License Agreement - SmithKline Beecham Corp., SmithKline Beecham plc and Human Genome Sciences Inc.
SB/HGS LICENSE AGREEMENT
This Agreement is effective as of this 28th day of June, 1996 between,
on the one hand, SmithKline Beecham Corporation, a corporation organized under
the laws of the Commonwealth of Pennsylvania, having a place of business at One
Franklin Plaza, Philadelphia, Pennsylvania 19101, U.S.A. ("SB corp"), SmithKline
Beecham p.l.c., a corporation organized under the laws of England and having a
place of business at Great West Road, Brentford, Middlesex, U.K. ("SB p.l.c.")
(individually and collectively "SB"), and, on the other hand, Human Genome
Sciences, Inc., 9410 Key West Avenue, Rockville, Maryland 20850 ("HGS").
WITNESSETH THAT:
WHEREAS SB corp and HGS, entered into the COLLABORATION AGREEMENT
(defined below) relating to sequencing of expressed genes and development of
practical applications therefor; and
WHEREAS SB corp, SmithKline Beecham Intercredit, B.V. and HGS entered
into the AMENDED AND RESTATED LICENSE AGREEMENT (defined below) pursuant to
which HGS granted to SB certain licenses under HGS patents and HGS technology to
make, have made, use and sell collaboration products; and to license certain
technologies to TAKEDA (defined below) pursuant to the SB/TAKEDA AGREEMENT
(defined below),
WHEREAS SB and HGS now wish to form alliances with THIRD PARTIES
(defined below) in addition to TAKEDA to collaborate and/or grant licenses to
COLLABORATION PARTNERS (defined below) under HGS TECHNOLOGY and SB TECHNOLOGY
(each defined below) in the SB FIELD (defined below) and GENE THERAPY VACCINES
(defined below) causing the parties to now supersede the COLLABORATION AGREEMENT
and the AMENDED AND RESTATED LICENSE AGREEMENT (defined below) as to such SB
FIELD and GENE THERAPY VACCINES (defined below), and to replace those agreements
only as to such fields with this Agreement;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, and otherwise to be bound
by proper and reasonable conduct, the parties agree as follows:
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The parties now agree that the COLLABORATION AGREEMENT is superseded in
accordance with Paragraph 23.01 of such agreement and the AMENDED AND RESTATED
LICENSE AGREEMENT is superseded both with respect to the SB FIELD and GENE
THERAPY VACCINES to read as follows:
1. DEFINITIONS
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1.0. "AFFILIATE" shall mean any corporation, firm, partnership or other entity,
whether de jure or de facto, which directly or indirectly owns, is owned by
or is under common ownership with a party to this Agreement to the extent
of at least fifty percent (50%) of the equity (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) having the power to vote on or direct the affairs
of the entity and any person, firm, partnership, corporation or other
entity actually controlled by, controlling or under common control with a
party to this Agreement.
1.1. "AMENDED AND RESTATED LICENSE AGREEMENT" shall mean the agreement between
SB and HGS entered into May 31, 1995.
1.2. "ANTIBODY PRODUCT" shall mean an antibody (monoclonal or polyclonal) and
fragments and constructs thereof which may be useful for the treatment or
prevention of a disease or disorder in humans.
1.3. "ANTIBODY RESEARCH PLAN" shall mean a plan for researching and developing
an ANTIBODY PRODUCT which is a COLLABORATION PRODUCT in the SB FIELD.
Appendix A is an example of such plan.
1.4. "ANTISENSE" shall mean inhibiting or preventing in vivo expression in a
human or animal of a gene product by use of an oligonucleotide or modified
oligonucleotide which binds to RNA or DNA to prevent and/or impair
expression of the gene product.
1.5. "BLOCKING CLAIM" shall mean a claim under any patent application or granted
patent anywhere in the world which generically but not specifically claims
(i) any and all compounds (and/or the use thereof) which interact with or
prevent interaction with a specified TARGET which is a COLLABORATION
PRODUCT and/or (ii) any and all antibodies (and/or the use thereof) against
a specific TARGET or THERAPEUTIC PROTEIN each of which is a COLLABORATION
PRODUCT. The following are examples of "blocking claims": (1) a compound
which interacts with, or is capable of interacting with, receptor X; (2) a
compound which prevents binding between or to receptor X and its ligand,
(3) a process for activating receptor X, comprising: contacting receptor X
with a
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compound which binds thereto and activates the receptor; (4) a process for
preventing activation of receptor X comprising contacting receptor X with a
compound which prevents binding between receptor X and its ligand.
1.6. "BIOINFORMATICS" shall mean computer software and know-how useful for the
analysis, comparison, and curation of human nucleic acid sequences; and
information related to such sequences; and software for the construction
and maintenance of databases for the compilation of such sequences and
their associated information; each developed from May 19, 1993 through the
end of the INITIAL RESEARCH TERM. BIOINFORMATICS shall include software for
the prediction of the three-dimensional structure of proteins from primary
sequence information but BIOINFORMATICS shall not include software for
rational drug design based on such three-dimensional structure. To the
extent BIOINFORMATICS includes software licensed from a THIRD PARTY such
THIRD PARTY software is not included except to the extent that a party has
the right to transfer to the other party such software and its use and the
other party agrees to pay any royalty owed to the THIRD PARTY for such
software and its use.
1.7. "cDNA" shall mean complementary DNA prepared from human cells.
1.8. "cDNA DATABASE" means the Human cDNA Database established pursuant to the
Human cDNA Database Agreement (the HUMAN cDNA DATABASE AGREEMENT),
effective as of July 7, 1994, among SB, HGS and The Institute for Genomic
Research (TIGR) and as may be amended from time to time.
1.9. "CLINICAL STUDY" shall mean a study in humans of a product which study is
intended for use in obtaining approval to sell the product in a "Major
Market" However, in the case of a product for which no human clinical
studies are required, then CLINICAL STUDY shall mean, instead, initiation
of country-wide sales of a product in a "Major Market". By "Major Market"
is meant the United States, Canada, Japan, Great Britain, France, Germany,
or Italy.
1.10."COLLABORATION AGREEMENT" shall mean the Collaboration Agreement entered
into between SB and HGS effective as of May 19, 1993, as amended as of
immediately before the EFFECTIVE DATE.
1.11."COLLABORATION PARTNER" shall mean those entities which are set forth in
Appendix B and any entity added to such Appendix by mutual written
agreement between SB and HGS. TAKEDA is not a COLLABORATION PARTNER.
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1.12."COLLABORATION PARTNER AGREEMENT" shall mean an agreement among HGS and SB
and a COLLABORATION PARTNER and designated in writing by SB and HGS as a
COLLABORATION PARTNER AGREEMENT.
1.13."COLLABORATION PARTNER PATENT" shall mean all patents and patent
applications filed during the INITIAL RESEARCH TERM which are or become
owned by a COLLABORATION PARTNER or to which a COLLABORATION PARTNER
otherwise has, now or in the future, the right to grant licenses, only to
the extent HGS and SB have the rights to grant licenses thereto under a
COLLABORATION PARTNER AGREEMENT. Included within the definition of
COLLABORATION PARTNER PATENTS are all continuations, continuations-in-part,
divisions, patents of addition, reissues, renewals, extensions,
registrations, confirmations, re-examinations thereof and any provisional
applications and all SPCs
1.14."COLLABORATION PRODUCT" shall mean any product, process, substance,
composition or service which (i) is based on the use of or is derived by
use of HGS TECHNOLOGY and/or SB TECHNOLOGY and/or (ii) is covered by a HGS
PATENT and/or (iii) is covered by a SB PATENT; and/or (iv) is covered by a
COLLABORATION PARTNER PATENT; and/or (v) is based on or is derived by use
of a TARGET and/or is a THERAPEUTIC PROTEIN and/or biological information
on such TARGET or THERAPEUTIC PROTEIN all as to which SB and/or HGS
receives rights from a COLLABORATION PARTNER under a COLLABORATION PARTNER
AGREEMENT. An incidental or immaterial use (or no use) of such technology
or patents in (i)-(v) shall not cause a product, process, substance,
composition or service to become a COLLABORATION PRODUCT.
1.15."CORIGHTS PRODUCT" shall mean a product subject to a COLLABORATION PARTNER
AGREEMENT as to which SB obtains rights to promote and/or market from such
COLLABORATION PARTNER.
1.16."COST OF GOODS" shall mean the sum of the actual direct and indirect costs
for active and other ingredients, supplies, material, and labor and an
allocated portion of overheads, incurred in manufacturing a SB PRODUCT or
an HGS PRODUCT, as determined in accordance with Generally Accepted
Accounting Principles in the United States.
1.17."DIAGNOSTIC(S)" shall mean a COLLABORATION PRODUCT which is any product,
process, substance, composition or service
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intended to predict, detect or identify a disease or determine the presence
of a pathologic condition in a human.
1.18."DISCOVERED" shall mean, with respect to a COLLABORATION PRODUCT or
CORIGHTS PRODUCT, the earlier of (a) the date of the specific disclosure of
the COLLABORATION PRODUCT or CORIGHTS PRODUCT, in an application for a
patent filed in any country by or in the name of the discovering party; or
(b) the date of the specific disclosure of such COLLABORATION PRODUCT or
CORIGHTS PRODUCT in a written document other than a filed patent
application.
1.19."DRUG PRODUCT" shall mean a product (including VACCINES), which is not a
THERAPEUTIC PROTEIN, GENE THERAPY VACCINE or ANTIBODY PRODUCT, which may be
useful for the treatment or prevention of a disease or disorder in a human.
1.20."DRUG RESEARCH PLAN" shall mean a plan for screening of TARGETS to
discover a DRUG PRODUCT which is a COLLABORATION PRODUCT in the SB FIELD
and shall also mean a plan for researching and developing a GENE THERAPY
VACCINE pursuant to Section 7 or a plan for researching and developing a
VACCINE which is a COLLABORATION PRODUCT in the SB FIELD. An example of
such a plan is shown in Appendix C.
1.21. "EFFECTIVE DATE" shall mean the date first written above.
1.22."EST"shall mean a partial cDNA sequence, i.e., a cDNA which corresponds to
less than the entire expressed portion of a complete human gene, determined
by Expressed Sequence Tag analysis. The ESTs shall comprise as many
nucleotides from the 5' end or the 3' end of a cDNA (exclusive of vector
nucleotides) as is practicable in order to enhance the informational value
of the ESTs and shall otherwise meet specifications previously established
by the RC and as amended from time to time. 1.23. "GENE" shall mean a cDNA
or a human gene or a family of such human genes or any portion of such
cDNA, gene or genes.
1.24."GENE THERAPY" shall mean treatment or prevention of a disease, or
remedying a gene deficiency of humans or animals by genetic modification of
human somatic cells or animal somatic or germ cells (in vivo, in vitro or
ex vivo) with DNA (RNA) for the purpose of expressing a protein or
oligo(poly)nucleotide encoded by said DNA (RNA) in a human or animal.
1.25.GENE THERAPY VACCINE" shall mean a VACCINE which achieves a therapeutic
and/or prophylactic effect by inducing an antigen-specific humoral and/or
cellular immune system response by GENE THERAPY.
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1.26. "HGS" shall mean Human Genome Sciences, Inc.
1.27."HGS FIELD" shall mean: (i) GENE THERAPY, GENE THERAPY VACCINES (other
than GENE THERAPY VACCINES as to which SB obtains rights under Section 7),
(ii) ANTISENSE, (iii) biotransformation of a chemical to prepare
pharmaceutically active agents for human or animal use, or intermediates
therefor, which active agents or intermediates were discovered before May
19, 1993.
1.28."HGS PATENT(S)" shall mean all patents and patent applications to the
extent they claim HGS TECHNOLOGY, which are or become owned by HGS or to
which HGS otherwise has, now or in the future, the right to grant licenses.
Included within the definition of HGS PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, re-examinations thereof and any
provisional applications and all SPCs.
1.29."HGS PRODUCT" shall mean (1) a COLLABORATION PRODUCT in the HGS FIELD; or
(2) a COLLABORATION PRODUCT in the SB FIELD (a) to which HGS obtains rights
in accordance with Section 6; and/or (b) which is a THERAPEUTIC PROTEIN
discovered or developed by or on behalf of HGS after the INITIAL RESEARCH
TERM; and/or (c) which is a DRUG PRODUCT or ANTIBODY PRODUCT discovered or
developed by or on behalf of HGS at any time.
1.30."HGS TECHNOLOGY" shall mean any and all data, substances, processes,
materials, formulae, know-how and inventions with respect to GENES and/or
expression products thereof (including sequence and function) which are
useful within the HGS FIELD or the SB FIELD and which are developed by or
on behalf of HGS during or prior to the INITIAL RESEARCH TERM and which are
owned by HGS or with respect to which HGS has a right to grant a license.
In the event HGS in-licenses from a THIRD PARTY a DRUG PRODUCT, ANTIBODY
PRODUCT or THERAPEUTIC PROTEIN in each case discovered by a THIRD PARTY
with no use of HGS TECHNOLOGY, such product and information generated by
HGS directly related to the research and development of such product, shall
not be HGS TECHNOLOGY.
1.31."HGS SPECIAL TECHNOLOGY shall mean (1) all HGS TECHNOLOGY in existence
prior to the EFFECTIVE DATE and required to be transferred or transferred
to SB under the COLLABORATION AGREEMENT and (2) all HGS TECHNOLOGY
developed by or for HGS after the EFFECTIVE DATE and during the INITIAL
RESEARCH TERM required to be transferred or transferred to SB by HGS which
is: (a) sequence data with respect to cDNA and
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expression products thereof and BIOINFORMATICS relating thereto, (b)
information on biological function of TARGETS and screens for such TARGETS,
and/or (c) biological information on THERAPEUTIC PROTEINS for their use as
TARGETS, and (3) HGS clones containing sequences in (1) and 2(a).
1.32."INITIAL RESEARCH TERM" shall mean the term beginning May 19, 1993 and
ending June 30, 2001.
1.33."make, have made, use and sell" shall mean all exclusionary rights now or
in the future conferred by a patent or equivalent of a patent (e.g., a
SPC), copyright, or trade secret law of each applicable respective
jurisdiction of the world, including but not limited to the right to make,
have made, use, offer to sell, sell, import, copy, display, and distribute.
1.34."NET SALES" shall mean gross receipts from sales of a COLLABORATION
PRODUCT (on a product-by-product basis) by SB or HGS or, except as provided
below, their respective AFFILIATES, licensees, distributors trading on SB's
or HGS's account or joint ventures or other associated companies, less
deductions for (i) transportation, shipping and postage charges, including
transportation insurance and customs duties to the extent separately
invoiced; (ii) sales and excise taxes and duties paid or allowed by a
selling party and any other governmental charges imposed upon the
production, importation, use or sale of such product; (iii) normal and
customary trade, quantity and cash discounts allowed and rebates including
but not limited to Medicaid and Medicaid-like rebates; and (iv) allowances
or credits to customers on account of rejection or return of such product
or on account of retroactive price reductions affecting such product. Sales
between or among a party to this Agreement and its respective AFFILIATES,
licensees, distributors trading on SB's or HGS's account, or joint ventures
or other associated companies shall be included within NET SALES only if
such purchaser is an end-user of the COLLABORATION PRODUCT. Otherwise, NET
SALES shall only include the subsequent, final sales to THIRD PARTIES.
1.35."OPERATING PROFITS" shall mean NET SALES less (i) COST OF GOODS, (ii)
royalties paid to a party or to THIRD PARTIES, (iii) costs and expenses of
Phase IV studies, i.e., post-marketing clinical studies and (iv) marketing,
promotion, distribution and selling expenses of SB and its AFFILIATES, in
the case of a SB PRODUCT, or of HGS, in the case of a HGS PRODUCT, all as
determined in accordance with Generally Accepted Accounting Principles in
the United States.
1.36."OUTLICENSE FEES" shall mean all royalties, license fees and other
payments or product rights received by HGS or SB from THIRD
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
PARTIES based on licensing permitted under this Agreement after deducting
therefrom fees reasonably paid to compensate HGS or SB, as the case may be,
for services rendered to the licensee after the effective date of the
agreement with the licensee. Throughout this Agreement, "outlicense" and
"license" and forms thereof, are used interchangeably.
1.37."PROTEIN RESEARCH PLAN" shall mean a written plan to research and develop
a THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT in the SB FIELD
which plan includes, at a minimum, scientific data, research and
development efforts, milestones, and which is sufficient to reasonably
monitor diligence of the research and development of the THERAPEUTIC
PROTEIN. A representative example of such a plan forms Appendix D.
THERAPEUTIC PROTEIN PROPOSALS and/or RESEARCH PROGRAMS directed to the six
(6) HGS PRODUCTS in Paragraph 6.3(a) are deemed to be PROTEIN RESEARCH
PLANS submitted by HGS under this Agreement.
1.38."RC" shall mean the Research Committee which shall consist of three (3)
appointees of HGS and three (3) appointees of SB and shall be chaired by
one (1) of the SB appointees.
1.39."RESEARCH PLAN" shall mean individually and collectively a DRUG RESEARCH
PLAN, ANTIBODY RESEARCH PLAN and PROTEIN RESEARCH PLAN. RESEARCH PROGRAMS
(other than the one directed to [***] under the COLLABORATION AGREEMENT are
deemed DRUG RESEARCH PLANS submitted by SB under this Agreement.
