or more licenses under patents owned by a third party necessary or desirable to
Commercialize any Licensed Product, based on CUSTOMER's good faith
determination, CUSTOMER may, beginning from the date of such third party
license, deduct [*] of the amount paid to such third party under such licenses
from the royalty obligations due to NeoGenesis under Section 4.3, provided that
(i) such third party patent primarily relates to the Designated Compound and
(ii) such deductions shall not exceed [*] of such royalties with respect to such
Licensed Product.
2.12 COMPLIANCE WITH LAW. CUSTOMER shall conduct the R&D Program and conduct its
Manufacturing operations in a safe and prudent manner, in compliance with all
Applicable Laws (including, but not limited to, occupational safety and health,
public safety and health, protecting the environment, the disposal of wastes,
Good Clinical Practices, Good Laboratory Practices and Good Manufacturing
Practices), and in compliance with all applicable provisions of this Agreement.
CUSTOMER shall obtain all necessary registrations and permits pertaining to
CUSTOMER'S activities contemplated by this Agreement. NeoGenesis shall conduct
all of its activities under this Agreement in a safe and prudent manner, in
compliance with all Applicable Laws, and in compliance with all applicable
provisions of this Agreement. NeoGenesis shall obtain all necessary
registrations and permits pertaining to NeoGenesis' activities contemplated by
this Agreement.
2.13 PERIODIC REVIEW. CUSTOMER and NeoGenesis shall periodically meet, at such
times and places as are mutually agreed upon, for CUSTOMER to provide NeoGenesis
with an update on the status of the progress of CUSTOMER's Commercialization of
each Licensed Product, PROVIDED, HOWEVER, that such meetings shall occur no more
than once per calendar year unless the parties agree, in writing, to meet more
or less often. CUSTOMER and NeoGenesis shall each be responsible for its own
expenses incurred in connection with attending such meetings.
3. LICENSE; PROPRIETARY RIGHTS
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3.1 GRANT OF LICENSE. (a) Subject to the terms and conditions of this Agreement,
including the payment of all applicable fees, NeoGenesis hereby grants to
CUSTOMER, and CUSTOMER hereby accepts, an exclusive, worldwide, right and
license, within the Territory and within the Field, to use the NeoGenesis
Know-How and NeoGenesis Patent Rights and NeoGenesis's undivided interest in any
Program Intellectual Property and Program Patent Rights that are jointly owned
by NeoGenesis and CUSTOMER, as embodied in or related to Designated Compound(s)
(collectively, the LICENSED TECHNOLOGY), to (i) identify, research, develop,
make, have made and use such Designated Compound to develop Licensed Products
and (ii) to develop, make, have made, use, distribute for sale, promote, market,
offer for sale, sell, have sold, import and export Licensed Products; PROVIDED,
that the exclusivity of such license shall be subject in the case of "Generic
Patent Rights" to the retained rights described in Section 3.2(c)(iv). CUSTOMER
may grant sublicenses of its rights under this Section 3.1; PROVIDED that
CUSTOMER: (1) obtains each sublicensee's written agreement to be subject to the
same obligations as is CUSTOMER under Sections 2.13, 3.1(c), 3.2, 4.4-4.7, 5.2,
7.1(b), 7.2(b), 7.4, 8.1, 8.3 and 8.4 of this Agreement (or substantially
identical provisions) and (2) shall remain responsible for the performance of
all of its obligations under this Agreement, whether such obligations are
performed by CUSTOMER, its Affiliates or any of its sublicensees.
(b) The license granted under this Section 3.1 shall be treated as a
license of rights to "intellectual property" (as defined in Section 101(56) of
Title 11 of the United States Code, as amended (the BANKRUPTCY CODE)) for
purposes of Section 365(n) of the Bankruptcy Code. The parties agree that
CUSTOMER may elect to retain and may fully exercise all of its rights and
elections under the Bankruptcy Code PROVIDED, that it abides by the terms of
this Agreement.
(c) CUSTOMER shall xxxx or have marked all containers or packages of
Licensed Products that are the subject of the license granted under this Section
3.1 in accordance with the patent marking laws of the jurisdiction in which such
Licensed Products are manufactured, used or sold.
3.2 RETAINED RIGHTS. (a) This Agreement does not convey to CUSTOMER any
ownership rights in any NeoGenesis Know-How or NeoGenesis Patent Rights by
implication, estoppel or otherwise except for the rights expressly granted in
Section 3.1. Title to the NeoGenesis Know-How and NeoGenesis Patent Rights
shall at all times remain vested in NeoGenesis. This Agreement does not
convey to NeoGenesis any ownership rights in any CUSTOMER Know-How or
CUSTOMER Patent Rights by implication, estoppel or otherwise except for the
rights expressly granted in Section 2.3. Title to the CUSTOMER Know-How and
CUSTOMER Patent Rights shall at all times remain vested in CUSTOMER. Title to
and any interest in Program Intellectual Property described in clause (a) of
the Program Intellectual Property definition shall be the property of
NeoGenesis and is included in the definition of NeoGenesis Know-How or
NeoGenesis Patent Rights, as the case may be, subject to the licenses granted
to CUSTOMER under Section 3.1. Title to and any interest in Program
Intellectual Property described in clause (b) of the Program Intellectual
Property definition shall be jointly held by CUSTOMER and NeoGenesis, subject
to the licenses granted to CUSTOMER under Section 3.1. Title to and any
interest in Program Intellectual Property described in clause (c) of the
Program Intellectual
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14
Property definition shall be the property of CUSTOMER and is included in the
definition of CUSTOMER Know-How or CUSTOMER Patent Rights, as the case may be.
(b) Patent counsel mutually acceptable to the parties and selected by the
Steering Committee in accordance with Section 3.3(c) shall determine
inventorship of all intellectual property that arises from the transactions
contemplated by this Agreement in accordance with U.S. patent law (and other
U.S. intellectual property law) when determining whether such intellectual
property is (i) CUSTOMER Know-How or CUSTOMER Patent Rights or (ii) NeoGenesis
Know-How or NeoGenesis Patent Rights or (iii) if such intellectual property is
Program Intellectual Property, whether Program Intellectual Property is jointly
owned or is owned solely by NeoGenesis or by CUSTOMER.
(c) Except as otherwise provided in Section 3.2(c)-(d), NeoGenesis shall
retain the following rights with respect to the following NeoGenesis Know-How
and NeoGenesis Patent Rights and Program Intellectual Property:
(i) NeoGenesis shall continue to use its NeoMorph Screening Library to
screen target proteins for other parties; PROVIDED, that (i)
NeoGenesis shall mask the Primary Active Compounds from the NeoMorph
Screening Library during the Program and during any period when
CUSTOMER is pursuing an R&D Program or Commercialization of a
Designated Compound selected from such Primary Active Compounds. In
addition, NeoGenesis shall mask any Selected Compounds, and
Designated Compound(s) from the NeoMorph Screening Library for as
long as CUSTOMER is pursuing an R&D Program or Commercialization of a
Designated Compound or a Licensed Product.
(ii) NeoGenesis shall retain all rights under its intellectual property to
continue to use Compounds created as part of the Program but not
selected as Selected Compounds or Designated Compounds.
(iii) NeoGenesis shall retain all rights in and continue to use compound
libraries that are designed by it as part of the Program using QSCD
or other structural information.
(iv) NeoGenesis shall retain, with respect to Generic Patent Rights, the
exclusive right to practice such Generic Patent Rights and to license
third parties to practice those Generic Patent Rights as necessary to
research, develop, make, have made, use, distribute for sale, import
and sell any product; PROVIDED, that such product shall not have the
"same active ingredient" as a Licensed Product, it being expressly
understood and agreed that CUSTOMER holds exclusive rights with
respect to the practice of the Generic Patent Rights as necessary to
research, develop, make, have made, use, distribute for sale, import
and sell any Licensed Product or any product having the same active
ingredient as any Licensed Product.
