Exhibit 10.22
FOCUSED COLLABORATION AGREEMENT
between
THE PROCTER & XXXXXX COMPANY
and
REGENERON PHARMACEUTICALS, INC.
EXECUTION COPY
FOCUSED COLLABORATION AGREEMENT
I. Definitions........................................................................
II. Termination of the Multi-Project Collaboration Agreement; Overview;
and Management Committee...........................................................
III. Research and Development...........................................................
IV. Marketing of Products..............................................................
V. License Grants.....................................................................
VI. Royalties and Accounting...........................................................
VII. Patents and Infringement...........................................................
VIII. Confidentiality....................................................................
IX. Representations, Warranties and Indemnification....................................
X. Term, Termination, Change of Control...............................................
XI. Miscellaneous......................................................................
XII. Execution..........................................................................
FOCUSED COLLABORATION AGREEMENT
Made as of the 31st day of December, 2000, by and among:
The Procter & Xxxxxx Company, an Ohio corporation having its principal
offices at Xxx Xxxxxxx & Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxx 00000 (hereinafter,
together with its Affiliate Procter & Xxxxxx Pharmaceuticals, Inc., "Procter &
Xxxxxx" or "P&G"), and
Regeneron Pharmaceuticals, Inc., a New York corporation having its
principal office at 000 Xxx Xxx Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000
(hereinafter, together with its Affiliates, "Regeneron").
The following sets forth the background for this Agreement:
Procter & Xxxxxx conducts research and develops and markets
pharmaceutical products for the treatment of a variety of disorders,
including without limitation products having utility in the treatment
of bone disorders, skeletal muscle disorders, cardiac muscle disorders,
arthritis, gastrointestinal disorders, obesity, and antiinfectives.
Regeneron conducts research for the development and commercialization
of pharmaceutical products, based on significant expertise in
identifying and developing molecular receptor targets and compounds
that mediate a variety of disorders. Regeneron has entered into
collaborative agreements with third parties for the research,
development and commercialization of products regarding several such
targets identified by Regeneron. Regeneron is independently pursuing
research on other such targets.
Regeneron and Procter & Xxxxxx entered into an agreement on the 11th
day of December 1996, establishing a collaborative effort to perform
research and develop and market products for the prevention, diagnosis,
and treatment of skeletal muscle disorders. Regeneron and Procter &
Xxxxxx entered into a subsequent agreement on the 13th day of May, 1997
broadening the scope of their collaboration (as the same has been
amended from time to time, the "Multi-Project Collaboration
Agreement").
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Pursuant to the terms of this Agreement, Procter & Xxxxxx and Regeneron
wish to terminate the Multi-Project Collaboration Agreement and enter
into this Agreement to pursue research, development and marketing of
products based on specific focused areas.
Procter & Xxxxxx and Regeneron intend fully to utilize their
capabilities, capitalize on each other's expertise, and put forth
Commercially Reasonable Efforts to achieve this objective, and
recognize that each party is contributing valuable technologies and
capabilities to this effort and that the combination of these
compatible and complementary technologies and capabilities creates the
basis for a successful collaboration.
Accordingly, the Parties agree to the following terms and conditions:
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ARTICLE I - DEFINITIONS
1.1. "Affiliate" means any entity that directly or indirectly Owns, is
Owned by, or is under common Ownership with a Party to this Agreement. In no
event will Amgen-Regeneron Partners, any legal entity that Regeneron forms with
Glaxo that relates to their July 1993 agreement, any legal entity that Regeneron
forms with Pharmacopeia, Inc. that relates to their October 1996 agreement, or
any legal entity that Regeneron forms with Procter & Xxxxxx that relates to this
Agreement be deemed to be an Affiliate of Regeneron under this Agreement. "Owns"
or "Ownership" means direct or indirect possession of more than fifty percent
(50%) of the votes of holders of a corporation's voting securities or a
comparable equity interest in any other type of entity.
1.2. "Agreement" means the present agreement together with all
attachments.
1.3. "Agrin" means the compounds claimed in the United States Patent
Application Serial Number [********] and any continuations, divisionals or
continuation-in-parts thereof, and any molecules representing one or more amino
acid substitutions, deletions, or additions derived therefrom.
1.4. "Allowable Product Expense" means Direct Costs incurred by either
Party pursuant to an approved Product Plan. Allowable Product Expenses will be
recognized in accordance with GAAP.
1.5. "Article" means any article of this Agreement.
1.6. "Commercially Reasonable Efforts" means efforts and resources
commonly used in the research-based pharmaceutical industry for a compound or
product at a similar stage of research, development or commercialization, and
having similar market potential. Commercially Reasonable Efforts shall be
determined taking into account the stage of research, development or
commercialization of the compound or product, the cost-effectiveness of efforts
or resources while optimizing profitability, the competitiveness of alternative
products that are or expected to be in the relevant marketplace, the proprietary
position of the product, the regulatory and business environment, the likelihood
of regulatory approval and product reimbursement, the profitability of the
product, the existence of alternative products that may also be developed by the
Parties, and all other relevant factors. Commercially Reasonable Efforts shall
be determined on a compound-by-compound and market-by-market basis, and it is
anticipated that the level of effort will
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change over time reflecting changes in the status of the compound, product and
the market involved.
1.7. "Competing Product" means any compound, product, method or system
that is indicated for the same disease state and has the same mechanism of
action as a Development Compound or Marketed Compound that is actively being
developed or marketed. Competing Product shall not include Excluded Technology.
1.8. "Compound" means a chemical entity, which is not Excluded
Technology, with research or commercial utility in the Field for methods of
research, diagnosis, treatment or prevention of any disease or disorder in
humans or animals, and which
(a) is conceived and/or reduced to practice by Regeneron, or
acquired by Regeneron from a Third Party with the right to sublicense,
before or during the Research Term; or
(b) is conceived and/or reduced to practice by Procter & Xxxxxx,
or acquired by Procter & Xxxxxx from a Third Party with the right to
sublicense, prior to or during the Research Term.
Compound includes Research Compounds, Development Compounds and
Marketed Compounds that may be useful in the Field for methods of research,
diagnosis, treatment or prevention of any disease or disorder in humans or
animals. Each Compound shall also be deemed to include all indications,
formulations, line extensions, or modes of administration thereof.
1.9 "Development Committee" or "DC" means the committee established
pursuant to Section 2.5(c).
1.10 "Development Compound" means a Compound that has been demonstrated
to meet Success Criteria as ready to begin regulated safety studies and
development of clinical supplies whether or not it has been designated by the
Operations Committee for further development pursuant to Section 3.3. The terms
Development Compound and Lead Compound may be used interchangeably.
1.11. "Direct Costs" means costs, of a nature, amount, and method of
calculation approved by the Operations Committee via the Research Collaboration
Plan and/or Product Plan, that are incurred by either Party, based upon efforts,
funds and/or resources expended to perform its obligations under such plan.
Direct Costs may include costs associated with activities performed by a Party,
or by a Third Party under an appropriate
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agreement pursuant to Section 2.9, for the research, development or marketing of
Compounds. Direct Costs shall not include any xxxx-up or profit above actual
costs.
1.12 "DDR Field" means the discovery, development, supply and
commercialization of products or processes that modulate the function of the
receptor tyrosine kinases XXX0 xxx/xx XXX0 (xx any receptor having at least
seventy-five percent (75%) homology with DDR1 or DDR2) whose biological action
is primarily due to this modulation.
1.13. "Effective Date" means the date described in Section 10.1(a).
1.14. "Excluded Technology" means any invention, trade secret or other
information, whether tangible or intangible, whether or not patentable, that is:
(a) conceived or reduced to practice by Regeneron, or acquired
from a Third Party, or Procter & Xxxxxx, by Regeneron before or during
the Term insofar as such invention, trade secret or other information is
not in the Field, including, without limitation, the subject matter
listed in Attachment 1.14(a), (collectively, the "Regeneron Excluded
Technology"). Without limiting the foregoing, Regeneron Excluded
Technology shall include any compound, product, method, system, Know-how
or Patent licensed by Regeneron to Procter & Xxxxxx pursuant to the
Multi-Project Collaboration Agreement and not within the Field, any
Procter & Xxxxxx Retained Project, or any Mutual Retained Project; or
(b) conceived or reduced to practice by Procter & Xxxxxx, or
acquired by Procter & Xxxxxx from a Third Party, or Regeneron, before or
during the Term insofar as such invention, trade secret and other
information (i) is not in the Field, (ii) are small molecule Research
Compounds that have not met Success Criteria, or (iii) is part of
[**************************] ("Procter & Xxxxxx Excluded Technology").
Without limiting the foregoing, Procter & Xxxxxx Excluded Technology
shall include any compound, product, method, system, Know-how or Patent
licensed by Procter & Xxxxxx to Regeneron pursuant to the Multi-Project
Collaboration Agreement and not within the Field, any Regeneron Retained
Project, or any Mutual Retained Project. Notwithstanding the foregoing,
Procter & Xxxxxx Excluded Technology shall not include any compound,
product, method or system which is in human clinical development or
Marketed and is acquired by Procter & Xxxxxx from a Third Party which, at
the time of acquisition is indicated for the same disease state and is
known to have the same mechanism of action as a Development Compound or
Marketed Compound; or
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(c) conceived or reduced to practice under the Multi-Project
Collaboration Agreement prior to December 31, 2000 in connection with a
Retained Project, and is not in the Field; or
(d) conceived or reduced to practice by a Party after December 31,
2000 in connection with a Retained Project and is not in the Field.
1.15 "Field" means the collective areas in which the Parties shall
collaborate encompassing the discovery, development, supply and
commercialization of products or processes in the Muscle Field, the GPCR Field
or the DDR Field.
1.16. "Fiscal Quarter" means each period of three (3) months ending on
31 March or 30 June or 30 September or 31 December.
1.17. "Fiscal Year" means the twelve (12) month period of time from
July 1 to June 30, except that the first Fiscal Year commences on the Effective
Date and ends on June 30, 2001 and the last Fiscal Year during the Research Term
shall end on the last day of the Research Term.
1.18. "FTE" or "Full Time Equivalent" means one Effort Year of an
employee or class of employees. "Effort Year" means
[***************************] hours of direct effort expended on approved
activities during a Fiscal Year.
1.19. "GAAP" means generally accepted accounting principles.
1.20. "GPCR" means a G-protein coupled receptor.
1.21 "GPCR Field" means the discovery, development, supply and
commercialization of products or processes that directly bind and/or modulate
the function of the twelve GPCRs as set forth in Attachment 1.21, as the same
may be modified pursuant to Section 2.4(e).
1.22 "Health Registration" means any and all consents, licenses,
authorizations, reimbursement pricing or approvals required by the U.S. Food and
Drug Administration or any Ministry of Health for the distribution, sale,
manufacture, or testing of a pharmaceutical product, including, without
limitation, an IND, NDA or supplemental NDA or other application or supplemental
application for a Health Registration.
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1.23. "IND" means an Investigational New Drug application, as described
by the U.S. Food, Drug and Cosmetics Act of 1938, 21 U.S.C. 301 et seq., as
amended, and associated regulations.
1.24. "Inventions" or "Technology" mean all inventions, trade secrets
and other information, whether tangible or intangible, whether or not
patentable, resulting from work by the parties (either individually or jointly)
in the Field during the Research Term.
1.25 "Joint Projects" mean the research projects undertaken by the
parties pursuant to the Multi-Project Collaboration Agreement and identified in
Attachment 2.2 as "Joint Projects".
1.26. "J-V" means such collaborative relationship as may be established
pursuant to Section 3.7 of this Agreement. J-V may or may not be structured as a
separate legal entity, such as a corporation, partnership, LLC, or such other
form as the Parties may agree. In agreeing on the form of the collaborative
relationship, the Parties shall take appropriate account of, among other
factors, ease of administration and tax liabilities.
1.27. "Know-how" means the entire right, title and interest in trade
secret technology. "P&G Know-how" shall mean the entire right, title and
interest in Know-how owned solely or jointly by Procter & Xxxxxx with a Third
Party. "Regeneron Know-how" shall mean the entire right, title and interest in
Know-how owned solely or jointly by Regeneron with a Third Party. "Joint
Know-how" shall mean the entire right, title and interest in Know-how jointly
owned by the Parties pursuant to Section 5.1(b).
1.28. "Lead Compound" means a Research Compound that has been
demonstrated to meet Success Criteria as ready to begin regulated safety studies
and development of clinical supplies pursuant to Section 3.3 during the Research
Term or Tail Period. The terms Development Compound and Lead Compound may be
used interchangeably.
1.29. "Major Country" means the United States, United Kingdom, Belgium,
Germany, France, Italy, Netherlands and Canada.
1.30. "Major Decision" means the following decisions to be made by the
Operations Committee:
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(a) Approval of all long-range strategic plans developed pursuant
to this Agreement, including without limitation the Research
Collaboration Plan and Product Plans;
(b) Disposition of any interest in any type of intellectual
property in which the Parties have rights under this Agreement (other
than routine copyright transfers incident to publications made pursuant
to Section 8.3), including without limitation any license, assignment, or
registration of any Patent, trademark or Know-how;
(c) Determination of whether a Research Compound has met the
Success Criteria for further development;
(d) Expenditure of any funds, or incurrence of any obligation, in
excess of [*****************************************] for the acquisition
of a particular piece of property (including without limitation real or
intellectual property), equipment or service regarding work under this
Agreement, unless such expenditure or obligation is explicitly authorized
in a Research Project Plan or a Product approved by the Operations
Committee;
(e) Expenditure of any funds, or incurrence of any obligation,
regarding any budget item that cannot be resolved by the Program
Committee or by the Development Committee;
(f) Initiation or settlement of any lawsuits by or against the
Parties (except against each other) in connection with this Agreement,
subject to Section 9.3;
(g) Acceptance of contracts outside the ordinary course of
business of the collaboration as described in Section 2.7 and any
contracts with either Party or its Affiliates or any contracts pertaining
to the collaboration in which a Party has a beneficial interest;
(h) Selection of any trademark regarding a Development Compound or
Marketed Compound; and
(i) Initiation of any recalls of Marketed Compounds.
1.31. "Marketed Compound" means a Compound which is sold pursuant to
this Agreement in any country in the Territory.
1.32. "Muscle Field" means the discovery, development, supply and/or
commercialization of products (except MuSK and/or Agrin) or processes that
diagnose, prevent and/or treat conditions in humans and animals associated with
the promotion or
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protection of skeletal muscle mass or function (including, without limitation,
the diagnosis, treatment or prevention of muscle atrophy or sarcopenia).