1.40."RESEARCH PROGRAM" shall have the meaning ascribed to it in the
COLLABORATION AGREEMENT.
1.41."RESEARCH TERM EXTENSIONS" shall mean extensions of the INITIAL RESEARCH
TERM obtained pursuant to Paragraph 8.6.
1.42."SB" shall mean SmithKline Beecham Corporation and/or SmithKline Beecham,
p.l.c., and any past (from May 19, 1993 through the EFFECTIVE DATE),
present or future AFFILIATE thereof, which AFFILIATE holds the relevant
right and/or is or was or will be necessary or required to perform any
obligations of SB under this Agreement and/or obligations of either of them
are subsequently assigned and/or delegated pursuant to Section 25 of this
Agreement.
1.43."SB/TAKEDA AGREEMENT" shall mean the agreement entered into between TAKEDA
and SB effective June 8, 1995 as amended or restated and superseded as of
immediately before the EFFECTIVE DATE of this Agreement which is attached
as Appendix F and as may be amended from time to time.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.44."SB FIELD" shall mean human health care, excluding both DIAGNOSTICS and
the HGS FIELD (except as to GENE THERAPY VACCINES). The SB FIELD shall
include without limitation VACCINES and GENE THERAPY VACCINES (other than
GENE THERAPY VACCINES to which HGS obtains rights to pursuant to Section
7).
1.45."SB PATENT(s)" shall mean all patents and patent applications to the
extent they claim SB TECHNOLOGY, which are or become owned by SB or to
which SB otherwise has, now or in the future, the right to grant licenses.
Included within the definition of SB PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, re-examinations thereof and any
provisional applications and all SPCs. SB PATENTS shall include TAKEDA
PATENTS to the extent such patents and patent applications claim SB
TECHNOLOGY.
1.46."SB PRODUCT shall mean (1) a GENE THERAPY VACCINE which is a COLLABORATION
PRODUCT to which SB obtains rights pursuant to Section 7; and/or (2) a
THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT in the SB FIELD to
which SB obtains rights pursuant to Section 6; and/or (3) a COLLABORATION
PRODUCT in the SB FIELD which results from a DRUG RESEARCH PLAN or an
ANTIBODY RESEARCH PLAN, each submitted by SB during the INITIAL RESEARCH
TERM and/or in the case of a DRUG RESEARCH PLAN, which is submitted by SB
during RESEARCH TERM EXTENSIONS.
1.47."SB TECHNOLOGY" shall mean any and all data, substances, processes,
materials, formulas, know-how, inventions and information useful within the
HGS FIELD and/or SB FIELD which are based on the use of or derived by use
of HGS SPECIAL TECHNOLOGY and are developed by or on behalf of SB during
the INITIAL RESEARCH TERM, or RESEARCH TERM EXTENSIONS or under a RESEARCH
PLAN submitted by SB pursuant to this Agreement prior to the later of [***]
years after the INITIAL RESEARCH TERM or [***] years after RESEARCH TERM
EXTENSIONS. SB TECHNOLOGY shall not include technologies, reagents or
materials made by SB merely because of an incidental or immaterial use (or
no use of) of HGS SPECIAL TECHNOLOGY in the development of such
technologies, reagents or materials or merely because of an incidental or
immaterial use of (or no use of) such technologies, reagents or materials
in a RESEARCH PLAN. SB TECHNOLOGY shall include TAKEDA TECHNOLOGY to the
extent that such TAKEDA TECHNOLOGY is based on the use of or derived by use
of (a) HGS SPECIAL
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TECHNOLOGY, or (b) SB TECHNOLOGY as defined in the preceding two sentences
of this Paragraph.
1.48."SOUTHEAST ASIA" shall mean Burma, Cambodia, Hong Kong, Indonesia , Japan,
Laos, Malaysia, Papua New Guinea, People's Republic of China, Philippines,
Singapore, South Korea, Taiwan, Thailand, and Viet Nam.
1.49. "SP" shall mean Schering Plough Corporation and its AFFILIATES.
1.50. SPC" shall mean a right based upon a patent to exclude others from makin
g, using or selling a product, process, substance, composition or service,
such as a Supplementary Protection Certificate.
1.51."SPECIAL SB TECHNOLOGY" shall mean (1) all SB TECHNOLOGY developed by or
on behalf of SB in existence prior to the EFFECTIVE DATE required to be
transferred or transferred to HGS by SB under the COLLABORATION AGREEMENT,
(2) after the EFFECTIVE DATE all SB TECHNOLOGY developed by or on behalf of
SB which SB is required to transfer to HGS or transfers to HGS pursuant to
this Agreement, and/or (3) SB TECHNOLOGY otherwise lawfully obtained by
HGS. With respect to information contained in a RESEARCH PLAN submitted by
SB pursuant to this Agreement, SPECIAL SB TECHNOLOGY shall not include
items of the type identified in sections 1, 2, or 3 of the RESEARCH PLAN
outlines attachedas appendices A, C, and D.
1.52. "TAKEDA" shall mean Takeda Chemical Industries, Ltd., and its AFFILIATES.
1.53."TAKEDA PATENT" shall mean all patents and patent applications which claim
TAKEDA TECHNOLOGY as defined herein, which are or become owned by TAKEDA or
to which TAKEDA otherwise has, now or in the future, the right to grant
licenses, to the extent of SB's rights under the SB/TAKEDA AGREEMENT.
Included within the definition of TAKEDA PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals
or extensions thereof and all SPCs
1.54."TAKEDA PRODUCT" shall mean individually or collectively a TAKEDA PRODUCT
or SB/TAKEDA JOINT PRODUCT as those terms are defined in the SB/TAKEDA
AGREEMENT.
1.55."TAKEDA TECHNOLOGY" shall mean all technology required to be transferred
or transferred to SB under the SB/TAKEDA AGREEMENT prior to the EFFECTIVE
DATE and such other technology required to be transferred or transferred to
SB pursuant to the SB/TAKEDA AGREEMENT in each case which SB is permitted
to transfer to or share with HGS pursuant to the SB/TAKEDA
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AGREEMENT and is required to transfer or transfers to HGS pursuant to this
Agreement.
1.56."TARGET" shall mean a GENE or expression product thereof (e.g., receptors,
enzymes or ion channels) which could be used for screening or other drug
discovery purpose to identify compounds or antibodies with a biochemical or
pharmacological effect.
1.57. "TERRITORY" shall mean all the countries and territories in the world.
1.58."THERAPEUTIC PROTEIN" shall mean a polypeptide derived from a GENE (not
including an ANTIBODY PRODUCT) which may be useful for the treatment or
prevention of a disease or disorder in humans.
1.59."THERAPEUTIC PROTEIN PROPOSAL" shall have the meaning ascribed to it in the
COLLABORATION AGREEMENT.
1.60."THIRD PARTY(IES)" shall mean any party other than a party to this
Agreement or an AFFILIATE of SB, or HGS.
1.61."VACCINE" shall mean any substance which achieves a prophylactic or
therapeutic effect by inducing an antigen-specific humoral and/or cellular
immune system response but shall not include a GENE THERAPY VACCINE.
2. GRANTS
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Research and Development
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2.1. (a) HGS hereby grants to SB a non-exclusive, world-wide license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development in
the SB FIELD during the INITIAL RESEARCH TERM pursuant to this Agreement.
(b) HGS hereby grants to SB a non-exclusive, world-wide license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development of
TARGETS and DRUG PRODUCTS which are COLLABORATION PRODUCTS in the SB FIELD
during RESEARCH TERM EXTENSIONS.
2.2. HGS hereby grants to SB a non-exclusive, world-wide, license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development in
the SB FIELD after the INITIAL RESEARCH TERM pursuant to a RESEARCH PLAN
submitted by SB pursuant to this Agreement.
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2.3. HGS hereby grants to SB a non-exclusive, world-wide, license under HGS
SPECIAL TECHNOLOGY, HGS PATENTS and COLLABORATION PARTNER PATENTS to
perform research and development in the HGS FIELD only in furtherance of
research and development in the SB FIELD (i) during the INITIAL RESEARCH
TERM and RESEARCH TERM EXTENSIONS, and (ii) after the INITIAL RESEARCH TERM
under a RESEARCH PLAN submitted by SB pursuant to this Agreement. For the
avoidance of doubt, no license is granted (other than to perform research
and development pursuant to this Paragraph 2.3) to SB hereunder to make,
have made, use and sell COLLABORATION PRODUCTS in the HGS FIELD.
2.4. SB hereby grants to HGS a non-exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and claims of SB PATENTS that cover SPECIAL SB TECHNOLOGY to
perform research and development in the SB FIELD during the INITIAL
RESEARCH TERM.
2.5. SB hereby grants to HGS a non-exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and claims of SB PATENTS that cover SPECIAL SB TECHNOLOGY to
perform research and development in the SB FIELD after the INITIAL RESEARCH
TERM pursuant to a RESEARCH PLAN submitted by HGS pursuant to this
Agreement during the INITIAL RESEARCH TERM.
2.6. Notwithstanding any rights obtained by a party, with respect to a
THERAPEUTIC PROTEIN under Section 6 or a GENE THERAPY VACCINE under Section
7, HGS and SB each acknowledges and agrees that HGS and SB, as the case may
be, retain the right under HGS SPECIAL TECHNOLOGY, HGS PATENTS, SPECIAL SB
TECHNOLOGY and SB PATENTS to use THERAPEUTIC PROTEINS and/or GENE THERAPY
VACCINES as to which the other obtains rights under Section 6 or 7 solely
for the purposes of discovering, researching, developing, marketing, using
and selling a DRUG PRODUCT or an ANTIBODY PRODUCT each in the SB FIELD
pursuant to the applicable provisions of this Agreement.
Research And Development in the HGS FIELD
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2.7. (a) SB hereby grants to HGS an exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and SB PATENTS to perform research and development in the HGS
FIELD;
(b) Notwithstanding subparagraph (a), HGS acknowledges and agrees that SB
and COLLABORATION PARTNERS as the case may be, retain the right under
SPECIAL SB TECHNOLOGY and SB PATENTS to perform research and development in
the HGS FIELD as provided in this Agreement and COLLABORATION PARTNER
AGREEMENTS.
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SB PRODUCTS.
- ------------
2.8. HGS hereby grants to SB an exclusive, sublicenseable world-wide license in
the SB FIELD under HGS SPECIAL TECHNOLOGY and HGS PATENTS and COLLABORATION
PARTNER PATENTS to make, have made, use and sell in the TERRITORY, each
THERAPEUTIC PROTEIN as to which SB obtains rights under Section 6 and each
GENE THERAPY VACCINE as to which SB obtains rights under Section 7.
2.9. HGS hereby grants to SB a non-exclusive, sublicenseable world-wide, license
in the SB FIELD under HGS SPECIAL TECHNOLOGY and HGS PATENTS and
COLLABORATION PARTNER PATENTS with respect to claims directed to TARGETS
(and the manufacture and use thereof) which are COLLABORATION PRODUCTS and
also with respect to BLOCKING CLAIMS, to make, have made, use and sell in
the TERRITORY, (1) DRUG PRODUCT which is a COLLABORATION PRODUCT which
results from a DRUG RESEARCH PLAN submitted by SB during the INITIAL
RESEARCH TERM and RESEARCH TERM EXTENSIONS, and (2) ANTIBODY PRODUCT which
is a COLLABORATION PRODUCT and which results from an ANTIBODY RESEARCH PLAN
submitted by SB during the INITIAL RESEARCH TERM.
2.10.(a) SB agrees not to grant to a THIRD PARTY rights in or to an SB PRODUCT
in the TERRITORY outside of SOUTHEAST ASIA except as follows:
(i) SB shall have the right to grant a license to a THIRD PARTY to an SB
PRODUCT which is a THERAPEUTIC PROTEIN as to which SB obtains rights under
Section 6 the earlier of (1) after SB has established proof of efficacy for
such SB PRODUCT in Phase II clinical tests; or (2) after sufficient
evidence to establish efficacy for one or more indications is available;
(ii) SB shall have the right to license SB PRODUCTS which are DRUG PRODUCTS,
GENE THERAPY VACCINES or ANTIBODY PRODUCTS at any time; and
(iii)SB shall have the right to grant a license to SB PRODUCTS in the TERRITORY
to TAKEDA pursuant to the SB/TAKEDA AGREEMENT.
(b) SB shall have the right at any time to grant rights and licenses to any and
all SB PRODUCTS in SOUTHEAST ASIA.
(c) In addition to (a) and (b), the rights granted to SB by HGS under this
Agreement are licenseable and/or transferable by SB to a COLLABORATION
PARTNER provided HGS and SB mutually agree to the terms and conditions of
the relevant agreement.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(d) Except for agreements permitted by Paragraph 12.3, the SB/TAKEDA AGREEMENT
or COLLABORATION PARTNER AGREEMENTS, the rights granted to SB by HGS under
this Agreement and SB's rights to SB TECHNOLOGY and SB PATENTS are
licenseable and/or transferable by SB to a THIRD PARTY only with respect to
a SB PRODUCT, and only pursuant to an Agreement by which SB grants a
license to a THIRD PARTY to an SB PRODUCT as permitted under this Paragraph
2.10 and in which the THIRD PARTY agrees to covenants and obligations with
respect to the use of such SB PRODUCT, and any HGS TECHNOLOGY, HGS PATENTS,
SB PATENTS and SB TECHNOLOGY to be licensed to such THIRD PARTY which are
essentially identical to the covenants and obligations of SB under this
Agreement.
HGS PRODUCTs
- ------------
2.11.SB hereby grants to HGS an exclusive, sublicenseable world-wide license
under SPECIAL SB TECHNOLOGY and SB PATENTS to make, have made, use and sell
in the TERRITORY within the SB FIELD each THERAPEUTIC PROTEIN which is an
HGS PRODUCT as to which HGS obtains rights under Section 6 and within the
HGS FIELD each GENE THERAPY VACCINE which is an HGS PRODUCT as to which HGS
obtains rights under Section 7.
2.12.With respect to THERAPEUTIC PROTEINS in the SB FIELD as to which HGS has
obtained rights under Section 6 and ANTIBODY PRODUCTS which are HGS
PRODUCTS in the SB FIELD developed under a ANTIBODY RESEARCH PLAN submitted
by HGS during the INITIAL RESEARCH TERM, in each case HGS shall have the
right to grant licenses to THIRD PARTIES only after HGS has obtained
sufficient pharmacological, biological and other data to permit a decision
to be made as to whether or not to complete studies required for an
Investigational New Drug Application (IND) provided, however, during the
INITIAL RESEARCH TERM such licensing rights are limited to a total of
[***] such THERAPEUTIC PROTEINS and [***] such ANTIBODY PRODUCTS.
2.13.SB hereby grants to HGS a non-exclusive, sublicenseable subject to the
limitations of Paragraphs 2.12, 2.14, 2.20 and 2.21, world-wide license
under SPECIAL SB TECHNOLOGY and under SB PATENTS only with respect to
claims directed to TARGETS (and the manufacture and use thereof) which are
COLLABORATION PRODUCTS and also only with respect to BLOCKING CLAIMS, to
make, have made, use and sell in the TERRITORY, HGS PRODUCTS which are DRUG
PRODUCTS within the SB FIELD developed pursuant to a DRUG RESEARCH PLAN
submitted by HGS during the
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INITIAL RESEARCH TERM and HGS PRODUCTS which are ANTIBODY PRODUCT in the SB
FIELD developed pursuant to a ANTIBODY RESEARCH PLAN submitted by HGS
during the INITIAL RESEARCH TERM.
2.14.Except for agreements permitted by Paragraph 12.3, during the INITIAL
RESEARCH TERM the rights to SPECIAL SB TECHNOLOGY and SB PATENTS granted to
HGS by SB under this Agreement in the SB FIELD are licenseable and/or
transferable by HGS to a THIRD PARTY only with respect to an HGS PRODUCT in
the SB FIELD, and only pursuant to an Agreement by which HGS grants a
license to a THIRD PARTY to an HGS PRODUCT in the SB FIELD as permitted
under this Agreement and in which the THIRD PARTY agrees to covenants and
obligations which limit the use of SB PATENTS and SPECIAL SB TECHNOLOGY
which are essentially identical to the covenants and obligations of HGS
under this Agreement.
2.15.SB hereby grants to HGS an exclusive, world-wide license, with the right
to grant sublicenses, (i) under SB PATENTS, and (ii) under SPECIAL SB
TECHNOLOGY developed by or on behalf of SB prior to the EFFECTIVE DATE, in
each case to make, have made, use and sell an HGS PRODUCT in the HGS FIELD;
provided that in any agreement with a THIRD PARTY (other than a
COLLABORATION PARTNER) with respect to such SPECIAL SB TECHNOLOGY, such
THIRD PARTY will only be provided with such SPECIAL SB TECHNOLOGY by HGS on
a gene-by-gene basis after prior written notice to SB of the SPECIAL SB
TECHNOLOGY to be provided and further provided that HGS will incorporate
the following terms into all THIRD PARTY agreements (other than a
COLLABORATION PARTNER) in the HGS FIELD with respect to such SPECIAL SB
TECHNOLOGY: (i) such THIRD PARTY will develop and maintain a 'firewall'
plan reasonably acceptable to both HGS and SB; and (ii) SB has the right to
directly enforce breaches of any such agreement by the THIRD PARTY with
respect to its use of SPECIAL SB TECHNOLOGY.
