[*] indicates that a confidential portion of the text of this agreement has been omitted.
This Collaboration Agreement (this " Agreement ") is dated as of November 1, 2006 (the " Effective Date ") and is made by and between Takeda Pharmaceutical Company Limited, a Japanese corporation having offices at 1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan (hereinafter " Takeda "); and XOMA (US) LLC, a Delaware limited liability company having offices at 2910 Seventh Street, Berkeley, California 94710, USA (hereinafter " XOMA "). Takeda and XOMA are sometimes referred to herein individually as a " Party " and collectively as the " Parties ."
R E C I T A L S
WHEREAS, Takeda and XOMA are each in the business of, among other things, discovering and developing products for the prevention or treatment of human diseases and conditions;
WHEREAS, Takeda (a) has technology for and expertise in the identification and validation of targets for use in the discovery of such products, and has identified and validated, and continues to identify and validate, target antigens for use in the discovery of antibodies potentially useful for such purposes, and (b) has personnel with expertise in the development of such products;
WHEREAS, XOMA has technology for and expertise in the discovery, optimization, development and manufacturing of antibodies potentially useful for such purposes;
WHEREAS, Takeda and XOMA are interested in collaborating (a) in the discovery of antibodies to target antigens identified and validated by Takeda and (b) in the development of such antibodies for use in the prevention or treatment of human diseases and conditions;
WHEREAS, it is anticipated that XOMA will have primary responsibility for research and preclinical development activities relating to the target antigens that are the subject of the Parties’ collaboration, including antibody discovery, identification of antibodies suitable for supporting Investigational New Drug application filing(s) and the manufacturing of clinical trial material for such antibodies during their clinical development; and
WHEREAS, it is anticipated that Takeda will have primary responsibility for all activities relating to development and commercialization of Collaboration Products including without limitation the filing of Investigational New Drug applications, clinical development and the sales and marketing of Collaboration Products.
NOW, THEREFORE, in consideration of the premises and of the covenants herein contained, the Parties hereto mutually agree as follows:
For purposes of this Agreement, the terms defined in this Article 1 shall have the respective meanings specified below:
1.1 " Additional Upfront Fee " has the meaning specified in Section 7.1 hereof.
1.2 " Adverse Drug Reaction " means any untoward medical occurrence in a patient or subject who is administered a Collaboration Product, the occurrence of which should be reported to one or more Regulatory Authorities in accordance with applicable Laws where the Collaboration Product is being administered to patients or subjects.
1.3 " Affiliate " means any corporation, company, partnership, joint venture and/or firm that controls, is controlled by or is under common control with a Party to this Agreement. For purposes hereof, "control" means (a) in the case of a corporate entity, direct or indirect ownership of more than fifty percent (50%) of the stock or shares entitled to vote for the election of directors; (b) in the case of a non-corporate entity, direct or indirect ownership of more than fifty percent (50%) of the equity interests with the power to direct the management and policies of such non-corporate entity; or (c) possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the entity in question (whether through ownership of securities or other ownership interests, by contract or otherwise). Notwithstanding the foregoing, TAP Pharmaceutical Products, Inc. and its subsidiaries, TAP Pharmaceuticals Inc. and TAP Finance Inc., shall be deemed Affiliates of Takeda for purposes hereof so long as Takeda directly or indirectly owns fifty percent (50%) or more of the stock or shares entitled to vote for the election of directors thereof.
1.4 " Annual Maintenance Fee " has the meaning specified in Section 7.2 hereof.
1.5 " Antibody " means any immunoglobulin molecule whether in monospecific or any other form and shall include, without limitation, immunoglobulin fragments, such as Fv, Fab, F(ab’) and single-chain antibodies.
1.6 " Antibody Product " means any composition of matter or article of manufacture consisting essentially of an Antibody (a) alone or (b) integrally associated with a composition of matter or article of manufacture (including without limitation conjugates bound to a toxin, label or other moiety) providing therapeutic, half-life, safety or other advantages to the Antibody.
1.7 " Antibody Related Claim " has the meaning specified in Section 6.1.1 hereof.
1.8 " Applicable Interest Rate " has the meaning specified in Section 7.12 hereof.
1.9 " Bankruptcy Code " has the meaning specified in Section 14.3 hereof.
