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Development, Licence and Supply Agreement [Amendment] - Elan Corp. plc and Ligand Pharmaceuticals Inc.

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                              Dated 20 August 1999

                              ELAN CORPORATION, plc

                                       AND

                       LIGAND PHARMACEUTICALS INCORPORATED



             AMENDMENT TO DEVELOPMENT, LICENCE AND SUPPLY AGREEMENT




<PAGE>

THIS AMENDMENT AGREEMENT is made on 20 August 1999.




BETWEEN:

(1)  ELAN CORPORATION, PLC, a company incorporated in Ireland having its
     registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland
     ("ELAN") and

(2)  LIGAND PHARMACEUTICALS INCORPORATED, a company organized under the laws of
     Delaware, with offices at 10275 Science Center Drive, San Diego, California
     92121, United States of America ("LIGAND").



RECITALS:

A.   ELAN and LIGAND entered into a Development, License and Supply Agreement
     dated 9 November, 1998 ("the Agreement").

B.   The clinical costs associated with the Agreement have transpired to be
     greater than ELAN and LIGAND originally envisaged and accordingly, ELAN and
     LIGAND wish to enter into this Amendment Agreement to adjust the license
     royalties payable to ELAN under Clause 10.1 of the Agreement, and also the
     commitment by LIGAND under Clause 5.5 of the Agreement to undertake
     additional clinical expenditure, including Phase III and Phase IV clinical
     trials, related to the commercialization of the PRODUCT in the TERRITORY,
     to the extent set forth in Clause I hereof.

All capitalized terms used in this Amendment Agreement shall have the same
meanings as are assigned thereto in the Agreement, except where expressly
provided to the contrary in this Amendment Agreement.


NOW IT IS HEREBY AGREED AS FOLLOWS:


1 Amendment to the Agreement:

ELAN and LIGAND hereby agree that the Agreement shall be amended as follows:

1.1 by the deletion of Clause I 0. I of the Agreement and the substitution
therefor of the following:


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"10.1    Licence Royalties:

         10.1.1   In consideration of the licence of the ELAN PATENTS granted to
                  LIGAND under this Agreement, LIGAND shall pay to ELAN the
                  following amounts:-

                    (1)  $5 million in cash or in shares of Common Stock of
                         LIGAND, par value $.001 per share (the "Common Stock")
                         (valued at $11.65 per share), at LIGAND's option, upon
                         the execution of the Agreement by both parties;

                    (2)  $10 million in cash, or at LIGAND's option, in cash
                         through an increase in the issue amount of the
                         CONVERTE3LE NOTE, upon the execution of the Agreement
                         by both parties;

                    (3)  *** in cash or in shares of Common Stock of LIGAND
                         (valued at a price per share equal to the average of
                         the CLOSING PRICE of the Common Stock for the 5
                         consecutive trading days immediately prior to the
                         required payment date thereof), at LIGAND's option,
                         upon substantial completion of full original patient
                         enrolment in the Phase III pivotal efficacy studies
                         relating to the submission of the NDA for the PRODUCT
                         in the U.S.A. if, and only if, accomplished-on or prior
                         to *** .

                    (4)  *** in cash or in shares of Common Stock of LIGAND
                         (valued at a price per share equal to the average of
                         the CLOSING PRICE of the Common Stock for the 5
                         consecutive trading days immediately prior to the
                         required payment date thereof), at LIGAND's option,
                         upon submission of the NDA for the PRODUCT in the
                         U.S.A. provided the exact amount of this payment will
                         be determined (and become payable) in accordance with
                         the date upon which the NDA for the PRODUCT is
                         submitted in the USA, as specified below:

                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. on or prior to *** ;

                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. after *** but on or prior to *** ;

                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. after *** but on or prior to *** ;

                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. after *** but on or prior to *** ;

--------------
         *** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

                                       3

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                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. *** but on or prior to *** ;

                    ***  upon submission of the NDA for the PRODUCT in the
                         U.S.A. on any date after *** .

               (5)  *** in cash or in shares of Common Stock of LIGAND (valued
                    at a price per share equal to the average of the CLOSING
                    PRICE of the Common Stock for the 5 consecutive trading days
                    immediately prior to the required payment date thereof), at
                    LIGAND's option, upon the NDA APPROVAL of the PRODUCT in the
                    U.S.A.