1.33. "Mutual Retained Projects" means the research projects undertaken
by the parties pursuant to the Multi-Project Collaboration Agreement and
identified in Attachment 2.2 as "Mutual Retained Projects."
1.34 "MuSK" means the materials disclosed in [**********] of the United
States Patent Application Serial Number [*********] and any molecules
representing one or more amino acid substitutions, deletions, or additions
derived therefrom which exhibit a biological activity substantially identical to
the materials disclosed in [*************] of the United States Patent
Application Serial Number [**********]
1.35 "NDA" means a New Drug Application or Biologics License
Application as described by the U.S. Food, Drug and Cosmetics Act of 1938, 21
U.S.C. 301 et seq., as amended, and associated regulations, or the U.S. Public
Health Service Act, 42 U.S.C. 201 et seq., as amended and associated
regulations.
1.36. "Net Sales" means total gross realization less:
[*******************************************************************************
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1.37. "Operations Committee" or "OC" means the committee described in
Section 2.5(a).
1.38. "Opting Out Party" means the Party that Opts Out of those
development and/or marketing activities with respect to a Compound as specified
in Sections 3.4(b), 3.6, and 10.3(a). "Opts Out" means that the Opting Out Party
either decides not to continue with such activities or does not fund its share
of Allowable Product Expenses with respect to such activities.
1.39. "Party" means Regeneron or Procter & Xxxxxx.
1.40. "Patent" means the entire right, title and interest in a Valid
Claim in a patent application, and all continuing and divisional patent
applications, continuations-in-part, reissue applications and all other related
patent applications claiming priority, indirectly and directly, to such
application, and all patents issuing therefrom, worldwide.
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"P&G Patent Rights" shall mean the entire right, title and interest in a Patent
owned solely by Procter & Xxxxxx or jointly by Procter & Xxxxxx with a Third
Party. "Regeneron Patent Rights" shall mean the entire right, title and interest
in a Patent owned solely by Regeneron or jointly by Regeneron with a Third
Party. "Joint Patent Rights" shall mean the entire right, title and interest in
a Patent jointly owned by Regeneron and Procter & Xxxxxx.
1.41. "Proceeding Party" means the Party that is not an Opting Out
Party with respect to the development or marketing of a Compound either in the
entire Territory or in one or more specific countries therein.
1.42. "Procter & Xxxxxx Inventions" shall mean the entire right, title
and interest in Inventions owned solely or jointly by Procter & Xxxxxx with a
Third Party. "Regeneron Inventions" shall mean the entire right, title and
interest in Inventions owned solely or jointly by Regeneron with a Third Party.
"Joint Inventions" shall mean the entire right, title and interest in Inventions
jointly owned by the Parties.
1.43 "Procter & Xxxxxx Retained Projects" means the research projects
undertaken by the Parties pursuant to the Multi-Project Collaboration Agreement
and identified in Attachment 2.2(c) as "Procter & Xxxxxx Retained Projects".
1.44. "Procter & Xxxxxx Technology" means any invention, Know-how or
other information, whether tangible or intangible, whether or not patentable, in
the Field, and which:
(a) is not Procter & Xxxxxx Excluded Technology, and
(b) is conceived or reduced to practice by Procter & Xxxxxx or
acquired or licensed by Procter & Xxxxxx from a Third Party with the
right to sublicense,
(i) before or during the Research Term; or
(ii) after the Research Term, but during the term of a J-V,
regarding a Development Compound or Marketed Compound.
Procter & Xxxxxx Technology may include, without limitation, research
methods and materials (including without limitation genetic materials,
receptors, cell lines and transgenic animals) useful in performing research,
Lead Compounds, formulations, chemical synthesis and manufacturing processes,
methods of diagnosis and methods of treatment.
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1.45. "Product Plan" means the annual compilation of objectives,
activities, resource allocations, Success Criteria, Allowable Product Expenses
and budgets regarding the development and/or marketing of Development Compounds
and/or Marketed Compounds agreed to by the OC, as more thoroughly described in
Section 3.3(b).
1.46. "Program Committee" or "PC" means the committee established
pursuant to Section 2.5(b).
1.47. "Regeneron Retained Projects" means all research projects
undertaken by the Parties pursuant to the Multi-Project Collaboration Agreement
other than the Procter & Xxxxxx Retained Projects, the Mutual Retained Projects,
and the Joint Projects, including, by way of example, but not limitation, the
specific projects identified in Attachment 2.2(c) as "Regeneron Retained
Projects".
1.48. "Regeneron Technology" means any invention, Know-how or other
information, whether tangible or intangible, whether or not patentable in the
Field, and which:
(a) is not Regeneron Excluded Technology, and
(b) is conceived or reduced to practice by Regeneron or acquired
or licensed by Regeneron from a Third Party with the right to sublicense,
(i) before or during the Research Term; or
(ii) after the Research Term, but during the term of a J-V,
regarding a Development Compound or Marketed Compound.
Regeneron Technology may include, without limitation, research methods
and materials (including without limitation genetic materials, receptors, cell
lines and transgenic animals) useful in performing research, Targets, Compounds,
formulations, chemical synthesis and manufacturing processes, methods of
diagnosis and methods of treatment.
1.49. "Research Collaboration Plan" means, on a Fiscal Year basis, the
compilation of objectives, prioritization of Research Projects and work on new
areas of research, Success Criteria and overall budget for work by the Parties
during the Research Term, but not including development and/or marketing
activities.
1.50. "Research Compound" means a Compound that has not yet met the
Success Criteria.
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1.51. "Research Project" shall mean research conducted by the Parties
for the purpose of identifying, optimizing, and testing a specific Target,
Validated Target and/or Research Compound.
1.52. "Research Project Plan" shall mean, on a Fiscal Year basis, the
compilation of activities, milestones, budget, and Success Criteria relating to
a Research Project.
1.53. "Research Term" means the period of time beginning on the
Effective Date and unless terminated earlier pursuant to 10.3, ending December
31, 2005.
1.54. "Retained Projects" means the Mutual Retained Projects, Procter &
Xxxxxx Retained Projects, and Regeneron Retained Projects.
1.55. "Royalty Term" means the period from the first Net Sales in the
first country to the final payment of royalties in the last country pursuant to
Section 6.1.
1.56. "Section" means any section of this Agreement.
1.57. "Securities Agreements" mean the following agreements between the
parties: the Registration Rights Agreement, the Securities Purchase Agreement
and the Warrant Agreement, all dated May 13, 1997, as each may be amended,
supplemented or modified from time to time and the Stock Purchase Agreement and
Registration Rights Agreement both dated December 11, 1996, as each may be
amended, supplemented or modified from time to time.
1.58. "Success Criteria" means the specific criteria set forth in a
Research Project Plan and Research Collaboration Plan and approved by the OC
that define the minimum technical and commercial requirements for a Research
Compound to be designated a Development or Lead Compound.
1.59. "Sumitomo Compound" means any Compound which:
(a) is claimed by a Regeneron Patent;
(b) is owned by Regeneron prior to the Effective Date, or
conceived and solely reduced to practice solely by Regeneron during the
Research Term; and
(c) Sumitomo Chemical Company Limited or its affiliates exercise
rights pursuant to its Technology Development Agreement with Regeneron
executed in March 1989 (hereinafter the "Sumitomo Agreement).
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1.60. "Tail Period" means the [************] immediately after the end
of the Research Term.
1.61. "Target" means any gene, receptor, ligand, or other compound
which has actual or potential utility in the Field for the identification,
research or commercialization of Compounds for the prevention, diagnosis, or
treatment of diseases or other disorders in humans or animals.
1.62. "Term" means the period of time specified in Section 10.1(b).
1.63. "Territory" means the entire world, excluding Japan with respect
to any Sumitomo Compound. Japan shall be included in the Territory except for
Sumitomo Compounds.
1.64. "Third Party" means any entity other than Regeneron or Procter &
Xxxxxx or their Affiliates or a J-V established in accordance with this
Agreement.
1.65. "Valid Claim" shall mean any claim in a published and unexpired
application or patent included within a Patent which claim has not been held
unenforceable, unpatentable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been finally abandoned or
admitted to be invalid or unenforceable through disclaimer.
1.66. "Validated Target" means a Target which has been shown to meet
all of the following criteria approved by the PC: (a) the Target is well
characterized (i.e., its biochemical and physiological actions are reasonably
well understood); (b) agents, ligands, or intracellular molecules that interact
with the Target demonstrate a desired effect on a biological process in
relationship to a disease state or disorder; and (c) the Target is shown to be
present in human tissue with the disease state or condition.
ARTICLE II - TERMINATION OF THE MULTI-PROJECT COLLABORATION AGREEMENT AND
OVERVIEW AND MANAGEMENT OF COLLABORATION
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2.1 TERMINATION OF THE MULTI-PROJECT COLLABORATION AGREEMENT. Subject
to the terms of Section 2.3, the Multi-Project Collaboration Agreement is hereby
terminated on the Effective Date and superseded by the terms of this Agreement.
Notwithstanding anything to the contrary in the Multi-Project Collaboration
Agreement, no license granted in Article V of the Multi-Project Collaboration
Agreement shall extend beyond the Effective Date.
2.2 RIGHTS TO REGENERON RETAINED PROJECT, PROCTER & XXXXXX RETAINED
PROJECT, AND MUTUAL RETAINED PROJECT UPON TERMINATION OF THE MULTI-PROJECT
COLLABORATION AGREEMENT. Patents and Know-how regarding all inventions, trade
secrets and other information, whether tangible or intangible, whether or not
patentable, resulting from work by the Parties during the Research Term of the
Multi-Project Collaboration Agreement were owned: (i) by P&G, if such technology
was conceived and reduced to practice solely by employees of P&G; and (ii)
jointly, if such technology was conceived and/or reduced to practice either
solely by employees of Regeneron or jointly by employees of Procter & Xxxxxx and
Regeneron. Contrary to the Multi-Project Collaboration Agreement, Regeneron
shall own all Inventions discovered by employees of Regeneron as part of any
Regeneron Retained Project and having no utility in the Field as of the
Effective Date. The Parties shall grant the following licenses to the Retained
Projects identified in Attachment 2.2(c) upon the Effective Date of this
Agreement:
(a) Subject to the terms of subsection (g) below, Procter & Xxxxxx
hereby grants Regeneron an Exclusive License under its Patents and Know-how
whether solely owned by Procter & Xxxxxx or jointly owned with Regeneron which
were conceived and reduced to practice in connection with any Regeneron Retained
Project at any time through December 31, 2000 and as of December 31, 2000 have
no known use in the Field or in any Procter & Xxxxxx Retained Project to make,
have made, use, import, offer for sale and sell any products for the prevention,
diagnosis, or treatment of any diseases or disorders in humans or animals in
connection with any Regeneron Retained Project. Procter & Xxxxxx hereby grants
Regeneron a Non-Exclusive License under its Patents and Know-how which were
conceived and reduced to practice in connection with any Regeneron Retained
Project at any time through December 31, 2000 and as of December 31, 2000 have
known use in the Field or in any Procter & Xxxxxx Retained Project, to make,
have made, use, import, offer for sale and sell any products for the prevention,
diagnosis, or treatment of any disease or disorder in humans or animals in
connection with any Regeneron Retained Project.
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(b) Regeneron hereby grants to Procter & Xxxxxx an Exclusive License
under its Patents and Know-how whether solely owned by Regeneron or jointly
owned with Procter & Xxxxxx which were conceived and reduced to practice in
connection with any Procter & Xxxxxx Retained Project at any time through
December 31, 2000 and as of December 31, 2000 have no known use in the Field or
in any Regeneron Retained Project, to make, have made, use, import, offer for
sale and sell any products for the prevention, diagnosis, or treatment of any
disease or disorder in humans or animals. Regeneron hereby grants to Procter &
Xxxxxx a Non-Exclusive License under its Patents and Know-how which were
conceived and reduced to practice in connection with any Procter & Xxxxxx
Retained Project at any time through December 31, 2000 and as of December 31,
2000 have known use in the Field or in any Regeneron Retained Project, to make,
have made, use, import, offer for sale and sell any products for the prevention,
diagnosis, or treatment of any disease or disorder in humans or animals in
connection with any Procter & Xxxxxx Retained Project. Further, Regeneron shall
xxxxx Xxxxxxx & Xxxxxx a non-exclusive, royalty-free license under Regeneron
Know-how and Regeneron Patents, without the right to sublicense, to make, have
made, and use Compounds (as defined in the Multi-Project Collaboration
Agreement) identified prior to the Research Term of the Multi-Project
Collaboration Agreement, other than MuSK or Agrin, for research utility for the
purpose of discovering, developing and/or commercializing other Compounds in the
Procter & Xxxxxx Retained Project. This non-exclusive license does not include
the right to commercialize, i.e., have sold or sell, these identified Compounds
(as defined in the Multi-Project Collaboration Agreement), under Regeneron
Know-how and Regeneron Patents.
(c) Regeneron grants Procter & Xxxxxx a Non-Exclusive License under its
Patents and Know-how conceived and reduced to practice in connection with any
Mutual Retained Project at any time through December 31, 2000, to make, have
made, use, import, offer for sale and sell any products for the prevention,
diagnosis, or treatment of any disease or disorder in humans or animals.
Further, Regeneron shall xxxxx Xxxxxxx & Xxxxxx a non-exclusive, royalty-free
license under Regeneron Know-how and Regeneron Patents, without the right to
sublicense, to make, have made, and use Compounds (as defined in the
Multi-Project Collaboration Agreement), identified prior to the Research Term of
the Multi-Project Collaboration Agreement, other than MuSK or Agrin, for
research utility for the purpose of discovering, developing and/or
commercializing other Compounds in the Mutual Retained Project. This
non-exclusive license does not include the right to [********************
***************************************] under Regeneron Know-how and
Regeneron Patents.
(d) Subject to subsection (g) below, Procter & Xxxxxx grants Regeneron
a Non-Exclusive License under its Patents and Know-how conceived and reduced to
practice in
16
connection with any Mutual Retained Project at any time through December 31,
2000, to make, have made, use, import, offer for sale and sell any products for
the prevention, diagnosis, or treatment of any disease or disorder in humans or
animals.
(e) The Parties agree that through December 31, 2000, they will provide
research support and otherwise cooperate with one another to effect the orderly
transfer of information, rights, and licenses, including Know-how and Patents,
for all Retained Projects as set forth in subsections (b), (c) and (d) above.