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15
(d) NeoGenesis will not use the NeoGenesis Know-How, NeoGenesis Patent
Rights, Program Know-How or Program Patent Rights with respect to any Target
selected by CUSTOMER for a period of [*] following delivery of such Target to
NeoGenesis by CUSTOMER. It is understood and acknowledged by NeoGenesis that the
restrictions imposed by this Section 3.2 will operate independently of any
patent rights that CUSTOMER may hold or be granted under this Agreement with
respect to any Target.
3.3 DISCLOSURE; PATENT PROSECUTION. (a) Each of NeoGenesis and CUSTOMER shall
promptly disclose to the other knowledge of any Program Intellectual Property,
described under clause (a) or (b) of the definition of Program Intellectual
Property and will be subject to the provisions of this Agreement. Within
forty-five (45) days following the date of such disclosure regarding the
existence of particular Program Intellectual Property that is jointly owned, the
parties shall confer as to appropriate protection for such Program Intellectual
Property. Except as otherwise expressly provided herein, all other inventions
and discoveries governed by this Agreement shall be owned based on inventorship,
as inventorship is determined in accordance with United States patent law.
Except as specifically provided under this Agreement, the transfer of physical
possession and use of any technology by CUSTOMER or NeoGenesis, as the case may
be, shall not be (nor be construed as) a license, sale, lease, offer to sell or
lease, or other transfer of title of such technology to CUSTOMER or NeoGenesis,
as the case may be.
(b) Except as provided in this Section 3.3 or Section 3.4, NeoGenesis
shall have the sole right, at its cost, but not the obligation, to file,
prosecute, and maintain each of the NeoGenesis Patent Rights throughout the
Territory. NeoGenesis shall keep CUSTOMER currently advised as to the status
of all patents and patent applications with respect to the NeoGenesis Patent
Rights and shall supply CUSTOMER promptly with copies of all patents, patent
applications, substantive patent office actions, substantive responses
received or filed in connection with such applications. CUSTOMER may itself
or through its attorney offer comments and suggestions with respect to the
matters that are the subject of this Section 3.3(b) and NeoGenesis agrees to
consider in good faith such comments and suggestions; PROVIDED that nothing
herein shall obligate NeoGenesis to adopt or follow such comments or
suggestions. In the event that NeoGenesis elects not to file for patent
protection under the NeoGenesis Patent Rights or elects not to prosecute or
maintain a patent or patent application under the NeoGenesis Patent Rights it
shall notify CUSTOMER of such decision at least forty-five (45) days prior to
the due date of any action or payment due. CUSTOMER shall have the right, but
not the obligation to assume the responsibility therefor then at its own cost
and expense. It is understood that while NeoGenesis has not sought, and will
not seek, patent protection on any of the compounds that will be screened in
the conduct of the Screening Program, NeoGenesis may seek patent protection
for Selected Compounds, including analogs, homologs and isomers thereof, in
the event and to the extent that NeoGenesis determines it can seek "generic
composition of matter claims" (which for purposes of this Agreement shall not
include any Target specific claims of utility) with respect to such compounds
(any such patents are referred to as "GENERIC PATENT RIGHTS"). Upon the
selection by CUSTOMER of a Designated Compound, CUSTOMER shall have the sole
right, at its cost, but not the obligation, to file, prosecute, and maintain
each of the NeoGenesis Patent Rights related to the Licensed Technology
embodied in or related to such Designated Compound. In the event that
CUSTOMER elects not to file for patent protection
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16
under such Licensed Technology or elects not to prosecute or maintain a patent
or patent application thereunder it shall notify NeoGenesis of such decision at
least forty-five (45) days prior to the due date of any action or payment due.
NeoGenesis shall have the right, but not the obligation to assume the
responsibility therefor then at its own cost and expense.
(c) CUSTOMER and NeoGenesis, acting through the Steering Committee, shall
select and retain patent counsel mutually acceptable to each of them for the
purpose of preparing, prosecuting, issuing and maintaining appropriate patent
applications concerning jointly owned Program Intellectual Property on behalf of
both CUSTOMER and NeoGenesis. Any differences between NeoGenesis and CUSTOMER
with respect to preparation, filing, prosecution, issuance and maintenance
matters will be discussed and resolved to their mutual satisfaction using the
procedures specified in Section 9.1, if necessary. The parties shall share
equally in all expenses associated with the preparation, filing, prosecution,
issuance and maintenance of patents or other intellectual property protection
for jointly owned Program Intellectual Property; PROVIDED, that in the event
that the parties disagree regarding the costs of a particular action and either
party elects not to pursue a particular action (e.g., patent coverage in a
particular country) either party shall have the right to assume such costs and
to have such action taken; PROVIDED FURTHER that the rights of the party which
elects not to participate in such expenses shall not include any such Program
Patent Rights that are the subject of such action (e.g., patent coverage in a
particular country) unless such party reimburses the other party for one half
(50%) of the costs of such action PLUS interest on such reimbursement from the
date such costs were incurred calculated at the rate specified in Section
4.4(b).
(d) CUSTOMER shall have the sole right, but not the obligation, to file,
prosecute, and maintain, at CUSTOMER's sole expense, each of the CUSTOMER Patent
Rights throughout the Territory and shall be responsible for all the costs
related thereto.
3.4 ENFORCEMENT. (a) NeoGenesis shall be solely responsible for defense and
enforcement of NeoGenesis Know-How and NeoGenesis Patent Rights but excluding
Licensed Technology within the Field and the Territory. In the event that legal
proceedings with respect to such Licensed Technology also materially affect
intellectual property rights of NeoGenesis that relate to other then active
NeoGenesis research, development or commercialization programs outside the
Field, the parties agree to cooperate in good faith with respect to such defense
or action. CUSTOMER shall be solely responsible for the defense and enforcement
of CUSTOMER Know-How and CUSTOMER Patent Rights.
(b) Except as otherwise provided in Section 3.4(a), CUSTOMER shall have the
first option to pursue any enforcement or defense of Licensed Technology within
the Field and the Territory; PROVIDED, that CUSTOMER pays all costs and expenses
related to the same, keeps NeoGenesis reasonably informed of its progress and
provides NeoGenesis with copies of any documents related to such proceedings as
permitted under any relevant protective order and reasonable notice of all
proceedings relating to same. CUSTOMER's costs in prosecuting such matters shall
be subject to reimbursement in accordance with Section 3.4(d). CUSTOMER shall
notify NeoGenesis of its decision to exercise its right to enforce Licensed
Technology as soon as
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possible, but not later than sixty (60) days following its discovery or receipt
of notice of the alleged infringement.
(c) Unless CUSTOMER and NeoGenesis have otherwise agreed not to pursue such
infringement for business reasons, if CUSTOMER does not exercise its option to
enforce or defend any Licensed Technology or and within (90) days of exercising
its option, CUSTOMER (i) has not persuaded the alleged infringer to desist, (ii)
is not diligently pursuing an infringement action or diligently defending the
validity or enforceability of Licensed Technology at issue, as determined by
NeoGenesis in its reasonable discretion, or (iii) has not provided NeoGenesis
with evidence of bona fide negotiations of a sublicense agreement with the
alleged infringer, then NeoGenesis shall have the right to pursue the alleged
infringer or take control of any action initiated by CUSTOMER at NeoGenesis's
own expense. In any such case, CUSTOMER will substitute NeoGenesis as party
plaintiff for purposes of pursuing any alleged infringer.
