COLLABORATION AGREEMENT

Exhibit 10.2

 

COLLABORATION AGREEMENT

 

This Agreement is entered into as of April 27, 2005 by and between:

 

SEATTLE GENETICS, INC., a Delaware corporation, having its principal place of business at 21823 30th Drive S.E., Bothell, Washington 98021

 

(hereinafter referred to as “SGI”)

 

and:

 

MEDIMMUNE, INC., a Delaware corporation, having its principal place of business at One MedImmune Way, Gaithersburg, MD 20878

 

(hereinafter referred to as “Licensee”).

 

WITNESSETH

 

WHEREAS, SGI owns or controls intellectual property rights relating to technology useful for linking proprietary [***] to other molecules, such as antibodies, capable of directing such [***] to specific tissues and/or cells;

 

WHEREAS, Licensee is currently conducting research and development programs to discover antigens that may have activity in certain disease-related pathways, and to develop antibodies that bind to those antigens;

 

WHEREAS, the Parties have created ADCs (as such term is defined below) to, and conducted initial characterization work regarding, the First Exclusive Antigen (as such term is defined below) pursuant to the terms and subject to the conditions of the Initial Agreement (as such term is defined below);

 

WHEREAS, Licensee wishes to obtain an exclusive worldwide license under SGI’s patent rights and know-how related to SGI’s proprietary [***] to the First Exclusive Antigen for use in conjunction with Licensee’s antibodies on the terms set forth below and Licensee wishes to acquire from SGI an exclusive option to obtain an exclusive worldwide license under SGI’s patent rights and know-how related to SGI’s proprietary [***] to a Second Exclusive Antigen for use in conjunction with Licensee’s antibodies; and

 

WHEREAS, SGI wishes to grant to Licensee such license and option and to allow Licensee to evaluate SGI’s [***] for use with certain of Licensee’s antigens and antibodies.

 

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth herein, the Parties hereto, intending to be legally bound, agree as follows:

 

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ARTICLE 1 - DEFINITIONS AND INTERPRETATION

 

1.1 Definitions: For the purposes of this Agreement the following words and phrases shall have the following meanings:

 

1.1.1 “AAA” has the meaning set forth in Section 19.3.

 

1.1.2 “ADC” or “Antibody-Drug Conjugate” means an Antibody [***] and that contains, uses or is made using SGI Technology.

 

1.1.3 “ADC Access Fee” has the meaning set forth in Section 6.1.1.

 

1.1.4 “Affiliate” of a Party means any corporation or other business entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a Party. As used herein, the term “control” means the direct or indirect ownership of [***] or more of the stock having the right to vote for directors thereof or the ability to otherwise control the management thereof.

 

1.1.5 “Agreement” means this agreement, all amendments and supplements to this Agreement and all schedules to this Agreement, including the following:

 

Schedule A     -     Research Plan.

 

Schedule B     -     SGI Patents.

 

Schedule C     -     SGI In-Licenses.

 

Schedule D     -     Designated Antigens and Exclusive Antigens.

 

1.1.6 “Antibody” or “Antibodies” means any and all antibodies, or [***], including, but not limited to, [***].

 

1.1.7 “Antigen” means any [***].

 

1.1.8 [***].

 

1.1.9 “[***]” means the SGI Technology licensed to SGI under the BMS Agreement (as defined in the definition of “SGI In-Licenses”).

 

1.1.10 “Calendar Quarter” means any of the three-month periods beginning January 1, April 1, July 1 and October 1 in any year.

 

1.1.11 “Change in Control” has the meaning set forth in Section 16.1.

 

1.1.12 “Claims” has the meaning set forth in Section 14.1.1.

 

1.1.13 “Combination Product” means any Licensed Product and [***].

 

1.1.14 “Confidential Information” has the meaning set forth in Section 8.1.