Each Party shall grant the other a non-exclusive license (without any right to
sublicense) under its respective Patents and Know-how solely with respect to
these support and transfer activities. Furthermore, at any time or from time to
time after the Effective Date, at either Party's request, one Party shall
execute and deliver to the other Party such other instruments of transfer,
conveyance, assignment and confirmation and take such other actions as may be
reasonably requested in order to more effectively transfer, convey and assign
title to the respective Know-how and Patents licensed pursuant to subsections
(b), (c) and (d) above.
(f) For purposes of this Section 2.2, (i) the term "Exclusive License"
shall mean a [******************************************************************
****************************]; (ii) the term "Non-Exclusive License" shall mean
a [*************************************************************;] and (iii) the
term non-exclusive license shall have the meaning set forth hereinabove.
(g) The Parties agree that for purposes of Section 2.2(a) above, the
only small molecules, proteins and peptides covered by the Exclusive License and
Non-Exclusive Licenses are set forth in Attachment 2.2(g)(i) hereof.
Furthermore, the Parties agree that for purposes of Section 2.2(d) above, the
only small molecules, proteins and peptides covered by the Non-Exclusive License
are set forth in Attachment 2.2(g)(ii) hereof. However, Regeneron may use the
small molecules, proteins and peptides listed in Attachment 2.2(g)(i) and
2.2(g)(ii) for additional research utility for the purpose of discovering,
developing and/or commercializing other small molecules, proteins and
peptides(including derivatives). Should any of these other small molecules,
proteins and/or peptides fall within Procter and Xxxxxx Patents or Know-how
conceived and/or reduced to practice prior to December 31, 2000, Procter and
Xxxxxx agrees that it shall never, anywhere in the world, institute any action
or suit at law or in equity, or aid in the prosecution of any such claim,
against Regeneron or any of its licensees, sublicensees, suppliers,
distributors, collaborators or agents ("Regeneron Licensees") alleging
infringement of any such Procter & Xxxxxx Patents or Know-how. Procter & Xxxxxx
further covenants and agrees that in the event Procter & Xxxxxx grants or
transfers any rights under any such Procter & Xxxxxx Patents and Know-how to any
third party, such grant or transfer of rights shall be only upon the condition
that such third party agrees, in
17
writing, to grant Regeneron and the Regeneron Licensees immunity from suit as
set forth in this Section 2.2(g). The Parties agree that notwithstanding the
Exclusive License granted to Regeneron pursuant to Section 2.2(a) above, P&G
shall retain the non-exclusive right to use the Compounds identified in
Attachment 2.2(g)(i) hereof for research purposes outside the Regeneron
Exclusive Project to which they pertain (the "Section 2.2(g) Fields"). For
clarity, P&G's retained non-exclusive research right described above does not
include the right to commercialize, i.e. have sold or sell, the small molecules,
proteins, and peptides in Attachment 2.2(g)(i) for use in the applicable Section
2.2(g) Field.
(h) The Parties agree that Procter & Xxxxxx does not grant any rights
to the small molecules in the [*****************] (other than those Compounds in
the Muscle Field or DDR Field). However, should Procter & Xxxxxx advance any
such small molecule [*****************] to the equivalent of a Lead Compound
[***************************] by June 30, 2002, Procter & Xxxxxx shall notify
Regeneron of such [***********************]. The Parties shall meet within
thirty (30) days of notification to agree on a Product Plan or other disposition
(e.g., license to a Party or Third Party) of such [****************]. The
[******************] will be subject to the terms and conditions of this
Agreement as a Lead Compound in the Field. All funding for the
[*********************] prior to notification to Regeneron shall be borne by
Procter & Xxxxxx.
2.3. WAIVER OF RIGHTS. Notwithstanding anything to the contrary in any
of the Securities Agreements, in consideration of the terms and conditions of
this Agreement, each party hereby unconditionally waives any rights or remedies
under any of the Securities Agreements, or otherwise available under contract
law, arising from the agreed upon termination of the Multi-Project Agreement.
Furthermore, the Parties agree that solely for purposes of the Securities
Agreements, the Multi-Project Agreement and the Collaboration Agreement, dated
as of December 11, 1996, between the Parties shall be considered superseded, but
not terminated, by this Agreement.
2.4. SCOPE OF COLLABORATION.
(a) The Parties will work together to research, develop and
commercialize Lead Compounds pursuant to this Agreement in the Territory. All
such work shall be conducted pursuant to a Research Collaboration Plan and
Product Plans established by the OC pursuant to Article III. The Parties shall
use Commercially Reasonable Efforts in performing their obligations under this
Agreement.
(b) Work under this Agreement will include work only in the Muscle
Field, the GPCR Field and the DDR Field.
18
(c) Subject to the provisions of a Research Project Plan or Research
Collaboration Plan, the primary responsibilities for the activities shall be
established and agreed to in the Research Project Plan.
(d) The Parties will also work together to develop and market
Development Compounds and Marketed Compounds in the Territory in accordance with
Product Plans.
(e) If, at any time during the Research Term, the PC decides to
discontinue research on a GPCR and remove it from the GPCR Field, Regeneron
shall own all rights to the specific GPCR (a "Returned GPCR"), including all
Patents and Know-how specifically relating to the Returned GPCR conceived or
reduced to practice before or during the Research Term. A GPCR will be removed
from the GPCR Field if it is not subject to any active or future planned
research activities under the Research Project Plan and Regeneron provides
information to the PC of the GPCR's potential utility in a therapeutic area
outside of P&G's fields of interest. The Returned GPCR(s) shall be considered
outside the GPCR Field and may be progressed by Regeneron independently or with
a Third Party subject to the terms of this Agreement. For a Returned GPCR that
Regeneron progresses either independently or with a Third Party, the following
royalty shall be paid to Procter & Xxxxxx:
(1) [*************] for any Returned GPCR progressed
under the Agreement wherein a transgenic (knock-in or
knock-out) has been created pursuant to the Research
Project Plan; or
(2) [***********] for any Returned GPCR progressed under
the Agreement wherein an antagonist or agonist
(biological or small molecule) is commercialized
which has been identified prior to the date the GPCR
is returned.
(f) Regeneron shall have the right to develop any GPCR outside the GPCR
Field on its own or with any third parties. However, should Regeneron during the
Research Term of this Agreement discover that a GPCR has utility in the Muscle
Field, the GPCR will be subject to the terms and conditions of this Agreement.
For the avoidance of doubt, if the GPCR in question is owned or controlled, in
whole, or in part, by a Third Party collaborator of Regeneron, Regeneron shall
discontinue further development of the GPCR in the Muscle Field. In addition, if
Regeneron independently develops a GPCR outside the GPCR Field to the
pre-clinical stage (i.e. equivalent to Success Criteria for Research Compounds)
and to the extent Regeneron wishes to partner said GPCR, P&G will have the right
of first negotiation to be the development partner for said GPCR at any time
prior to the initiation of the IND process (subject to the terms of Section
5.4(c)).
2.5. COMMITTEE MEMBERSHIP.
19
(a) OC Membership. The work under this Agreement, as set forth in
Section 2.4, shall be performed by the Parties pursuant to the oversight of the
OC. The OC has overall responsibility for the collaboration. The OC may delegate
its responsibilities to other committees (e.g., to a Program Committee as
established pursuant to Section 2.5(b), to a Development Committee as
established pursuant to section 2.5(c) or to a Patent Committee, Research
Committee, Finance Committee, Clinical Committee or such other committees as the
OC may establish); however, the OC may not delegate Major Decisions. The OC will
initially consist of two (2) members with one (1) member designated by each
Party. The initial members are listed on Attachment 2.5(a). A chairperson of the
OC will be nominated alternately by Procter & Xxxxxx and Regeneron to twelve
(12) month terms. The Parties will be free to change their respective
representatives, on notice to the other Party. The OC will exist until the
earlier of termination or expiration of this Agreement or when one Party is an
Opting Out Party with respect to all Compounds in all countries, unless the
Parties otherwise agree.
(b) PC Membership. A Program Committee is also hereby established and
shall work pursuant to the oversight of the OC. The PC shall develop and propose
the Research Collaboration Plan, as well as a plan for any other Major
Decisions, for the OC's review and approval. Upon the OC's approval of such
Research Collaboration Plan or Major Decision, the PC is responsible for
managing such matters and reporting to the OC on a regular basis. The PC shall
also develop and propose the Research Project Plans. The membership of the PC
shall consist of six (6) members, with three (3) members designated by each
Party. The method for the nomination of the chairperson of the PC shall be the
same as that for the OC as described in Section 2.5(a). The initial members of
the PC are listed on Attachment 2.5(b).
(c) Development Committee. The Parties shall establish a Development
Committee composed of representatives of both Parties which shall be responsible
for managing work on each Development Compound pursuant to the Product Plan for
such Development Compound and subject to the oversight of the OC. The
Development Committee shall draft the Product Plan and annual updates to the
Product Plan for each Development Compound and submit such drafts as well as a
plan for any Major Decisions concerning such Development Compound to the OC for
approval. Upon the OC's approval of a Product Plan or Major Decision for a
particular Development Compound, the DC is responsible for managing such matters
and reporting to the OC on a regular basis. The DC may delegate responsibility
for the day-to-day management of a particular Development Compound to a sub-team
comprised of members from both Parties. The membership of the DC shall be as
agreed by the Parties, and shall consist of an equal
20
number of representatives from each Party. The initial members of the DC are
listed on Attachment 2.5(c).
2.6. MEETINGS. The OC will meet at least one (1) time per Fiscal Year
and the PC will meet at least four (4) times per Fiscal Year, and either or both
committees may meet at additional times as the Parties shall agree. The DC shall
meet at such times as the Parties shall agree. Either Party may call a special
meeting of the OC up to two (2) times per Fiscal Year, on fifteen (15) days'
written notice to the other Party. Additionally, the OC shall meet within twenty
(20) business days of the PC's or DC's request to approve any Major Decisions.
The chairperson shall send to all OC or PC members (as the case may be) notices
of all regular meetings and agendas for such meetings. The Party convening a
special meeting shall send notices and agenda for such meeting. Meetings will
alternate between the offices of the Parties, or may be held via teleconference,
videoconference or such other place or manner as the Parties may mutually agree.
Members of the OC, PC and DC shall be empowered to make decisions within the
scope of their respective committee responsibilities and shall have the right to
participate in and vote at meetings in person, by telephone, by videoconference
or by proxy. The Party hosting any meeting shall appoint a secretary to the
meeting who will record the minutes of the meeting which will be circulated to
the members of the OC, PC or DC (as the case may be) promptly following the
meeting for review, comment, and adoption.
2.7. DECISION-MAKING CRITERIA. All decisions of the OC, PC and DC shall
be made by majority vote and in the exercise of good faith. Such decisions shall
adhere to the ethical and legal standards for the research-based pharmaceutical
industry and utilize Commercially Reasonable Efforts to research, develop, and
commercialize Compounds in the Field.
Notwithstanding the foregoing regarding a majority vote, Procter &
Xxxxxx shall have the tie-breaking vote in the OC and PC with respect to: (i)
any strategic and/or funding/budgeting issues with respect to the Research
Collaboration Plan where Procter & Xxxxxx determines in good faith that there is
the likelihood that Targets proposed by Regeneron may become Excluded Technology
as defined in Section 1.14, (ii) any Third Party costs which are the
responsibility of Procter & Xxxxxx pursuant to Section 3.2 and (iii) decisions
made pursuant to Section 4.1. Regeneron shall have the tie-breaking vote in the
OC and PC with respect to allocating Regeneron research FTEs within the scope of
an approved Research Collaboration Plan.
21
2.8. DISPUTE RESOLUTION. Subject to Section 2.7, if a decision cannot
be achieved by the PC or DC, the matter shall be referred to further review and
resolution by the OC. If the OC cannot resolve the matter within thirty (30)
days, the OC shall refer the matter to the Chairman or CEO of Regeneron and the
President of Procter & Xxxxxx Pharmaceuticals (the "CEOs"), if both CEOs were
not voting members of the OC. If the CEOs (or the OC, if the CEOs are both
voting members) cannot resolve the issue within thirty (30) days, the CEOs shall
mutually agree upon and appoint to the OC a "Temporary Member." "Temporary
Member" means a person who is knowledgeable in the research based pharmaceutical
industry, possessing senior executive experience and skills and not associated
with either Party or a competitor of either Party. If the CEOs cannot mutually
agree on the identity of such Temporary Member within fifteen (15) days of the
end of such thirty (30) day period, the Parties shall request an arbitral panel
composed in accordance with Section 11.4, sitting in Boston, Mass., to, and such
panel shall, appoint to the OC a Temporary Member. The OC shall meet and resolve
the dispute within one week of such appointment of the Temporary Member. All
decisions with respect to the issue in dispute shall be made by majority vote of
the OC. Such Temporary Member shall be appointed to the OC until such time as
the CEOs mutually agree that the dispute or disputes have been resolved or until
one Party is deemed to be an Opting Out Party with respect to such Compound (and
country, if applicable) at issue, whichever is earlier. Such Temporary Member
shall be instructed to render his or her votes consistent with the stated
decision-making criteria of the OC, as set forth in Section 2.7. The Parties
shall share equally in all costs associated with the appointment of the
Temporary Member. Notwithstanding the foregoing, any disputes, with respect to
approving (or not approving) a Research Collaboration Plan or negotiating a J-V
Agreement shall be resolved by the Temporary Member voting for one Party's
proposed Research Collaboration Plan or J-V Agreement, as the case may be.
2.9. CONDUCT OF WORK BY OTHERS. It is understood that each Party has
entered into this Agreement based on the specific experience and skill of the
other Party. Accordingly, it is anticipated that work under this Agreement will
be conducted primarily by the Parties. However, it may be commercially
reasonable for the Parties to enter into agreements with commercial or
non-commercial Third Parties to acquire technology or conduct certain aspects of
such work (e.g., because the Third Party's work provides a favorable
cost/benefit vs. utilizing internal resources). Such agreements may include
(without limitation), acquisition of research methods, Compounds or intellectual
property rights (if applicable), consultation, conduct of certain research
tests, chemical synthesis and supply, safety testing, clinical testing, and
marketing support. All such work by or
22
acquisition from Third Parties shall be conducted pursuant to the Research
Collaboration Plan and/or Product Plan and shall be performed pursuant to
written agreements embodying confidentiality, intellectual property rights and
other terms consistent with the terms set forth in this Agreement. To the extent
commercially reasonable, the commercial or non-commercial Third Parties will be
obligated to assign or exclusively license any patents, patent applications or
know-how under terms that are mutually agreeable to the Parties. Information
obtained by a Party from any Third Party shall be subject to Article VIII of
this Agreement. All technology obtained from a Third Party pursuant to this
Section 2.9 shall be, to the extent possible under commercially reasonable
terms, jointly owned by the Parties and shall be subject to Articles V and VII.