(d) Any recoveries by settlement or otherwise, with regard to Licensed
Technology in any suit handled by one party pursuant to Section 3.4(b) or
Section 3.4(c) shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of the litigant relating to the suit or settlement
thereof and of the other party in providing requested cooperation. Any remaining
recoveries shall (i) to the extent that the infringement is based on the
development, manufacture, commercialization or use of Licensed Products in the
Field, be deemed Net Sales and NeoGenesis shall receive an amount equal to the
royalty due on such Net Sales and CUSTOMER shall receive the balance of such
remainder; or (ii) to the extent that the infringement is not based on the
development, manufacture, commercialization or use of Licensed Products in the
Field, such remainder shall be paid: (1) [*] to NeoGenesis if NeoGenesis is the
prosecuting party, (2) [*] to NeoGenesis and [*] to CUSTOMER if CUSTOMER is the
prosecuting party, or (3) if the parties jointly participate, other than the
assistance that each party is required to provide to the litigating party
pursuant to Section 3.4(b) or Section 3.4(c), as the case may be, and for which
it has been reimbursed in prosecuting legal proceedings relating to infringement
or defense of the Licensed Technology, any damages and costs received in any
proceedings or by way of settlement shall be split fifty percent (50%) to
NeoGenesis and fifty percent (50%) to CUSTOMER. No settlement, or consent
judgment or other voluntary final disposition of any suit regarding Licensed
Technology may be entered into without the consent of the other party, which
consent shall not be unreasonably withheld.
(e) In any infringement suit as either party may institute to enforce
Licensed Technology, or in any declaratory judgment action alleging invalidity
or non-infringement of any Licensed Technology brought against NeoGenesis or
CUSTOMER, the other party shall, at the request and expense of the party
initiating or defending the suit or action, cooperate and assist in all
reasonable respects, having its employees testify when requested and making
available relevant records, papers, information, specimens and the like.
(f) Notwithstanding the provisions of Section 3.4(b), if a declaratory
judgment action or other action alleging invalidity or non-infringement of any
of the patents within Licensed Technology is brought, NeoGenesis at its initial
option, shall have the right, within sixty (60)
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18
days after notification of same, to assume defense of the action at its expense,
but CUSTOMER shall be entitled to participate in such action, at its own
expense.
4. PRICING; PAYMENT
4.1 SCREENING FEE. CUSTOMER will pay NeoGenesis a screening fee of [*] per
accepted Target for the NeoGenesis services pursuant to the Program with respect
to such Target. CUSTOMER will pay this fee within [*] of the effective date of a
designated Target being accepted by NeoGenesis. In addition, CUSTOMER will pay
NeoGenesis a fee of [*] per Target in FTE funding for the Program ([*] people
for [*] at an FTE of [*]). Such FTE funding shall be paid at the commencement of
each Program. Any additional FTE funding for a Target (for Program services
beyond those specified in paragraphs 1-7 and 9 of ATTACHMENT A (i.e.,
optimization of three Selected Compounds to a Kd value of [*] and [*] of
optimization on [*] Selected Compounds) must be approved by the Steering
Committee on a Target-by-Target basis and will be charged at the rate of [*] per
FTE. In addition to the fees described above, at the completion of each Program
CUSTOMER shall pay to NeoGenesis a fee of [*].
4.2 MILESTONES. (a) CUSTOMER will pay NeoGenesis milestone payments in respect
of Licensed Products that are related to Designated Compounds selected from
NeoGenesis supplied libraries as specified in this Section 4.2(a).
(i) Within thirty (30) days following the date on which CUSTOMER first
identifies a Designated Compound as having acceptable "cellular
efficacy" against the relevant Target, as documented in secondary
cell-based bioassays performed by or on behalf of CUSTOMER, CUSTOMER
will pay NeoGenesis [*]. CUSTOMER shall promptly notify NeoGenesis of
the results of such secondary bioassays. The Steering Committee shall
define the acceptable cellular efficacy for each Target at the first
Steering Committee meeting following the designation of such Target
(which shall occur within 30 days of the designation of such Target)
and it is understood and agreed that notwithstanding the provisions
of Section 2.2, NeoGenesis shall not be required to accept a Target
until the Steering Committee defines acceptable cellular efficacy.
Cellular efficacy shall be based on the functional activity in a
cellular assay as well as acceptable cytotoxicity and shall take
into consideration the novelty and or patentability of compounds
that have achieved cellular efficacy, or compositions containing
or methods of using those compounds.
(ii) Within thirty (30) days following the date on which CUSTOMER files
its first IND with the FDA on any Licensed Product or makes a
comparable filing with regulatory authorities in another Major
Country (including both a centralized filing, including a Major
Country, or a filing in any Major Country), CUSTOMER will pay
NeoGenesis [*].
(iii) Within thirty (30) days following the date on which the first
administration or dosing of any Licensed Product occurs in the first
Phase II Clinical Trials relating to any
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Licensed Product, CUSTOMER will pay NeoGenesis [*]. PHASE II CLINICAL
TRIALS means any safety and/or efficacy clinical studies of any
Licensed Product in human patients to determine initial efficacy and
dose range finding before embarking on Phase III clinical studies.
(iv) Within thirty (30) days following the date on which CUSTOMER first
submits an NDA covering any Licensed Product with the FDA, or
alternatively makes a comparable filing with regulatory authorities
in another Major Country, (including both a centralized filing,
including a Major Country, or a filing in a Major Country) CUSTOMER
will pay NeoGenesis [*].
(v) Within thirty (30) days following the date on which CUSTOMER first
receives approval from the FDA permitting the manufacture and sale of
a Licensed Product or alternatively a comparable Regulatory Approval
for another Major Country, CUSTOMER will pay NeoGenesis [*].
(b) In the event that CUSTOMER, pursuant to Section 2.6, designates a
compound from a CUSTOMER supplied library as a Designated Compound, CUSTOMER
will pay NeoGenesis milestone payments in respect of Licensed Products relating
to such Designated Compound as specified in this Section 4.2(b).
(i) Within thirty (30) days following the date on which CUSTOMER
identifies the first Designated Compound as having acceptable
cellular efficacy against the relevant Target, as documented in
secondary cell-based bioassays performed by or on behalf of CUSTOMER,
CUSTOMER will pay NeoGenesis [*]. CUSTOMER shall promptly notify
NeoGenesis of the results of such secondary bioassays.
(ii) Within thirty (30) days following the date on which CUSTOMER files
its first IND with the FDA on any Licensed Product or makes a
comparable filing with regulatory authorities in another Major
Country (including both a centralized filing, including a Major
Country, or a filing in any Major Country), CUSTOMER will pay
NeoGenesis [*].
(iii) Within thirty (30) days following the date on which the first
administration or dosing of any Licensed Product occurs in the first
Phase II Clinical Trials relating to any Licensed Product, CUSTOMER
will pay NeoGenesis [*].
(iv) Within thirty (30) days following the date on which CUSTOMER first
submits an NDA covering any Licensed Product with the FDA, or
alternatively makes a comparable filing with regulatory authorities
in another Major Country, (including both a centralized filing,
including a Major Country, or a filing in a Major Country) CUSTOMER
will pay NeoGenesis [*].
(v) Within thirty (30) days following the date on which CUSTOMER first
receives approval from the FDA permitting the manufacture and sale of
a Licensed Product or
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20
alternatively a comparable Regulatory Approval for another Major
Country, CUSTOMER will pay NeoGenesis [*].
(c) Notwithstanding the foregoing, the parties understand and agree that
none of the payments listed in Section 4.2(a)(i)-(v) or Section 4.2(b)(i)-(v)
will be due before [*]. Milestones identified in Section 4.2(a)(i)-(v) and
Section 4.2(b)(i)-(v) shall be due only for the first Licensed Product in
respect of each Target, regardless of the number of Licensed Products developed
and/or commercialized by CUSTOMER for such Target; PROVIDED that in the event
that any milestones under Section 4.2(b)(i)-(v) are first paid for a Licensed
Product with respect to a Target and subsequently, CUSTOMER achieves a
corresponding milestone under Section 4.2(a)(i)-(v) for another Licensed Product
with respect to the same Target, then CUSTOMER shall only be required to pay the
difference between the Section 4.2(b)(i)-(v) milestone payment already paid and
the Section 4.2(a)(i)-(v) milestone payment subsequently achieved. On the date
any one milestone with respect to a Licensed Product is achieved, all lower
numbered unachieved milestones shall be deemed to have been achieved with
respect to that Licensed Product.