1.10 " Batch " means a specific volume, produced in a [*] or larger size bioreactor, of cell culture fluid processed through to bulk drug substance that is intended to have a uniform character and quality, within specified limits, and that is produced according to a single manufacturing order during the same cycle of manufacture.
1.11 " Batch Price " means the price associated with the production of each Batch (excluding FTE Costs for internal analytical testing as provided in Section 1.59 and Third Party costs as provided in Section 7.6.2) and, during the period from the Effective Date until December 31, 2006, shall be as follows: [*] for each [*] scale Batch; [*] for each [*] scale Batch; and [*] for each [*] scale Batch. Batch Prices shall be adjusted annually beginning January 1, 2007 by XOMA, [*].
1.12 " BLA " means a Biologics Licensing Application (as defined in the FDC Act) and any other equivalent marketing authorization application or other license, registration or application seeking approval from a Regulatory Authority to market a Collaboration Product in the Field in the Territory.
1.13 " Cancer " means a condition or disease primarily characterized by uncontrolled growth or spread of abnormal and anaplastic cells, metastases, neoplasm, malignant tumors and/or invasion by abnormal and anaplastic cells into tissues regardless of cause. For the avoidance of doubt, Cancer shall not include inflammation, infection or conditions characterized solely by hypertrophy or hyperplasticity of normal cells.
1.14 " cGMP Guidelines " means the FDA’s current good manufacturing practice guidelines as promulgated under the FDC Act and 21 C.F.R. (parts 210 and 211), and as further defined by FDA guidance documents, as amended from time to time.
1.15 " Change of Control " means a transaction or a series of related transactions (collectively, the " Transaction ") wherein the shareholders of a company or its parent company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of voting shares of such company or its parent company immediately before the Transaction, direct or indirect beneficial ownership of more than two-thirds (66.67%) of the total combined voting power of the outstanding voting shares of the company or the entity or entities to which the assets of the company were transferred (the " Transferee Corporation "), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting shares of one or more entities which, as a result of the Transaction, own the company or the Transferee Corporation(s), as the case may be, either directly or through one or more subsidiaries.
1.16 " Chiron Agreement " has the meaning specified in Section 1.17 hereof.
1.17 " Chiron Exclusivity Period " shall mean the exclusivity period provided for in Section 3.2 of the May 26, 2005 Research, Development and Commercialization Agreement between Chiron Corporation and XOMA (the " Chiron Agreement "). As of the Effective Date, although the Chiron Exclusivity Period is scheduled to expire on February 27, 2007, it may be extended to not later than February 27, 2009. In the event that XOMA learns that such expiration date changes or is reasonably expected to change, XOMA shall inform Takeda within ten (10) business days of such change or expected change in writing as well as the known or anticipated new expiration date.
1.18 " Collaboration " has the meaning specified in Section 2.1.1 hereof.
1.19 " Collaboration Committee " means the Joint Steering Committee, JRDC or Joint Patent Committee. "Collaboration Committees" means any combination of the foregoing.
1.20 " Collaboration Product " means a Program Antibody that has been selected by Takeda at the Joint Steering Committee as a lead or backup development candidate for further development under the Collaboration.
1.21 " Collaboration Target " means any Proposed Target that has been selected for Research and Development in accordance with Section 2.2 hereof.
1.22 " Combination Product " has the meaning specified in Section 1.62 hereof.
1.23 " Commercially Reasonable and Diligent Efforts " means the carrying out of obligations or tasks by a Party in a sustained manner using good faith commercially reasonable and diligent efforts, which efforts shall be consistent with the exercise of prudent scientific and business judgment in accordance with either (a) the efforts such Party devotes to products or research and development projects of similar scientific and commercial potential, or (b) if such Party does not have and has not had any such products or projects, the efforts a peer company in the biopharmaceutical industry would devote, in accordance with industry standards and practices, to products or research and development projects of similar scientific and commercial potential, and subject in any event to any Pre-existing Obligations of such Party properly disclosed to the other Party in accordance herewith.