2.10. RECORD-KEEPING. All committees shall appoint one Party to keep
complete and accurate records pertaining to the Parties' activities hereunder.
The other Party shall have the right to review such records upon reasonable
notice to the recordkeeping party and at reasonable times. Such records are
subject to audit by the other Party pursuant to Section 6.5 within a reasonable
period after the end of the Fiscal Year. In addition, the recordkeeping party
shall prepare quarterly unaudited financials pertaining to such activities,
which shall be distributed to the Parties within thirty (30) days of the end of
such period.
2.11. NON-COMPETE.
(a) During the Research Term, neither Party will, independently of the
other, perform research in the Field.
(b) During the Research Term and for five (5) years thereafter, neither
Party may directly or indirectly develop, including without limitation the
performance of clinical trials, or commercialize a Competing Product in the
Territory.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Parties agree that Excluded Technology is not included within the
scope of this Agreement. In particular, nothing in this Agreement shall prohibit
either Party from performing research, developing or marketing compounds or
products using its own Excluded Technology
2.12. BOARD REPRESENTATION. Regeneron will uses its best efforts to put
a person representing Procter & Xxxxxx (a "P&G Director") on Regeneron's Board
of Directors sixty (60) days after Regeneron receives written notice from
Procter & Xxxxxx at any time during the Term. The Parties shall work together to
identify a mutually agreeable P&G Director; however, if the Parties cannot agree
upon a P&G Director within thirty (30) days
23
of Regeneron's receipt of Procter & Gamble's written notice, Procter & Xxxxxx
shall designate an officer of Procter & Xxxxxx as a P&G Director and Regeneron
shall uses its best efforts to have such P&G Director appointed or nominated and
elected as a Director on Regeneron's Board of Directors. Notwithstanding
anything to the contrary, Regeneron shall have no obligation pursuant to this
Agreement to take any action that would result in more than one P&G Director
sitting on Regeneron's Board of Directors at any one time, nor shall Regeneron
have any obligations with respect to appointing or nominating a P&G Director
under this Section 2.12 so long as Procter & Xxxxxx owns less than
[****************] of Regeneron's Outstanding Securities (as defined in the
Securities Purchase Agreement dated May 13, 1997 between Procter & Xxxxxx and
Regeneron and as amended from time to time).
ARTICLE III - RESEARCH AND DEVELOPMENT
3.1. RESEARCH COLLABORATION PLAN. The Parties will agree to a Research
Collaboration Plan. The OC is authorized to approve and amend the Research
Collaboration Plan. During the Research Term, the Research Collaboration Plan
budget shall include FTE allocations and any Third Party costs. The timing and
calculations for the Research Collaboration Plan budget are contained in
Attachment 3.1.
3.2. FUNDING OF RESEARCH COLLABORATION PLAN.
(a) During the Research Term, Regeneron shall provide [*******]
Regeneron research FTEs per year for Regeneron's work pursuant to the Research
Collaboration Plan. Unless otherwise agreed to by the parties, Procter & Xxxxxx
shall make payments quarterly, in arrears to Regeneron equal to [**********] per
calendar quarter through December 31, 2005, subject to the adjustments
contemplated in the paragraph below.
An Inflation Payment Adjustment shall be made quarterly beginning with
the quarter ending September 30, 2001. Such Inflation Payment Adjustment shall
be based on Regeneron's annual cost per research FTE of
[***********************************] ("FTE Rate"). The FTE Rate includes costs
such as those listed in Attachment 3.2. The Inflation Payment Adjustment shall
be calculated by multiplying [****] Regeneron research FTEs by the FTE Rate
Adjustment, which is defined as the quarterly equivalent of the FTE Rate
multiplied by the percentage change (rounded to the nearest tenth of a percent)
between the Consumer Price Index for All Urban Consumers as published by the
U.S. Bureau of Labor Statistics ("CPI") for June 2000 versus the CPI for the
month of June immediately preceding the Fiscal Year in which such payments are
applicable. The calculation for and examples of such Inflation Payment
Adjustments are detailed in Attachment 3.2. Regeneron shall use funding provided
under this Section 3.2 solely for
24
carrying out the Research Collaboration Plan. Regeneron shall submit a report to
Procter & Xxxxxx within [***************] after the end of each Fiscal Quarter
detailing the number of FTEs performing work pursuant to the Research
Collaboration Plan and detailed description of such work. Regeneron shall submit
invoices to Procter & Xxxxxx pursuant to this Section 3.2(a), including, if
applicable, a calculation of any amounts payable as Inflation Payment
Adjustments, quarterly in arrears. Invoices submitted to Procter & Xxxxxx
pursuant to this Section are payable net [************] days after receipt and
are subject to Procter & Gamble's audit pursuant to Section 6.5.
(b) All costs associated with work by Procter & Xxxxxx pursuant to the
Research Collaboration Plan shall be borne by Procter & Xxxxxx. In addition,
Procter & Xxxxxx shall pay for all Third Party costs for which it approves in
its sole discretion.
(c) If a Lead Compound is identified by either or both Parties during
the Tail Period, the Parties shall meet within [****************] days of such
identification to agree on a Product Plan or other disposition (e.g., Opt out,
license to a Party or Third Party) of such Lead Compound. The Lead Compound will
be subject to the terms and conditions, including funding obligations required
in this Agreement and shall be considered a Lead Compound in the Field. The Tail
Period Term shall be terminated by the OC's approval or as otherwise agreed by
the Parties.
3.3. SELECTION OF DEVELOPMENT COMPOUNDS. When a Research Compound has
been demonstrated to meet the Success Criteria, the Compound shall be designated
a Development Compound. Within ninety (90) days after the designation of a
Development Compound by the Parties, the OC shall approve a Product Plan for
such Development Compound. The Product Plan shall include
[*******************************************************************************
********************************************************************************
*************************************************************************] Each
Product Plan should incorporate those elements set forth in Attachment 3.3.
[******************************************************] The timing and
calculations for the typical Product Plan budget is contained in Attachment 3.1
as an example. The OC will have complete authority to adopt all Product Plans.
3.4. FUNDING OF DEVELOPMENT COMPOUNDS AND MARKETED COMPOUNDS; OPTING
OUT.
(a) Allowable Product Expenses.
********************************************************************************
********************************************************************************
25
*******************************************************************************
***********************************************************]
(b) Either Party may, at any time during the Term, become an Opting Out
Party with respect to a Lead Compound, Development Compound or Marketed
Compound, either in total or on a country-by-country basis pursuant to Section
3.6. [*************************************************************************
***********************************************************************] The
Opting Out Party shall grant licenses to the Proceeding Party pursuant to
Section 5.5. Royalties paid pursuant to such licenses shall be made pursuant
to Article VI.
(c) If both Parties are Opting Out Parties with respect to a Lead
Compound, Development Compound or Marketed Compound pursuant to Section 3.4(b),
[*******************************************************************************
********************].
(d) Procter & Xxxxxx shall not be deemed an Opting Out party for
[*******************************************************************************
********************************************************************************
*********************************************************]
3.5. RESEARCH, DEVELOPMENT AND MARKETING COMMUNICATION. In addition to
Regeneron's reporting obligations under Section 3.2(a), Regeneron and Procter &
Xxxxxx will submit reports to each other not less than two (2) times per Fiscal
Year presenting a meaningful summary of research, development and marketing
activities performed under this Agreement. Regeneron and Procter & Xxxxxx will
make presentations of such activities to each other, beyond that made to the OC,
as reasonably requested by each other. All technology generated by the Parties
shall be disclosed pursuant to Section 7.1. The Parties shall use their best
efforts to communicate information only within the scope of this Agreement.
Regeneron and Procter & Xxxxxx will also communicate informally and through the
OC to inform each other of research and development done under this Agreement.
Regeneron and Procter & Xxxxxx will provide each other with raw data in original
form or a photocopy thereof for any and all work carried out under this
Agreement as reasonably requested by the other. Any information contained in
such reports and as otherwise communicated by Regeneron or Procter & Xxxxxx is
subject to Article VIII. If one Party is deemed an Opting Out Party, the
Proceeding Party shall annually report to the Opting Out Party research,
development and marketing activities performed for Compounds in the Territory
for the prior Fiscal Year sufficient to allow the Opting Out
26
Party to determine whether the Proceeding Party is utilizing Commercially
Reasonable Efforts.
3.6. GLOBAL DEVELOPMENT. The Product Plan shall set forth commercially
reasonable development work (including without limitation clinical studies) to
support acceptable regulatory applications for marketing clearance in all Major
Countries. The costs associated with these activities shall be deemed "Global
Expenses." If either Party fails to pay its share of Global Expenses with
respect to a Compound, such Party shall be deemed an Opting Out Party with
respect to such Compound in the entire Territory pursuant to Section 3.4(b).
Either Party may Opt Out of the commercialization of a Compound on a
country-by-country basis provided it funds its share of total Global Expenses,
to the extent that funding of any development and/or marketing expenses is
solely attributable to one country and is not considered a Global Expense
("Country Expenses"). A Party that does not pay such Country Expenses shall be
deemed an Opting Out Party with respect to such Compound in that particular
country only pursuant to Section 3.4(b).
3.7. J-V FORMATION. Commencing at the [****************************
************************************] the Parties shall negotiate in good faith
an agreement that contains all of the terms and conditions of this Agreement,
along with other terms and conditions as the Parties may agree to develop and/or
market Compounds, including without limitation reasonable non-compete provisions
("J-V Agreement"). In the event that the Parties cannot finalize such J-V
Agreement within [************] the Parties may commence dispute resolution
pursuant to Section 2.8 or the Parties may elect to continue to perform
development and marketing activities pursuant to this Agreement until its
termination, or negotiate such other arrangement as the Parties may agree.
3.8. SUMITOMO COMPOUNDS. Regeneron shall, subject to the
confidentiality provisions of Article VIII, have the right to disclose to
Sumitomo Chemical Company Limited and its affiliates (herein "Sumitomo")
information regarding a Compound solely conceived and reduced to practice by
Regeneron solely for the purpose of, and to the extent necessary for, enabling
Regeneron to fulfill its obligations under the Sumitomo Agreement.
********************************************************************************
********************************************************************************
********************************************************************************
*******************************************
27
3.9. REGULATORY RESPONSIBILITY. As part of the Product Plan for each
Development Compound, the DC shall assign responsibility for the preparation and
filing of Health Registrations for such Development Compound. The Parties shall
consult and cooperate in obtaining all Health Registrations.
3.10. COMMUNICATION WITH REGULATORY AUTHORITIES. The Party assigned
regulatory responsibility for a particular Health Registration for a Development
Compound shall have primary responsibility for communications with respect to
the regulatory authorities having jurisdiction over such Health Registration for
the Development Compound. Both Parties shall have the right to participate in
all meetings with regulatory authorities. The Party that is not assigned
regulatory responsibility for a particular Health Registration for a Development
Compound shall have the right to review all correspondence to the applicable
regulatory authority prior to submission, unless such correspondence is of a
routine nature or is an Adverse Experience report required by applicable law or
regulation. Copies of all written correspondence submitted by either Party to
regulatory authorities or written reports of discussions with regulatory
authorities shall be sent to the other Party promptly after such submission or
discussion. The Parties shall enter into further agreement or agreeable standard
operating procedures to ensure rapid communication between the Parties regarding
all communication to and from regulatory authorities.
3.11. OWNERSHIP OF INDS.
(a) Regeneron will own the IND or foreign equivalent for each
Development Compound that is a protein and that is manufactured by Regeneron.
(b) P&G will own the IND or foreign equivalent for each Development
Compound that is a small molecule and that is manufactured by P&G.
(c) For all other Development Compounds, the Party assigned primary
responsibility for the execution of the clinical program shall own the IND or
foreign equivalent.
(d) If the Party that owns the IND or foreign equivalent for a
particular Development Compound is not assigned primary responsibility for the
execution of the clinical program for such Development Compound, the Parties
will enter into further agreement or agreeable standard operating procedures to
ensure direct communication between FDA or other regulatory agency and the Party
assigned primary responsibility for the execution of the clinical program
regarding all clinical matters.
3.12. ADVERSE EXPERIENCES.
28
(a) Reporting Responsibilities. Adverse Experiences reported in respect
of a particular Development Compound shall be reported to the appropriate
regulatory authorities by the Party required to report such Adverse Experiences
under the laws and regulations of each country in the Territory. "Adverse
Experience" shall have the meaning set forth in current ICH guideline.
(b) Safety Representatives. Each Party will provide to the other the
name of an appointed safety representative of the Party to whom all adverse
Experiences reports and queries should be reported. The safety representative of
each Party will report to the safety representative of the other Party all
Adverse Experiences received in respect of a particular Development Compound as
follows:
(i) Without regard to investigator-ascribed causality, any and
every Adverse Experience which is fatal or life threatening or
which is a serious Adverse Experience as defined in clinical
protocols shall be reported by the receiving party to the
other Party by facsimile within one (1) working day of receipt
by the receiving Party's safety representative;
(ii) A summary written report of all non-serious Adverse
Experiences shall be submitted by the receiving Party to the
other Party on a monthly basis by the receiving Party's safety
representative;
(iii) A summary written report of all Adverse Experiences, serious
and non-serious shall be provided by each Party to the other
Party, on an annual basis, indicating those cases which have
previously been reported to the other Party;
(iv) Any information which changes an Adverse Experience from
non-serious to serious shall be reported to the other Party's
safety representative within one (1) working day of receipt of
such information by the receiving Party's safety
representative;
(v) Further information received by a Party on any serious Adverse
Experience shall be reported to the other Party's safety
representative within ten (10) working days of receipt of such
information by the receiving Party's safety representative;
and
(vi) Treatment codes shall be included in all reports for any
Adverse Experiences that must be reported to European
regulatory authorities.
(c) Serious Adverse Experiences. For purposes of this Agreement, an
Adverse Experience will be considered "serious" according to the then-current
ICH and FDA criteria as well as any event defined as a serious Adverse
Experience by the relevant study protocol.
29
ARTICLE IV - MARKETING OF PRODUCTS
4.1. MARKETING AND SALES STRATEGY. [****************************
********************************************************************************
********************************************************************************
********************************************************************************
************************************************]
4.2. NET PROFITS. The Parties, so long as neither Party is an Opting
Out Party with respect to such Marketed Compound either in the entire Territory
or in one or more specific countries, as appropriate, will share equally in the
Net Profits of each Compound sold. "Net Profits" mean Net Sales less Allowable
Product Expenses.