Copromotion.
------------
2.16.(a) HGS hereby grants to SB an option to co-promote HGS PRODUCT sold by
HGS in the HGS FIELD (other than a GENE THERAPY VACCINE), on a
country-by-country basis, in the TERRITORY. SB may exercise this option as
provided in Paragraph 10.2. The option does not extend to any HGS PRODUCT
which is primarily a service.
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(b) HGS hereby grants to SB an option to develop, sell, promote and/or market
HGS PRODUCTS in the SB FIELD (other than a GENE THERAPY VACCINE) in the
TERRITORY, which option may be exercised as provided in Paragraph 10.3.
(c) SB hereby grants to HGS an option to co-promote SB PRODUCT sold by SB in
the SB FIELD (other than a GENE THERAPY VACCINE), on a country-by-country
basis in the United States, Canada, Mexico, and Europe. HGS may exercise
this option as provided in Paragraph 10.1. The option does not extend to
any SB PRODUCT which is primarily a service.
Takeda.
-------
2.17.(a) HGS acknowledges that it has reviewed the SB/TAKEDA AGREEMENT as it
exists as of the EFFECTIVE DATE as may be amended with the consent of HGS
and hereby confirms its approval of, and consent to SB's entry into such
agreement.
(b) HGS hereby grants to SB the right to grant to TAKEDA, pursuant to the
SB/TAKEDA AGREEMENT as it exists as of the EFFECTIVE DATE and as it may be
amended with the consent of HGS, an exclusive or non-exclusive sublicense
under LICENSED PATENTS, LICENSED TECHNOLOGY, SB PATENTS and SB TECHNOLOGY
(to the full extent of the interest of HGS therein), to make, have made,
use and sell SB PRODUCTS and TAKEDA PRODUCTS.
(c) HGS hereby grants to SB the right to grant to TAKEDA, a non-exclusive,
non-transferable, paid-up sublicense under LICENSED PATENTS, LICENSED
TECHNOLOGY, SB PATENTS and SB TECHNOLOGY (to the full extent of the
interest of HGS therein), to carry out research and development pursuant to
the SB/TAKEDA AGREEMENT as it exists as of the EFFECTIVE DATE and as it may
be amended with the consent of HGS.
(d) LICENSED PATENTS and LICENSED TECHNOLOGY as used in this Paragraph 2.17
shall have the meaning ascribed to them in the SB/TAKEDA AGREEMENT.
Other License Terms.
--------------------
2.18.HGS grants to SB an irrevocable, royalty-free non-exclusive world-wide,
license (sublicenseable only to COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT and TAKEDA under the SB/TAKEDA AGREEMENT),
to use BIOINFORMATICS which is HGS TECHNOLOGY to perform research and
development after the INITIAL RESEARCH TERM. Without limiting the
generality of the forgoing, HGS hereby grants to SB the rights to grant to
TAKEDA an irrevocable, paid-up, non-
16
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exclusive, world-wide license to any and all BIOINFORMATICs which is HGS
TECHNOLOGY transferred to TAKEDA during the INITIAL RESEARCH TERM pursuant
to the SB/TAKEDA AGREEMENT.
2.19.If during the INITIAL RESEARCH TERM HGS develops a biotransformation
process within the HGS FIELD for preparing pharmaceutically active human or
animal agents sold by SB prior to May 19, 1993, HGS hereby grants to SB the
first right to an exclusive license under HGS know-how and patents to make,
have made, use and sell such agents under terms to be negotiated. If the
parties are unable to reach agreement on the terms thereof within ninety
(90) days of notice by HGS that such process has been developed, then HGS
shall have the right to grant such license to a THIRD PARTY provided,
however, that HGS shall not grant such license to a THIRD PARTY on terms
more favorable than those last extended to SB without first offering such
terms to SB.
2.20.Except for (i) licenses granted by HGS to SB under this Agreement, TAKEDA
under the SB/TAKEDA AGREEMENT, and/or COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT; and (ii) licenses granted to THIRD PARTIES
in the SB FIELD with respect to THERAPEUTIC PROTEINS or ANTIBODY PRODUCTS
as permitted by Paragraph 2.12, during the INITIAL RESEARCH TERM, HGS shall
not grant any rights or license to THERAPEUTIC PROTEINS which are
COLLABORATION PRODUCTS in the SB FIELD or ANTIBODY PRODUCTS which are
COLLABORATION PRODUCTS in the SB FIELD.
2.21.Except for licenses granted by HGS to SB under this Agreement, TAKEDA
under the SB/TAKEDA AGREEMENT, and/or COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT, (a) for the period commencing on the
expiration of the INITIAL RESEARCH TERM and ending four (4) years
thereafter, HGS agrees not to grant any rights or licenses to a THIRD PARTY
in the SB FIELD with respect to TARGETS which are COLLABORATION PRODUCTS
and which are the subject of a DRUG RESEARCH PLAN or ANTIBODY RESEARCH PLAN
submitted prior to the end of the INITIAL RESEARCH TERM by SB or similar
research plan submitted prior to the end of the INITIAL RESEARCH TERM by
TAKEDA under the SB/TAKEDA AGREEMENT and/or a COLLABORATION PARTNER under
such COLLABORATION PARTNER AGREEMENT, and (b) HGS agrees not to grant any
rights or license to a THIRD PARTY in the SB FIELD with respect to
17
<PAGE>
TARGETS which are COLLABORATION PRODUCTS during the INITIAL RESEARCH TERM.
2.22 (a) HGS shall not use TARGETS which are COLLABORATION PRODUCTS for DRUG
PRODUCT discovery in the SB FIELD until three (3) years from the EFFECTIVE
DATE, and (b) HGS further agrees that after such period and during the
INITIAL RESEARCH TERM HGS shall not use TARGETS which are COLLABORATION
PRODUCTS for DRUG PRODUCT discovery in the SB FIELD which are the subject
of a DRUG RESEARCH PLAN submitted by SB or an equivalent plan submitted by
a COLLABORATION PARTNER under a COLLABORATION PARTNER AGREEMENT or TAKEDA
under the SB/TAKEDA AGREEMENT prior to the end of the INITIAL RESEARCH TERM
unless prior to the submission of such plan by SB, TAKEDA or COLLABORATION
PARTNER, HGS has either submitted to SB biological data with respect to the
TARGET to which such plans are directed or HGS has submitted to SB a DRUG
RESEARCH PLAN with respect to such TARGET. For the purposes of this
Paragraph 2.22, biological data shall mean for example, nucleotide sequence
from a single clone encoding the complete open reading frame for the full
length TARGET and/or transient or stable functionally expressing cell lines
each of which are generated by or on behalf of HGS.
2.23.During the INITIAL RESEARCH TERM, HGS shall not use TARGETs or THERAPEUTIC
PROTEINS which are COLLABORATION PRODUCTS for ANTIBODY PRODUCT discovery in
the SB FIELD which are the subject of an ANTIBODY RESEARCH PLAN submitted
by SB in accordance with this Agreement unless prior to the submission of
such ANTIBODY RESEARCH PLAN by SB, HGS has either submitted an ANTIBODY
RESEARCH PLAN with respect to such TARGET or HGS has submitted to SB
biological data with respect to the TARGET to which the ANTIBODY RESEARCH
PLAN is directed. For the purposes of this Paragraph biological data shall
mean for example, nucleotide sequence from a single clone encoding the
complete open reading frame for the full length TARGET and/or transient or
stable functionally expressing cell lines each of which are generated by or
on behalf of HGS.
2.24.Notwithstanding anything else to the contrary, SPECIAL SB TECHNOLOGY
developed after the EFFECTIVE DATE and claims of SB PATENTS that cover such
SPECIAL SB TECHNOLOGY developed after the EFFECTIVE DATE, and RESEARCH
PROGRAMS submitted under the COLLABORATION AGREEMENT shall not be disclosed
18
<PAGE>
by HGS to SP or a THIRD PARTY until such patents and technology have, prior
to such disclosure, become generally available to the public other than
through a breach of this Agreement.
2.25.All the grants in this Section 2 are subject to all the terms and
conditions of the Agreement.
2.26.HGS and SB each agree that: (i) either party may compare microbial
nucleotide sequences with human cDNA sequences which are HGS SPECIAL
TECHNOLOGY or SPECIAL SB TECHNOLOGY to determine homologies between such
sequences; (ii) such use of HGS SPECIAL TECHNOLOGY or SPECIAL SB TECHNOLOGY
by SB during the INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS shall be
deemed to be an "immaterial use" of such technologies (as such phrase is
used in this Agreement) with respect to any microbial gene based drug
discovery target or vaccine identified by SB (or a licensee of SB) by such
use, and such use alone shall not cause such microbial nucleotide sequence
or such target and/or such vaccine to be SB TECHNOLOGY or a COLLABORATION
PRODUCT nor any antimicrobial product discovered or developed by SB (or a
licensee of SB) by such use of any such microbial nucleotide sequence or
such target and/or such vaccine to be a COLLABORATION PRODUCT or SB
TECHNOLOGY under this Agreement, (iii) such use alone of HGS SPECIAL
TECHNOLOGY or SPECIAL SB TECHNOLOGY by HGS shall not cause any such
microbial nucleotide sequence or any microbial gene based drug discovery
target or vaccine identified by HGS (or a licensee of HGS) by such use to
be a COLLABORATION PRODUCT, nor any antimicrobial product discovered or
developed by HGS (or a licensee of HGS) by such use of any such microbial
nucleotide sequence or such target and/or such vaccine to be a
COLLABORATION PRODUCT or HGS TECHNOLOGY under this Agreement.
3. PAYMENTS AND ROYALTIES
----------------------
Payments to HGS
---------------
3.1 SB shall pay the following royalties on NET SALES of each SB PRODUCT (other
than a GENE THERAPY VACCINE) and TAKEDA PRODUCT, each which are sold by SB
or SB licensees (other than TAKEDA or its licensees) which royalty shall be
calculated on a product by product basis, with the applicable royalty rate
for each such SB PRODUCT or TAKEDA PRODUCT in a calendar year being based
on world-wide sales for such SB PRODUCT or TAKEDA PRODUCT in the calendar
year and this determined royalty rate being applied to all world-wide sales
(other than sales by TAKEDA or its
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
licensees) of such SB PRODUCT or TAKEDA
PRODUCT in such calendar year:
i.6% (six percent) of NET SALES of each SB PRODUCT and/or TAKEDA PRODUCT
during each calendar year in which the NET SALES of such SB PRODUCT
and/or TAKEDA PRODUCT do not exceed [***];
ii.8% (eight percent) of such NET SALES of each SB PRODUCT and/or TAKEDA
PRODUCT during each calendar year in which the NET SALES of such SB
PRODUCT and/or TAKEDA PRODUCT exceed [***];
iii.9% (nine percent) of such NET SALES of each SB PRODUCT and/or TAKEDA
PRODUCT during each calendar year in which the NET SALES of such SB
PRODUCT and/or TAKEDA PRODUCT exceed [***];
iv.10% (ten percent) of such NET SALES of each SB PRODUCT and/or
TAKEDA PRODUCT during each calendar year in which the NET SALES of such
SB PRODUCT and/or TAKEDA PRODUCT exceed [***]).
3.2 SB shall have the right on a product by product basis, to credit against
any royalty payment due to HGS pursuant to Paragraph 3.1 for any calendar
half-year, [***] of the royalties due TAKEDA pursuant to Section 3 of the
SB/TAKEDA AGREEMENT for that half-year on sales of TAKEDA PRODUCT by SB or
its licensees; provided however, that in no event shall the royalty due to
HGS on such sales in such half-year be reduced more than [***] of the
royalty that would otherwise be due HGS under Paragraph 3.1 on such sales
in such half-year.
3.3 SB shall pay royalties to HGS for sales made by SB of each CORIGHTS
PRODUCT in an amount equal to [***] of the royalty which would be due HGS
under Paragraph 3.1, as if such CORIGHTS PRODUCT were a SB PRODUCT.
3.4 No royalties are due HGS under Paragraph 3.1 for any product for which
royalties are due HGS under Paragraph 3.5 or 3.6.
3.5 SB shall pay to HGS the royalties owed by TAKEDA to SB pursuant to
Paragraph 3.3 of the SB/TAKEDA AGREEMENT on sales of TAKEDA PRODUCTS sold
by TAKEDA or its licensees (other than SB).
3.6 SB shall pay to HGS fifty (50%) percent of the royalties owed by TAKEDA to
SB pursuant to Paragraph 3.3 of the SB/TAKEDA AGREEMENT on sales of SB
PRODUCTS sold by TAKEDA or its licensees other than SB pursuant to the
SB/TAKEDA AGREEMENT.
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
3.7 Notwithstanding anything herein to the contrary, SB shall not be obligated
to pay any royalties or make any milestone payments and HGS shall not have
co-promotion rights each with respect to the following:
(a) SB PRODUCT, CORIGHT PRODUCT or TAKEDA PRODUCT encompassed by a DRUG
RESEARCH PLAN or ANTIBODY RESEARCH PLAN submitted by SB under this
Agreement (or in the case of a CORIGHT PRODUCT or TAKEDA PRODUCT submitted
under a research plan pursuant to an agreement with SB and/or HGS) which
product is not covered by a claim of a granted HGS PATENT and which product
is DISCOVERED after the later of (i) [***] after the end of the
INITIAL RESEARCH TERM or (ii) [***] years after the end of RESEARCH TERM
EXTENSIONS; or (b) SB PRODUCT which is a THERAPEUTIC PROTEIN which is not
covered by a granted claim of a HGS PATENT, SB PATENT or COLLABORATION
PARTNER PATENT licensed to SB under this Agreement and of which at least
95% of the full length DNA coding sequence for, or the cDNA
corresponding to the amino acid sequence of the final form of, such SB
PRODUCT is independently identified by SB without the use of HGS TECHNOLOGY
or SB TECHNOLOGY.
Payments to SB
- --------------
3.8 If a HGS PRODUCT (other than a GENE THERAPY VACCINE) (i) is sold by HGS in
the HGS FIELD and is covered by a SB PATENT or incorporates or is based on
or is derived by use of SB TECHNOLOGY or (ii) is sold by HGS in the SB
FIELD, then HGS shall pay the following royalties on NET SALES of each HGS
PRODUCT sold by HGS which royalty shall be calculated on a product by
product basis, with the applicable royalty rate for each HGS PRODUCT in a
calendar year being based on world-wide sales by HGS and its licensees for
such HGS PRODUCT in the calendar year and this determined royalty rate
being applied to all world-wide sales by HGS of such HGS PRODUCT in such
calendar year:
i 6% (six percent) of NET SALES during each calendar year in which the
NET SALES do not exceed [***];
ii 8% (eight percent) of all NET SALES during each calendar year in
which the NET SALES exceed [***];
iii 9% (nine percent) of all NET SALES of the HGS PRODUCT during each
calendar year in which the NET SALES exceed [***] but do not exceed
[***];
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
iv 10% (ten percent) of all NET SALES of the HGS PRODUCT during each
calendar year in which the NET SALES exceed [***]).
3.9 With respect to
(i) each THERAPEUTIC PROTEIN as to which HGS obtains rights under
Section 6;
(ii) each DRUG PRODUCT or ANTIBODY PRODUCT in each case which is an HGS
PRODUCT in the SB FIELD DISCOVERED prior to the end of the INITIAL
RESEARCH TERM; and
(iii) each DRUG PRODUCT or ANTIBODY PRODUCT which is an HGS PRODUCT in
the SB FIELD which results from a TARGET which is a COLLABORATION
PRODUCT which is the subject of a DRUG RESEARCH PLAN or ANTIBODY
RESEARCH PLAN submitted prior to the end of the INITIAL RESEARCH TERM
by HGS and which is also the subject of a DRUG RESEARCH PLAN or
ANTIBODY RESEARCH PLAN submitted by SB, where the DRUG PRODUCT or
ANTIBODY PRODUCT is DISCOVERED by HGS prior to the period ending [***]
years after the end of the INITIAL RESEARCH TERM,
which HGS PRODUCTS are licensed by HGS to a THIRD PARTY in the SB FIELD,
HGS shall pay SB:
(a) [***] percent [***] of any OUTLICENSE FEES (excluding royalties)
received by HGS from a THIRD PARTY with respect thereto; and
(b) the following percentage of royalties (Royalty Share) due HGS from
such THIRD PARTY which percentage shall be based on all world-wide NET
SALES for such HGS PRODUCT in a calendar year:
Net Sales Royalty Share to SB
----------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
3.10 Except as provided in Paragraphs 3.9, 10.2 and 10.3, HGS shall be obligated
to pay royalties on and shall have other obligations pursuant to this
Agreement only with respect to:
(a) any HGS PRODUCT which is covered by an issued SB PATENT; and/or
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(b) any HGS PRODUCT in the HGS FIELD (other than a GENE THERAPY VACCINE)
which is not covered by an issued SB PATENT, where such product is based on
the use of, or is derived by the use of SPECIAL SB TECHNOLOGY; and/or
(c) any HGS PRODUCT in the SB FIELD which is a DRUG PRODUCT or ANTIBODY
PRODUCT DISCOVERED during the INITIAL RESEARCH TERM; and/or
(d) any HGS PRODUCT in the SB FIELD which is a DRUG PRODUCT or ANTIBODY
PRODUCT which is not covered by an issued SB PATENT, where such product is
based on the use of, or derived by the use of SPECIAL SB TECHNOLOGY and is
DISCOVERED during the period commencing after the end of the INITIAL
RESEARCH TERM and ending [***] years thereafter; and/or
(e) any HGS PRODUCT in the SB FIELD which is a THERAPEUTIC PROTEIN to which
HGS has obtained rights under Section 6; and/or
(f) any HGS PRODUCT which is a GENE THERAPY VACCINE to which HGS has
obtained rights under Section 7.