4.3 ROYALTIES. Not later than forty-five (45) days following each March 31, June
30, September 30 and December 31 commencing with the First Commercial Sale of
Licensed Products in any country, CUSTOMER shall pay to NeoGenesis royalties by
country for the most recent three-month period then ended, equal to (a) [*] of
Net Sales in such period for Licensed Products related to Designated Compounds
selected from NeoGenesis supplied libraries, and (b) [*] for Licensed Products
related to Designated Compounds selected from CUSTOMER supplied libraries.
CUSTOMER shall pay royalties with respect to each Licensed Product on a country
by country basis (i) until the expiration or revocation or complete rejection
(without the right of appeal) of the last to expire or to be revoked or to be
completely rejected of any NeoGenesis Patent Rights covering such Licensed
Product in the country in which the Licensed Product is manufactured or sold, or
(ii) if no NeoGenesis Patent Rights exist in the relevant country covering the
manufacture, use or sale of the relevant Licensed Product, until [*] from the
First Commercial Sale of such Licensed Product in such country. Notwithstanding
the foregoing or anything in this Agreement to the contrary, no royalties shall
be due with respect to Licensed Products which include Designated Products which
are identified using CUSTOMER supplied libraries, unless the development,
manufacture, use, or sale of which, absent the license granted under this
Agreement, would infringe a Valid Claim of s patent within NeoGenesis Patent
Rights.
4.4 REMITTANCE. (a) All royalties and milestone payments required under this
Section 4 shall be payable in full in the United States in United States
Dollars, regardless of the countries in which sales are made. For the purpose of
computing Net Sales for which a currency other than United States Dollars is
received, such currency shall be converted into United States Dollars at the
average exchange rate for buying United States Dollars set forth in THE WALL
STREET JOURNAL for the calendar quarter in which such sales were made.
(b) In the event that any payment due NeoGenesis under this Agreement is not
made when due, the amount due shall accrue interest beginning on the fifth day
following the final date on
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21
which such payment was due, calculated at the annual rate equal to two percent
(2%) above the prime interest rate reported in the WALL STREET JOURNAL for the
due date, calculated from the due date until paid in full. Such payment when
made shall be accompanied by all interest so accrued. Said interest and the
payment and acceptance thereof shall not negate or waive the right of NeoGenesis
to any other remedy, legal or equitable, to which it may be entitled because of
the delinquency of the payment.
(c) If at any time legal restrictions within any country in the Territory
prevent the conversion of the local currency and such currency cannot be removed
from such country such that prompt remittance by CUSTOMER of any royalties owed
by CUSTOMER to NeoGenesis in respect of sales in such country is prevented,
CUSTOMER shall use its best efforts to make payment through any lawful means or
methods that may be available as CUSTOMER shall reasonably determine and, if
royalties in any country cannot be remitted to NeoGenesis for any reason within
three (3) month after the end of the relevant reporting period, then CUSTOMER
shall pay NeoGenesis in the local currency of such country by deposit of the
relevant royalties in a bank account in such country designated by NeoGenesis.
4.5 RECORDS. CUSTOMER, its Affiliates and sublicensees shall keep and maintain
for a period of at least three (3) years from the date of each payment of
royalties, records (prepared in accordance with United States Generally Accepted
Accounting Principles, consistently applied) sufficient to determine the amounts
of Net Sales and payments due under Section 4.3. Within forty-five (45) days
following each March 31, June 30, September 30 and December 31 in which payments
are due under Section 4.3, CUSTOMER shall provide NeoGenesis with a report
including at least: (a) the quantities of Licensed Products and Combination
Products that CUSTOMER, its Affiliate(s) and sublicensee(s) sold during the
preceding quarter in each country in which Licensed Products or Combination
Products were sold; (b) the monetary amount, in the national currency of such
country, of such sales; (c) actual Net Sales, by country; (d) the currency
conversion rate used and U.S. dollar-equivalent of such sales; (e) the
calculation of royalties thereon; and (f) the total royalties so computed and
due NeoGenesis. Such reports shall be submitted to NeoGenesis whether or not any
sales of Licensed Product have been made during such period. Upon delivery of
the report due for the period ending December 31 of each year, CUSTOMER shall
also report to NeoGenesis the aggregate royalties due NeoGenesis for the entire
preceding year.
4.6 INSPECTION. CUSTOMER and its Affiliates and sublicensees shall each make its
records available for inspection by an independent certified public accountant
during regular business hours at such place or places where such records are
customarily kept, upon reasonable notice from NeoGenesis, solely to verify the
accuracy of the reports and payments. Such inspection right shall not be
exercised more than once in any calendar year nor more than once with respect to
sales of Licensed Products in any given payment period. NeoGenesis agrees to
hold in strict confidence all information concerning royalty payments and
reports, and all information learned in the course of any audit or inspection,
except to the extent necessary for NeoGenesis to reveal such information in
order to enforce its rights under this Agreement or, subject to compliance with
the provisions of Section 5, if disclosure is required by law, regulation or
judicial order. Any person or entity conducting such audit or inspection will
agree in writing with NeoGenesis
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22
to treat all records reviewed in the course of the audit or inspection as the
Confidential Information of CUSTOMER under terms and conditions no less
restrictive than the terms contained in Section 5.2. The CUSTOMER may require
the independent certified accountant to sign a standard non-disclosure agreement
before providing the independent certified accountant access to the CUSTOMER'S
facilities or records. The results of each inspection, if any, shall be binding
on both parties. NeoGenesis shall pay for such inspections, except that in the
event there is any upward adjustment in aggregate royalties payable for any year
shown by such inspection of more than five percent (5%) of the amount paid, in
which case CUSTOMER shall pay for such inspection.
4.7 TAXES. Except for income taxes that may be assessed against NeoGenesis, all
taxes and charges that may be imposed by any government taxing authority on the
amounts paid by CUSTOMER to NeoGenesis under this Agreement shall, to the extent
permitted under applicable law, be paid by CUSTOMER for NeoGenesis's account. In
the event CUSTOMER is required to pay the taxes or charges for the account of
NeoGenesis, and therefore withholds such taxes or charges from the amounts paid
to NeoGenesis under this Agreement, CUSTOMER shall deliver to NeoGenesis true
copies of the receipts and/or returns covering all such payments and the
appropriate documentation which is necessary to obtain a tax credit, to the
extent such tax credit can be obtained. Each party shall provide assistance to
the other party in seeking any benefits available to such party with respect to
government tax withholdings by any relevant law or double tax treaty.
4.8 CONVERTIBLE DEBT. In connection with the transactions contemplated in this
Agreement, on the Effective Date, NeoGenesis will borrow $2,000,000 from
CUSTOMER on the terms and conditions contained in the Convertible Note Purchase
Agreement to be entered into by the parties on the Effective Date and a
Convertible Note to be issued by NeoGenesis to CUSTOMER on the Effective Date.