4.3. EXCLUSIVE DISTRIBUTOR. The OC may appoint either Party or a Third
Party to act as its agent in connection with the marketing, sale and
distribution of Marketed Compounds, and the OC and/or the Parties (as the case
may be) shall grant to such agent(s) appropriate authority to perform its or
their responsibilities hereunder. In connection with such marketing, sales and
distribution, the following principles shall apply:
(a) the business objective will be to maximize overall profits;
and
(b) in the event that a Third Party is appointed as the Parties'
agent with respect to the marketing, sale and distribution of the
Marketed Compound in a country, Regeneron and Procter & Xxxxxx will each
receive equal shares of any revenue received from such Third Party, so
long as neither Party is an Opting Out Party with respect to such
Marketed Compound in such country.
4.4. REGENERON CO-PROMOTION ACTIVITIES. Provided that Regeneron is not
an Opting Out Party with respect to the Compound, Regeneron will have an equal
right and opportunity, but not the obligation, to participate in the sales and
marketing efforts in any country in the Territory as to which it has not Opted
Out by supplying up to [*****************] of a Marketed Compound's sales and
marketing efforts with notice to Procter & Xxxxxx within [********] of the OC's
decision to prepare a regulatory application for marketing clearance in the
first Major Country with respect to all Major Countries, then on a
country-by-country basis upon regulatory filings in such countries other than
Major Countries. Regeneron's and Procter & Gamble's sales and marketing
personnel costs shall be an Allowable Product Expense and shall be calculated
for both
30
Parties on the same basis (e.g., the cost per salesperson or sales call for
Regeneron and Procter & Xxxxxx shall be the same per year). If the Parties want
to discontinue or decrease its promotion activities, it must give the other
Party [*********] notice prior to such discontinuation or decrease. Either
Party's choice to not promote a Marketed Compound shall not cause such Party to
be an Opting Out Party with respect to such Marketed Compound, so long as such
Party meets its funding obligations pursuant to Section 3.4.
4.5. TRADEMARKS; PACKAGING. After a Compound has been designated a
Development Compound, the Parties shall jointly develop a trademark for such
Development Compound. So long as it is not an Opting Out Party with respect to
such Compound in a country, Procter & Xxxxxx shall file, prosecute and maintain
all trademark applications and registrations for such trademarks. Procter &
Xxxxxx shall pay all expenses in connection with filing and prosecution of such
trademarks. All other costs associated with such trademarks shall be deemed
Allowable Product Expenses. As long as neither Party is an Opting Out Party with
respect to the Marketed Compound, such Marketed Compound shall be sold under a
single trademark which shall be owned by Procter & Xxxxxx (and Procter & Xxxxxx
shall grant Regeneron a royalty-free license to such trademark(s) if Regeneron
promotes a Marketed Compound pursuant to Section 4.4) or, if a legal entity is
formed pursuant to a J-V Agreement, the trademark shall be owned by such entity
to the extent legally permissible. If one Party is an Opting Out Party with
respect to such Marketed Compound, any trademarks shall be owned by the
Proceeding Party. So long as neither Party is an Opting Out Party, the label of
the Marketed Compound will contain the name of Regeneron and Procter & Xxxxxx,
to the extent legally permissible.
ARTICLE V - LICENSE GRANTS
5.1 RIGHTS IN TECHNOLOGY DEVELOPED DURING AGREEMENT. Patents and
Know-how regarding all Inventions, shall be owned:
(a) by P&G, if such technology is conceived and reduced to practice
solely by employees of P & G;
(b) jointly, if such technology is conceived and/or reduced to practice
jointly by employees of P&G and Regeneron; and
(c) by Regeneron, if such technology is conceived and reduced to
practice solely by employees of Regeneron.
31
Inventorship shall be determined according to the laws of the United
States. Filing, prosecution, maintenance and enforcement of such Patents shall
be handled pursuant to Article VII. Except as specifically set forth in this
Agreement, no Party shall have any rights to Patents or Know-how owned solely by
the other Party.
5.2 LICENSE GRANTS DURING RESEARCH TERM - INVENTIONS HAVING UTILITY IN
THE FIELD.
(a) P&G hereby grants Regeneron a Sole License under P&G Patent Rights
and P&G Know-how to make, have made, use, import, offer for sale and sell P&G
Technology in the Field. The Sole License shall be royalty free for uses in the
Field. P&G also hereby grants Regeneron, for research purposes only in the
Field, a Sole License under P&G Patent Rights and P&G Know-how to make, have
made, and use small molecule Research Compounds that have not met Success
Criteria.
(b) Regeneron hereby grants P&G a Sole License under Regeneron Patent
Rights and Regeneron Know-how to make, have made, use, import, offer for sale
and sell Regeneron Technology in the Field. The Sole License shall be royalty
free for uses in the Field.
(c) The licenses granted in Sections 5.2(a) and (b) above will not be
used by either Party independent of this Agreement.
(d) As used herein, "Sole License" shall mean a non-exclusive license
in the Territory under Know-how or a Patent, without the right to sublicense,
granted by a "Licensor Party" to the other "Licensee Party" in the Field,
wherein the Licensor Party shall not grant any Third Party rights in the Field
under the Know-how or Patent to the subject matter of the license.
(e) With respect to Inventions made as a direct result of work done
under this Agreement during the Research Term and owned solely or jointly by a
Party wherein the Invention has utility in the Field, each Party grants to the
other the right of first negotiation to obtain from the other Party exclusive
rights outside the Field in the Territory under reasonable terms for any such
Invention. This "right of first negotiation" shall be in effect during the
Research Term. For sole Inventions that a Party wishes to partner or out
license, the "rights of first negotiation" shall operate as set forth in Section
5.4(c).
5.3 RIGHTS UPON TERMINATION OF THE RESEARCH TERM - INVENTIONS HAVING
UTILITY IN THE FIELD.
(a) Upon expiration of the Research Term, the Sole Licenses and rights
of first negotiation granted by the Parties under Section 5.2 shall terminate.
However, the Parties
32
grant the license rights set forth in Sections 5.3(b) and (c) on expiration of
the Research Term.
(b) With respect to Procter & Xxxxxx Inventions having a utility in the
Field, P&G shall grant Regeneron a non-exclusive, royalty-free license under
Procter & Xxxxxx Know-how and P&G Patent Rights, without the right to
sublicense, to make, have made, and use P&G Technology for the purpose of
discovering, developing and/or commercializing Compounds (other than small
molecules, DNA sequences, proteins and peptides that are covered by Procter &
Xxxxxx Inventions identified during the Research Term or Tail Period ("Procter &
Xxxxxx Compounds")) in the Field. In addition, P&G shall grant to Regeneron a
non-exclusive, royalty free license under Procter & Xxxxxx Know-how and P&G
Patent Rights, without the right to sublicense, to make, have made, and use
Procter & Xxxxxx Compounds solely for research purposes. For clarity, this
non-exclusive license to Procter & Xxxxxx Technology and Procter & Xxxxxx
Compounds does not include the right to have sold or sell Procter & Xxxxxx
Technology and Procter & Xxxxxx Compounds, under Procter & Xxxxxx Know-how and
P&G Patent Rights.
(c) With respect to Regeneron Inventions having utility in the Field,
Regeneron shall xxxxx Xxxxxxx & Xxxxxx a non-exclusive, royalty-free license
under Regeneron Know-how and Regeneron Patent Rights, without the right to
sublicense, to make, have made, and use Regeneron Technology for the purpose of
discovering, developing and/or commercializing Compounds (other than Compounds
that are small molecule Research compounds, DNA sequences, proteins or peptides
covered by Regeneron Inventions identified during the Research Term or the Tail
Period ("Regeneron Compounds")) in the Field. This non-exclusive license does
not include the right to have sold or sell Regeneron Technology, including,
without limitation, Regeneron Compounds, under Regeneron Know-how and Regeneron
Patents.
(d) Pursuant to Section 5.6, Procter & Xxxxxx and Regeneron hereby
grant to one another for the Term a Sole License in the Territory to Patents and
Know-how directly relating to and necessary to make, have made, use, import,
offer for sale, and sell Development Compounds and the corresponding Validated
Targets. In addition, further to the rights granted elsewhere in this Section
5.3, Procter & Xxxxxx and Regeneron hereby grant to one another a non-exclusive,
royalty-free license in the Territory to Patents and Know-how or other general
application technology that either Party owns or acquires from a Third Party
with the right to sublicense to the extent necessary to make, have made, use,
import, offer for sale, and sell Development Compounds and/or Validated Targets
in the Territory. Such general applications may include, but are not limited to,
dosage form, reagents, and or cloning methods.
33
(e) Neither Party shall file an Abbreviated New Drug Application
("ANDA") in the U.S. or an equivalent foreign application for generic approval
for marketing of a Compound using the licenses under this Section.
5.4 LICENSE GRANTS TO INVENTIONS HAVING NO UTILITY IN THE FIELD. With
respect to Inventions (i) for which there is no known utility in the Field, (ii)
that are made as a direct result of work performed under this Agreement and
(iii) for which there are no license obligations to Third Parties prohibiting
the grant of licenses set forth below, the parties agree that subject to (a) and
(b) below, each Party shall have the right of first negotiation to obtain
exclusive rights outside the Field and in the Territory under reasonable terms
consistent with those set forth herein for any such Invention owned jointly with
the other Party.
(a) Procter & Xxxxxx shall have the right of first negotiation to
obtain exclusive rights outside the Field and in the Territory under reasonable
terms consistent with those set forth herein for any such Invention having
[******************] owned solely by Regeneron or its Affiliates.
(b) Regeneron shall have the right of first negotiation to obtain
exclusive rights outside the Field and in the Territory under reasonable terms
consistent with those set forth herein for any such Invention having
[*****************************************************] owned solely by P&G or
its Affiliates.
(c) The "rights of first negotiation" referred to above in this Section
5.4(a) and (b) and previously in Section 5.2(c) shall operate as follows: The
Party that discovered the Invention (the "Discovering Party") shall notify the
other Party (the "Other Party") that it intends to partner in developing and/or
marketing the Invention and other material information concerning the applicable
Invention (the "Non-Field Invention Notice"). Within thirty (30) days after
receipt of the Non-Field Invention Notice, the Other Party will notify the
Discovering Party if it wishes to negotiate the terms of research, development
and/or marketing agreement between the Parties with respect to such Invention.
The Parties shall then negotiate in good faith to agree upon the terms of any
such agreement, provided that no Party shall have any obligation to enter into a
final binding agreement or letter of intent. During this period, the Discovering
Party shall respond to all reasonable inquiries by the Other Party concerning
the applicable Invention. The information disclosed to the Other Party in the
Non-Field Invention Notice and during this negotiation period concerning the
Invention shall be considered Information pursuant to Section 8.1 of this
Agreement. In the event that the Parties have not entered into a
34
further agreement (which may include a binding letter of intent in lieu of a
final agreement) on or before sixty (60) days after the delivery of the
Non-Field Invention Notice to the Other Party, the Discovering Party shall have
no obligations to the Other Party, and the Other Party shall have no rights,
with respect to the use of the applicable Invention.
5.5 GRANT OF LICENSE BY OPTING OUT PARTY. In the event a Party becomes
an Opting Out Party with respect to a Development Compound in its entirety or on
a country-by-country basis, then the license granted by the Opting Out Party to
the Proceeding Party shall be an exclusive license including as to the Opting
Out Party, with the right to sublicense, to make, have made, use, import and
sell such Development Compound under the Patents, Know-how, trademarks and
copyrights regarding that Compound owned in whole or in part by the Opting Out
Party. The license shall be in all countries of the Territory in which Opting
Out has been deemed to occur, and shall be subject to a royalty as set forth in
Section 6.1. The Opting Out Party shall comply with reasonable requests for
cooperation by the Proceeding Party, and the Proceeding Party shall reimburse
the Opting Out Party for reasonable out-of-pocket expenses incurred with respect
to such cooperation.
5.6 RIGHTS IN COMPOUNDS UNDER RESEARCH, DEVELOPMENT AND MARKETING. A
Party shall not grant any license to a Third Party in the Territory under any
Patent or Know-how owned in whole or in part by that Party to make, have made,
use, import or sell any Compounds that are the subject of joint research,
development or marketing by the Parties under this Agreement or any J-V
Agreement.
ARTICLE VI - ROYALTIES AND ACCOUNTING
6.1. ROYALTY CALCULATION.
(a) The Proceeding Party will pay to the Opting Out Party a royalty on
Net Sales of a Marketed Compound on a country-by-country basis, sold by the
Proceeding Party, its Affiliates, licensees and/or sublicensees in the Territory
at the applicable rate listed below multiplied by the Net Sales in such country:
35
Opt Out Time Royalty
------------ -------
[************************************ [****]
*************************************
*************************************
*************************************
*************************************
*************************************
*************************************
**********************************
************************************* [****]
*************************************
*************************************
************************************
[************************************ [****]
*************************************
*************************************
*************************************
[************************************ [****]
*************************************
***********************************]
Such royalty will be paid for a period of [*********] years from the date
of first sale to a customer of such Compound in a particular country, or for so
long as the manufacture, use, importation or sale of the Compound would, but for
the licenses granted herein, infringe a Valid Claim of a licensed Patent in such
country, whichever is longer.
(b) If the Parties license the Development or Marketed Compound to a
Third Party pursuant to Section 3.4(c)[***************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
***********]. Examples of the respective percentages are outlined in Attachment
6.1(b). Reasonable out-of-pocket expenses incurred in obtaining such licensee
shall be shared equally by the Parties. Notwithstanding the above, either
Party may receive, without sharing with the other Party, reimbursement from
such licensee for reasonable,[*************************************************
*********************] costs of research, development and/or marketing costs
(whether internal or Third Party) to be incurred by such Party for work to be
conducted in the future on behalf of the licensee.
36
Any amounts in excess of such reimbursement shall be shared in the same
proportion as calculated above in this Section 6.1(b) All amounts from licensees
received by either Party shall be fully disclosed to the other Party and subject
to audit (including without limitation the calculation of Fully-Loaded costs)
pursuant to Section 6.5.
(c) If the Proceeding Party elects to distribute or sublicense a
Development or Marketed Compound in any country, and a license must be obtained
from a Third Party to manufacture and/or market such Development or Marketed
Compound to avoid a non-frivolous claim of patent infringement, the Proceeding
Party shall offset the following portion of the Third Party license fee, royalty
or other similar payments ("Licensee Fees") against the Opting Out Party's
royalty:
Percent of Licensee Fee Offset
[******************************] Against the Opting Out Party's Royalty
-------------------------------- --------------------------------------
[****] [******]
[****] [******]
[****] [******]
[****] [******]
Any portion of Licensee Fees paid by the Proceeding Party that is to be
offset against the Opting Out Party's royalty but that exceeds the Opting Out
Party's royalty payable, shall be carried forward and accrue interest pursuant
to Section 6.4 and be offset against future royalties as such royalties become
payable.