3.11 If a HGS PRODUCT is sold in the HGS FIELD by a licensee of HGS, and is
covered by a SB PATENT or incorporates or is based on or is derived by use
of SB TECHNOLOGY, then HGS shall pay to SB [***] percent [***] of
OUTLICENSE FEES received by HGS for such HGS PRODUCT.
3.12 Notwithstanding any of the provisions of this Section 3, HGS shall not owe
SB any royalties or have any other obligations to SB with respect to the
[***] HGS PRODUCTS for which SP elects to obtain and obtains co-promotion
or co-marketing rights under a COLLABORATION PARTNER AGREEMENT among SP,
HGS and SB.
3.13 Notwithstanding any of the provisions of this Section 3, HGS shall not owe
SB any royalties and SB shall not owe HGS royalties with respect to an HGS
PRODUCT in countries and/or territories for which SB obtains rights
pursuant to Paragraphs 2.16(b) and 10.3.
Milestone payments
- ------------------
3.14 (a) In addition to royalties as provided above, for each SB PRODUCT, SB
shall pay to HGS [***] dollars [***] upon initiation by SB, a licensee of
SB (except TAKEDA under the SB/TAKEDA AGREEMENT or a COLLABORATION PARTNER
under a COLLABORATION PARTNER AGREEMENT) or by a THIRD PARTY authorized by
SB (subject to the above exceptions) of the first CLINICAL STUDY and [***]
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
dollars [***] upon acceptance of the first filing of a New Drug Application
or a Product License Application (or equivalent thereof in a Major Market).
Such milestone payments shall be applicable to all SB PRODUCTS except any
SB PRODUCT where expected worldwide NET SALES are less than [***] million
dollars [***] per year. (b) In the case of SB PRODUCTS for which expected
worldwide NET SALES are less than US [***], SB shall pay to HGS [***]
dollars [***] upon initiation of country-wide sales of the product in a
Major Market. If the actual annual worldwide NET SALES of such product
exceed the US [***] then SB shall thereupon pay to HGS [***].
(c) The milestone payments provided in this Paragraph 3.14 shall only be made
once for each SB PRODUCT and shall not be made in the case of improvements
or modifications such as but not limited to changed forms, formats, salts,
formulations, indications, processes or protocols of an SB PRODUCT for
which the payments were previously made.
(d) Notwithstanding anything in this Paragraph 3.14 to the contrary, payments
to HGS in connection with milestone payments for TAKEDA PRODUCTS and SB
PRODUCTS sold by TAKEDA or its sublicencees under the SB/TAKEDA AGREEMENT
are governed by Section 3 of such agreement.
(e) In the event SB licenses an SB PRODUCT to a THIRD PARTY, SB shall credit
the share of OUTLICENSE FEE paid HGS on such SB PRODUCT against any
milestone payments due HGS under this Paragraph 3.14 for such SB PRODUCT.
3.15 SB and HGS shall share equally (i) any milestone payments received by SB
from TAKEDA pursuant to Paragraph 3.8 of the SB/TAKEDA AGREEMENT and (ii)
milestone payments due to HGS and/or SB from COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT.
COLLABORATION PARTNER PAYMENTS.
- -------------------------------
3.16 HGS and SB shall share on an equal basis any up front contract execution
fees received by HGS and/or SB from a COLLABORATION PARTNER under a
COLLABORATION PARTNER AGREEMENT, which fees include only: (1) the forty
five (45,000,000) Million U.S. Dollar payment due SB and HGS from SP which
fee is due and payable over a five year period, (2) the thirty five
(35,000,000) Million U.S. Dollar payment due SB and HGS from Merck which
fee is due and payable over a five year period, (3) the twenty five
(25,000,000) U.S. Dollar payment due SB and HGS from Synthelabo which
24
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
fee is due and payable over a five year period, and (4) similar fees
received from another COLLABORATION PARTNER.
Other.
- ------
3.17 With respect to any SB PRODUCT or HGS PRODUCT in any country in any
calendar year, in the event that royalties are paid to a THIRD PARTY on NET
SALES of such HGS PRODUCT or SB PRODUCT in such country for such calendar
year and the royalties actually owed to such THIRD PARTY when aggregated
with the royalties owed to HGS or SB as the case may be for such product in
such country in such calendar year causes the royalty rate on NET SALES for
such product in such country in such calendar year to exceed [***], then
one-half of the royalties which are to be actually paid to such THIRD PARTY
may be credited against the royalties due to SB or HGS as the case may be
for such product in such country in such calendar year until the aggregated
royalty rate for such product in such country in such calendar year is
reduced to [***] provided however, that in no event shall the royalty due
to SB or HGS as the case may be on such NET SALES in such year be reduced
to less than [***].
3.18 Royalties owed HGS by COLLABORATION PARTNERS under a COLLABORATION PARTNER
AGREEMENT shall be paid to and collected by HGS.
3.19.Royalty obligations on TAKEDA PRODUCTS sold by SB and HGS PRODUCTS and SB
PRODUCTS in the SB FIELD and GENE THERAPY VACCINES, under this Agreement
shall terminate on a country-by-country and product-by-product basis on the
later of (i) ten (10) years after first country-wide launch of each product
in each country or (ii) expiration of the SB PATENT, COLLABORATION PARTNER
PATENT or HGS PATENT which covers the making, using or selling of such
product in such country.
3.20 Royalty obligations on HGS PRODUCTs in the HGS FIELD, under this Agreement
shall terminate on a country-by-country and product-by-product basis on the
later of (i) ten (10) years after first country-wide launch of each product
in each country or (ii) expiration of the SB PATENT which covers the
making, using or selling of such product in such country.
3.21 Royalty obligations under this Agreement on CORIGHTS PRODUCTS sold by SB or
a licensee of SB shall terminate when such royalty obligations expire under
the relevant COLLABORATION PARTNER AGREEMENT covering such CORIGHTS
PRODUCT, but in no event sooner than ten (10) years after the first country
wide
25
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
launch of such CORIGHTS PRODUCT in each country in which such CORIGHT
PRODUCT is sold by SB.
3.22 Royalty obligations under this Agreement with respect to or deriving from
sales by TAKEDA or its licensees (other than SB or its licensees) of a
TAKEDA PRODUCT or SB PRODUCT shall terminate simultaneously with the
termination, on a country-by-country and product-by-product basis, of
TAKEDA's obligation to pay royalties on the sale of such TAKEDA PRODUCT or
SB PRODUCT pursuant to the SB/TAKEDA AGREEMENT.
3.23 If the SB PRODUCT or HGS PRODUCT sold comprises one or more
pharmaceutically active agents or antigens which are not SB PRODUCTS or HGS
PRODUCTS respectively, then the royalty rates set forth in this Section
shall be adjusted by mutual agreement of the parties provided that in no
event shall such rates exceed those provided for in said Section.
3.24 If the SB PRODUCT sold by SB or a THIRD PARTY authorized by SB is a service
or a component of a service, then SB shall pay to HGS a royalty in
accordance with the schedule in Paragraph 3.1, except that such royalty
rate schedule shall be adjusted by mutual agreement of the parties if such
adjustment is necessary to equitably reflect the value of the service
component of the product relative to the value of the component derived
from or based upon HGS TECHNOLOGY or SB TECHNOLOGY, but in no event shall
such royalties exceed those payable under Paragraph 3.1.
3.25 If the HGS PRODUCT sold by HGS or a THIRD PARTY authorized by HGS in the SB
FIELD or in the HGS FIELD is a service or a component of a service, then
HGS shall pay to SB a royalty in accordance with the schedule in Paragraph
3.8, except that such royalty rate schedule shall be adjusted by mutual
agreement of the parties if such adjustment is necessary to equitably
reflect the value of the service component of the product relative to the
value of the component derived from or based upon HGS TECHNOLOGY or SB
TECHNOLOGY, but in no event shall such royalties exceed those payable under
Paragraph 3.8.
3.26 Except for SB PRODUCTS, TAKEDA PRODUCTS, and/or CORIGHTS PRODUCTS sold
under the licenses granted to TAKEDA under the SB/TAKEDA AGREEMENT and
licenses granted to a COLLABORATION PARTNER under a COLLABORATION PARTNER
AGREEMENT, for any license granted by SB to a THIRD PARTY for a SB PRODUCT,
SB shall pay to HGS [***] of all OUTLICENSE FEES (except royalties)
received with respect to
26
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
such SB PRODUCT and royalties in accordance with Section 3 based on NET
SALES of such SB PRODUCT by such THIRD PARTY.
3.27 Notwithstanding anything else in this Section to the contrary, but subject
to Paragraph 3.7 and 3.10, for each HGS PRODUCT or SB PRODUCT which is a
GENE THERAPY VACCINE, the only payments made under this Section shall be as
follows: each party shall pay the other (a) [***] of the OUTLICENSE FEES
paid to it for such product under a license to a THIRD PARTY for such GENE
THERAPY VACCINE; and/or (b)[***] of the NET SALES on each product which is
a GENE THERAPY VACCINE sold by it.
4. THE RESEARCH COMMITTEE
----------------------
4.1 The RC shall have the duties and responsibilities specified in this
Agreement or otherwise accorded to it by mutual agreement of the parties.
The RC shall meet two (2) times during the year, at times and places
mutually agreed upon. All RC decisions shall be decided by majority vote of
all members, including the chair. To constitute a quorum, at least four (4)
members must be present, two of whom were appointed by HGS and two of whom
were appointed by SB. To constitute a valid decision of the RC, the
majority vote must always include at least one concurring (1) vote from a
member appointed by SB and at least one (1) concurring vote from a member
appointed by HGS. Tie votes shall be resolved by senior management of both
SB and HGS. Tie votes which cannot be resolved by senior management of both
companies shall be resolved by binding arbitration as provided in the
arbitration agreement between SB and HGS dated 19 August, 1993 as may be
amended from time to time.
5. SEQUENCING
----------
5.1 The parties acknowledge that some of the sequencing of GENES had been
carried out by a THIRD PARTY, The Institute for Genomic Research ("TIGR"),
and that neither HGS nor SB controls TIGR or its activities.
5.2 During the INITIAL RESEARCH TERM, HGS sequencing capacity equal to 35 ABI
373 automated DNA sequencers (which capacity is 160,000 sequences per year
meeting quality specifications agreed to by the parties promptly after the
EFFECTIVE DATE) shall be at the complete disposal of the RC for sequencing
GENES. HGS shall keep the RC regularly and fully informed of the extent of
the usage requested by the RC relative to the total capacity under RC
direction. To the extent the full sequencing capacity under RC direction is
not absorbed by requests from the RC, HGS may use the residual capacity
27
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
for other efforts, provided, such other efforts do not impede the efforts
requested by the RC. All sequencing of GENES by HGS or by TIGR during the
INITIAL RESEARCH TERM shall be at no expense to SB. HGS retains its rights
to utilize other sequencing capacity for any purpose provided that all HGS
sequencing of GENES or cDNAs shall be subject to this Agreement.
5.3 SB and HGS will meet during 1996 to jointly determine a sequencing
strategy, which may be amended from time to time, for use of such 35 RC
dedicated sequencers or their equivalent capacity until the end of the
INITIAL RESEARCH TERM. HGS shall provide adequate staff and reagent to keep
such 35 RC dedicated sequencers or their equivalent capacity running at
capacity during the INITIAL RESEARCH TERM. In the event SB and HGS are
unable to jointly determine such strategy, the matter will be referred to
the RC for resolution. Any tie vote on such matter will be resolved
according to Paragraph 4.1; provided however that during the resolution
process defined in Paragraph 4.1, the Chair of the RC shall be empowered to
direct the utilization of the RC directed sequencers, and HGS shall use its
reasonable best efforts to carry out such activities as are requested by
the Chair of the RC to this end.
5.4. Fifty percent (50%) of the sequencing requirements of the COLLABORATION
PARTNERS which are Synthelabo and Merck will come from the RC sequencing
capacity of Paragraph 5.2.
5.5 HGS shall use diligent efforts to complete any sequencing done under this
Section subject to timely receipt by HGS of directions regarding
prioritization and/or cDNA libraries suitable for such sequencing from SB.
5.6 Sequencing pursuant to Paragraph 5.2 shall include a reasonable number of
second walks and clone sequence confirmations requested by SB and/or TAKEDA
for any reason. Such reasonable number shall mean a total of [***] second
walks and/or clone sequence confirmations for which SB requests such
sequence confirmation.
5.7 During the INITIAL RESEARCH TERM, HGS shall maintain its annual sequencing
activities of GENES and cDNAs at a level at least equal to the level of
such sequencing during the one year period immediately prior to the
EFFECTIVE DATE.
5.8 All ESTs and second walks sequenced by HGS pursuant to this Agreement and
clones developed by HGS containing such sequences shall be owned by HGS and
shall be HGS TECHNOLOGY under this Agreement.
28
<PAGE>
6. THERAPEUTIC PROTEINS
--------------------
6.1 SB, HGS, TAKEDA, and COLLABORATION PARTNERS shall obtain rights in
accordance with Section 2 of this Agreement, the SB/TAKEDA AGREEMENT or a
COLLABORATION PARTNER AGREEMENT as the case may be to a THERAPEUTIC PROTEIN
which is a COLLABORATION PRODUCT, provided
(a) as among SB, TAKEDA, such COLLABORATION PARTNERS and HGS, such entity
is the first to submit a dossier as permitted under this Agreement or a
COLLABORATION PARTNER AGREEMENT or the SB/TAKEDA AGREEMENT prior to the end
of the INITIAL RESEARCH TERM,
(1) which dossier demonstrates evidence of in vivo activity for any such
THERAPEUTIC PROTEIN. Such evidence of in vivo biological activity must be
statistically different (p less than 0.05) from control for at least one
data point, and must be demonstrated in an experiment using at least
three (3) dosages of the test substance in which at least a trend of dose
related activity is demonstrated, or,
(2) in the case of a THERAPEUTIC PROTEIN for which (a) in vivo activity
cannot be demonstrated after bona fide attempts to do so in at least two
(2) sub-primate species, or (b) it is demonstrated by documented evidence
(from scientific literature or in house studies) that the relevant
effector system does not exist in sub-primates, or (c) it is demonstrated
by documented evidence (from scientific literature or in-house studies)
that there is an absence of reactivity with relevant targets in
subprimates, such dossier demonstrates evidence of in vitro biological
activity in at least one relevant cellular based assay for any such
THERAPEUTIC PROTEIN. Such evidence of in vitro biological activity must
be statistically different (p less than 0.05) from control for at least
one data point, and must be demonstrated in an experiment using multiple
concentrations of the test substance in which at least a trend of dose
related activity is demonstrated.
(3) The preparation used to demonstrate biological activity shall be:
(i) a purified preparation in which at least 75% (w/w) of the protein
component of the preparation is the THERAPEUTIC PROTEIN; or
(ii) a purified preparation in which the relative concentration and/or
specific activity of the THERAPEUTIC PROTEIN has been increased at least
1000 fold as compared to an unpurified preparation.
In no case shall the concentration of the THERAPEUTIC PROTEIN be less
that one (1) microgram/ml in the purified
29
<PAGE>
preparation of (i) or (ii). Such purified preparation shall be shown to
have a biological activity which is not attributable to endotoxin
contamination;
(b) such rights to such THERAPEUTIC PROTEIN have not been previously
granted to SB, TAKEDA, COLLABORATION PARTNER or HGS in accordance with the
requirements of this Paragraph 6.1 or under Paragraph 6.3 of this Agreement
or under a provision comparable to Paragraph 6.1 in the SB/TAKEDA AGREEMENT
or a COLLABORATION PARTNER AGREEMENT; and
(c) SB, TAKEDA, a COLLABORATION PARTNER or HGS, as the case may be, submits
with the dossier a PROTEIN RESEARCH PLAN therefor.
6.2 (a) The RC will appoint one person from SB and one person from HGS to meet
within five (5) working days of the receipt of a dossier submitted by a
COLLABORATION PARTNER (other than SP) or TAKEDA and notify the submitting
party in writing within ten (10) working days of receipt of such dossier as
to whether or not such dossier received meets the requirements set forth in
the COLLABORATION PARTNER AGREEMENT or the SB/TAKEDA AGREEMENT, as the case
may be, and if it does meet such requirements and unless a dispute is
pending as set forth in Paragraph 6.2(f) or a comparable provision of the
SB/TAKEDA AGREEMENT or a COLLABORATION PARTNER AGREEMENT, rights to the
THERAPEUTIC PROTEIN which is the subject of such dossier shall have been
obtained by such submitting party. The failure of HGS or SB to respond
within such period shall be deemed to be notification that the dossier
meets the requirements set forth in the SB/TAKEDA AGREEMENT or such
COLLABORATION AGREEMENT as the case may be.