1.24 " Confidential Information " means any information and data received by a Party (the " Receiving Party ") from the other Party or its Affiliates (the " Disclosing Party ") in connection with this Agreement or the Confidential Disclosure Agreement made as of February 8, 2006 between the Parties (including, without limitation, any terms of this Agreement, all information disclosed by the Parties under Article 2 hereof and any research, testing, clinical, regulatory, marketing or other scientific or business information, plans, or data pertaining to any Collaboration Product of the Disclosing Party). Notwithstanding the foregoing, Confidential Information shall not include any part of such information or data:
1.25 " Contract Quarters " has the meaning specified in Section 1.26 hereof.
1.26 " Contract Year " means, with respect to a particular Collaboration Target, (a) with respect to the first Contract Year, the period beginning on the date such Collaboration Target is accepted into the Collaboration (or, in the case of the first Collaboration Target, the Effective Date) and ending on December 31 of the calendar year in which such acceptance takes place (which in the case of the first Collaboration Target is December 31, 2006) (such period, the " First Contract Year "), and (b) with respect to each subsequent Contract Year, the twelve (12) month period beginning on the day following the end of the First Contract Year and each succeeding twelve (12) month period thereafter. Each Contract Year (other than the First and last Contract Years, as applicable) shall be divided into four (4) " Contract Quarters " comprised of successive three (3) month periods. In the First Contract Year, the first Contract Quarter shall begin on the first day of the First Contract Year and shall end on the last day of the calendar quarter in which the relevant Collaboration Target is accepted into the Collaboration (which in the case of the first Collaboration Target is December 31, 2006).
1.27 " Control " or " Controlled " means, with respect to any (a) material, document, item of information, method, data or other Know-How or (b) Patent Right or other intellectual property right, the possession (whether by ownership or license, other than by a license granted pursuant to this Agreement) by a Party or its Affiliates of the ability to grant to the other Party access, ownership, a license and/or a sublicense as provided herein under such item or right without violating the terms of any agreement or other arrangement with any Third Party as of the time such Party would first be required hereunder to grant the other Party such access, ownership, license or sublicense.
1.28 " Cover ," " Covered " or " Covering " means, with respect to a Patent Right, that, but for rights granted to a person or entity under such Patent Right, the practice by such person or entity of an invention claimed in such Patent Right would infringe a Valid Claim included in such Patent Right, or in the case of a Patent Right that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a patent.
1.29 " Disclosing Party " has the meaning specified in Section 1.24 hereof.
1.30 " Effective Date " means the date specified in the initial paragraph of this Agreement.
1.31 " EMEA " means the European Medicines Agency, or any successor thereto.
1.32 " Escrow Agent " means an independent Third Party consultant hired by XOMA with whom XOMA has deposited a list of Excluded Targets, which XOMA may update from time to time, and who shall notify Takeda which, if any, Proposed Targets are Excluded Targets.
1.34 " Event of Default " means an event described in Section 13.4 hereof.
1.35 " Excluded Target " means a Target that XOMA has elected, in its sole discretion, to exclude from consideration for inclusion in the Collaboration and is identified on the list of Excluded Targets deposited with the Escrow Agent prior to such Target being designated as a Proposed Target by Takeda.
1.36 " FDA " means the United States Food and Drug Administration, or any successor thereto.
1.37 " FDC Act " means the United States Food, Drug and Cosmetic Act (or any successor thereto), as amended, and the rules and regulations promulgated thereunder.
1.38 " Field " means any and all uses except, until the expiration or termination of the Chiron Exclusivity Period, the diagnosis, prevention, control or treatment of Cancer; [*]. For avoidance of doubt, upon the expiration or termination of the Chiron Exclusivity Period, the Field shall become automatically any and all uses including but not limited to the diagnosis, prevention, control or treatment of Cancer.
1.39 " First Commercial Sale " means the first sale for use or consumption by the general public of a Collaboration Product in a country after Regulatory Approval has been obtained in such country. For the avoidance of doubt, First Commercial Sale shall not include the sale of any Collaboration Product for use in clinical trials or for compassionate use prior to Regulatory Approval.
1.40 " First Contract Year " has the meaning specified in Section 1.26 hereof.
1.41 " First Upfront Fee " has the meaning specified in Section 7.1 hereof.
1.42 " FTE " means a full-time person dedicated to the R&D Plan activities or Manufacturing Plan activities, as applicable, or in the case of less than a full-time, dedicated person, a full-time, equivalent person year, based, in either case, upon a total of [*] hours per year of work in connection with R&D Plan activities or Manufacturing Plan activities, as applicable.