4.9 DILIGENCE FEE. In the event that within [*] of the Effective Date both: (i)
NeoGenesis has not completed an initial public offering (IPO) AND (ii) CUSTOMER
has not filed an IND with the FDA on any Licensed Product as described in
Section 4.2(a)(ii) or 4.2(b)(ii), then CUSTOMER shall pay NeoGenesis [*]. In the
event that either (i) or (ii) above has occurred then no such fee shall be due
5. CONFIDENTIALITY
5.1 PUBLICITY. Except as is necessary to comply with applicable laws and
regulations or to enforce their respective rights under this Agreement, and
except as otherwise agreed to by the parties in writing, the parties shall: (a)
keep the material terms of this Agreement and results of any Program
confidential; (b) agree upon the text and the exact timing of an initial public
announcement relating to the transactions contemplated by this Agreement as soon
as practicable after the Effective Date (such agreement not to be unreasonably
withheld or delayed); and (c) agree on the text and the timing of any other
public announcements regarding this Agreement or the transactions contemplated
herein that provide additional information. The parties are free to
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23
use the information in agreed announcements in subsequent references to this
Agreement. Notwithstanding the foregoing, following the selection of a
Designated Compound by CUSTOMER as described in Section 2.6, CUSTOMER shall be
free to disclose NeoGenesis Know-How related to the Designated Compound and
Program results to the extent necessary and appropriate in connection with
CUSTOMER's efforts to obtain Regulatory Approvals for Licensed Products.
5.2 CONFIDENTIALITY. (a) Confidential Information of each party will be used by
the other party solely for the purposes permitted by this Agreement. All
Confidential Information will be received and held in confidence by the
receiving party, subject to the provisions of this Agreement. Each party
acknowledges that it will not obtain any rights of any sort in or to the
Confidential Information of the other party as a result of such disclosure and
that any such rights must be the subject of a separate written agreement(s)
except as contemplated by the last sentence of Section 5.1. Either party may
only disclose the general nature, but not the specific financial terms, of this
Agreement without the prior consent of the other party; PROVIDED that either
party may provide a copy of this Agreement or disclose the terms of this
Agreement (i) to any finance provider in conjunction with a financing
transaction, if such finance provider agrees to keep this Agreement
confidential, (ii) to any legal or financial advisor of such party, or (iii) in
response to a subpoena or other validly issued administrative or judicial
process requesting disclosure of same; PROVIDED, the party that receives such
order or process provides prompt notice to the disclosing party before making
any disclosure and permits the disclosing party to oppose or narrow such request
for disclosure and supports any of disclosing party's reasonable efforts to
oppose such request (at disclosing party's expense) and shall disclose the terms
of this Agreement only in the event of a final judgment or administrative order
requiring such disclosure, and only to the extent necessary to comply with such
request.
(b) Each party will restrict disclosure of the other party's Confidential
Information to those of its employees to whom it is necessary to disclose such
Confidential Information in connection with the purposes permitted under Section
5.2(a). Each party shall use reasonable efforts, including at least efforts
fully commensurate with those employed by the party for the protection of its
own Confidential Information, to protect the Confidential Information of the
other party.
(c) Nothing herein shall prevent a receiving party from disclosing all or
part of the Confidential Information as necessary pursuant to the lawful
requirement of a governmental agency or when disclosure is required by operation
of law; PROVIDED that prior to any such disclosure, the receiving party shall
use reasonable efforts to: (i) promptly notify the disclosing party in writing
of such requirement to disclose; and (ii) cooperate fully with the disclosing
party in protecting against any such disclosure or obtaining a protective order.
6. REPRESENTATIONS AND WARRANTIES.
6.1 AUTHORIZATION; ENFORCEABILITY; INFRINGEMENT. Each of CUSTOMER and NeoGenesis
represent and warrant to the other that: (a) it is a corporation or limited
liability company, as applicable, duly organized and validly existing under the
laws of its jurisdiction of organization
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24
and has all requisite power and authority to enter into this Agreement; (b) it
is duly authorized by all requisite action to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby, and that the
same do not conflict or cause a default with respect to such party's obligations
under any other agreement; (c) it has duly executed and delivered this
Agreement; and (d) it is authorized to disclose any and all Confidential
Information made available to the other party pursuant to this Agreement. In
addition, NeoGenesis represents and warrants that it is not aware of any patent
held by any third party which would prevent NeoGenesis' or CUSTOMER's use of the
NeoGenesis Patent Rights or NeoGenesis Know-How in performance of the Program.
6.2 NEOGENESIS PERFORMANCE. NeoGenesis hereby represents and warrants to
CUSTOMER that: (a) NeoGenesis shall perform the Program using qualified
personnel and in a good and workmanlike manner consistent with industry
standards of companies that are comparable to NeoGenesis performing similar
activities under similar circumstances; (b) as of the Effective Date, there is
no agreement known to NeoGenesis to which it is a party and by which it is bound
that would conflict with or be breached by NeoGenesis granting CUSTOMER the
license in Section 3.1 or NeoGenesis' performance under this Agreement; and (c)
NeoGenesis is unaware of any patent and other rights owned or controlled by any
third Person which would be infringed by the NeoGenesis Patent Rights or the
NeoGenesis Know-How or the performance of its obligations under this Agreement.
6.3 DISCLAIMER. (a) EXCEPT FOR THE WARRANTIES EXPRESSLY MADE IN SECTIONS
6.1-6.2, NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED (WHETHER WRITTEN OR ORAL), INCLUDING, WITHOUT LIMITATION ANY
WARRANTY AGAINST INFRINGEMENT OF ANY THIRD PARTY PATENT OR OTHER INTELLECTUAL
PROPERTY RIGHTS, ANY WARRANTY OF MERCHANTABILITY OR ANY WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE WITH RESPECT TO THE NEOMORPH SCREENING LIBRARY, THE
NEOMORPH FOCUSED LIBRARIES, QSCD, THE PRELIMINARY COMPOUNDS, THE PRIMARY ACTIVE
COMPOUNDS, THE SELECTED COMPOUNDS, THE DESIGNATED COMPOUNDS, THE TARGETS, THE
LICENSED PRODUCTS, THE NEOGENESIS KNOW-HOW, THE CUSTOMER KNOW-HOW, THE SCOPE,
VALIDITY OR ENFORCEABILITY OF THE NEOGENESIS PATENT RIGHTS OR THE CUSTOMER
PATENT RIGHTS, OR SUCH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT.
(B) THE REPRESENTATIONS AND WARRANTIES OF EACH OF NEOGENESIS AND CUSTOMER EXTEND
ONLY TO THE OTHER PARTY. NEITHER PARTY WILL BE LIABLE FOR ANY CLAIM OR DEMAND
AGAINST SUCH OTHER PARTY BY A THIRD PARTY, EXCEPT TO THE EXTENT PROVIDED IN
SECTIONS 7.1-7.2.
7. INDEMNIFICATION
7.1 INFRINGEMENT INDEMNIFICATION. (a) Subject to the provisions of Section 7.4,
NeoGenesis shall defend, indemnify and hold harmless CUSTOMER, its subsidiaries,
parent corporations,
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25
Affiliates, officers, directors, independent contractors, partners,
sublicensees, distributors, members, employees, agents, successors and assigns
(each, in such capacity, an INDEMNIFIED PARTY) from and against any claim, suit,
demand, loss, damage, expense (including reasonable attorney's fees of
indemnitee(s) and those that may be asserted by a third party) or liability
(collectively, LOSSES) imposed upon them by any third party and arising from or
related to a third party claim that (i) use of NeoGenesis Know-How or (ii)
practice of the NeoGenesis Patent Rights by CUSTOMER in accordance with the
terms of this Agreement violates or infringes the intellectual property rights
of any third party. NeoGenesis shall have no liability or obligation to CUSTOMER
under this Section 7.1(a) in the event and to the extent that the alleged
infringement is caused by: (1) modifications, alterations, combinations or
enhancements of the Designated Compounds not created by NeoGenesis, or (2) or
results from willful misconduct or negligent acts or omissions of CUSTOMER or
its Affiliates, or its or their respective employees, officers, directors or
agents.