(b) In the case of a dossier submitted by HGS or SB, HGS or SB as the case
may be shall submit the dossier to the other party and such other party
shall notify the other in writing within ten (10) working days of receipt
of such dossier as to whether or not it meets the requirements of Paragraph
6.1 and if it does meet such requirements and unless a dispute is pending
as set forth in Paragraph 6.2(f) ) or a comparable provision of the
SB/TAKEDA AGREEMENT or a COLLABORATION PARTNER AGREEMENT, rights to the
THERAPEUTIC PROTEIN which is the subject of such dossier shall be obtained
by such submitting party. The failure of HGS or SB as the case may be to
respond within such period shall be deemed to be notification that the
dossier meets the requirements of set forth in Paragraph 6.1.
30
<PAGE>
(c) HGS and/or SB will also notify all other COLLABORATION PARTNERS (other
than SP) and TAKEDA in writing within ten (10) working days of such rights
to a THERAPEUTIC PROTEIN being obtained by HGS, SB, TAKEDA or a
COLLABORATION PARTNER and such notification will only include the identity
of the THERAPEUTIC PROTEIN so claimed by HGS Sequence ID number and not the
name of the obtaining party. Subject to subparagraph (g) of this Paragraph,
any notification or failure to notify pursuant to this Paragraph is final
and binding on the parties.
(d) HGS alone shall receive, approve and/or reject dossiers received from
SP in accordance with the applicable provisions of this Agreement and a
COLLABORATION PARTNER AGREEMENT among SP, SB and HGS and in accordance with
the timelines and procedures in this Paragraph and in a COLLABORATION
PARTNER AGREEMENT among SP, SB and HGS. In the event that SB is notified by
HGS that a COLLABORATION PARTNER has been granted rights to a THERAPEUTIC
PROTEIN under a COLLABORATION PARTNER AGREEMENT, such notification shall
also include a certification on behalf of HGS, signed by a senior officer
of HGS, that such dossier met all of the requirements of the applicable
provisions in such COLLABORATION PARTNER AGREEMENT.
(e) Any written notification by HGS pursuant to this Paragraph 6.2 that SP
has been granted rights to a THERAPEUTIC PROTEIN shall be binding on SB and
HGS.
(f) Following the receipt of any written notification pursuant to Paragraph
6.2 by HGS or SB that a dossier submitted by SB or HGS does not meet the
requirements of Paragraph 6.1, the parties shall meet within ten (10)
working days to discuss such notification. If the parties are unable to
agree that such dossier does not meet the data and/or RESEARCH PLAN
requirements of Paragraph 6.1 within ten (10) working days, the parties
shall immediately submit such dossier to a neutral expert qualified to
determine whether or not such dossier meets such requirements of Paragraph
6.1. If such dispute is not resolved within twenty (20) days, then either
party shall have the right to submit such dispute to binding arbitration
under Paragraph 27.
(g) While a dispute is pending as to whether SB, HGS, TAKEDA or a
COLLABORATION PARTNER is entitled to exclusive rights to a THERAPEUTIC
PROTEIN, all dossiers submitted to HGS and SB under this Agreement, the
SB/TAKEDA AGREEMENT and a COLLABORATION PARTNER AGREEMENT directed to the
same
31
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
THERAPEUTIC PROTEIN shall be dated, held and no rights shall be granted to
such THERAPEUTIC PROTEIN pending resolution of the dispute to such
THERAPEUTIC PROTEIN..
6.3 (a) The following six (6) THERAPEUTIC PROTEINS are hereby declared as HGS
PRODUCTS and HGS shall have rights to such products as if they were
obtained pursuant to Paragraph 6.1:
Name HGS Sequence ID
--------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
(b) The following six (6) THERAPEUTIC PROTEINS are hereby declared as SB
PRODUCTS and SB shall have rights to such products as if they were obtained
pursuant to Paragraph 6.1:
Name HGS Sequence ID
--------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
(c) SP may obtain rights to [***] THERAPEUTIC PROTEINS pursuant to a
COLLABORATION PARTNER AGREEMENT among SB, HGS and SP without meeting the
data requirements of Paragraph 6.1(a).
6.4 It is understood that any sequence ID number used under this Agreement is
for identification purposes only and that all clones, sequences and
polypeptides associated with any and all THERAPEUTIC PROTEINS as to which
rights are obtained under this Section, shall include muteins and fragments
thereof.
6.5 (a) During the INITIAL RESEARCH TERM, HGS shall have the right to obtain
rights pursuant to Paragraph 6.1 to THERAPEUTIC PROTEINS as HGS PRODUCTS as
follows:
(i) For each THERAPEUTIC PROTEIN as to which HGS grants a license to a
THIRD PARTY pursuant to Paragraph 2.12, HGS may obtain rights under
Paragraph 6.1 to one additional THERAPEUTIC PROTEIN;
(ii) For each THERAPEUTIC PROTEIN as to which HGS initiates a CLINICAL
STUDY, HGS may obtain rights under Paragraph 6.1 to one additional
THERAPEUTIC PROTEIN; and
32
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iii) For each THERAPEUTIC PROTEIN as to which HGS surrenders in writing
its exclusive rights thereto (excluding those in subparagraph 6.5 (b)), HGS
may obtain rights under Paragraph 6.1 to an additional THERAPEUTIC PROTEIN.
(b) It is expressly understood and agreed that HGS hereby surrenders any
rights it had with respect to THERAPEUTIC PROTEINS which had become HGS
PRODUCTS in the SB FIELD prior to the EFFECTIVE DATE other than those in
Paragraph 6.3.
(c) During the INITIAL RESEARCH TERM, HGS may not obtain rights to more
than eight (8) THERAPEUTIC PROTEINS pursuant to Paragraph 6.1 in any
rolling twelve month period beginning with the EFFECTIVE DATE.
6.6 Neither party shall have any liability to the other party with respect to
any decisions made with respect to rights to a THERAPEUTIC PROTEIN made
under this section unless there has been willful misconduct by a party
concerning such decision.
7. OTHER COLLABORATION PRODUCTS
----------------------------
7.1 (a)A DRUG RESEARCH PLAN and/or ANTIBODY RESEARCH PLAN may only be submitted
to the RC by SB during the INITIAL RESEARCH TERM; or in the case of a DRUG
RESEARCH PLAN, also during RESEARCH TERM EXTENSIONS.
(b) A PROTEIN RESEARCH PLAN may only be submitted to the RC during the
INITIAL RESEARCH TERM and only in accordance with Section 6. Such PROTEIN
RESEARCH PLAN shall be deemed to also be an ANTIBODY RESEARCH PLAN.
(c) SB agrees that without first submitting to the RC a DRUG RESEARCH PLAN
(i) during the INITIAL RESEARCH TERM SB will not initiate screening to
evaluate multiple chemical entities for activity or a formal program of
rational drug design with respect to a TARGET which is a COLLABORATION
PRODUCT; and (ii) during RESEARCH TERM EXTENSIONS, SB will not initiate
screening to evaluate multiple chemical entities for activity or a formal
program of rational drug design with respect to a TARGET which is a
COLLABORATION PRODUCT.
(d) Except as provided in Paragraphs 7.2 and 7.3, a DRUG RESEARCH PLAN may
not be submitted to the RC by HGS prior to June 30, 1999;
(e) During the INITIAL RESEARCH TERM, HGS agrees that it will not initiate
screening to evaluate multiple chemical entities for activity or a formal
program of rational drug design with respect to a TARGET without first
submitting to the RC a DRUG RESEARCH PLAN.
33
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(f) SB and HGS each agree that during the INITIAL RESEARCH TERM, they will
not conduct dedicated activities for the discovery of ANTIBODY PRODUCTS
which are COLLABORATION PRODUCTS without first submitting an ANTIBODY
RESEARCH PLAN therefor.
(g) During the INITIAL RESEARCH TERM, HGS agrees that it shall submit no
more than ten (10) ANTIBODY RESEARCH PLANS per year under this Agreement.
7.2 SB or HGS (or HGS on behalf of its licensees) shall obtain rights pursuant
to Paragraphs 2.6, 2.8 and 2.11 to GENE THERAPY VACCINES which are
COLLABORATION PRODUCTS, provided that SB or HGS, as the case may be, is the
first to submit a dossier to the other party prior to the end of the
INITIAL RESEARCH TERM which, demonstrates a biological activity which
activity included evidence of in vivo induction of an antigen specific
humoral and/or cellular immune system response, and
(i) exclusive rights to the GENE THERAPY VACCINE have not been previously
granted to SB, HGS or a licensee of HGS, and
(ii) the dossier includes a DRUG RESEARCH PLAN therefor.
7.3 HGS or SB shall submit dossiers pursuant to Paragraph 7.2 to the other
party and such party shall notify the other in writing within ten (10)
working days of receipt of such dossier as to whether or not it meets the
requirements of Paragraph 7.2 and if it does meet such requirements, rights
to the GENE THERAPY VACCINE which is the subject of such dossier shall have
been obtained by such submitting party. The failure of HGS or SB to respond
within such period shall be deemed to be notification that the dossier
meets the requirements of set forth in Paragraph 7.2. Subject to Paragraph
7.4, any notification or failure to notify pursuant to this Paragraph is
final and binding on the parties.
7.4 Following the receipt of any written notification pursuant to Paragraph 7.3
by HGS or SB that a dossier submitted by SB or HGS does not meet the
requirements of Paragraph 7.2, the parties shall meet within ten (10)
working days to discuss such notification. If the parties are unable to
agree that such dossier does not meet the requirements of Paragraph 7.2
within ten (10) working days, the parties shall immediately submit such
dossier to a neutral expert qualified to determine whether or not such
dossier meets the requirements of Paragraph 7.2. If such dispute is not
resolved within twenty (20) days, then either party shall have the right to
submit such dispute to binding arbitration under Paragraph 27. Until any
dispute is resolved with respect to a GENE THERAPY VACCINE for which SB, or
HGS is the
34
<PAGE>
first to submit a dossier, no rights shall be obtained with respect to such
GENE THERAPY VACCINE pursuant to Paragraph 7.2.
7.5 HGS agrees that during the INITIAL RESEARCH TERM licensees of HGS cannot
obtain exclusive rights to GENE THERAPY VACCINES other than through the
procedure as set forth in Paragraph 7.2.
8. RESEARCH MATTERS
----------------
8.1 Human sequence data generated during the INITIAL RESEARCH TERM shall be
electronically transferred to SB as near to simultaneously upon HGS
obtaining such data as reasonably possible and shall be stored by HGS in an
electronic database having appropriate database encryption and security
provisions, in a manner specified by the RC. The electronic database shall
provide the capability of transferring the data directly to a database for
patent application filings. In addition to electronic storage of sequence
data, physical samples of all cDNAs will be deposited in a manner, with
consistent archival coding parameters, and in a location designated by the
RC. An inventory of the depository shall be stored in electronic form and
made accessible to SB. HGS and SB shall each establish and/or maintain
respective standard operating procedures for the documentation and
archiving of original laboratory notebooks and other data sources
sufficient to support examination of patent applications and/or litigation
using criteria jointly agreed upon by the parties. All data electronically
stored by HGS shall conform to security and data format provisions
specified by the RC.
8.2 The sequencing carried out under this Agreement during the INITIAL RESEARCH
TERM shall be performed in accordance with sequencing and quality assurance
procedures and specifications set by the RC. The RC shall determine whether
or not sequence data provided to SB were generated and are otherwise in
compliance with such procedures and specifications. Unless otherwise
requested by the RC, ESTs provided after September 1, 1993 shall be derived
from the 5' end of the cDNAs.
8.3 The RC shall have a reasonable period of time following transfer to the RC
and SB of sequence data from HGS within which to determine if the sequence
data meet the criteria established by the RC. If the RC determines that
sequence data do not meet the criteria, then HGS shall use its best efforts
to cure the defects. Such sequence data shall nevertheless be included
within HGS SPECIAL TECHNOLOGY and can be used by SB in the same manner as
acceptable sequence data.
8.4 During the INITIAL RESEARCH TERM, HGS shall provide SB and the RC with
yeast gene sequence (S. cerevisiae) and function
35
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
information which is or becomes known to HGS, but only to facilitate
decision-making, and otherwise to advance research and development, under
this Agreement.
8.5 During the INITIAL RESEARCH TERM, at the request of the RC and as
prioritized by the RC, HGS agrees to sequence and provide to SB partial
cDNA sequences of animal genes from libraries prepared by SB which
sequencing is to be performed using the sequencing capacity specified in
Section 5 hereof. Such partial cDNA sequences of animal genes shall be used
by SB only to facilitate decision making and otherwise to advance research
under this Agreement.
8.6 The INITIAL RESEARCH TERM may be extended by SB as RESEARCH TERM EXTENSIONS
for up to 5 additional years on a year-by-year basis by written notice to
HGS at least sixty (60) days prior to the end of the INITIAL RESEARCH TERM
or at least sixty (60) days prior to the end of any one year extension
thereof, which written notice shall include a payment of [***] for each
additional year.
9. PRODUCT DEVELOPMENT
-------------------
9.1 SB shall have full control and authority over development, registration and
commercialization of SB PRODUCT, including SB PRODUCT which HGS has
indicated it intends to co-promote with SB as provided in this Agreement.
9.2 As between the parties to this Agreement, SB shall also have full control
and authority over the development, registration and commercialization of
SB PRODUCTS in the SB FIELD in SOUTHEAST ASIA and of TAKEDA PRODUCT and
CO-RIGHTS PRODUCT elsewhere in the world, and SB may delegate such
responsibilities in whole or in part to its licensees.
9.3 Each party shall keep the other informed of progress of its efforts to
develop and commercialize royalty bearing SB PRODUCT or HGS PRODUCT. Each
party shall keep the other party informed of its, and its licensees
progress to develop and commercialize royalty bearing SB PRODUCTS or HGS
PRODUCTS as the case may be. SB shall keep HGS informed of SB's and
TAKEDA's progress to develop and commercialize royalty bearing TAKEDA
PRODUCTS.
9.4 SB shall use its diligent efforts to develop, market, promote and sell SB
PRODUCT as to which SB obtains rights under Section 6 and Section 7
equivalent to those efforts it uses with respect to products of similar
value and status, subject to SB's right to terminate such efforts and
surrender such rights in and to such product.
9.5 HGS shall use its diligent efforts to develop, promote and sell HGS PRODUCT
as to which HGS obtains rights to under Section 6 and Section 7 equivalent
to those efforts it uses with respect to products of similar value and
status, subject to HGS's right to terminate such efforts and surrender such
exclusive rights in and to such product
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9.6 After the RESEARCH TERM, each of HGS and SB shall use diligent efforts
screen for DRUG PRODUCTS pursuant to any DRUG RESEARCH PLAN submitted by SB
or HGS as the case may be prior to the end of the INITIAL RESEARCH TERM
and/or RESEARCH TERM EXTENSIONS equivalent to those efforts it uses to
develop and screen its other proprietary targets of similar value and
status.
9.7 Within sixty (60) days after the end of each calendar year, SB and HGS
shall provide to each other in writing annual reports with respect to work
performed by or for it under RESEARCH PLANS which shall consist of updates
to RESEARCH PLANS substantially in the form of the APPENDICES A, C, and D.
9.8 SB and HGS shall not use any information or data in RESEARCH PLANS
submitted by the other, other than information which is HGS SPECIAL
TECHNOLOGY and SPECIAL SB TECHNOLOGY as specified in section 1, 2 and 3 of
a RESEARCH PLAN.
10. CO-PROMOTION/CORIGHTS
---------------------
10.1.For each SB PRODUCT which is to be sold by SB (but not licensees of SB) in
the United States, Canada, Mexico or a country in Europe, SB shall give
prompt notice to HGS of acceptance by the U.S. Food and Drug
Administration, or like agency of such country, of an application for
approval to sell SB PRODUCT under 21 U.S.C. 355, or like law or regulation
of the U.S. or such country. HGS may exercise its option to co-promote
under Paragraph 2.16(c) in such country on a country-by-country basis by
giving written notice thereof to SB within sixty (60) days of receipt of
each such notice of acceptance. In this event, the parties shall enter into
a definitive co-promotion agreement which shall set forth all terms and
conditions for the co-promotion and which shall incorporate the following
principles, to the extent legally permissible.
(i) SB shall be solely responsible for pricing.
(ii) HGS and SB will co-promote a single brand of the SB PRODUCT in one
or more of the United States, Canada, Mexico and Europe (the "Co-promotion
Territory"), using a trademark selected and controlled by SB.
(iii) A Marketing Committee will be formed composed of SB
representatives and two representatives of HGS. The Marketing
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
Committee shall make all decisions on sales, marketing, promotion, and
advertising, including the target prescribers whom HGS will detail and the
number and manner of details. The Marketing Committee will also be
responsible for approving in advance all marketing, selling and promotion
expenses. SB shall chair the Marketing Committee and shall make all final
decision thereof.
(iv) HGS will have the right to provide [***] and shall provide at
least [***], of the total promotion effort in each country where it co-
promotes.
(v) HGS will receive a percentage of the OPERATING PROFITS in the
countries where HGS co-promotes from the sales of the co-promoted SB
PRODUCT which percentage shall be equal to the percentage of the promotion
effort provided by HGS, but shall not exceed [***] of the OPERATING
PROFITS.
(vi) HGS's name will appear on the SB PRODUCT packaging or promotional
materials as decided by the Marketing Committee.
(vii) HGS shall use only SB promotional materials and SB samples in its
co-promotion activities, as approved by the Marketing Committee and in
accordance with all relevant laws, regulations and accepted practices. The
costs of such materials and samples shall be included within SB's aggregate
marketing and promotion expenses.