1.43 " FTE Costs " means the amounts determined by multiplying (a) the number of FTEs contributed by a Party toward R&D Plan activities or Manufacturing Plan activities during the relevant time period, subject to any limitations set forth in the applicable R&D Plan or Manufacturing Plan and associated budget(s) or otherwise established by the Joint Steering Committee, by (b) the applicable FTE Rates.
1.44 " FTE Rate " means, for each functional area, the rate set forth below corresponding to such functional area, to be adjusted annually (beginning in January of 2007) for inflation using the latest available U.S. Producer Price Index for Total Manufacturing Industries, unadjusted (PCUOMFG#) as published by the Bureau of Labor Statistics; [*]. In addition, the Joint Steering Committee shall discuss and approve, as needed, further adjustments to FTE Rates [*] on a prospective basis beginning in [*]. Establishment of annual FTE Rates for functional areas not set forth in the table below shall be the responsibility of the JRDC based on XOMA’s then-current FTE rates. Such rates will be used to determine the R&D Plan and related budget for the applicable annual period.
1.45 " GAAP " means United States generally accepted accounting principles, as they exist from time to time, consistently applied.
1.46 " Human Engineering™ Technology " means the Human Engineering™ technology Controlled by XOMA, as more fully described in Schedule 1.46 .
1.47 " IND " means an Investigational New Drug application filed with the U.S. Food and Drug Administration or a similar application for the clinical testing of a Collaboration Product in human subjects filed with a foreign Regulatory Authority.
1.48 " Indemnitee " has the meaning specified in Section 12.4 hereof.
1.49 " Indemnitor " has the meaning specified in Section 12.4 hereof.
1.50 " Joint Patent Committee " has the meaning specified in Section 3.1.3 hereof.
1.51 " Joint Project Team " has the meaning specified in Section 3.1.2 hereof.
1.52 " Joint Steering Committee " has the meaning specified in Section 3.1.1 hereof.
1.53 " JRDC " has the meaning specified in Section 3.1.2 hereof.
1.54 " Know-How " means any and all know-how, trade secrets, data, processes, techniques, procedures, compositions, materials, devices, methods, formulas, protocols, and research, preclinical and clinical data and information, including any and all chemical, biochemical, toxicological, and scientific research information, whether in written, electronic, graphic or video form or any other form or format. Know-How shall not include Patent Rights.
1.55 " Laws " means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, domestic or foreign.
1.56 " Lead Antibody " has the meaning specified in Section 7.3.4(a) hereof.
1.57 " License Agreements " means the license agreements listed in Schedule 1.57 , which list shall be updated from time to time as necessary to reflect additional license agreements entered into by XOMA after the Effective Date, the inclusion of which in the Collaboration has been agreed to by the Joint Steering Committee as provided in Section 2.7.
1.58 " Manufacturing " or " Manufacture " means all activities set forth in the applicable Manufacturing Plan associated with the production, processing, formulating, filling, finishing and packaging of Collaboration Products in the Field, including pilot plant process development; pilot plant stability testing; manufacturing process development; manufacturing process and assay validation;
manufacturing scale-up; preclinical, clinical and commercial manufacture; and analytical development, quality assurance and quality control activities.
1.59 " Manufacturing Costs " means, with respect to the Manufacture of a Collaboration Product as set forth in the applicable Manufacturing Plan, the [*] internal costs of XOMA, which costs shall be determined based on (i) FTE Costs or (ii) with respect to Batches of the scale sizes referred to in Section 1.11, the Batch Price, and the [*] costs billed to XOMA by Third Parties, in each case consistent with and directly related to the budget set forth in the applicable Manufacturing Plan incurred in cell line development; pilot plant process and assay development; manufacturing process development; manufacturing process improvement; manufacturing scale-up; the development of manufacturing standard operating procedures, batch records, and quality assurance and quality control methods and procedures; and the time of manufacturing personnel for preparing, submitting, reviewing or developing data or information for the purpose of a drug master file or for submission to a Regulatory Authority.
1.60 " Manufacturing Plan " has the meaning specified in Section 5.1.1 hereof.