       10.1.2. In the event that LIGAND elects to issue shares of the Common
               Stock pursuant to Clause 10.1.1(1), (3), (4) or (5) or the
               CONVERTIBLE NOTE pursuant to Clause 10.1.1(2), each such issuance
               shall be made pursuant to, and subject to the terms and
               conditions set forth in, the PURCHASE AGREEMENT. Nothing in this
               Agreement shall relieve LIGAND from its obligations to make the
               payments set forth in Clauses 10.1.l.(l), (2), (3), (4) or (5),
               in cash, in the event that any of the applicable conditions set
               forth in the PURCHASE AGREEMENT are not satisfied or waived on or
               prior to the required payment date thereof; provided however,
               that in the event that LIGAND elects to issues shares of Common
               Stock pursuant to Clause 10.1.1.(1), (3), (4) or (5) and ELAN is
               unable to satisfy the conditions to such issuance as set forth in
               the PURCHASE AGREEMENT or if such conditions have not been waived
               by LIGAND, as the case may be, LIGAND and ELAN shall negotiate in
               good faith to agree upon customary terms and conditions which
               will enable LIGAND to issue such shares pursuant to a transaction
               exempt from the registration requirements of the Securities Act
               pursuant to Regulation D thereunder, including the giving by
               ELAN, to the extent possible, of representations and warranties
               in connection therewith."

          1.2  by the deletion of Clause 5.5 of the Agreement and the
               substitution therefore of the following:

          "5.5 For the *** following submission of the NDA in the USA, LIGAND
               shall commit to undertake additional clinical expenditure, ***
               *** *** (including FULLY ALLOCATED COST of LIGAND and the sums
               paid by LIGAND to ELAN as referred to in Clause 5.4 above). The
               objective of the programme so conducted shall be to *** . LIGAND
               agrees to carry out and complete the clinical efficacy programme
               to a standard and timeframe that LIGAND would otherwise find
               acceptable for one of its major branded products. LIGAND shall
               keep ELAN informed as to *** *** . LIGAND undertakes that it
               shall carry out all *** to prevailing cGCP and CGLP and most
               specifically in accordance with FDA standards and guidelines. In
               the event that LIGAND does not expend *** during the ***
               following submission of the NDA in the USA, then, unless
               otherwise agreed in writing between the parties, LIGAND shall pay
               any shortfall between the *** and the actual sum expended by
               LIGAND to ELAN, provided however, in the event the FDA notifies
               ELAN of its refusal to grant the NDA submitted by ELAN and
               LIGAND, after discussion with ELAN, determines that it is not
               commercially viable for LIGAND to incur any additional
               development expenses as provided in Clause 5.4, LIGAND shall have
               no further obligation to expend or remit sums under this Clause
               5. 5. In such event, ELAN shall have the right to terminate this
               Agreement. Thereafter, ELAN shall be entitled to research,
               develop and commercialise the PRODUCT in the TERRITORY. In the
               event of such termination, all monies paid to ELAN by LIGAND
               pursuant to this Agreement shall not be recoverable by LIGAND."

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         *** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

                                       4

<PAGE>

2    Governing law and jurisdiction:

     This Amendment Agreement is construed under and ruled by the laws of
     New York. For the purposes of this Amendment Agreement the parties submit
     to the non- exclusive jurisdiction of the courts of New York.



     IN WITNESS of which the parties have executed this Amendment Agreement.

                                       5

<PAGE>


Executed by LIGAND on 20 August, 1999

By:     /s/David Robinson

Name:   David Robinson

Title:  President & CEO



Executed by ELAN on 20 August, 1999

By:      /s/Seamus Mulligan

Name:    Seamus Mulligan

Title:   Executive Vice President
         Corporate Development


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