(viii) HGS shall have the right to transfer this co-promotion right
only in connection with a transfer of all of HGS's rights and obligations
under this Agreement to another single entity.
10.2.For each HGS PRODUCT which is to be sold by HGS in the HGS FIELD, HGS
shall give prompt notice to SB of acceptance by the U.S. Food and Drug
Administration, or like agency of another country, of an application for
approval to sell HGS PRODUCT under 21 U.S.C. 355, or like law or regulation
of the U.S. or another country. SB may exercise its option to co-promote
under Paragraph 2.16(a) on a country-by-country basis by giving written
notice thereof to SB within sixty (60) days of receipt of each such notice
of acceptance. In this event, the parties shall enter into a definitive
co-promotion agreement which shall set forth all terms and conditions for
the co-promotion and which shall incorporate the following principles, to
the extent legally permissible.
(i) HGS shall be solely responsible for pricing.
(ii) SB and HGS will co-promote a single brand of the HGS PRODUCT in
one or more countries in the TERRITORY.
(iii) A Marketing Committee will be formed composed of HGS
representatives and two representatives of SB. The Marketing Committee
shall make all decisions on sales, marketing, promotion,
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
and advertising, including the target prescribers whom SB will detail and
the number and manner of details. The Marketing Committee will also be
responsible for approving in advance all marketing, selling and promotion
expenses. HGS shall chair the Marketing Committee and shall make all final
decision thereof.
(iv) SB will have the right to provide [***], and shall provide at
least [***], of the total promotion effort in each country where it co-
promotes.
(v) SB will receive a percentage of the OPERATING PROFITS in the
countries where SB co-promotes from the sales of the co-promoted HGS
PRODUCT which percentage shall be equal to the percentage of the promotion
effort provided by SB, but shall not exceed [***] of the OPERATING PROFITS.
(vi) SB's name will appear on the HGS PRODUCT packaging or promotional
materials as decided by the Marketing Committee.
(vii) SB shall use only HGS promotional materials and HGS samples in
its co-promotion activities, as approved by the Marketing Committee and in
accordance with all relevant laws, regulations and accepted practices. The
costs of such materials and samples shall be included within HGS's
aggregate marketing and promotion expenses.
(viii) SB shall have the right to transfer this co-promotion right only
in connection with a transfer of all of SB's rights and obligations under
this Agreement to another single entity.
10.3.(a) SB may exercise its option granted pursuant to Paragraph 2.16(b) to the
following HGS PRODUCTS in each country for which HGS has not licensed all
of its marketing rights in and to such product to a THIRD PARTY prior to
completion of Phase II(a) CLINICAL STUDIES conducted by or on behalf of HGS
for such HGS PRODUCT:
(i) THERAPEUTIC PROTEINS to which HGS obtains rights to under Section 6 where
such HGS PRODUCT has completed Phase II(a) in the United States prior to
April 30, 2005; and
(ii) DRUG PRODUCTS or ANTIBODY PRODUCTS DISCOVERED prior to the end of the
INITIAL RESEARCH TERM (other than DRUG PRODUCTS or ANTIBODY PRODUCTS in
subparagraph (iii)) which HGS PRODUCTS have completed Phase II(a) in the
United States prior to June 30, 2005; and
(iii)DRUG PRODUCTS which resulted from a TARGET which TARGET is a COLLABORATION
PRODUCT and also the subject of a DRUG RESEARCH PLAN or ANTIBODY RESEARCH
PLAN submitted by SB, provided the DRUG PRODUCT is DISCOVERED by HGS prior
to the period ending four (4) years after the end of the INITIAL RESEARCH
TERM; and
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(iv) ANTIBODY PRODUCTS which resulted from a TARGET which TARGET is a
COLLABORATION PRODUCT and also the subject of a ANTIBODY RESEARCH PLAN
submitted by SB prior to the submission by HGS of an ANTIBODY RESEARCH PLAN
directed to such TARGET, provided the ANTIBODY PRODUCT is DISCOVERED by HGS
prior to the period ending four (4) years after the end of the INITIAL
RESEARCH TERM: all pursuant to an agreement which shall set forth all the
terms and conditions for such rights and incorporates the following
principal terms:
(1) SB and HGS will share equally in the Phase III/IV development
costs of such HGS PRODUCT;
(2) SB and HGS will share equally in the sales and marketing expenses
of such HGS PRODUCT;
(3) SB and HGS will share equally in the OPERATING PROFIT for such HGS
PRODUCT;
(4) SB shall owe HGS no license fees or milestone payments or other
such fees.
(b) This option shall not apply to any HGS PRODUCTS which are THERAPEUTIC
PROTEINS as to which SP has exercised its option to market, promote,
co-market and/or co-promote under a COLLABORATION PARTNER AGREEMENT, nor in
Japan to any HGS PRODUCT which is subject to an un-exercised (but not an
option rejected by TAKEDA) option right or to a license to TAKEDA granted
pursuant to the HGS/TAKEDA Option and License Agreement dated June 12,1995.
(c) HGS shall notify SB in writing within thirty (30) days of when each HGS
PRODUCT subject to subparagraphs (a)(i) and (a)(ii) has competed Phase
II(a) in the United States prior to April 30, 2005; and when each HGS
PRODUCT subject to subparagraph (a)(iii) has competed Phase II(a) in the
United States. Such notice shall include the principal terms and conditions
stated above for SB to exercise its option to such HGS PRODUCT. If SB is
offered the option and does not accept the option in writing within sixty
(60) days after receipt of written notice by HGS under this subparagraph
(c), SB shall no longer have any rights thereto and no royalty shall be
payable by HGS to SB for such HGS PRODUCT.
(d) In the event SB would have been extended an option to an HGS PRODUCT
but for the fact that Phase II(a) CLINICAL STUDIES were not conducted by or
on behalf of HGS, and where HGS begins selling such HGS PRODUCT in any
country, SB shall have an option pursuant to 2.16 (b) and if SB accepts
such option and enters into an agreement
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pursuant to this Paragraph 10.3, SB and HGS shall enter into such agreement
which shall include the terms in Paragraph 10.3(a)(2)-(4) and shall provide
for SB to reimburse HGS in an amount equal to half of HGS's expenses in the
Phase III/IV development costs of such HGS PRODUCT for the relevant
country. In the event that HGS has to purchase back rights to an HGS
PRODUCT in order to sell such HGS PRODUCT, then SB and HGS shall negotiate
an appropriate allocation of such purchase cost.
11. HGS RIGHT TO MANUFACTURE
------------------------
11.1.SB shall retain the right to make all preclinical, clinical and commercial
supplies of any SB PRODUCT sold by SB or by THIRD PARTIES authorized by SB
which may be required during and after the expiration of this Agreement.
However, in the event that SB decides, at its sole discretion, to have any
quantity of preclinical, clinical and/or commercial supplies of any such
THERAPEUTIC PROTEIN which is an SB PRODUCT made by an entity other than SB
during the term of this Agreement, SB shall give HGS the first right to
supply such quantity subject to all terms of an agreement which shall be
negotiated in good faith by the parties and which agreement shall include
that HGS shall be required to meet all of SB's reasonable cost, quality,
quantity and performance requirements; provided, however, that such first
right shall be subject to and shall not conflict with the rights of TAKEDA
to make and have made SB PRODUCT under the SB/TAKEDA AGREEMENT. If HGS and
SB do not reach such agreement within a reasonable period of time in light
of the circumstances, or if HGS is unable to satisfy SB's reasonable cost,
quality, quantity and performance requirements, then HGS's rights hereunder
shall terminate and SB shall be free to have the SB PRODUCT supplied from
another source.
12. EXCHANGE OF INFORMATION AND CONFIDENTIALITY
- --- -------------------------------------------
12.1.(a) Promptly after the EFFECTIVE DATE, HGS shall disclose and supply to SB
all HGS SPECIAL TECHNOLOGY which HGS has not previously disclosed to SB.
Thereafter, HGS shall promptly and fully disclose to SB any and all
information which is HGS SPECIAL TECHNOLOGY, provided that HGS SPECIAL
TECHNOLOGY that are clones, cell lines and vectors shall be provided to SB
as reasonably requested by SB and as they are reasonably available to HGS.
(b) Notwithstanding Paragraph 12.1(a), after the EFFECTIVE DATE, HGS shall
not be required to transfer to SB sequence data consisting of second walks
and full length sequences not requested by
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SB or biological information each only with respect to potential
THERAPEUTIC PROTEINS which HGS in good faith intends to study as a
THERAPEUTIC PROTEIN , until HGS obtains rights to such THERAPEUTIC PROTEIN
pursuant to Section 6.
(c) Notwithstanding subparagraph (b) HGS shall promptly disclose the
results of research under material transfer agreements (MTAs) listed in
Appendix E and all other MTAs HGS has entered into or enters into during
the period ending at the end of the INITIAL RESEARCH TERM with respect to
TARGETS which are COLLABORATION PRODUCTS, provided that SB may not use such
results to meet the requirement of Paragraph 6.1(a)(i) for more that four
(4) THERAPEUTIC PROTEINS per year.
(d) Promptly after the EFFECTIVE DATE SB shall disclose to HGS all SPECIAL
SB TECHNOLOGY in existence as of the EFFECTIVE DATE to the extent such
SPECIAL SB TECHNOLOGY has not already been transferred to HGS.
12.2.During the term of this Agreement and thereafter, irrespective of any
termination earlier than the expiration of the term of this Agreement, HGS
and SB shall not use or reveal or disclose to THIRD PARTIES any information
or materials received from the other party, without first obtaining the
written consent of such other party or the RC, except as permitted
hereunder. This confidentiality and non-use obligation shall not apply to
disclosures to or uses by TAKEDA pursuant to the SB/TAKEDA AGREEMENT or
disclosures to or uses by COLLABORATION PARTNERS pursuant to COLLABORATION
PARTNER AGREEMENTS. Unless otherwise restricted by this Agreement, the
confidentiality and non-use provisions of this Paragraph 12.2 shall not
apply to such information which
(i) was known to the receiving party or generally known to the public
prior to its disclosure hereunder;
(ii) subsequently becomes known to the public by some means other than
a breach of this Agreement;
(iii)is subsequently disclosed to the receiving party by a THIRD PARTY
having a lawful right to make such disclosure;
(iv) is required by law or bona fide legal process to be disclosed,
provided that the party required to make the disclosure takes all
reasonable steps to restrict and maintain confidentiality of such
disclosure and provides reasonable notice to the party providing
the information and/or materials;
(v) is approved for release by the parties, or
(vi) is independently developed by employees or agents of either party
or their respective parent corporation or their
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AFFILIATES and/or subsidiaries without any knowledge of the information
and/or materials provided by the other party.
12.3.(a) Nothing in Paragraph 12.2 shall be construed as preventing either
party from disclosing any information to an AFFILIATE or to a licensee,
distributor or joint venture or other associated company of either party
for the purpose of developing or commercializing SB PRODUCT, TAKEDA
PRODUCT, CORIGHTS PRODUCT or HGS PRODUCT as permitted by this Agreement,
provided such AFFILIATE, licensee, distributor or joint venture or other
associated company has undertaken a similar obligation of confidentiality
and non-use with respect to the confidential information.
(b) In the event that SB intends to transfer or disclose HGS SPECIAL
TECHNOLOGY or SB TECHNOLOGY to a THIRD PARTY collaborator that is a
not-for-profit entity (and/or an investigator working for a not-for-profit
entity) no such transfer or disclosure shall take place until such THIRD
PARTY enters into an agreement with SB by which SB is granted a license to
all inventions and patent rights based thereon which result from the use of
such technology. To the extent any such invention would be HGS TECHNOLOGY
or SB TECHNOLOGY if invented or discovered by SB and/or HGS, then such
invention shall be HGS TECHNOLOGY or SB TECHNOLOGY as the case may be
subject to the terms and conditions of this Agreement. HGS agrees that SB
may enter into agreements pursuant to this Paragraph using an Agreement
substantially in the form of MTAs used by SB and/or HGS under the
COLLABORATION AGREEMENT.
(c) Either party may disclose HGS TECHNOLOGY and SB TECHNOLOGY to a THIRD
PARTY contractors or collaborators to facilitate or carry out research
activities under this Agreement provided that such THIRD PARTIES enter into
an agreement with such party which contains confidentiality provisions
substantially the same as those set forth herein and which provides that
all rights in inventions and which result from the use of such technology
by the THIRD PARTY shall be owned by HGS or SB or exclusively licensed to
HGS or SB as the case may be with a right to grant licenses. To the extent
any such invention or discovery would be HGS TECHNOLOGY or SB TECHNOLOGY if
invented or discovered by SB and/or HGS, then such invention or discovery
shall be HGS TECHNOLOGY or SB TECHNOLOGY as the case may be subject to the
terms and conditions of this Agreement.
12.4.All confidential information disclosed by one party to the other shall
remain the intellectual property of the disclosing party. In the
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event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or
complete control over the assets of a party to this Agreement based on the
insolvency or bankruptcy of such party, the bankrupt or insolvent party
shall promptly notify the court or other tribunal (i) that confidential
information received from the other party under this Agreement remains the
property of the other party and (ii) of the confidentiality obligations
under this Agreement. In addition, the bankrupt or insolvent party shall,
to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality of the other party's confidential information
and to insure that the court, other tribunal or appointee maintains such
information in confidence in accordance with the terms of this Agreement.
12.5.No public announcement concerning (i) the existence of or terms of this
Agreement (ii) research and/or discoveries made by SB, (iii) milestones
achieved by SB, and (iv) exercise of SB of rights and options granted under
this Agreement shall be made, either directly or indirectly, by any party
to this Agreement without prior written notice to the other party and,
except as may be legally required, or as may be required for a public
offering of securities, or as may be required for recording purposes,
without first obtaining the approval of the other party and agreement upon
the nature and text of such announcement. The party desiring to make any
such public announcement shall inform the other party of the proposed
announcement or disclosure in reasonably sufficient time prior to public
release, and shall provide the other party with a written copy thereof, in
order to allow such other party to comment upon such announcement or
disclosure. This Paragraph 12.5 shall not apply to any information in a
public announcement which is information essentially identical to that
contained in a previous public announcement agreed to pursuant to this
Paragraph.
12.6.Without the prior written approval of the other party, neither SB nor HGS
shall submit for written or oral publication any manuscript, abstract or
the like which is directed to TARGETS and/or to a THERAPEUTIC PROTEIN each
of which is a COLLABORATION PRODUCT prior to the earlier of (1) eighteen
(18) months after SB or HGS, as the case may be, files an SB PATENT or HGS
PATENT, as the case may be, which claims such TARGET or THERAPEUTIC PROTEIN
(but not including EST omnibus filings) or (2) with respect to a
THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT, the date on which SB
or HGS, as the case may be, obtains rights to such THERAPEUTIC PROTEIN
pursuant to Section 6, or (3)
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the publication in a printed publication, other than through a breach of
this Agreement, of such TARGET or THERAPEUTIC PROTEIN and related
information to be submitted in such written or oral publication; provided
that once a party obtains rights to such THERAPEUTIC PROTEIN pursuant to
Section 6, the other party shall have no rights under this Paragraph with
respect to such THERAPEUTIC PROTEIN. During the INITIAL RESEARCH TERM, HGS
shall provide SB and SB shall provide HGS with all proposed publications
that include HGS TECHNOLOGY or SB TECHNOLOGY received pursuant to a
collaboration with a not-for-profit entity prior to its publication.
12.7.For the avoidance of doubt, nothing in this Agreement shall be construed
as preventing or in any way inhibiting either party from complying with
statutory and regulatory requirements governing the development,
manufacture, use and sale or other distribution of products in any manner
which it reasonably deems appropriate, including, for example, by
disclosing to regulatory authorities confidential or other information
received from a party or THIRD PARTIES. The parties shall take reasonable
measures to assure that no unauthorized use or disclosure is made by others
to whom access to such information is granted.
12.8.During the term of this Agreement, each party shall promptly inform the
other party of any information that it obtains or develops regarding the
utility and safety of a COLLABORATION PRODUCT. Prior to initiating clinical
studies in human patients or volunteers with any COLLABORATION PRODUCT
which will be manufactured, sold, promoted or marketed by both parties in
the same or in different countries anywhere in the world, the parties shall
first agree on methods and procedures for notifying each other of adverse
drug experiences within such time periods and in such form and manner as
are necessary or appropriate in order for each party to comply with its
standard practices and procedures for recording adverse drug experiences
and for reporting adverse drug experiences to appropriate regulatory
authorities.
12.9.Any materials provided by one party to the other under this Agreement
shall be subject to the confidentiality and non-use provisions set out in
this Section. All such materials shall be used in compliance with all
applicable laws and regulations. SB and HGS each certifies that it is
regularly engaged in conducting tests in vitro or in animals used only for
laboratory research purposes, that all materials which SB or HGS receive
under this Agreement will actually be used for these purposes only, and
that no animal used for such tests
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will be used for any food purposes or kept as a domestic pet or livestock.
12.10. SB and HGS agree to comply with any applicable law or regulation of the
United States or any country governing the export or reexport of products
(including test equipment), software, and technical data (and the product
of such data).