1.61 " Master Cell Bank " means an aliquot of a single pool of cells which generally has been prepared from the selected cell clone under defined conditions, dispensed into multiple containers and stored under defined conditions. The single pool of cells will be generated from a cell line having agreed upon characteristics established prior to the initiation of preparation of such Master Cell Bank pursuant to the R&D Program, or as subsequently agreed to by the Joint Steering Committee, based on relevant cGMP and GLP standards [*].
1.62 " Net Sales " means, with respect to a Collaboration Product, the gross amount invoiced for sales of such Collaboration Product to customers which are not Affiliates (or which are Affiliates but are end users of such Collaboration Product), less the following unreimbursed or non-refunded deductions with respect thereto, determined in accordance with GAAP and calculated in United States dollars and to the extent such amounts have not already been deducted from the amount invoiced: (a) amounts actually allowed as volume or quantity discounts, rebates, price reductions, returns (including recalls) and charge-backs (including without limitation, with respect to any Net Sales in Japan, any sales-based contribution for "Drug Induced Suffering" and any sales-based contribution for "Contribution for Measure for Drug Safety," in each case as required by applicable Laws or Regulatory Authority in the amount determined by and payable to the Pharmaceuticals and Medical Devices Agency (so-called "KIKO")), (b) sales, excise and turnover taxes and similar duties, levies and charges collected, charged or otherwise imposed directly upon and actually paid by such party and its Affiliates, and (c) all other direct expenses or discounts, including but not limited to cash discounts, custom duties and transportation and insurance charges.
In the event the Collaboration Product is sold as part of a Combination Product (as defined below), the Net Sales from the Combination Product, for the purposes of determining royalty payments, will be determined by [*].
In the event that the average sale price of the Collaboration Product can be determined but the average sale price of the other active compounds or active ingredients in the Combination Product cannot be determined, Net Sales for purposes of determining royalty payments will be calculated by [*]. If the average sale price of the other active compounds or active ingredients can be determined but the average price of the Collaboration Product cannot be determined, Net Sales for purposes of determining royalty payments will be calculated by [*].
In the event that the average sales price of both the Collaboration Product and the other active compounds or active ingredients in the Combination Product cannot be determined, the Net Sales of the Collaboration Product shall be negotiated in good faith by the Parties.
As used above, the term " Combination Product " means any Collaboration Product sold in conjunction with any other active component(s) (whether packaged together or in the same therapeutic formulation).
Free samples of Collaboration Product and the disposition of Collaboration Product for, or the use of Collaboration Product in, preclinical or clinical (Phase 1–3) trials or other market-focused (Phase 4) trials in which Collaboration Product is provided to patients without any payment shall not result in any Net Sales.
1.63 " Patent Prosecution " has the meaning specified in Section 9.2.1 hereof.
1.64 " Patent Rights " means all patents and patent applications existing as of the Effective Date and all patent applications thereafter filed and patents thereafter issued, including, without limitation, any continuations, continuations-in-part, divisionals, provisionals or any substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal or extension (including any supplemental protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing.
1.65 " Phage Display Technology " means an in vitro selection technique that enables polypeptides (e.g. human antibody fragment) with desired properties to be extracted from a repertoire of many different polypeptides or variants, utilizing the ability to display polypeptides on the surface of bacteriophage.
1.66 " Phase 1 Trial " means a human clinical trial in any country that is intended to initially evaluate the safety and/or pharmacological effect of a Collaboration Product in subjects or that would otherwise satisfy the requirements of 21 C.F.R. 312.21(a), or its foreign equivalent. For purposes of this Agreement, " commencement of a Phase 1 Trial " for a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 1 Trial.
1.67 " Phase 2 Trial " means a human clinical trial in any country that is intended to initially evaluate the effectiveness of a Collaboration Product for a particular indication or indications in patients with the disease or indication under study or that would otherwise satisfy the requirements of 21 C.F.R. 312.21(b), or its foreign equivalent. For purposes of this Agreement, " commencement of a Phase 2 Trial " for a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 2 Trial.