(b) Subject to the provisions of Section 7.3, CUSTOMER shall defend,
indemnify and hold harmless NeoGenesis, its subsidiaries, parent corporations,
Affiliates, officers, directors, independent contractors, partners,
shareholders, employees, agents, successors and assigns (each, in such capacity,
an INDEMNIFIED PARTY) from and against any Losses imposed upon them by any third
party and arising from or related to a third party claim that (i) the use of the
CUSTOMER Know-How; (ii) the practice of the CUSTOMER Patent Rights; and (iii)
the Manufacture, development, testing, Commercialization, use or other
disposition of any of the foregoing, violates or infringes the intellectual
property rights of any third party. CUSTOMER shall have no obligation or
liability to NeoGenesis under this Section 7.1(b) in the event and to the extent
that the alleged infringement (1) is covered by Section 7.1(a) or (2) results
from willful misconduct or negligent acts or omissions of NeoGenesis or its
Affiliates, or its or their respective employees, officers, directors or agents.
7.2 OTHER CLAIMS. (a) Subject to the provisions of Section 7.3, NeoGenesis will
defend, indemnify and hold harmless the CUSTOMER Indemnified Parties from and
against any Losses imposed upon the Indemnified Party(s) by any third party
arising from or related to: (i) any material breach of the NeoGenesis's
representations and warranties under this Agreement; or (ii) any negligence or
intentional misconduct by NeoGenesis (or its employees, agents or
representatives) in performing its obligations under this Agreement, including
the performance of the Program. The foregoing indemnification action shall not
apply in the event and to the extent that such Losses arose as a result of any
Indemnified Party's negligence, intentional misconduct or breach of this
Agreement.
(b) Subject to the provisions of Section 7.3, CUSTOMER will defend,
indemnify and hold harmless the NeoGenesis Indemnified Parties from and against
any Losses imposed upon the Indemnified Party(s) by any third party arising from
or related to: (i) any material breach of CUSTOMER's representations and
warranties under this Agreement; (ii) any negligence or intentional misconduct
by CUSTOMER (or its employees, agents or representatives) or by an Affiliate,
licensee, sublicensee, distributor or agent of CUSTOMER in performing its
obligations under this Agreement, including the performance of the R&D Program;
or (iii) the labeling, packaging, package insert, other materials or promotional
claims with respect to any Licensed
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Product or the development, testing, Manufacturing, Commercialization, use or
other disposition of any Licensed Product by CUSTOMER or by an Affiliate,
licensee, sublicensee, distributor or agent of CUSTOMER. The foregoing
indemnification action shall not apply in the event and to the extent that such
Losses arose as a result of any Indemnified Party's negligence, intentional
misconduct or breach of this Agreement.
7.3 PROCEDURE. To receive the benefit of indemnification under Sections 7.1 or
7.2, the Indemnified Party must (a) promptly notify the party from whom
indemnification is sought (the INDEMNIFYING PARTY) in writing of a claim or
suit; PROVIDED, that failure to give such notice shall not relieve Indemnifying
Party of its indemnification obligations except where, and solely to the extent
that, such failure actually and materially prejudices the rights of Indemnifying
Party); (b) provide reasonable cooperation (at the Indemnifying Party's
expense); and (c) tender to the Indemnifying Party (and its insurer) full
authority to defend or settle the claim or suit; PROVIDED that no settlement
requiring any admission by the Indemnified Party or that imposes any material
obligation or loss on the Indemnified Party shall be made without the
Indemnified Party's consent. Neither party has any obligation to indemnify the
other party in connection with any settlement made without the Indemnifying
Party's written consent. The Indemnified Party has the right to participate at
its own expense in the claim or suit and in selecting counsel therefor. The
Indemnified Party shall cooperate with Indemnifying Party (and its insurer), as
reasonably requested, at Indemnifying Party's cost and expense.
7.4 INDEMNIFICATION AS SOLE REMEDY. To the fullest extent permitted by law, the
indemnification provided in this Section 7, subject to the limitations set forth
herein, shall be the exclusive remedy for damages available to any Indemnified
Party.
7.5 LIMITATION OF LIABILITY. EXCEPT FOR INFRINGEMENT OF THE OTHER PARTY'S
INTELLECTUAL PROPERTY RIGHTS OR BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER
SECTION 5 AND EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 7.1-7.4 WITH RESPECT TO
THIRD PARTY CLAIMS, THE AGGREGATE LIABILITY OF EITHER PARTY FOR DIRECT DAMAGES
ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
LIMITED TO THE AGGREGATE AMOUNT PAID TO (OR PAID BY) SUCH PARTY BY THE OTHER
PARTY AS OF THE DATE SUCH CLAIM IS FINALLY RESOLVED. EXCEPT FOR INFRINGEMENT OF
THE OTHER PARTY'S INTELLECTUAL PROPERTY RIGHTS OR BREACH OF CONFIDENTIALITY
OBLIGATIONS UNDER SECTION 5 AND EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 7.1-7.4
WITH RESPECT TO THIRD PARTY CLAIMS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER FOR LOST PROFITS OR SAVINGS OR FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, HOWEVER CAUSED,
UNDER ANY THEORY OF LIABILITY.
8. TERM AND TERMINATION
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8.1 TERM. This Agreement shall take effect as of the Effective Date and shall
remain in effect until the later of (i) completion of the Program on CUSTOMER'S
[*] Target, if that Target is identified and accepted within four (4) years of
the Effective Date, subject to any extensions entered into pursuant to Section
2.2, or (ii) until expiration of CUSTOMER's obligation to pay royalties
hereunder if the license under Section 3.1 is exercised, in each case unless
sooner terminated in accordance with Section 8.2. If the license under Section
3.1 is exercised through the selection of a Designated Compound for a Target, as
described in Section 2.7, such license will remain in effect until the LATER OF:
(a) the expiration of the term of the last-to-expire of the patent rights within
the NeoGenesis Patent Rights or Program Intellectual Property or (b) twenty (20)
years following the First Commercial Sale in the last country in which sales of
Licensed Products are made (if the Licensed Products do not embody any patents
within the NeoGenesis Patent Rights or Program Intellectual Property).
8.2 TERMINATION. (a) Either party may terminate the Program with thirty (30)
days notice to the other party commits a material breach unless the breach is
cured within the thirty (30)-day notice period. In addition, NeoGenesis may
suspend work pursuant to the Program with notice to CUSTOMER if CUSTOMER fails
to pay NeoGenesis any amount due NeoGenesis under this Agreement.
(b) Following completion of the Program, either party may terminate the
license with sixty (60) days notice if the other commits a material breach
unless the breach is cured within the sixty (60)-day notice period consistent
with Section 8.2(a).
(c) Either party shall have the right to terminate this Agreement upon
thirty (30) days notice if a Force Majeure condition has prevented performance
by the other party for more than one hundred twenty (120) consecutive days. The
parties may also terminate this Agreement at any time upon mutual written
agreement of the parties.
8.3 EFFECT OF TERMINATION/COMPLETION. (a) Upon termination (including
expiration) of this Agreement or completion of the Program with respect to a
Target: (i) NeoGenesis will terminate all tasks for such Program in an orderly
manner, as soon as practical and in accordance with a schedule agreed to by
CUSTOMER and NeoGenesis; (ii) NeoGenesis shall deliver to CUSTOMER all materials
developed through the termination of such Program; (iii) CUSTOMER shall pay
NeoGenesis any monies due and owing NeoGenesis up to the time of termination,
for services actually performed in respect of such Program (including all
work-in process (if any) pursuant to the last sentence of paragraph 6 or the
last sentence of paragraph 7 of ATTACHMENT A) in an amount calculated using
NeoGenesis's then-current daily charge for similar services and deliverables,
PROVIDED, such fee shall not exceed the price specified in this Agreement and
(iv) within thirty (30) days following termination (including expiration) of
such Program, NeoGenesis shall deliver to CUSTOMER a reasonably-detailed written
report describing the results of all research activities conducted under this
Agreement in respect of such Program up to the date of such termination.