12.11. All rights and licensing granted under or pursuant to this Agreement by
HGS to SB are, and shall irrevocably be deemed to be, "intellectual
property" as defined in Section 101(56) of the Bankruptcy Code. In the
event of the commencement of a case by or against either party under any
Chapter of the Bankruptcy Code, this Agreement shall be deemed an executory
contract and all rights and obligations hereunder shall be determined in
accordance with Section 365(n) thereof. Unless a party rejects this
Agreement and the other party decides not to retain its rights hereunder,
the other party shall be entitled to a complete duplicate of (or complete
access to, as appropriate) all intellectual property and all embodiments of
such intellectual property held by the party and the party shall not
interfere with the rights of the other party, which are expressly granted
hereunder, to such intellectual property and all embodiments of such
intellectual property from another entity. Further, this Agreement shall be
deemed, upon presentation to another entity, to be the same as an express
instruction by the party to such other entity to provide such intellectual
property and all embodiments of such intellectual property directly to the
other party. Without limiting the foregoing provisions in this paragraph,
the other party shall be entitled to all post-bankruptcy-petition
improvements, updates, or developments of intellectual property created
hereunder. If such intellectual property is not fully developed as of the
commencement of any bankruptcy case, the other party shall have the right
to complete development of the property.
12.12. For the avoidance of doubt, HGS shall not disclose to a THIRD PARTY any
RESEARCH PROGRAMS and/or work request justifications submitted to HGS by SB
under the COLLABORATION AGREEMENT.
13. PATENT PROSECUTION AND LITIGATION
---------------------------------
13.1.Each party shall have and retain sole and exclusive title to all
inventions, discoveries, designs, works of authorship and other know-how
which are made, conceived, reduced to practice or generated only by its
employees, agents, or other persons acting under its authority. Each party
shall own an equal undivided interest in all such
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inventions, discoveries, designs, works of authorship and other know-how
made, conceived, reduced to practice or generated jointly by employees,
agents, or other persons acting under the authority of both parties. In the
event of jointly owned inventions, HGS shall have the first right to file,
prosecute and maintain patents and applications directed thereto under the
terms and conditions of Paragraph 13.2. If a joint owner does not desire to
file, prosecute or maintain a patent or patent application to a joint
inventions, such owner shall assign its ownership interest therein to the
other. All patents and patent applications to joint inventions which are
HGS SPECIAL TECHNOLOGY and SPECIAL SB TECHNOLOGY shall be both SB PATENTS
and HGS PATENTS, subject to the terms and conditions of the Agreement;
otherwise, any joint owner shall be free to dispose of its interest therein
without accounting to the other joint owner.
13.2.HGS shall have the right within its sole discretion and at its expense to
prepare, file, prosecute and maintain HGS PATENTS. With respect to HGS
PATENTS as to which SB retains a license hereunder, subject to Paragraph
13.10, HGS shall keep SB informed with respect to the filing and
prosecution thereof. In the event that SB desires that HGS obtain and
maintain patent protection in any country with respect to HGS SPECIAL
TECHNOLOGY as to which SB retains a license hereunder, HGS shall do so at
the cost and expense of SB, which expense shall be SB's pro rata share
where a COLLABORATION PARTNER and/or TAKEDA requests HGS to do so with
respect to the same HGS SPECIAL TECHNOLOGY provided that SB shall have the
right within its sole discretion and at its expense to prepare, file,
prosecute and maintain HGS PATENTS to the extent they claim a THERAPEUTIC
PROTEIN or GENE THERAPY VACCINE (and the making, using and selling thereof)
to which SB has obtained exclusive rights pursuant to Section 6 or 7.
13.3.SB shall have the right within its sole discretion and at its expense to
prepare, file, prosecute and maintain SB PATENTS. With respect to SB
PATENTS as to which HGS retains a license hereunder, subject to Paragraph
13.11, SB shall keep HGS informed with respect to the filing and
prosecution thereof. In the event that HGS desires that SB obtain and
maintain patent protection in any country with respect to SPECIAL SB
TECHNOLOGY as to which HGS retains a license hereunder, SB shall do so at
the cost and expense of HGS; provided that HGS shall have the right within
its sole discretion to prepare, file, prosecute and maintain SB PATENTS at
its expense to the extent they claim a THERAPEUTIC PROTEIN or GENE THERAPY
VACCINE
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(and the making, using and selling thereof) to which HGS has obtained
exclusive rights pursuant to Section 6 or 7.
13.4.Each party, on behalf of itself and its directors, employees, officers,
shareholders, agents, successors and assigns hereby waives any and all
actions and causes of action, claims and demands whatsoever, in law or
equity of any kind it or they may have against the other party, its
officers, directors, employees, shareholders, agents, successors and
assigns, which may arise in any way, except as a result of gross
negligence, recklessness, or willful misconduct, in performance of patent
activities under this Section.
13.5.In the event of the institution of any suit by a THIRD PARTY against HGS,
SB or its licensees for patent infringement involving the manufacture, use,
sale, distribution or marketing of HGS PRODUCT or SB PRODUCT, TAKEDA
PRODUCT, or CORIGHT PRODUCT, the party sued shall promptly notify the other
party in writing. The other party shall have the right, to the extent of
its interest, but not the obligation to defend or participate in the
defense of such suit at its own expense. HGS and SB shall assist one
another and cooperate in any such litigation at the other's request without
expense to the requesting party.
13.6.In the event that HGS or SB becomes aware of actual or threatened
infringement of a SB PATENT or HGS PATENT anywhere in the TERRITORY, that
party shall promptly notify the other party in writing. The owner of the SB
PATENT or HGS PATENT shall have the first right but not the obligation to
bring, at its own expense, an infringement action against any THIRD PARTY
and to use the other party's name in connection therewith. If the owner of
the patent does not commence a particular infringement action within thirty
(30) days, the other party, after notifying the owner in writing, shall be
entitled to bring such infringement action at its own expense to the extent
that such party is licensed thereunder and in its own name and/or in the
name of the owning party. The foregoing notwithstanding, in the event that
an alleged infringer certifies pursuant to 21 USC 355(b)(2)(A)(vii)(IV) or
(j)(2)(A)(iv) against an issued HGS PATENT or SB PATENT covering a
COLLABORATION PRODUCT, the party receiving notice of such certification
shall immediately notify the other party of such certification, and if
fourteen (14) days prior to expiration of the forty fine (45) day period
set forth in 21 USC 355(c)(3)(C) or (j)(4)(B)(iii), the owner of the HGS
PATENT or SB PATENT fails to commence an infringement action, the party
receiving notice, in its sole discretion, at its own expense and to the
extent that it is licensed under the HGS PATENT or SB PATENT, shall be
entitled to bring
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such infringement action in its own name and/or in the name of the owning
party The party conducting such action shall have full control over its
conduct, including settlement thereof provided such settlement shall not be
made without the prior written consent of the other party if it would
adversely affect the patent rights of the other party. In any event, HGS
and SB shall assist one another and cooperate in any such litigation at the
other's request without expense to the requesting party.
13.7.HGS and SB shall recover their respective actual out-of-pocket expenses,
or equitable proportions thereof, associated with any litigation or
settlement thereof from any recovery made by any party. Any excess amount
shall be shared between SB and HGS in an amount proportional to their
respective losses and expenses.
13.8.The parties shall keep one another informed of the status of and of their
respective activities regarding any such litigation or settlement thereof.
13.9.The owner of a SB PATENT or HGS PATENT shall have the first right to seek
extensions of the terms of the patent and to seek to obtain SPCs. A party
who is developing, selling or planning to sell a product covered by a
patent shall have the second right. Each party shall assist the other in
the obtaining of such extensions or SPCs including by authorizing the other
party to act as its agent.
13.10.The disclosure obligations of Paragraph 13.2 shall only apply to HGS
PATENTS which include HGS SPECIAL TECHNOLOGY which HGS has disclosed to SB
Pursuant to this Agreement.
13.11.The disclosure obligations of Paragraph 13.3 shall only apply to SB
PATENTS which claim SPECIAL SB TECHNOLOGY which SB has disclosed to HGS
pursuant to this Agreement.
14. TRADEMARKS AND NON-PROPRIETARY NAMES
------------------------------------
14.1.SB, at its expense, shall be responsible for the selection, registration
and maintenance of all trademarks which it employs in connection with SB
PRODUCT and shall own and control such trademarks. Nothing in this
Agreement shall be construed as a grant of rights, by license or otherwise,
to HGS to use such trademarks for any purpose other than co-promotion as
provided in this Agreement.
14.2.SB, at its expense, shall be responsible for the selection and
registration of non-proprietary names employed by SB for SB PRODUCT.
14.3.HGS, at its expense, shall be responsible for the selection, registration
and maintenance of all trademarks which it employs in
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connection with HGS PRODUCT and shall own and control such trademarks.
Nothing in this Agreement shall be construed as a grant of rights, by
license or otherwise, to SB to use such trademarks for any purpose other
than co-promotion as provided in this Agreement.
14.4.HGS, at its expense, shall be responsible for the selection and
registration of non-proprietary names employed by HGS for HGS PRODUCT.
14.5.(a) At no expense to HGS, SB and its licensees under this Agreement shall
be responsible for the selection, registration and maintenance of all
trademarks which they employ in connection with a SB PRODUCT in the SB
FIELD in SOUTHEAST ASIA and TAKEDA PRODUCT, and shall own and control such
trademarks. Nothing in this Agreement shall be construed as a grant of
rights, by license or otherwise, to HGS to use such trademarks for any
purpose.
(b) At no expense to HGS, SB and its licensees under this Agreement shall
be responsible for the selection and registration of non-proprietary names
for SB PRODUCT in the SB FIELD in SOUTHEAST ASIA and TAKEDA PRODUCT.
15. STATEMENTS AND REMITTANCES
--------------------------
15.1.Each party, as the case may be, shall keep and require its licensees to
keep complete and accurate records of all NET SALES of HGS PRODUCT, SB
PRODUCT, CORIGHTS PRODUCT and TAKEDA PRODUCT subject to royalties under the
licenses granted herein or in the applicable COLLABORATION PARTNER
AGREEMENT or SB/TAKEDA AGREEMENT. Each party shall have the right, at its
expense, through a certified public accountant or like person reasonably
acceptable to the other party, to examine such records during regular
business hours during the life of this Agreement and for six (6) months
after its termination; provided, however, that such examination shall not
take place more often than once a year and provided further that such
accountant shall report only as to the accuracy of the royalty statements
and payments, including the magnitude and source of any discrepancy.
Neither party nor their licensees shall be required to maintain such
records for more than three (3) years.
15.2.Except for SB PRODUCT and TAKEDA PRODUCT sold by TAKEDA or its licensees
under the SB/TAKEDA AGREEMENT, within sixty (60) days after the close of
each calendar quarter, each party shall deliver to the other a true
accounting of all SB PRODUCT, CORIGHTS PRODUCT, TAKEDA PRODUCT or HGS
PRODUCT sold by it and its licensees and distributors during such quarter
for which royalties are payable and shall at the same time pay all
royalties due.
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Such accounting shall show sales on a country-by-country and
product-by-product basis.
15.3.Within ninety (90) days after the close of each half year, SB shall
deliver to HGS a true accounting of all SB PRODUCT or TAKEDA PRODUCT, sold
under authority of the SB/TAKEDA AGREEMENT by TAKEDA and its licensees and
distributors during such half year and shall at the same time pay all
royalties due to HGS as a result of or deriving from such sales. Such
accounting shall show sales on a country-by-country and product-by-product
basis.
15.4.Any tax paid or required to be withheld on account of the licensing party
based on milestone payments or royalties payable under this Agreement shall
be deducted from the amount of milestones or royalties otherwise due. Taxes
paid or withheld from monies due SB by TAKEDA or its licensees shall be
deducted proportionately from the amount of monies otherwise due HGS. Each
party shall secure and send to the other proof of any such taxes withheld
and paid.
15.5.All royalties due under this Agreement shall be payable in U.S. dollars.
If governmental regulations prevent remittances from a foreign country with
respect to sales made in that country, the obligation to pay royalties on
sales in that country shall be suspended until such remittances are
possible. Each party shall have the right, upon giving written notice to
the other, to receive payment in that country in local currency.
15.6.Monetary conversations from the currency of a foreign country, in which a
product is sold, into United States currency shall be made at the official
exchange rate in force in that country for financial transactions on the
last business day of the calendar quarter or half year for which the
royalties are being paid. If there is no such official exchange rate, the
conversation shall be made at the rate for such remittances on that date as
certified by Citibank, N.A., New York, New York, U.S.A.
16. TERM AND TERMINATION
--------------------
16.1.This Agreement shall come into effect as of the EFFECTIVE DATE and shall
remain in full force and effect unless earlier terminated as provided in
this Section 16.
16.2.In the event HGS fails to make a payment to SB under this Agreement or a
co-promotion agreement with respect to an HGS PRODUCT when due, or fails to
meet its obligations under Section 9 with respect to an HGS PRODUCT, in
addition to any other remedy which it may have, SB may notify HGS in
writing that all of HGS's rights with respect to such HGS PRODUCT shall
terminate as of sixty
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(60) days after such written notice and HGS's rights with respect thereto
shall terminate unless such payment is made or such failure is cured, prior
to the expiration of such sixty (60) day period.
16.3.In the event SB fails to make a payment to HGS under this Agreement or a
co-promotion agreement with respect to an SB PRODUCT when due, or fails to
meet its obligations under Section 9 with respect to an SB PRODUCT, in
addition to any other remedy which it may have, HGS may notify SB in
writing that, subject to SB licensee rights provided in Paragraph 17.4(a),
all of SB's rights with respect to such SB PRODUCT shall terminate as of
sixty (60) days after such written notice and SB's rights with respect
thereto shall terminate unless such payment is made or such failure is
cured, prior to the expiration of such sixty (60) day period.
16.4 Either party may terminate this Agreement if, at any time, the other party
shall file in any court or agency pursuant to any statute or regulation of
any state or country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver
or trustee of the party or of its assets, or if the other party proposes a
written agreement of composition or extension of its debts, or if the other
party shall be served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed within
sixty (60) days after the filing thereof, or if the other party shall
propose or be a party to any dissolution or liquidation, or if the other
party shall make an assignment for the benefit of creditors.
16.5 Notwithstanding the bankruptcy of HGS or SB, or the impairment of
performance by HGS or SB of its obligations under this Agreement as a
result of bankruptcy or insolvency of HGS or SB, the other party shall be
entitled to retain the licenses granted herein, and SB licensees shall be
entitled to retain their rights as provided in Paragraph 17.4 hereof,
subject to rights of a party to terminate this Agreement for reasons other
than bankruptcy or insolvency as expressly provided in this Agreement.
16.6 Neither party shall have the right to terminate this Agreement except under
Paragraph 16.4, provided however that nothing in this Agreement shall limit
any remedies for breach which may be available pursuant to a judgment of a
court, in law or equity, including termination of this Agreement or of any
or all rights hereunder.
16.7 In the event that by one (1) year after the end of the INITIAL RESEARCH
TERM, SB has not obtained the full length DNA coding sequence for a TARGET
encompassed by, and as used in, an ANTIBODY RESEARCH PLAN and/or DRUG
RESEARCH PLAN
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submitted by SB under this Agreement and SB has not certified in writing
(e.g, inclusion of such sequence in a RESEARCH PLAN) to HGS that such
sequence(s) has been obtained, HGS by written notice to SB may terminate
all rights and licenses to such TARGETS(S) and such rights and licenses
shall terminate thirty (30) days thereafter unless SB prior to the
expiration of such thirty (30) days has obtained such sequence and has
certified in writing to HGS that such sequence has been obtained. Upon any
termination of rights and licenses to a TARGET under this Paragraph 16.7,
SB shall discontinue all work encompassed by such ANTIBODY RESEARCH PLAN or
DRUG RESEARCH PLAN as the case may be.
17. RIGHTS AND DUTIES UPON TERMINATION
----------------------------------
17.1.Upon termination of this Agreement in its entirety or with respect to any
SB PRODUCT, CORIGHTS PRODUCT, TAKEDA PRODUCT or HGS PRODUCT or to any
country, each party shall notify the other of the amount of such product it
and its licensees and distributors then have on hand, the sale of which
would, but for the termination, be subject to royalty, and such party and
its licensees and distributors shall thereupon be permitted to sell that
amount of the product provided that the party shall pay the royalty thereon
at the time herein provided for provided, however, that no such termination
of the this Agreement shall affect the rights of an SB licensee to sell
such SB PRODUCT or TAKEDA PRODUCT to the extent such rights survive such
termination under Paragraph 17.4 of this Agreement.
17.2.Termination of this Agreement shall terminate all outstanding obligations
and liabilities between the parties arising from this Agreement except
those described in Paragraphs 2.10, 2.14, 2.24, 12.2, 12.4, 12.7, and 13.1
and Sections 15, 17, 19, 21, and 28, as well as any provision not specified
in this Paragraph which is clearly meant to survive termination of this
Agreement.
17.3.Termination of the Agreement in accordance with the provisions hereof
shall not limit remedies which may be otherwise available in law or equity.