1.68 " Phase 3 Trial " means a pivotal human clinical trial in any country, the results of which could be used to establish safety and efficacy of a Collaboration Product as a basis for a BLA or that would otherwise satisfy the requirements of 21 C.F.R. 312.21(c) or its foreign equivalent. For purposes of this Agreement, " commencement of a Phase 3 Trial " for a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 3 Trial. In the event of a Phase 2/3 trial, initiation of Phase 3 shall be deemed to have occurred upon a decision by Takeda to continue enrollment for the pivotal portion of such trial.
1.69 " Plan " means the R&D Plan or Manufacturing Plan, as the case may be.
1.70 " Pre-existing Obligations " means the obligations of Takeda or XOMA, as the case may be, existing (a) with respect to Takeda Background Technology or XOMA Background Technology, under agreements in effect prior to the Effective Date and listed on Schedule 1.70 , and (b) with respect to any Collaboration Target other than the initial Collaboration Target referred to in Section 2.2.1, under agreements in effect at the time such Collaboration Target is designated as such pursuant to Section 2.2 and disclosed in writing by the Party subject to such obligation(s) to the other Party.
1.71 " Program Antibody " means an Antibody Product that (a) is identified or discovered by XOMA in the course of the Collaboration, or (b) the Parties agree to acquire from a Third Party, and, in the case of clauses (a) and (b), selectively binds to and acts through a Collaboration Target; provided , however , that in no event shall an Antibody Product that is subject to one or more Pre-existing Obligations become a Program Antibody unless such designation is affirmatively agreed to by the Joint Steering Committee after disclosure of the nature of such Pre-existing Obligation(s) by the applicable Party, such agreement not to be unreasonably withheld or delayed.
1.72 " Program Director " has the meaning specified in Section 3.2 hereof.
1.73 " Program Materials " means (a) any Program Antibodies and (b) any materials other than Program Antibodies Controlled by a Party or jointly by the Parties that are first identified, discovered or created in the conduct of the Collaboration and during the applicable Program Term including, but not limited to, (i) a cell line producing a Program Antibody and (ii) plasmid DNA incorporating the cDNA with respect to a Program Antibody.
1.74 " Program Patent Rights " means any Patent Rights Controlled by a Party or jointly by the Parties that Cover any Program Technology or Program Materials.
1.75 " Program Technology " means any and all Know-How and inventions Controlled by a Party or jointly by the Parties that are first invented, identified, discovered, made, conceived, reduced to practice or otherwise licensed or acquired in the conduct of the Collaboration and during the applicable Program Term; provided that Know-How or inventions that constitute an improvement to the Human Engineering™ Technology (including any Know-How or inventions otherwise meeting this definition and constituting an improvement thereto) shall not be included in Program Technology. For clarity, Program Technology excludes Program Materials.
1.76 " Program Term " has the meaning specified in Section 2.1.2 hereof.
1.77 " Proposed Targets " has the meaning specified in Section 2.2.2 hereof.
1.78 " Qualified Generic " means, with respect to a particular Collaboration Product in a given country, a generic product (i.e., referred to as a follow-on biologic in the U.S. or a biosimilar medicinal product in the E.U.) that has received Regulatory Approval in such country in the Territory (i) on the basis of the quality, safety and efficacy of such Collaboration Product and (ii) as a substitute for such Collaboration Product in such country has achieved sales revenues exceeding [*] of the sales revenues of Collaboration Product sold by Takeda or its sublicensees in such country based on monthly IMS data if available, or equivalent data for that country if IMS data is not available.
1.79 " R&D Costs " means costs and expenses that are incurred after the Effective Date by either Party in performing Research and Development activities consistent with and directly related to an applicable R&D Plan and associated budget, including:
1.80 " R&D Plan " means the plan relating to a particular Collaboration Target for each Contract Year prepared, developed and approved in accordance with Section 2.2.5 or Section 4.2.1, as applicable. An outline of the tasks to be considered for inclusion in each R&D Plan is set forth in Schedule 1.80 .
1.81 " R&D Program " means the Research and Development activities relating to a particular Collaboration Target and to be conducted in accordance with an applicable R&D Plan.
1.82 " Receiving Party " has the meaning specified in Section 1.24 hereof.
1.83 " Regulatory Approval " means any and all approvals (including any applicable governmental price and reimbursement approvals), licenses, registrations, or authorizations of any
federal, national, multinational, state, provincial or local regulatory agency, department bureau or other governmental entity that are necessary for the manufacture, use, storage, import, transport, promotion, marketing and sale of a Collaboration Product in the Field in a country or group of countries.