6.2. ROYALTY PAYMENT.
(a) Royalties payable under Sections 2.4(e) and 6.1 will be paid not later
than sixty (60) calendar days following the end of each Fiscal Quarter. All
payments shall be accompanied by a report in writing showing the Fiscal Quarter
for which such payment applies, the amount billed to Third Parties for Marketed
Compounds sold during such Fiscal Quarter, the deductions from the amount billed
to arrive at the Net Sales, the Net Sales for the Fiscal Quarter, and the
royalties due on such Net Sales, such report being broken down by Marketed
Compound and country. All royalties will be paid in the currency where Net Sales
take place or, at the option of the payee, in US dollars at a rate of exchange
on the last business day of the Fiscal Quarter as quoted in The Wall Street
Journal (or Citibank, N.A. if such rates are not available in The Wall Street
Journal).
(b) All royalties due under this Article VI will be deposited in a bank
chosen by the recipient by the date due. Any amounts or royalties prohibited
from export by a
37
particular country will be deposited in a bank chosen by the recipient in
such country. Any deductions for withholding taxes imposed by the country in
which Net Sales take place will be withheld and paid as required by law. The
amount of tax withheld shall be for the account of the Party receiving the
payment. The amount of withholding tax will be allocated, if applicable, in the
ratio of the respective income to which the withholding tax is related. The
paying Party will provide promptly upon request any receipts from the
governmental or taxing authority evidencing payment of such taxes and will
assist the receiving Party in claiming relief from double taxation.
6.3. RECORDS. Procter & Xxxxxx and Regeneron will maintain, and will
require their Affiliates and sublicensees to maintain, complete and accurate
records of Net Sales of Marketed Compounds sold subject to the royalty
provisions of Sections 2.4(e) and 6.1 and the audit provisions of Section 6.5.
6.4. INTEREST RATE. Unless otherwise provided in this Agreement, any
payments past due will bear interest at the prime rate (such quoted in The Wall
Street Journal on the first day of the month of the accrual) plus two (2)
percentage points, compounded monthly.
6.5. AUDIT. Records shall be open for audit during reasonable business
hours for a period of three (3) years from creation of individual records for
examination not more often than once each year by an independent certified
public accountant ("CPA") selected by the payee and reasonably acceptable to the
payer for the sole purpose of verifying the correctness of payments to be made
under this Agreement. If the CPA finds a discrepancy of greater than ten (10)
percent of such payment, the CPA shall submit a detailed report regarding the
audit and such discrepancy to both Parties within thirty (30) days of commencing
the audit. The Parties shall attempt to resolve such discrepancy to their mutual
satisfaction during the next fifteen (15) days. If the Parties cannot resolve
the discrepancy, their CEOs shall meet within ten (10) days after such fifteen
(15) day time period. If the CEOs cannot resolve the dispute within five (5)
days, either Party may take such dispute to arbitration pursuant to Section
11.4. The calculation of such payment shall be deemed final (and not subject to
audit or dispute resolution) five (5) years after the period in which such
payment was due, unless arbitration pursuant to Section 11.4 is commenced prior
to such time. Out-of-pocket expenses incurred with respect to such CPA shall be
paid by the payee; however, the payer shall reimburse the payee for such CPA
expenses if the discrepancy is greater than ten (10%) percent, as such
discrepancy is determined by the CEOs or arbitrators.
38
ARTICLE VII - PATENTS AND INFRINGEMENT
7.1. DISCLOSURE. Procter & Xxxxxx will promptly disclose to Regeneron all
Procter & Xxxxxx Technology described in Section 1.43. Regeneron will promptly
disclose to Procter & Xxxxxx all Regeneron Technology described in Section 1.47
The Parties intend that there be a timely and full exchange of all information
arising from each Research Collaboration Plan or Product Plan subject to the
terms and conditions of this Agreement. Each Party shall promptly disclose to
the other Party any critical data or development which it reasonably believes
would or could have a material effect, whether positive or negative, on a
Research Collaboration Plan or Product Plan.
7.2. PATENT APPLICATIONS. Regeneron and Procter & Xxxxxx will discuss and
evaluate Technology disclosed pursuant to Section 7.1, and confer regarding the
advisability of filing patent applications to cover any Technology. The Party
(herein "Responsible Party") responsible for the filing, prosecution and
maintenance of patent applications shall be: (a) Procter & Xxxxxx, if the
subject invention is made solely by employees of Procter & Xxxxxx; (b)
Regeneron, if the subject invention is made solely by employees of Regeneron; or
(c) determined by agreement of the Parties for all other inventions, taking into
account the nature of the invention and the relationship of the invention to
inventions claimed in other patents or applications. Regeneron and Procter &
Xxxxxx will discuss with each other the advisability of filing Patent
applications beyond the priority country.
7.3. FILING AND PROSECUTION OF PATENTS. The Responsible Party shall, at its
expense, diligently file, prosecute, issue, and maintain patent applications
according to its own internal standards and for effectively covering other
inventions made by its employees or consultants. The Responsible Party will
endeavor to ensure that all patent applications are filed before any public
disclosures so as to ensure validity of patent applications filed outside of the
United States. The Responsible Party will submit a substantially complete draft
of each patent application to the other Party at least thirty (30) days prior to
the contemplated filing date and consider any comments of the other Party,
provided that in those circumstances where the Responsible Party believes time
is of the essence, the Responsible Party will endeavor to provide the other with
such advance notice as it reasonably can under the circumstances. Regeneron and
Procter & Xxxxxx will confer with each other regarding the prosecution of such
Patent Applications and will copy each other with any official action and
submission in such Patent Applications.
39
7.4. ALTERNATE RESPONSIBILITY FOR PROSECUTION. In the event the
Responsible Party determines that it will not file, prosecute, issue or
maintain, a Patent in a particular country, it shall promptly notify the other
Party. The other Party shall then have the right, but not obligation to assume
responsibility for the Patent in such country, and thereby become the
Responsible Party for that Patent in such country pursuant to Section 7.3. The
other Party shall be given all necessary authority by the original Responsible
Party to file, prosecute, issue, and maintain the Patent in such country.
7.5. INFRINGEMENT. Procter & Xxxxxx and Regeneron shall
promptly notify the other in writing of any infringement of a Patent
licensed or to be licensed pursuant to Article V of which they become
aware.
7.6. ENFORCEMENT OF PATENTS. Regeneron and Procter & Xxxxxx may, but shall
not be required to, prosecute any alleged infringement or threatened
infringement of a Patent licensed or to be licensed pursuant to Article V of
which they are aware or which is brought to their attention. The prosecuting
Party shall act in its own name and at its own expense unless the other Party at
its option pays fifty percent (50%) of all reasonable out-of-pocket costs prior
to the commencement of trial or an agreement on a settlement. Regeneron and
Procter & Xxxxxx shall cooperate fully with each other including, if required to
bring such action, the furnishing of power of attorney. Any recovery obtained
shall belong to the prosecuting Party unless the other Party has paid fifty
percent (50%) of said costs in which case each Party will receive fifty percent
(50%) of any recovery.
7.7. ALTERNATE RESPONSIBILITY FOR ENFORCEMENT. If Regeneron or Procter &
Xxxxxx has failed to prosecute under Section 7.6 with respect to alleged or
threatened infringement of one of its Patents (i) three (3) months after it has
been notified in writing by the other of such alleged infringement or (ii) one
(1) month before the time limit, if any, set forth in the appropriate laws and
regulations for the filing of such actions, whichever comes first, the other
may, but shall not be required to, prosecute any alleged infringement or
threatened infringement of the Patent. Such prosecuting Party shall act in its
own name and at its own expense. In such event, both Parties shall cooperate
fully with each other at their own expense, including if required in order to
bring such an action, the furnishing of a power of attorney. Any recovery
obtained shall belong to the prosecuting Party.
7.8. TRADEMARK INFRINGEMENT AND ENFORCEMENT. Procter & Xxxxxx and Regeneron
shall promptly notify the other in writing of any infringement of a trademark
40
under Section 4.5 of which they become aware. The owner of the trademark
application or registration may, but shall not be required to, prosecute any
such alleged infringement or threatened infringement. The prosecuting Party
shall act in its own name (unless joinder of the other Party is required by law
in which case it shall be joined) and at its own expense unless the other Party
at its option pays fifty percent (50%) of all reasonable out-of-pocket costs
prior to the commencement of trial or an agreement on a settlement. Regeneron
and Procter & Xxxxxx shall cooperate fully with each other in such action. Any
recovery obtained shall belong to the prosecuting Party unless the other Party
has paid fifty percent (50%) of the costs in which case each Party will receive
fifty percent (50%) of any recovery.
7.9. ALTERNATE RESPONSIBILITY FOR TRADEMARK ENFORCEMENT. If the owner of
the trademark application or registration has failed to prosecute under Section
7.8 with respect to an alleged or threatened infringement of a trademark (i)
three (3) months after it has been notified in writing by the other of such
alleged infringement or (ii) one (1) month before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, the other Party may, but shall not be required to,
prosecute any alleged infringement or threatened infringement of the trademark.
Such prosecuting Party shall act in its own name and at its own expense. In such
event, both Parties shall cooperate fully with each other at their own expense.
Any recovery obtained shall belong to the prosecuting Party.
ARTICLE VIII - CONFIDENTIALITY
8.1. CONFIDENTIALITY AND NON-USE OBLIGATIONS. Each Party shall
maintain in confidence all information (herein "Information") which is:
(a) disclosed to it by the other Party pursuant to Section 7.1;
(b) developed by the Party during the Research Term; or
(c) other information ("Other Information") disclosed by
the other Party which is not within the scope of the collaboration and
which is considered confidential by the other Party, and so designated as
confidential in writing when first disclosed or within thirty (30) days
after disclosure if the first disclosure is oral.
The Party shall take all reasonable precautions to:
(d) prevent disclosure of such Information to Third
Parties, except as set forth in Section 2.9, Section 8.3 and Section
11.10, or as may be necessary for the filing or prosecution of patent
applications pursuant to Article VII;
41
(e) use Know-how pursuant to the rights and obligations of
the Party pursuant to Article V; and
(f) use Other Information only for the purposes of this
Agreement.
These restrictions upon disclosure and use of Information shall
terminate ten (10) years after the date such Information is developed or
disclosed as set forth above, but shall not apply to any specific portion of
Information which:
(i) is Other Information already in the possession of
a Party at the time of disclosure by the other Party;
(ii) is or later becomes available to the public other
than by default by the Party;
(iii) is received from a Third Party having no
obligation of confidentiality to the other Party;
(iv) is Other Information developed by the Party
entirely without reference or use of Information, as
established by probative documentary evidence; or
(v) is required to be disclosed by law or government
regulation.
8.2. PRIOR CONFIDENTIALITY AGREEMENTS. All Information that is covered
under the confidentiality and non-use obligations of Section 8.1. of the
Multi-Project Collaboration Agreement (hereinafter referred to as "MPC
Information") applicable to this Agreement that was to be kept confidential
under the Multi-Project Collaboration Agreement as of the Effective Date will be
subject to the terms of Section 8.1 as if disclosed under this Agreement. All
other MPC Information shall be treated as set forth in this Section 8.2. The
confidentiality and non-use obligations set forth in Section 8.1 of the
Multi-Project Collaboration Agreement shall survive for each Party pursuant to
the terms of Section 11.8 thereof (i) for Regeneron with respect to any MPC
Information relating to Procter & Xxxxxx Retained Projects, (ii) for Procter &
Xxxxxx with respect to any MPC Information relating to Regeneron Retained
Projects, and (iii) for both Parties with respect to all other MPC Information
unrelated to any of the Retained Projects of the Field. Notwithstanding the
terms of Section 11.8 of the Multi-Project Collaboration Agreement, all
confidentiality and non-use obligation set forth in Section 8.1 of the
Multi-Project Collaboration Agreement relating to any Mutual Retained Project
shall no longer remain in effect.
8.3. RESEARCH MANUSCRIPTS AND ABSTRACTS. It is understood the Parties may
wish to publish or otherwise disclose technology to a Third Party for
publication in a
42
reputable scientific forum (for example, as an abstract, poster presentation,
lecture, article, book, or any other means of dissemination to the public).
Either Party may make such a disclosure to a Third Party regarding preclinical
research solely invented by its own employees, provided that if appropriate, a
patent application adequately describing and claiming any technology embodied in
such disclosure has been filed pursuant to Article VII. If such disclosure is
related to clinical research or work jointly invented by the Parties, no such
disclosure will be made to a Third Party until a patent application has been
filed adequately describing and claiming any patentable technology embodied in
such disclosure pursuant to Article VII and the non-disclosing Party has been
provided thirty (30) days to review and comment on such disclosure. Such
disclosures may be made to a Third Party regarding clinical research only if
clinical data has been locked and if disclosure presents no significant risk to
regulatory filings and serves a compelling business reason for publication. Any
disputes regarding the appropriateness and content of any such disclosure shall
be resolved by the PC.
8.4. THIRD PARTY ACCESS TO DEVELOPMENT COMPOUNDS. The Parties recognize
that inappropriate use of a Development Compound outside the scope of the
approved Product Plan may result in Adverse Experiences that could adversely
affect the labeling of the Compound or the ability of the Parties to gain
regulatory approval to market the Compound. Therefore, neither Party shall
provide a Development Compound in any form to a Third Party without the prior
written consent of the other Party. Upon receiving notice that the other Party
intends to provide a Development Compound to a Third Party, a Party shall have
two (2) weeks to provide or withhold consent. Before providing a Development
Compound to a Third Party, the Parties shall enter into a written agreement with
such Third Party obligating the Third Party to disclose to the Parties all
results of research involving the Development Compound, including without
limitation all Adverse Experiences.
8.5. PUBLICATIONS. The Parties recognize that independent investigators
will be engaged to conduct pre-clinical and clinical trials of Development
Compounds, and that the disclosure of information regarding such trials could be
detrimental to the ability of the Parties to effectively develop and market such
Compound. To the extent practicable, the Parties will enter into agreements with
investigators that require the approval of the Parties before the publication of
information concerning a Development Compound.
8.6. SUMITOMO COMPOUNDS. Notwithstanding anything to the contrary, nothing
in this Article VIII shall govern the Sumitomo Compounds.