 

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1.1.15 “Control” means, with respect to any information or intellectual property right, possession by a Party of the ability to grant the right to access or use, or to grant a license or a sublicense to, such information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

 

1.1.16 “Cost of Goods” shall mean with respect to Drug Conjugation Materials supplied to Licensee (a) for manufacturing activities performed by Third Parties, SGI’s reasonably documented out-of-pocket costs incurred in such manufacture and supply of Drug Conjugation Materials, as well as SGI’s internal costs incurred in supporting the Third Party manufacturing relationship, including without limitation [***]; and (b) for manufacturing activities performed by SGI or its Affiliates, the consolidated fully burdened cost of providing such goods or services, which shall include costs of the following: [***].

 

1.1.17 “Designated Antigen(s)” means the [***] Antigens, excluding the [***], that are designated as such in accordance with Section 2.5 of this Agreement.

 

1.1.18 “Drug Conjugation Material(s)” means (a) any and all [***], including, but not limited to, the [***], and (b) any [***] that are useful in [***].

 

1.1.19 “Drug Conjugation Technology” means Drug Conjugation Materials and uses thereof, including [***], and methods for producing Drug Conjugation Materials and attaching Drug Conjugation Materials to [***] and the [***], and uses thereof.

 

1.1.20 “Effective Date” means the date set forth in the first line of this Agreement.

 

1.1.21 “EMEA” means the European Medicines Agency and any successor agency(ies) thereto

 

1.1.22 “Events of Force Majeure” has the meaning set forth in Article 15.

 

1.1.23 “Exclusive Antigen(s)” means collectively, the [***].

 

1.1.24 “Exclusive License(s)” has the meaning set forth in Section 3.2.

 

1.1.25 “Exclusive License Maintenance Fee” has the meaning set forth in Section 6.2.

 

1.1.26 “FD&C Act” means the federal Food, Drug & Cosmetic Act, as amended.

 

1.1.27 “FDA” means the United States Food and Drug Administration, and any successor agency(ies) thereto.

 

1.1.28 “Field” means the [***].

 

1.1.29 “First Commercial Sale” means, in each country of the Territory, the first commercial sale of a Licensed Product by Licensee, its Affiliates or Sublicensees to a Third

 

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Party following, if required by law, Regulatory Approval and, when Regulatory Approval is not required by law, the first commercial sale in that country, in each case for use or consumption of such Licensed Product in such country by the general public. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar use shall not be considered to constitute a First Commercial Sale.

 

1.1.30 “First Exclusive Antigen” means [***].

 

1.1.31 “FTE Fees” has the meaning set forth in Section 6.1.2.

 

1.1.32 “GAAP” means generally accepted accounting principles in the United States.

 

1.1.33 “Good Laboratory Practices” means the then-current standards for laboratory activities for pharmaceuticals, as set forth in the FD&C Act and applicable regulations and guidances promulgated thereunder, including without limitation the Code of Federal Regulations, as amended from time to time.

 

1.1.34 “IND” means (a) an Investigational New Drug Application filed with the FDA or its equivalent in any country outside the United States where a regulatory filing is required or obtained to conduct a clinical trial; or (b) with respect to any country where a regulatory filing is not required or obtained to conduct a clinical trial, the first enrollment of a patient in the first trial involving the first use of a Licensed Product in humans.

 

1.1.35 “Indemnitee” has the meaning set forth in Section 14.2.

 

1.1.36 “Indemnitor” has the meaning set forth in Section 14.2.

 

1.1.37 “Initial Agreement” means the Research Collaboration Agreement effective [***] by and between the Parties, as amended.

 

1.1.38 “Initiation” means, with respect to a human clinical trial, the dosing of the first patient with a Licensed Product pursuant to the clinical protocol for the specified clinical trial.

 

1.1.39 “Joint Patents” has the meaning set forth in Section 9.2.2.

 

1.1.40 “Liabilities” has the meaning set forth in Section 14.1.1.

 

1.1.41 “Licensed Product” means any and all products containing an ADC comprised of an Antibody that binds specifically [***] to an Exclusive Antigen and that is attached to a [***]: (a) the manufacture, use, sale, offer for sale or import of which would [***]; or (b) which [***].

 

1.1.42 “Licensed Technology Acquisition Agreement” has the meaning set forth in Section 3.6.1.

 

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1.1.43 “Licensee ADC Know-How” means all Program Inventions developed by Licensee using SGI Technology, and that are necessary or useful for identifying, developing, making, using or selling [***].