1.84 " Regulatory Authority " means any governmental authority in a country or region that regulates the manufacture or sale of pharmaceutical products, including the FDA and the EMEA, and any successors thereto.
1.85 " Relevant Third Party IP " has the meaning specified in Section 11.2.8 hereof.
1.86 " Representatives " has the meaning specified in Section 188.8.131.52 hereof.
1.87 " Research and Development " means the conduct of activities relating to the discovery of Antibodies for Collaboration Targets, the identification, characterization, selection, optimization and research of Program Antibodies and Collaboration Products and the conduct of all tests, clinical and other studies and other activities (including test method development, toxicology studies, statistical analysis and report writing, preclinical and other testing, packaging and regulatory affairs, product approval and registration activities) set forth in, or required to obtain the information set forth in, applicable R&D Plan(s). Research and Development may include without limitation (a) the discovery of Program Antibodies that selectively bind to and act through Collaboration Targets, (b) the development of assays for Program Antibodies to, inter alia, confirm the activity of such Program Antibodies or Collaboration Target, (c) if applicable, the Human Engineering™ of non-human Antibodies that selectively bind to and act through such Collaboration Target, and (d) the performance of affinity maturation on such Program Antibodies, in each case with the objective of identifying Program Antibodies that meet the criteria for designation as Collaboration Products. Such criteria for the initial Collaboration Target referred to in Section 2.2.1 are set forth on Schedule 2.2.1, and criteria for any Proposed Target shall be agreed upon between the Parties as a part of the initial R&D Plan prepared pursuant to Section 2.2.5.
1.88 " Specifications " means, with respect to any Collaboration Product, the applicable written specifications for such Collaboration Product in effect at a particular time including, but not limited to, specifications provided in any Regulatory Approval for such Collaboration Product.
1.89 " Subsequent Lead Antibody " has a meaning specified in Section 7.3.4(b) hereof.
1.90 " Takeda Background Technology " means any and all Know-How and Patent Rights Controlled by Takeda as of the Effective Date [*] and, in particular, any such Patent Rights and Know-How Covering any Collaboration Target, Program Antibody or Collaboration Product, for purposes of conducting Research and Development or Manufacturing activities in connection with the Collaboration. For the avoidance of doubt, the Parties acknowledge that, to the extent any Takeda Background Technology is covered by a license or other agreement with a Third Party, such Takeda Background Technology shall, for all purposes of this Agreement, be subject to the limitations, restrictions and financial obligations established in such Third Party license or agreement, with Takeda being responsible for the payment of all payments due thereunder.
1.91 " Target " means a gene and the products encoded by such gene, including, without limitation, [*].
1.92 " Territory " means all of the countries and territories of the world.
1.93 " Third Party " means any person or entity other than Takeda, XOMA and their respective Affiliates.
1.94 " Valid Claim " means either (a) a claim of an issued and unexpired patent which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (b) a claim of a pending parent patent application that has not been abandoned or finally rejected without the possibility of appeal or refiling.
1.95 " XOMA Background Technology " means any and all Know-How and Patent Rights owned by XOMA as of the Effective Date [*] and, in particular, any such Patent Rights and Know-How Covering any Collaboration Target, Program Antibody or Collaboration Product, that are necessary for (a) research related to Collaboration Target(s) or (b) Research and Development, Manufacture or commercialization of Program Antibody(ies) or Collaboration Product(s). For the avoidance of doubt, the Parties acknowledge that, to the extent any XOMA Background Technology is covered by a license or other agreement with a Third Party, such XOMA Background Technology shall, for all purposes of this Agreement, be subject to the limitations, restrictions and financial obligations established in such Third Party license or agreement, with Takeda being responsible for payment of the portion of the financial obligations related to this Agreement arising as a result of the Collaboration, subject to Section 7.4.2. XOMA Background Technology excludes the Human Engineering™ Technology.