17.4.All rights of licensees pursuant to licenses granted by SB to TAKEDA or
otherwise to an SB PRODUCT in SOUTHEAST ASIA under this Agreement shall
survive termination of this Agreement pursuant to Paragraph 16.3, or
Paragraph 16.4 thereof in the event of the bankruptcy or similar event
listed in such Paragraph 16.4 with respect to SB, provided that the
following conditions are met: (i) the SB licensee is not then in breach of
its license; (ii) except for the SB/TAKEDA AGREEMENT, HGS's rate of royalty
compensation thereunder is no less than the rate of royalty compensation to
HGS
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under this Agreement; (iii) HGS assumes no performance obligations under
the license agreement; and (iv) SB and its licensee assign the license
agreement to HGS within sixty (60) days after such termination and as a
result of such assignment such licensee is directly obligated to HGS. All
rights of licensees with respect to a SB PRODUCT pursuant to licenses
granted by SB under this Agreement shall survive termination of SB's rights
with respect to such SB PRODUCT pursuant to Paragraph 16.3 or Paragraph
16.4 hereof, provided that the above-stated conditions are met with respect
to such rights of the licensees.
18. WARRANTIES AND REPRESENTATIONS
------------------------------
18.1.Nothing in this Agreement shall be construed as a warranty that SB
PATENTS, COLLABORATION PARTNER PATENTS or HGS PATENTS are valid or
enforceable or that their exercise does not infringe any patent rights of
THIRD PARTIES. A holding of invalidity or unenforceability of any such
patent, from which no further appeal is or can be taken, shall not affect
any obligation already accrued hereunder, but shall only eliminate
royalties otherwise due under such patent from the date such holding
becomes final.
18.2.Each party warrants and represents that it has the right to enter into
this Agreement and to perform in accordance therewith.
18.3.HGS hereby further represents and warrants that, during the INITIAL
RESEARCH TERM, HGS will not grant TIGR permission to disclose or provide to
a THIRD PARTY materials which are GENES in circumstances where TIGR
requires such permission without SB's prior consent. HGS' failure to take
action against TIGR where TIGR is in breach of an obligation to HGS shall
not be construed as HGS granting TIGR permission to disclose or provide
such materials.
18.4.Except as otherwise expressly set forth herein neither party makes any
representations or extends any warranties of any kind, either express or
implied, including, but not limited to, warranties of merchantability or
fitness for a particular purpose.
18.5.Each party guarantees that its respective AFFILIATES will perform all
obligations under this Agreement as if such AFFILIATES were signatories of
this Agreement.
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19. INDEMNIFICATION
---------------
19.1.SB shall defend, indemnify and hold harmless HGS, AFFILIATES of HGS,
licensors of HGS and their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages
and expenses (including attorneys' fees) as the result of claims, demands,
costs or judgments which may be made or instituted against any of them
arising out of the manufacture, possession, distribution, use, testing,
sale or other disposition by or through SB or any THIRD PARTY granted
rights by SB under this Agreement of any SB PRODUCT. SB's obligation to
defend, indemnify and hold harmless shall include claims, demands, costs or
judgments, whether for money damages or equitable relief by reason of
alleged personal injury (including death) to any person or alleged property
damage, provided, however, the indemnity shall not extend to any claims
against an indemnified party which result from the gross negligence or
willful misconduct of such indemnified party. SB shall have the exclusive
right to control the defense of any action which is to be indemnified in
whole by SB hereunder, including the right to select counsel acceptable to
HGS to defend HGS and to settle any claim, provided that, without the
written consent of HGS (which shall not be unreasonably withheld or
delayed), SB shall not agree to settle any claim against HGS to the extent
such claim has a material adverse effect on HGS. The provisions of this
Paragraph shall survive and remain in full force and effect after any
termination, expiration or cancellation of this Agreement and obligation
hereunder shall apply whether or not such claims are rightfully brought. SB
shall require each licensee to agree to indemnify HGS in a manner
consistent with this Paragraph.
19.2.HGS shall defend, indemnify and hold harmless SB, AFFILIATES of SB,
licensors of SB and their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages
and expenses (including attorneys' fees) as the result of claims, demands,
costs or judgments which may be made or instituted against any of them
arising out of the manufacture, possession, distribution, use, testing,
sale or other disposition by or through HGS or its AFFILIATES or any THIRD
PARTY granted rights by HGS under this Agreement of any HGS PRODUCT. HGS's
obligation to defend, indemnify and hold harmless shall include claims,
demands, costs or judgments, whether for money damages or equitable relief
by reason of alleged personal injury (including death) to any person or
alleged property damage, provided, however, the indemnity shall not extend
to any claims against an indemnified party which result from the gross
negligence or willful misconduct of such
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indemnified party. HGS shall have the exclusive right to control the
defense of any action which is to be indemnified in whole by HGS hereunder,
including the right to select counsel acceptable to SB to defend SB and to
settle any claim, provided that, without the written consent of SB (which
shall not be unreasonably withheld or delayed), HGS shall not agree to
settle any claim against SB to the extent such claim has a material adverse
effect on SB. The provisions of this Paragraph shall survive and remain in
full force and effect after any termination, expiration or cancellation of
this Agreement and HGS obligation hereunder shall apply whether or not such
claims are rightfully brought. HGS shall require each licensee to agree to
indemnify SB in a manner consistent with this Paragraph.
19.3.A person or entity that intends to claim indemnification under this
Section 19 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the
Indemnitor, after it determines that indemnification is required of it,
shall assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense; or, if representation
of such Indemnitee by the counsel retained by the Indemnitor would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Section 19 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action
is such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld unreasonably. The failure to deliver notice
to the Indemnitor within a reasonable time after the commencement of any
such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this
Section 19, but the omission so to deliver notice to the Indemnitor will
not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Section 19. The Indemnitee under this Section 19,
its employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigations of any action, claim or
liability covered by this indemnification. In the event that each party
claims indemnity from the other and one party is finally held liable to
indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
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20. FORCE MAJEURE
-------------
20.1.If the performance of any party of this Agreement by either party, or of
any obligation under this Agreement, is prevented, restricted, interfered
with or delayed by reason of any clause beyond the reasonable control of
the party liable to perform, unless conclusive evidence to the contrary is
provided, the party so affected shall, upon giving written notice to the
other party, be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected
party shall use its reasonable best efforts to avoid or remove such causes
of non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable solution.
21. GOVERNING LAW
-------------
21.1.This Agreement shall be deemed to have been made in the Commonwealth of
Pennsylvania and its form, execution, validity, construction and effect
shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania, U.S.A.
22. SEPARABILITY
------------
22.1.In the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect.
22.2.If any of the terms or provisions of this Agreement are in conflict with
any applicable statute or rule of law, then such terms or provisions shall
be deemed inoperative to the extent that they may conflict therewith and
shall be deemed to be modified to conform with such statute or rule of law.
22.3.In the event that the terms and conditions of this Agreement are
materially altered as a result of Paragraphs 22.1 or 22.2, the parties will
renegotiate in good faith the terms and conditions of this Agreement to
resolve any inequities.
23. ENTIRE AGREEMENT
----------------
23.1 This Agreement, entered into as of the date written above, constitutes the
entire agreement between the parties relating to the subject matter hereof
and supersedes all previous writings and understandings relating to such
subject matter. No terms or provisions of this Agreement shall be varied or
modified by any prior or subsequent statement, conduct or act of either of
the parties, except that the parties may amend this Agreement by written
instruments specifically referring to and executed in the same manner as
this Agreement.
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23.2 (a) Neither HGS nor SB may enter into any agreement with a COLLABORATION
PARTNER which amends the terms and conditions of the COLLABORATION PARTNER
AGREEMENT to which such COLLABORATION PARTNER is a party without the prior
written consent of the other; and (b) SB may not amend the terms and
conditions of the SB/TAKEDA AGREEMENT in a manner that materially affects
HGS without the prior written consent of HGS, which consent shall not be
unreasonably withheld.
23.3.The headings and titles to the Sections and Paragraphs of this Agreement
are inserted for convenience only and shall not be deemed a part hereof or
affect the construction or interpretation of any provision hereof.
24. NOTICES
-------
24.1.Any notice required or permitted under this Agreement shall be sent by air
mail, postage pre-paid, courier or fax to the following addresses of the
parties or such other addresses as may be notified to the parties as
provided herein:
HGS: HUMAN GENOME SCIENCES, INC.
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Chief Executive Officer
fax: 301-309-0092
copy to:
Mr. Elliot Olstein
Carella, Byrne, Bain, Gilfillan, Cecchi & Stewart
6 Becker Farm Road
Roseland, New Jersey 07068
fax: 201-994-1744
SB: SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
King of Prussia, Pennsylvania 19103
Attention: Vice-President,
Advanced Technologies in Genetics
SmithKline Beecham Pharmaceuticals
fax: 610-270-6663
copy to:
SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
P. O. Box 1539
King of Prussia, Pennsylvania 19406
Attention: Corporate Intellectual Property
fax: 610-270-4026
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24.2.Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.
25. ASSIGNMENT
----------
25.1.This Agreement and the licenses herein granted shall be binding upon and
inure to the benefit of the successors in interest of the respective
parties. Neither this Agreement nor any interest hereunder shall be
assignable by either party without the written consent of the other
provided, however, that SB or HGS may assign this Agreement or any of its
rights or obligations hereunder to any AFFILIATE or to any THIRD PARTY with
which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, without
obtaining the consent of the other party, subject to Paragraphs 10.1 (viii)
and 10.2 (viii), provided the assigning party remains liable under this
Agreement and that the THIRD PARTY assignee or surviving entity assumes in
writing all of its obligations under this Agreement. HGS hereby consents
and agrees to accept any assignment to HGS of a license agreement by SB and
its licensee pursuant to Paragraph 17.4 if the conditions of Paragraph
17.4(a)(i),(ii)(iii) and (iv) are satisfied. .
26. RECORDING
---------
26.1.SB and HGS shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the TERRITORY, and the other party shall provide
reasonable assistance to the notifying party in effecting such recording,
registering or notifying.
27. DISPUTE RESOLUTION
------------------
27.1.Senior management of SB and HGS shall endeavor to resolve all disputes
under this Agreement.
27.2.If there is a tie vote within the RC over an issue within the jurisdiction
of the RC, which tie vote is not timely solved by the RC, and if senior
management does not timely resolve any such tie vote, then either party may
submit such to binding arbitration pursuant to the SB/HGS arbitration
agreement dated 19 August, 1993 as may be amended from time to time.
27.3.Either party may submit disputes arising from Paragraphs 6.2 and 7.4 to
binding arbitration pursuant to the SB/HGS Arbitration Agreement dated 19
August 1993 as may be amended from time-to-time.
28. COVENANTS
---------
28.1.
(a) SB agrees not to use SB TECHNOLOGY except
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(1) during the INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS to
perform research and development in the SB FIELD and after the INITIAL
RESEARCH TERM and RESEARCH TERM EXTENSIONS to perform research and
development in the SB FIELD pursuant to a RESEARCH PLAN submitted by or
on behalf of SB pursuant to this Agreement,
(2) in the HGS FIELD to perform research and development only (i) in
furtherance of research and development in the SB FIELD during the
INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS, and (ii) after the
INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS only in furtherance
of research and development in the SB FIELD pursuant to a RESEARCH PLAN
submitted by or on behalf of SB pursuant to this Agreement,
(3) to perform research and development of GENE THERAPY VACCINES during
the INITIAL RESEARCH TERM,
(4) to make, have made, use, and sell SB PRODUCT (other than SB
PRODUCTS to which SB's rights have been terminated pursuant to
Paragraph 16.3), TAKEDA PRODUCT and CORIGHTS PRODUCT and as expressly
permitted under this Agreement, HGS PRODUCTS,
(5) to grant licenses that SB is otherwise permitted to grant pursuant
to this Agreement, and
(b) during and after the INITIAL RESEARCH TERM, SB agrees not to use HGS
SPECIAL TECHNOLOGY except as licensed and permitted pursuant to this
Agreement;
(c) Notwithstanding the preceding, SB shall have the right to use SB
TECHNOLOGY that is solely based on or derived from published information
and/or information which otherwise becomes lawfully known to SB
independently of this Agreement, unless: (i) the information is claimed in
a published HGS PATENT or SB PATENT and there is no THIRD PARTY patent
application or patent with an earlier priority date which discloses the
information or (ii) the SB TECHNOLOGY results from a RESEARCH PLAN
undertaken by SB.
28.2.HGS shall not use SPECIAL SB TECHNOLOGY except as licensed or permitted
under this Agreement. Notwithstanding the preceding, HGS shall have the
right to use SPECIAL SB TECHNOLOGY independently of this Agreement if such
SPECIAL SB TECHNOLOGY is solely based on or derived from published
information and/or information which otherwise becomes lawfully known to
HGS independently of this Agreement, unless: the information is claimed in
a published HGS PATENT or SB PATENT and there is no THIRD
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PARTY patent application or patent with an earlier priority date which
discloses the information.
28.3.Notwithstanding anything else to the contrary, the following uses of SB
TECHNOLOGY and/or HGS SPECIAL TECHNOLOGY shall not be a breach of this
Agreement by SB:
(i) use of unpatented HGS TECHNOLOGY outside a RESEARCH PLAN submitted by
SB in accordance with this Agreement after the later of the end of the
INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS which HGS TECHNOLOGY at
the time of such use is generally available to the public, and/or
(ii) use of SB TECHNOLOGY outside a RESEARCH PLAN submitted by SB in
accordance with this Agreement developed after the later of the end of the
INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS which is SB TECHNOLOGY
only as a result of the use of unpatented HGS TECHNOLOGY which is generally
available to the public at the time of such use; and/or
(iii) use of BIOINFORMATICS after the end of the INITIAL RESEARCH TERM or
RESEARCH TERM EXTENSION which BIOINFORMATICS is SB TECHNOLOGY; and/or
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iv) use of SB TECHNOLOGY with respect to any products discovered [***]
years after the later of the end of the INITIAL RESEARCH TERM or RESEARCH
TERM EXTENSIONS outside a RESEARCH PLAN submitted by SB in accordance with
this Agreement.
29. COUNTERPARTS
------------
29.1 This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Agreement as of the date first written above.
SmithKline Beecham Corporation
By:______________________________
SmithKline Beecham, p.l.c.
By:______________________________
Human Genome Sciences, Inc.
By:______________________________
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APPENDIX A
SAMPLE ANTIBODY RESEARCH PLAN
1. Target (Antigen) Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Expected indications for product
- Brief summary of supporting biological data on target (antigen)
3. Status of Cloning and Expression or Synthesis of Target (Antigen)
- nucleotide sequence encoding Target (Antigen) (as available)
4. Patent Status
5. Estimated date for start of laboratory animal immunization
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APPENDIX B
COLLABORATION PARTNERS
SP
MERCK
SYNTHELABO
any other entity pursuant to Paragraph 1.11
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APPENDIX C
Sample DRUG RESEARCH PLAN
1. Target Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Brief summary of supporting biological data on target
- Expected Indications for Product
3. Status of full length cloning and expression
- nucleotide sequence encoding Target (as available)
4. Patent status
5. Estimated date for the start of small molecule screening.
(No description of the screen is required.)
6. Chemical optimization
- No details required
- Estimated date of start (can be updated)
7. Plan updates if and when a potential development compound is identified
- R&D product (compound) code #/INN name/generic name
(when available)
- Notification when a compound enters preclinical
development
- Notification when a compound enters clinical development
- Notification when regulatory approvals are sought
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APPENDIX D
SAMPLE PROTEIN RESEARCH PLAN
1. Therapeutic Protein Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Expected indications for Product
3. Biological data on protein
- Full length cloning
- Expression and purification
full length nucleotide sequence of the GENE encoding the
THERAPEUTIC PROTEIN
The protein preparation(s) used for the in vivo activity demonstration must be
purified to the level specified in Paragraph 6.1(a), and evidence of this purity
level must be included in the research plan.
- In vivo demonstration of relevant pharmacological activity
(along with supporting demonstration of in vitro or ex vivo demonstrations of
activity if available)
In certain instances, in vivo demonstration of activity will not be possible for
scientific reasons. In these specific cases, an ex-vivo or in vitro
demonstration of activity will be acceptable.
4. Patent status(full length gene patent application must have been filed)
5. Research and development plan
This plan need not contain detail of these activities, but rather
one-line descriptions of planned activities (with estimates of timing). Not all
of these plans/timings will be available when the initial plan is submitted, but
will be added as part of the yearly update of the plan.
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- Further preclinical studies of activity
- Preclinical development
- determination of pharmacokinetic profile
- initiation of toxicology studies
- Steps to completion of IND package
- Certain key milestones in production/scale-up
- Clinical development
- Major phase transition (when available and appropriate)
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
APPENDIX E
MTAS FOR SECTION 12
HGS MTA STATUS SUBJECT
------- ------ -------
Collaboration #120 Signed [***]
Collaboration #121 Signed [***]
Collaboration #174 Signed [***]
Collaboration #177 Signed [***]
Collaboration #199 Signed [***]
Collaboration #203 Signed [***]
Collaboration #204 Signed [***]
Collaboration #207 Signed [***]
Collaboration #221 Signed [***]
Collaboration #230 Signed [***]
Collaboration #235 Signed [***]
Collaboration #236 Signed [***]
Collaboration #242 SB approved [***]
Collaboration #243 Proposed [***]
Collaboration #247 Proposed [***]
Collaboration #249 Proposed [***]
Collaboration #253 Proposed [***]
Collaboration/CRADA SB Approved [***]
(Fauci-NIH)
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APPENDIX F
SB/TAKEDA AGREEMENT IN EXISTENCE AS OF THE EFFECTIVE DATE
69