43
ARTICLE IX - REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
9.1. PATENTS.
(a) Each Party warrants that, as of the Effective Date, it has no
actual knowledge of any information rendering invalid or unenforceable any
Patent licensed to the other Party under Article V or VII. Each Party will
promptly inform the other Party immediately if it obtains such information after
the Effective Date.
(b) Each Party warrants that it is has no actual knowledge of any
patents or Know-how owned by a Third Party that might prevent, inhibit, or limit
the Parties from conducting the research, development and marketing activities
under this Agreement other than what has been previously disclosed. Each Party
warrants that, except as disclosed in Attachment 9.1(b), it has not entered into
any agreement with a Third Party that might prevent, inhibit, or limit the
Parties from conducting the research, development and marketing activities under
this Agreement.
9.2. NO GUARANTEE. The Parties understand that the research and
development work to be conducted pursuant to this Agreement will involve
untested, experimental, and currently undeveloped technology and that neither
Regeneron nor Procter & Xxxxxx guarantees the safety or usefulness of any
Compound. Except as expressly set forth in this Agreement, the Parties disclaim
all warranties of any nature, express or implied.
9.3. INDEMNIFICATION.
(a) Indemnification Regarding Joint Activities, General. Any and all
liability, damage, loss, cost (including without limitation reasonable
attorneys' fees) and expense resulting from any suits, claims, actions, demands,
liabilities, expenses and/or loss ("Losses") relating to the joint development,
manufacture, use, storage, distribution or sale of any Compound ("Joint
Activities") will be shared equally. Each Party shall indemnify and hold
harmless the other Party for such Party's respective share of such liability;
provided, however, that the portion of Losses due to the gross negligence or
willful or intentional misconduct of either or both Party(ies) shall be governed
by Section 9.3(b).
(b) Indemnification by the Parties. Each Party shall indemnify and
hold the other Party harmless from and against that portion of any and all
Losses due to the gross negligence or willful or intentional misconduct of such
indemnifying Party, as well as any Losses caused by the negligence or misconduct
of the other Party that were not caused by Joint Activities.
44
(c) Indemnification by the Proceeding Party. The Proceeding Party
agrees to save, defend and hold the Opting Out Party harmless from and against
any and all Losses to the extent that such factual allegations forming the
primary basis for such Losses occurred after the Party became an Opting Out
Party with respect to that Compound and/or country. Both Parties shall provide
prompt notice to the other of such potential Losses. The Proceeding Party shall
assume control of the defense of the potential Losses (including without
limitation the right to settle the claim). The Opting Out Party shall provide
reasonable cooperation to the Proceeding Party, and the Proceeding Party shall
reimburse the Opting Out Party its reasonable out-of-pocket expenses.
(d) Indemnification Procedure. In the event that either Party
receives notice of potential Losses, such Party shall immediately inform the
other Party and the OC. The OC shall decide the manner in which to respond to
and handle the claim. If the OC cannot decide on how to respond to the claim
prior to five (5) days before the answer is due, the Party receiving the notice
shall answer the claim and take reasonably necessary actions to defend itself,
and the other Party may appoint its own counsel at its own expense, until the OC
agrees on how to handle the claim.
ARTICLE X - TERM, TERMINATION; CHANGE OF CONTROL
10.1. EFFECTIVE DATE AND TERM.
(a) Effective Date. This Agreement shall become effective
on January 1, 2001 ("Effective Date").
(b) Term. Unless terminated earlier by mutual agreement or by either
Party pursuant to Section 10.3 and subject to Section 3.2(c) (in which case
relevant portions of this Agreement may come back into effect for any Lead
Compound discovered during the Tail Period), this Agreement shall commence on
the Effective Date and expire at the later of (i) the end of the Research Term;
(ii) the end of development and marketing of the last Compound to be developed
or marketed pursuant to this Agreement (unless such Compound is the subject of a
separate agreement); or (iii) the end of the Royalty Term. Rights in technology
upon termination shall be as set forth in Section 5.3.
10.3. DEFAULT. Failure by either Party (the "Defaulting Party") to comply
with any of the material obligations contained in this Agreement, or any of the
Securities Agreements, the Registration Rights Agreement, the Warrants Purchase
Agreement or any J-V Agreement shall entitle the other Party (the "Nondefaulting
Party") to give to the Defaulting Party notice specifying the nature of the
default and requiring it to cure such default. If the Defaulting Party disagrees
with the existence, extent or nature of the
45
default, the Parties shall use good faith efforts to resolve the dispute within
thirty (30) days. If (i) such default is not cured with such thirty (30) day
period after the receipt of such notice or (ii) the Parties have not otherwise
resolved the dispute during such thirty (30) day period, the Nondefaulting Party
shall be entitled to initiate arbitration under Section 11.4 and at its sole
discretion terminate this Agreement. In the event of such termination, and in
addition to any other remedies available to the Nondefaulting Party, the
Defaulting Party shall be deemed an Opting Out Party with respect to any
Compounds pursuant to Section 5.5.
10.4. CHANGE OF CONTROL.
(a) In the event of a Change in Control, as that term is defined in
Section 10.6(a), of either the Parties or their respective Affiliates that have
responsibilities or obligations under this Agreement (each collectively or
individually then referred to as the "Acquired Company") and the Acquired
Company is not an Opting Out Party with respect to all Compounds in all
countries under this Agreement, then the Party affiliated with the Acquired
Company shall notify the other Party of any such Change in Control as soon as
the Change in Control may publicly be announced. Upon receipt of any such
notification, the other Party or an Affiliate thereof (the "Electing Company")
shall have the unilateral right to give notice to the Acquired Company within
thirty (30) days after its next regularly scheduled board meeting, but in no
event longer than sixty (60) days, after receipt of the Acquired Company's
notification that the Electing Company:
(i) elects not to continue the research, development and
marketing collaboration, whether or not a J-V has been formed (the
"Option"), in which case a determination of the License Fee pursuant
to Section 10.7 will be made, and within [**********] following such
License Fee determination will make the further election either to
purchase the entire interest of the Party affiliated with the
Acquired Company under this Agreement or any J-V Agreement
("Acquired Company Interest") or offer the Acquired Company the
option to purchase the entire interest of the Electing Company under
this Agreement or any J-V Agreement ("Electing Company Interest") at
the License Fee (but in the event that the Acquired Company does not
desire to purchase the Electing Company Interest, the interests of
the Parties shall be disposed of by sale, license or other
commercially reasonable arrangement for a price that maximizes value
for both Parties, paid by a Third Party or a Party, and each Party
shall have the right to receive half of the consideration thus
obtained), or
46
(ii) desires to continue the collaboration for a period
of up to [**********] from the date of the Change in Control (the
"Trial Period") upon the express condition that the ultimate parent
of the entity acquiring control of the Acquired Company within
[**********] thereafter agrees in writing to such Trial Period and
otherwise agrees to be bound by the provisions of this Agreement,
the Registration Rights Agreement, the Securities Agreements, and
any J-V Agreement. If the ultimate parent of the acquiring entity
accepts these conditions, the collaboration shall continue, and the
Option shall expire unless the Electing Company exercises the Option
within [***********] days prior to the expiration of the Trial
Period. If the ultimate parent of the acquiring entity fails to give
notice within the required period that it will be bound by the
provisions of such aforementioned Agreements, the Electing Company
shall be deemed to have exercised the Option as of the expiration of
such [**********] period and the Parties shall then follow the
procedures set forth in this Section 10.4.
10.5. SUBSTANTIAL STOCK ACCUMULATION. In the event of a Substantial Stock
Accumulation in either the Procter & Xxxxxx Parent or the Regeneron Parent, as
soon as the Party affiliated with the Affected Company has knowledge of the
Substantial Stock Accumulation, it shall give prompt notice to the other Party.
Such notice shall be separate from and in addition to the notice provided for in
Section 10.4 and must be given regardless of whether the Party affiliated with
the Affected Company regards the Substantial Stock Accumulation as being not in
the best interest of the collaboration. From the date on which the Party
affiliated with the Affected Company has notice of the Substantial Stock
Accumulation, the following provisions shall become effective and remain
effective until the Substantial Stock Accumulation is eliminated, unless
otherwise agreed:
(i) If the Party that is not affiliated with the Affected
Company reasonably determines in good faith that the person or
entity making the Substantial Stock Accumulation is a competitor of
such Party or its Affiliates, such Party may so inform the other
Party in writing. Promptly after receipt of such notice, the Party
affiliated with the Affected Company shall establish a procedure
whereby no director or executive employee of the Affected Company
who was not a director or employee of the Affected Company prior to
the Substantial Stock Accumulation, and who was previously a
director or employee of the person or entity making the
47
Substantial Stock Accumulation (a "Tainted Director or Executive"),
shall receive any of the following: (x) confidential information of
the other Party and its Affiliates; and (y) confidential information
of the collaboration, except that any such Tainted Director or
Executive can be given information as to actual and projected sales
and profits of the collaboration.
(ii) If the Party that is not affiliated with the Affected
Company does not give notice pursuant to this Section 10.5, the
Party affiliated with the Affected Company shall establish a
procedure whereby no Tainted Director or Executive shall receive
confidential information of the other Party and its Affiliates but
need not place any restrictions on confidential or other information
of the collaboration.
(iii) In the event of a material violation of this Section
10.5, the non-breaching Party may, without resort to the dispute
resolution procedure set forth in Articles II and XI, bring an
immediate court action or enjoin such violation and to recover any
damages that it may have incurred by reasons of such violation.
10.6. DEFINITIONS.
(a) For purposes of this Agreement, a "Change in Control" of a
company shall be deemed to have occurred in the event of (i) a merger,
consolidation, reorganization, recapitalization, the purchase of substantially
all of the company's assets, or other transaction in which or as result of which
the common stock of the company, or a successor entity having the same ownership
as the company, shall cease (except temporarily) to be a publicly traded
security; or (ii) the acquisition by any individual, firm, corporation, or
entity (other than any profit sharing or other employee benefit plan of the
company or any Affiliate, or any employee or group of employees or former
officers an/or directors of the company or its Affiliates) of beneficial
ownership, directly or indirectly, of securities of the company representing
more than [**************] of the combined voting power of the company's then
outstanding voting securities. Notwithstanding the foregoing, for purposes of
this Section 10.6(a), a Change in Control shall only be deemed to occur for
Procter & Xxxxxx if there is a Change in Control of The Procter & Xxxxxx Company
or Procter & Xxxxxx Pharmaceuticals, Inc.
(b) A "Substantial Stock Accumulation" of a company shall be deemed
to have occurred in the event of the accumulation by any individual, firm,
corporation, or entity (other than any profit sharing or other employee benefit
plan of the company or any Affiliate, or any employee or group of employees or
former officers and/or directors of the company or its Affiliates) of beneficial
ownership, directly or
48
indirectly, of securities of the company representing more than
[*****************] of the combined voting power of the company's then
outstanding voting securities.
(c) Notwithstanding the foregoing in Sections 10.6(a) and (b),
Xxxxxxx Xxxxxxxxx, M.D., Ph.D., the present President and Chief Executive
Officer of Regeneron, may increase his percentage of Regeneron's or Regeneron's
Parent's combined voting power of its outstanding securities and no Substantial
Stock Accumulation or Change in Control for Regeneron shall be deemed to have
occurred. For the purposes of this Section 10.6(c), Xx. Xxxxxxxxx'x ownership of
securities of Regeneron or Regeneron's Parent shall be deemed to be his direct
or indirect ownership of capital shares or options to purchase such capital
shares of Regeneron or Regeneron's Parent and the direct or indirect ownership
of such shares by members of his family living in his household to the extent
that Xx. Xxxxxxxxx retains voting control, the power to exercise such options,
and the right to dispose of such shares, and shall not include any other shares
over which he does not possess Beneficial Ownership, as defined in the
Securities and Exchange Act of 1934, as amended.
10.7. LICENSE FEE. The "License Fee" for purposes of Sections
10.4 and 10.5 shall be determined as follows:
(a) License Fee has two components: a Valuation (as defined
herein) of the Parties' interest in the Agreement or J-V Agreement with respect
to Compounds to which neither Party has Opted Out in total and a running royalty
on Net Sales of any Compound for which neither Party has Opted Out, such rate
and term being calculated as per Section 6.1 ("Running Royalty"). Each Party
shall designate an investment banking firm of its choice, and each investment
banking firm will be asked to prepare an appraisal as to the fair market value
of the collaboration as a going concern that would be received in cash from a
Third Party if a sale of the collaboration were made to a Third Party, taking
into account any contractual obligation of either Party or its Affiliates to
refrain from manufacturing or marketing a product competitive with the products
in the Territory for any period, the value of the information, Patents and
Know-how, and other assets being licensed and the potential market for such
Compounds in the Territory ("Fair Market Value"). The Fair Market Value shall
not include Compounds in specific countries or in the entire Territory for which
either Party is an Opting Out Party, as such royalty shall continue to be
governed pursuant to Section 6.1, regardless of a Change of Control.
[*****************************************************************************
*******************************************************************The
investment bankers will be asked to submit their Valuations within thirty (30)
days after the Purchase Date as defined in Section 10.7(e). In the event of a
Party's failure to
49
obtain an investment banking firm's Valuation within thirty (30) days after the
Purchase Date, the Valuation will be the Valuation determined by the investment
banking firm appointed by the other Party. An example of the operation of the
License Fee is set forth in Attachment 10.7(a).
(b) If the difference between the lower Valuation and the higher Valuation
is not more than [***********] of the higher Valuation, or if the Valuations are
equal, the final Valuation shall be the average of the Valuations. If the
difference between the [*********] Valuations is more than [**************] of
the higher Valuation, the investment bankers will select a third investment
banking firm from those known as major bracket investment banking firms, and
that firm shall also prepare a Valuation. The third investment banking firm will
not have access to the Valuations prepared by the other investment banking
firms. The [*************] Valuations that are the closest in value then shall
be averaged, and the resulting average shall be the final Valuation.
(c) The purchase of the interest shall thereafter be consummated by
payment of the Valuation and the obligation to pay the Running Royalty within
sixty (60) days after receipt of all investment bankers' valuations or such
later date upon which all necessary regulatory approvals have been obtained
and/or regulatory waiting periods have expired.
(d) The Party that sells its entire interest in the collaboration
("Seller") shall grant to the other Party ("Purchaser") an exclusive,
royalty-free license in the Territory under Seller's Patents and Seller's
Know-how to make, have made, use, import, offer for sale and sell Lead Compounds
and Validated Targets and a non-exclusive, royalty-free license in the Territory
under Seller's Patents and Seller's Know-how to make, have made, use, import,
offer for sale and sell other Seller's Technology. "Seller's Patents," "Seller's
Know-how" and "Seller's Technology" shall be Procter & Xxxxxx or Regeneron
Technology, Patents and Know-how, depending upon which Party is Seller.