2.1 General .
2.2 Selection of Collaboration Targets .
2.3 Conduct of Collaboration .
2.4 Collaboration Records . In order to protect the Parties’ Patent Rights and Know-How under U.S. law in respect of any inventions conceived or reduced to practice during or as a result of the Collaboration, each Party agrees to maintain a policy that requires its employees to record and maintain all data and information developed during the Collaboration in such a manner as to enable the Parties to use such records to establish the earliest date of invention and/or diligence to reduction to practice. At a minimum, the policy shall require such individuals to record all inventions generated by them in standard laboratory notebooks or other suitable means that are dated and corroborated by non-inventors on a regular, contemporaneous basis.
2.5 Disclosure of Collaboration Results . Subject to restrictions imposed by a Party’s confidentiality obligations to any Third Party with respect to Takeda Background Technology or XOMA Background Technology, each Party will disclose to the JRDC and to the Joint Patent Committee all Program Technology and Program Materials that are discovered, invented or made by such Party in the course of the Collaboration and that are useful in or relate to the Collaboration, including without limitation information regarding Collaboration Targets, Program Antibodies and Collaboration Products and uses thereof and the results of all Research and Development studies. Such Program Technology and Program Materials will be promptly disclosed to the JRDC and to the Joint Patent Committee, with meaningful discoveries or advances being communicated as promptly as practicable after such information is obtained or its significance is appreciated. [*]. Any information disclosed pursuant to this Section 2.5 may be used by the other Party solely for the purposes of the Collaboration or as otherwise expressly permitted in this Agreement.
2.6 Material Transfer . Any Program Materials useful or necessary for the R&D Program that are first derived or obtained in the course of the Collaboration and that are specific, as opposed to being of general applicability, to a Collaboration Target or a Program Antibody shall be delivered and assigned from XOMA to Takeda in accordance with the Research Plan or otherwise upon Takeda’s request. Such Program Materials shall become Takeda’s sole property but, if applicable, subject to the Pre-existing Obligations. For the avoidance of doubt, notwithstanding anything herein to the contrary, such Program Materials shall include any and all Program Antibodies themselves (including any rights and interests in a Master Cell Bank established therefor), which shall consequently be delivered and assigned from XOMA to Takeda as described above. Any and all Program Materials useful or necessary for the R&D Program that are first derived or obtained in the course of the Collaboration and that are of general applicability, as opposed to being specific, to a Collaboration Target or a Program Antibody shall also be delivered (but shall not be assigned) from XOMA to Takeda for its use permitted under this Agreement, regardless of the ownership thereof (which shall be as determined under Section 9.1.2 hereof), provided, that XOMA may retain such quantities of such Program Materials as are reasonably necessary for use by XOMA in accordance with Section 184.108.40.206. The Parties will use Commercially Reasonable and Diligent Efforts to specify in the applicable R&D Plan the quantities of such Program Materials to be so retained by XOMA, recognizing that the Parties’ primary objective with respect to such Program Materials in the context of such R&D Plan shall be to meet Takeda’s requirements with respect thereto.
Furthermore, in order to facilitate the Collaboration, either Party may provide to the other Party certain Program Materials not derived or obtained during the course of Collaboration for use by the other Party in furtherance of the Collaboration. The Parties hereto shall cooperate with each other for proper
identification and maintenance of the Program Materials provided hereunder by providing the receiving Party with certificate(s) of analysis, where applicable, and keeping records of exchange and, where feasible, using the same identification code(s). All such Program Materials shall be considered the Confidential Information of both Parties and shall be subject to the restrictions in Article 10. Except as otherwise provided under this Agreement or in accordance with the applicable Plan(s), all such Program Materials delivered to the other Party voluntarily shall remain the sole property of the supplying Party, shall be used only in furtherance of the Collaboration and solely under the control of the other Party and its Affiliates, shall not be used or delivered to or for the benefit of any Third Party without the prior written consent of the supplying Party and shall not be used in research or testing involving human subjects, in each case except as may be provided in the applicable R&D Plan. The Program Materials supplied under this Section 2.6 must be used with prudence and appropriate caution in any experimental work, since not all of their characteristics may be known. THE PROGRAM MATERIALS ARE PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. The Party providing the Program Materials shall disclose to the other Party such information as is in the Providing Party’s possession and can reasonably be disclosed regarding such Program Materials including, where feasible, its identity, scientific nature, safety, safe handling, related patents or any other proprietary rights of a Third Party that are known to the providing Party.
3.1 Collaboration Committees .