(b) Upon notice from a disclosing party or termination (including
expiration) of this Agreement each party shall return to the other party or
certify in writing to the other party that it
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has destroyed all documents and other tangible items it or its employees or
agents have received or created pertaining, referring or relating to the
Confidential Information of the other party.
(c) The licenses granted by NeoGenesis under Section 3.1 shall survive any
expiration or termination of the Program or this Agreement with respect to any
Designated Compound or Licensed Product for which the applicable service fees
and milestone fees and royalties have been paid (when due in accordance with the
terms of this Agreement) and CUSTOMER shall continue to have the right to
develop, have developed, make, have made, use, distribute, offer for sale,
import, export and sell Licensed Products relating to such Designated Compounds;
PROVIDED that CUSTOMER shall continue to pay NeoGenesis milestone fees and
royalties as required by Sections 4.2 and 4.3 and complies with Sections
4.4-4.7. In the event the license granted to CUSTOMER under Section 3.1
terminates for any reason, each of CUSTOMER's sublicensees at such time shall
continue to have the rights and license set forth in their sublicense
agreements, PROVIDED such sublicensee agrees in writing that NeoGenesis is
entitled to enforce all relevant provisions directly against such sublicensee.
(d) Except as otherwise provided herein, neither party shall be liable to
the other party for any compensation or damages by reason of termination of this
Agreement in accordance with this Section 8.
(e) Nothing herein shall be construed to release either party of any
obligation which matured prior to the effective date of any termination.
CUSTOMER's liability for any charges, payments or expenses due to NeoGenesis
that accrued prior to the termination date shall not be extinguished by
termination, and such amounts (if not otherwise due on an earlier date) shall be
immediately due and payable on the termination date. NeoGenesis shall refund
CUSTOMER for any amounts paid prior to termination for activities not performed.
8.4 SURVIVAL. Sections 1, 2.7, 3.1 (solely in accordance with Section 8.3(c)),
3.2, 3.3 and 4-9 shall survive any termination or expiration of this Agreement.
9. GENERAL PROVISIONS.
9.1 ISSUE RESOLUTION. (a) The parties shall use their best efforts to resolve
any controversy or dispute that arises under or relates to this Agreement
through good faith discussions. The parties shall initiate such discussions
using the following procedure. Either party shall notify the other party of the
nature of the controversy or dispute, providing sufficient detail to permit the
other party to understand same (a DISPUTE NOTICE). The representatives of the
parties shall meet within 30 days after the date that the non-sending party
receives the Dispute Notice to attempt to reach an agreement about the nature of
the dispute and a resolution of the dispute. If they are unable to resolve the
dispute within 60 days after their meeting, and do not agree to extend the time
period for resolving the dispute, or if the terms and conditions of the
resolution or settlement of the dispute are breached, the dispute may be
resolved by litigation. Pending resolution of any dispute covered by this
Section 9.1, both parties will continue their performance under this
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Agreement including, without limitation, the payment of all amounts due to the
other party that are not in dispute.
9.2 GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the internal, substantive laws of the Commonwealth of Massachusetts to the
exclusion of any choice or conflict of laws rule or provision that would result
in the application of the substantive law of any other jurisdiction.
Notwithstanding the foregoing, the parties (and the arbitrators) shall use
United States (Federal) patent and copyright laws for purposes of governing and
construing Sections 3.2-3.4 of this Agreement. The United Nations Convention on
Contracts for the International Sale of Goods shall not apply to the
transactions contemplated by this Agreement.
9.3 AMENDMENT AND WAIVER. No provision of or right under this Agreement shall be
deemed to have been waived by any act or acquiescence on the part of either
party, its agents or employees, but only by an instrument in writing signed by
an authorized officer of each party. No waiver by either party of any breach of
this Agreement by the other party shall be effective as to any other breach,
whether of the same or any other term or condition and whether occurring before
or after the date of such waiver.
9.4 INDEPENDENT CONTRACTORS. Each party represents that it is acting on its own
behalf as an independent contractor and is not acting as an agent for or on
behalf of any third party. This Agreement and the relations hereby established
by and between CUSTOMER and NeoGenesis do not constitute a partnership, joint
venture, franchise, agency or contract of employment. Neither party is granted,
and neither party shall exercise, the right or authority to assume or create any
obligation or responsibility on behalf of or in the name of the other party or
its Affiliates. NeoGenesis shall be solely responsible for compensating all its
personnel and for payment of all related FICA, workers' compensation,
unemployment and withholding taxes. CUSTOMER shall not provide NeoGenesis
personnel with any benefits, including but not limited to compensation for
insurance premiums, paid sick leave or retirement benefits.
9.5 ASSIGNMENT. Neither party may assign this Agreement or any of its rights and
obligations under this Agreement without the prior written consent of the other
party; PROVIDED, that either party may assign this Agreement to (a) any Person
to which such party transfers all or substantially all of its assets related to
this Agreement or with which such party is consolidated or merged; (b) any
Person that owns a majority of the voting stock of such party; or (c) any Person
of which such party owns directly or indirectly a majority of the voting stock;
PROVIDED, FURTHER, that in each instance the assignee Person expressly assumes
all obligations imposed on the assigning party by this Agreement in writing and
the other party is notified in advance of such assignment.
9.6 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
9.7 NOTICES. Unless otherwise provided herein, any notice, report, payment or
document to be given by one party to the other shall be in writing and shall be
deemed given when delivered personally or mailed by certified or registered
mail, postage prepaid (such mailed notice to be
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30
effective on the date which is three (3) business days after the date of
mailing), or sent by nationally recognized courier for next day delivery (such
notice sent by courier to be effective one business day after it is deposited
with such courier), or sent by facsimile or e-mail (such notice to be effective
when sent, if confirmed by overnight courier as aforesaid) to the address set
forth on the signature page to this Agreement or to such other place as any
party may designate as to itself by written notice to the other party.
9.8 SEVERABILITY. In the event any provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof. The parties agree that they will negotiate in good faith or
will permit a court or arbitrator to replace any provision hereof so held
invalid, illegal or unenforceable with a valid provision which is as similar as
possible in substance to the invalid, illegal or unenforceable provision.
9.9 CAPTIONS. Captions of the sections and subsections of this Agreement are for
reference purposes only and do not constitute terms or conditions of this
Agreement and shall not limit or affect the meaning or construction of the terms
and conditions hereof.
9.10 WORD MEANINGS. Words such as HEREIN, HEREINAFTER, HEREOF and HEREUNDER
refer to this Agreement as a whole and not merely to a section or paragraph in
which such words appear, unless the context otherwise requires. The singular
shall include the plural, and each masculine, feminine and neuter reference
shall include and refer also to the others, unless the context otherwise
requires.
9.11 ENTIRE AGREEMENT. The terms and provisions contained in this Agreement
(including the Attachments) constitute the entire understanding of the parties
with respect to the transactions and matters contemplated hereby and supersede
all previous communications, representations, agreements and understandings
relating to the subject matter hereof. No representations, inducements, promises
or agreements, whether oral or otherwise, between the parties not contained in
this Agreement shall be of any force or effect. No agreement or understanding
extending this Agreement or varying its terms (including any inconsistent terms
in any purchase order, acknowledgment or similar form) shall be binding upon
either party unless it is in a writing specifically referring to this Agreement
and signed by a duly authorized representative of the applicable party.
9.12 RULES OF CONSTRUCTION. The parties agree that they have participated
equally in the formation of this Agreement and that the language and terms of
this Agreement shall not be construed against either party by reason of the
extent to which such party or its professional advisors participated in the
preparation of this Agreement.