(e) Each Party shall bear the expense of obtaining the Valuation of the
investment bankers selected by such Party, and if a third investment banker is
selected, the expense of obtaining its Valuation shall be borne equally by the
Parties.
(f) Unless otherwise agreed in writing by the Parties, the License Fee for
a license under Sections 10.4, 10.5 and 10.6 shall be calculated as of the date
of the Electing Company's notice that it elects to exercise the Option under
Sections 10.4 or 10.5 or the Purchasing Company's notice that it desires to
license the interest of the Party affiliated with the Affected Company under
Section 10.4 (such date shall be referred to as the "Purchase Date").
(g) During the pendency of the Option election and valuation process and
any time period when the Parties are attempting to sell their interest to a
Third Party pursuant
50
to Section 10.4(a)(i), the Parties shall continue to perform their customary
activities under this Agreement or any J-V Agreement.
(h) Seller and Purchaser shall cooperate with each other in good faith to
facilitate the transfer of the Seller's interest in the collaboration, including
transferring Information relating to the collaboration to Purchaser, so as to
minimize disruption to the business. As used in this Section, "Information"
means any confidential information and trade secrets, including but not limited
to information relating to inventions, disclosures, processes, systems,
Know-how, methods, techniques, formulations, drawings, patents, patent
applications, sales and marketing information, materials, services, research and
development activities and plans, clinical studies, manufacturing information
and regulatory filings.
ARTICLE XI - MISCELLANEOUS
11.1. FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or loss on account of failure of
performance by the Defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the reasonable control of the Defaulting Party,
provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure and given prompt notice to the
other Party.
11.2. NOTICES. Any notices or communications provided for in this
Agreement to be made by either of the Parties to the other shall be in writing,
in English, and shall be made by prepaid air mail with return receipt addressed
to the other at its address set forth above. Any such notice or communication
may also be given by hand or facsimile to the appropriate designation with
confirmation of receipt. Either Party may by like notice specify an address to
which notices and communications shall thereafter be sent. Notices sent by mail
shall be effective upon receipt; notices given by hand shall be effective when
delivered.
Notices for Regeneron shall be sent to:
Regeneron Pharmaceuticals, Inc.
Attn: Corporate Secretary
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
51
With copy to:
Regeneron Pharmaceuticals, Inc.
Attn: General Counsel
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Notices for Procter & Xxxxxx shall be sent to:
Procter & Xxxxxx Pharmaceuticals, Inc.
Attn: President
Health Care Research Center
0000 Xxxxx-Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
With copy to:
Procter & Xxxxxx Pharmaceuticals, Inc.
Attn: Associate General Counsel-Patents
Health Care Research Center
0000 Xxxxx-Xxxxxxxxxx Xxxx
Xxxxx, Xxxx 00000
11.3. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware, as such laws are applied to contracts entered into and to be
performed within such state. Any claim or controversy arising out of or related
to this Agreement or any breach hereof shall be submitted to arbitration
pursuant to Section 11.4. The United Nations Convention on Contracts for the
International Sale of Goods will not apply to this Agreement.
11.4. ARBITRATION. Subject to Sections 2.8 and 10.5, disagreements under
this Agreement shall be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association. The parties further
agree that each such disagreement be submitted to a panel of three (3) impartial
arbitrators with each Party selecting one (1) arbitrator within fifteen (15)
days of a request for arbitration and the two (2) selected arbitrators selecting
a third arbitrator who is experienced in the United States pharmaceutical
industry within thirty (30) days after the request. Any arbitration hereunder
shall commence within thirty (30) days after appointment of the third arbitrator
and shall be held in Boston, Mass., U.S.A. Upon reasonable notice and prior to
any hearing, the Parties will allow document discovery and will disclose all
materials relevant
52
to the subject matter of the dispute. The arbitrators shall make final
determinations as to any discovery disputes. The decision of the arbitrators
shall be rendered no later than sixty (60) days after commencement of
arbitration. The costs of arbitration shall be split by the parties unless the
arbitrators decide otherwise. Any judgment or decision rendered by the panel
shall be binding upon the Parties and shall be enforceable by any court of
competent jurisdiction.
11.5. NON-WAIVER OF RIGHTS. Except as specifically provided for herein,
the waiver from time to time by any of the parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such Party's rights or remedies
provided in this Agreement.
11.6. SEVERABILITY. If any term, covenant, or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant, or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant, or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant, or condition of this Agreement or
the application thereof that is invalid or unenforceable, and in the event that
the Parties are unable to agree upon a reasonably acceptable alternative, then
the Parties agree that a submission to arbitration shall be made in accordance
with Section 11.4 to establish an alternative to such invalid or unenforceable
term, covenant, or condition of this Agreement or the application thereof, it
being the intent that the basic purposes of this Agreement are to be
effectuated.
11.7. ENTIRE AGREEMENT. This Agreement sets forth all the covenants,
promises, agreements, warranties, representations, conditions, and
understandings between the Parties hereto in the scope of the Collaboration ,
with the exception of any agreements by the Parties executed at an even date
hereof, and supersedes and terminates all prior agreements and understanding
between the parties under this Agreement. No subsequent alteration, amendment,
change, or addition to this Agreement shall be binding upon the Parties hereto
unless reduced to writing and signed by the respective authorized officers of
the Parties.
53
11.8. SURVIVAL. Sections 2.2, 2.10, 5.3, 5.4, 8.1, and 8.2 shall survive
the termination of this Agreement to the extent specified therein. Section 9.3
and any accrued obligations under this Agreement shall survive termination of
this Agreement without limit as to time.
11.9. ASSIGNMENT.
(a) Procter & Xxxxxx and Regeneron may assign any of their rights or
obligations under this Agreement in any country of the Territory to any
Affiliates; provided, however, that such assignment shall not relieve the
assigning Party of its responsibility for performance of its obligations under
this Agreement.
(b) The Parties recognize that each may perform some of its
obligations hereunder through Affiliates; provided, however, that Procter &
Xxxxxx and Regeneron shall remain responsible and be guarantors of such
performance by their Affiliates and shall cause their Affiliates to comply with
the provisions of this Agreement in connection with such performance.
(c) Procter & Xxxxxx and Regeneron may only assign their rights
under this Agreement in any country of the Territory to a Third Party with
written permission of the other Party, which permission will only be given at
its sole discretion.
11.10. PUBLICITY.
(a) Procter & Xxxxxx and Regeneron will jointly discuss, based on
the principles of Section 11.10(b), any press releases and any other public
statements regarding the execution and the subject matter of this Agreement, the
research to be conducted under this Agreement or any other aspect of this
Agreement, subject in each case to disclosure otherwise required by law or
regulation.
(b) In the discussion and agreement of Section 11.10(a), the
principles observed by Procter & Xxxxxx and Regeneron will be accuracy, the
requirements for confidentiality under Article VIII, the advantage a competitor
of Procter & Xxxxxx or Regeneron may gain from any statement under Section
11.10(a), the requirements of disclosure under any securities laws or
regulations of the United States, including those associated with SEC and
regulatory filings and public offerings, the restrictions imposed by the Federal
Food, Drug and Cosmetic Act, and the standards and customs in the pharmaceutical
industry for such disclosures by companies comparable to Procter & Xxxxxx and
Regeneron.
54
11.11. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one in the same instrument.
11.12. NO SOLICITATION. During the Term of this Agreement,
the Parties shall not directly or indirectly solicit the other Party's
employees for employment or other consulting arrangements.
ARTICLE XII - EXECUTION
12.1. In witness whereof the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first
written above.
The Procter & Xxxxxx Company
By:
-------------------------
Xxxx Collar
Vice President - Pharmaceuticals
Regeneron Pharmaceuticals, Inc.
By:
-------------------------
Xxxxxxx X. Xxxxxxxxx, M.D., Ph.D.
President and Chief Executive Officer
55
ATTACHMENT 1.14(a) EXAMPLES OF REGENERON EXCLUDED TECHNOLOGY
[*******************************************************************************
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ATTACHMENT 1.21 REGENERON/P&GP GPCR PROGRAM
[******]
[******]
[******]
[******]
[******]
[******]
[******]
[******]
[******]
[******]
[******]
[******]
57
ATTACHMENT 2.2(c) MULTI-PROJECT COLLABORATION AGREEMENT PROJECT DIVISION
P&G MUTUAL REGENERON
RETAINED PROJECTS RETAINED PROJECTS RETAINED PROJECTS JOINT PROJECTS
----------------- ----------------- ----------------- --------------
[************** [************************* All other projects that are GPCR Program***
**************] ************************* not P&G Retained Projects,
*************************] Mutually Retained
Projects and Joint Projects.
[************]
[**************] [************************* [******************************* Muscle
*****] [*******************************]
[*******************************
********************************] DDRs
[*******************************
********************************
********************************]
[**********]
[**********]
[**********]
[**********]
[**********]
[**********0
* Ab = antibody based therapeutic, SM = small molecule based therapeutic
**Includes those GPCRs not identified in Attachment 1.21 and the Returned GPCRs,
if any.
***Includes the GPCRs identified in Attachment 1.21 with the exception
of the Returned GPCRs, if any.
58
ATTACHMENT 2.2(g)(i)
[********************]
PG PG PG PG PG PG PG PG
Number Number Number Number Number Number Number Number
59
[******************]
PG Number PG Number PG Number
--------- --------- ---------
60
[***************]
PG PG PG PG PG PG PG
NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER
------ ------ ------ ------ ------ ------ ------
61
[*****************************]
PG PG PG PG PG PG PG PG
Number Number Number Number Number Number Number Number
------ ------ ------ ------ ------ ------ ------ ------
62
[******************]
PG PG PG PG PG PG
Number Number Number Number Number Number
------ ------ ------ ------ ------ ------
63
[************]
PG PG PG PG PG PG
Number Number Number Number Number Number
------ ------ ------ ------ ------ ------
64
[****************]
PG PG PG PG PG PG PG
Number Number Number Number Number Number Number
------ ------ ------ ------ ------ ------ ------
65
66
ATTACHMENT 2.2(g)(ii)
[****************]
PG PG PG PG
Number Number Number Number
------ ------ ------ ------
67
ATTACHMENT 2.5(a)
INITIAL MEMBERS OF THE OPERATING COMMITTEE
From Regeneron:
[******************************]
[******************************]
From Procter & Xxxxxx:
[******************************]
[******************************]
68
ATTACHMENT 2.5(b)
INITIAL MEMBERS OF THE PROGRAM COMMITTEE
From Regeneron:
[******************************].
[******************************]
[******************************]
From Procter & Xxxxxx:
[******************************]
[******************************]
[******************************]
69
ATTACHMENT 2.5(c)
INITIAL MEMBERS OF THE DEVELOPMENT COMMITTEE
From Regeneron:
[******************************]
From Procter & Xxxxxx:
[******************************]
70
ATTACHMENT 3.1
TIMING AND CALCULATION OF RESEARCH AND/OR PRODUCT PLAN BUDGETS
BUDGET PROCESS
1) [*****************]
- [****************************************************************
*****************************************************************
- [****************************************************************]
- [****************************************************************]
- [****************************************************************]
- [****************************************************************]
2) [*******************]
- [***************************************************************]
- [***************************************************************]
- [***************************************************************]
- [***************************************************************]
3) [*******************]
- [***************************************************************].
- [***************************************************************]
- [***************************************************************]
- [***************************************************************]
If a quarterly budget projection exceeds [*****] of the target quarterly
spending budget, the matter will be referred to the OC for approval /
non-approval of change in budget
71
ATTACHMENT 3.1 ("CONTINUED")
[************************]
[**************************]
- [**********************************************************]
[***************************************************]
- [*****************************]
- [**********************************************************
*************************************************************
*************************************************************
- [******************************************************
- [******************************************************
-
[********************************************************
-
[********************************************************
-
[********************************************************
-
[********************************************************
-
[********************************************************
- [****************************************************
- ************************************************************
*************************************************************
- *************************************************************
[***********************************************]
- [****************************************]
- [**************************************]
- [**************************************]
- [**************************************]
-
72
ATTACHMENT 3.2 INFLATION PAYMENT ADJUSTMENT
[*********]
[****************** ******]
[****************** ******]
[****************** ******]
[***********************************************]
[***********************************************]
[**************************************************]
[***************]
[************************************************************]
[************************************************************]
76
ATTACHMENT 3.2(b)(3)
EXPENSES INCLUDED IN THE REGENERON RESEARCH FTE RATE
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
ATTACHMENT 3.3
[***************************]
- [*************************************************************]
[*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
[*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [*************************************************************]
- [************************].
- [******************].
- [************************].
- [************************].
ATTACHMENT 6.1(b)
EACH PARTY'S SHARE OF ROYALTIES OR OTHER INCOME
WHEN BOTH PARTIES OPT OUT
PARTY A'S ROYALTY PARTY A'S SHARE OF PARTY B'S ROYALTY PARTY B'S SHARE OF
RATE AS AN OPTING OUT ROYALTIES OR OTHER RATE AS AN OPTING ROYALTIES OR OTHER
PARTY INCOME OUT PARTY INCOME
ATTACHMENT 9.1(b) THIRD PARTY AGREEMENTS RELATING TO EXCLUDED TECHNOLOGY
Technology Development Agreement dated as of March 20, 1989, between Sumitomo
Chemical Company, Limited and Regeneron Pharmaceuticals, Inc.
Collaboration Agreement dated as of August 31, 1990, between Amgen Inc. and
Regeneron Pharmaceuticals, Inc.
Collaboration Agreement dated as of July 22, 1993, between Glaxo Group Limited
and Regeneron Pharmaceuticals, Inc.
Research Development Agreement dated as of June 2, 1994, between Sumitomo
Pharmaceuticals Company, Ltd., and Regeneron Pharmaceuticals, Inc.
Collaboration Agreement dated as of October 9, 1996, between Pharmacopeia, Inc.,
and Regeneron Pharmaceuticals, Inc.
Collaborative Development Agreement dated as of June 27, 1996, between
Medtronic, Inc. and Regeneron Pharmaceuticals, Inc.
Memorandum of Understanding of an Agreement dated March 9,2000 between Medarex
Inc. and Regeneron Pharmaceuticals, Inc.
ATTACHMENT 10.7(a)
EXAMPLE OF LICENSE FEE OPERATION
SCENARIO LICENSE FEE OPERATION