9.13 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
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9.14 FORCE MAJEURE. Except as otherwise provided in this Agreement, in the event
that a delay or failure of a party to comply with any obligation created by this
Agreement is caused by a Force Majeure condition, that obligation shall be
suspended during the continuance of the Force Majeure condition.
9.15 FURTHER ASSURANCES. Each party covenants and agrees that, subsequent to the
execution and delivery of this Agreement and without any additional
consideration, it will execute and deliver any further legal instruments and
perform any acts which are or may become reasonably necessary to effectuate the
purposes of this Agreement.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed on
their behalf by their duly authorized representatives intending it to take
effect as an instrument under seal as of the Effective Date.
NEOGENESIS DRUG DISCOVERY, INC. BIOGEN, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ (Kees Been)
---------------------------------------- ----------------------------
Xxxxxx Xxxxxx, President and CSO ____________, _____________
NOTICE ADDRESS: NOTICE ADDRESS:
NeoGenesis Drug Discovery, Inc. Biogen, Inc.
000 Xxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Phone: 000.000.0000 Phone: 000.000.0000
Fax: 000.000.0000 Fax: 000.000.0000
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SEPARATELY WITH THE COMMISSION.
32
ATTACHMENT A
SCREENING PROGRAM
The Program to be performed by NeoGenesis with respect to the Targets will
screen compounds contained in the NeoGenesis NeoMorph Screening Library or
CUSTOMER supplied compounds against each Target using the protocol described
below. The NeoMorph Screening Library consists of approximately 10,000,000
diverse small organic compounds. Additional compounds are added from time to
time to the NeoMorph Screening Library by NeoGenesis (collectively, such
compounds are the COMPOUNDS).
1. CUSTOMER will identify a Target to NeoGenesis. NeoGenesis will have [*] to
agree to conduct the control experiments and follow-up control experiments
and for the purpose of establishing an SOP(s), as provided in PARA 2, or
to reject the Target because of its unavailability.
2. Within [*] of NeoGenesis agreement as provided in PARA 1, CUSTOMER will
provide NeoGenesis with approximately [*] of the purified
functionally-active Target proteins. NeoGenesis will perform control
experiments with the CUSTOMER Targets to determine screening
characteristics in NeoGenesis' ALIS (Automated Preliminary Compound
Identification System) protocols. Follow-up control experiments will be
performed using CUSTOMER ligands (if available) to validate the retention
of binding activity of the Targets. If the Steering Committee agrees that
such control and follow-up experiments (if any) have been successfully
completed, NeoGenesis will establish an SOP(s) for ALIS screening based on
the preceding experiments.
3. Upon approval of the SOP(s) by the Steering Committee, NeoGenesis will
perform ALIS screening of at least [*] Compounds using the then available
NeoMorph Screening Libraries against the Target using such SOPs. The ALIS
screening will be carried out to identify Target-specific Compounds that
bind to the CUSTOMER Target with binding affinities less than [*]
micromolar (Kd < [*]) (each such Compound is referred to as a PRELIMINARY
COMPOUND).
4. If NeoGenesis identifies a Preliminary Compound(s) for the Target and
CUSTOMER is able to provide NeoGenesis with a second protein that differs
from the Target but is of the same functional class of protein as the
Target, NeoGenesis will screen such second protein against the Preliminary
Compound(s) to determine the relative selectivity of the Preliminary
Compound for the Target. Alternatively, if CUSTOMER is unable to deliver a
second protein of the same functional class, NeoGenesis will screen an
unrelated protein against the Preliminary Compound(s) to assay the
specificity of the initial Preliminary Compounds. If CUSTOMER is able to
deliver a second protein of the same functional class, then CUSTOMER will
provide NeoGenesis with [*] of each such protein.
5. NeoGenesis will synthesize discrete compounds, each an individual compound
of greater than [*] purity, based upon the Preliminary Compounds, and
subject them to ALIS for confirmation of binding to the Target. NeoGenesis
will evaluate the activity of the discrete compound(s) in a Target-based
functional assay that has been delivered to NeoGenesis by
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CUSTOMER within [*] after NeoGenesis has identified such Preliminary
Compound(s) and has confirmed their selectivity or specificity pursuant
to PARA 4. NeoGenesis will notify CUSTOMER of any such Preliminary
Compound which has demonstrated activity in the Target-based functional
assays (each, a PRIMARY ACTIVE COMPOUND). NeoGenesis will prepare a
report for all Primary Active Compound(s) that details the structure(s),
binding affinities, Target specificity(ies), and functional activities
of such Primary Active Compound (each, a PRIMARY ACTIVE COMPOUNDS
REPORT). Alternatively, CUSTOMER will perform such Target-based
functional assays and will notify NeoGenesis of any Primary Active
Compounds within [*] after completion of such assays and not later than
[*] after the Primary Active Compounds are delivered by NeoGenesis.
NeoGenesis will then, with assistance from CUSTOMER, prepare the Primary
Active Compounds Report for those compounds.
6. CUSTOMER will have the right to select up to [*] Primary Active Compounds
per Target, for further study or optimization by NeoGenesis (each, a
SELECTED COMPOUND).
7. NeoGenesis will perform optimization on [*] Selected Compounds
identified by CUSTOMER. To perform such optimization, NeoGenesis will
create NeoMorph Focused Libraries based upon such Selected Compounds and
will perform high stringency-ALIS screening to improve Kd values to [*]
micromolar or better (i.e., Kd LESS THAN OR EQUAL TO [*]). In addition,
NeoGenesis will perform a single round of optimization on the remaining
[*] Selected Compounds without any obligation to improve Kd values to [*]
micromolar or better. In the event that CUSTOMER wishes to have
NeoGenesis perform additional cycles of optimization, the parties shall
negotiate a separate fee for such work, which will be based upon the FTE
cost. NeoGenesis will prepare a final Target report (the FINAL TARGET
REPORT) which includes the structure(s), binding affinities, chemical
synthetic schemes, CUSTOMER ligand competitiveness (if available),
Target specificity(ies), and functional activities of all of the
Selected Compounds and their optimized derivatives (each also a Selected
Compound).
8. Within [*] following the Final Target Report, NeoGenesis will provide
CUSTOMER with [*] of up to [*] Selected Compound(s), chosen by CUSTOMER,
for further evaluation by CUSTOMER in Target-based secondary assays. Any
additional quantities of those [*] Selected Compounds or quantities of any
other Selected Compounds requested by CUSTOMER will be furnished to
CUSTOMER at cost, which shall be based on FTE cost.
9. In addition, upon approval of the SOP(s) by the Steering Committee,
NeoGenesis will perform ALIS screening of libraries provided by the
CUSTOMER which in total will not exceed [*] samples screened. The ALIS
screening will be carried out to identify Target-specific Samples that bind
to the CUSTOMER Target with binding affinities less than [*] micromolar (Kd
< [*]), denoted Preliminary Samples. NeoGenesis will notify CUSTOMER of
such Target-specific Preliminary Samples within [*] following the ALIS
screening of said CUSTOMER-provided Sample. If so desired by the CUSTOMER,
NeoGenesis will also conduct an ALIS confirmation of Preliminary Sample(s)
by conducting a competition experiment of the Preliminary Sample(s) against
CUSTOMER ligand(s). NeoGenesis will
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34
provide CUSTOMER with a Sample Screening Report within [*] of completion of
all CUSTOMER Sample screening.
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ATTACHMENT B
TARGETS
[TO BE SUPPLIED BY CUSTOMER]
ATTACHMENT C
NEOGENESIS PATENT RIGHTS
[TO BE SUPPLIED BY NEOGENESIS AS APPLICABLE]
NEOGENESIS KNOW-HOW
[TO BE SUPPLIED BY NEOGENESIS AS APPLICABLE]
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SEPARATELY WITH THE COMMISSION.
36