 

1.1.44 “Licensee ADC Patents” means all patent applications and patents that are Controlled by Licensee that claim Licensee ADC Know-How.

 

1.1.45 “Licensee Know-How” means all technical information, processes, formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets, in each case that are not in the public domain, used by Licensee in the Research Program and that are Controlled by Licensee, including technical information, processes, formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets that relate to (a) [***], or (b) [***].

 

1.1.46 “Licensee Indemnitee” has the meaning set forth in Section 14.1.1.

 

1.1.47 “Licensee Materials” means any tangible chemical, biological or physical materials that are furnished by or on behalf of Licensee to SGI in connection with this Agreement.

 

1.1.48 “Licensee Patents” means all patent applications and patents that claim Licensee Know-How.

 

1.1.49 “Licensee Proprietary Antigen” means an Antigen for which Licensee Patents (excluding Licensee ADC Patents) would reasonably be expected to [***].

 

1.1.50 “Net Sales” means, as to each Calendar Quarter, the gross invoiced sales prices charged for all Licensed Products sold by Licensee, its Affiliates and Sublicensees to independent Third Parties during such Calendar Quarter, after [***]:

 

(a)

[***];

 

(b)

[***];

 

(c)

[***];

 

(d)

[***];

 

(e)

[***]; and

 

(f)

[***].

 

All of the [***] shall be determined in accordance with GAAP. In the event that Licensee, its Affiliates or Sublicensees make any adjustments to [***] have been reported pursuant to this Agreement, the adjustments shall be reported and reconciled in the next report and payment of any royalties due.

 

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In the event a Licensed Product is sold as a [***], for the purposes of determining royalty payments, shall be determined by [***], in each case during the applicable royalty reporting period or, if sales of the ADC [***] did not occur in such period or country, then in the most recent royalty reporting period in which [***] Licensed Product occurred in such country or if no such sales have occurred in such country, the [***] during the applicable royalty period. In the event that such [***].

 

1.1.51 “Option” has the meaning set forth in Section 3.3.

 

1.1.52 “Option Period” means the period commencing on the Effective Date and continuing for [***] thereafter; provided that the Option Period shall terminate when Licensee [***], and further provided, that the Option Period shall continue for [***].

 

1.1.53 “Parties” means Licensee and SGI, and “Party” means either of them.

 

1.1.54 “Patent(s)” means all patents and patent applications in any country, including divisions, continuations, continuations in part, reissues, renewals, registrations, confirmations, reexaminations, extensions, supplementary protection certificates and the like.

 

1.1.55 “Phase I Clinical Trial” means a clinical trial in which there is a first administration of a candidate drug in humans that would satisfy the requirements of 21 C.F.R. 312.21(a).

 

1.1.56 “Phase II Clinical Trial” means a controlled dose clinical trial prospectively designed to evaluate the efficacy and safety of a candidate drug in the targeted patient population and to define the optimal dosing regimen that would satisfy the requirements of 37 C.F.R. 312.21(b).

 

1.1.57 “Phase III Clinical Trial” means a controlled, and usually multi-center, clinical trial, involving patients with the disease or condition of interest to obtain sufficient efficacy and safety data to support Regulatory Approval of a candidate drug that would satisfy the requirements of 37 C.F.R. 312.21(c).

 

1.1.58 “Program Invention” means any [***]; provided, that any Program Invention made pursuant to the [***].

 

1.1.59 “Proposed Disclosure” has the meaning set forth in Section 8.3.1.

 

1.1.60 “Publication” has the meaning set forth in Section 8.4.

 

1.1.61 “Reduction Amount” has the meaning set forth in Section 6.5.4.

 

1.1.62 “Regulatory Approval” means final regulatory approval in a country (including, where applicable, pricing approval in the event that actual sales in that country do not take place before such approval) required to market a Licensed Product for a disease or condition in accordance with the applicable laws and regulations of a given country. In the United States, its territories and possessions, Regulatory Approval means approval of a New Drug Application (“NDA”), Biologics License Application (“BLA”) or an equivalent by the FDA.

 

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1.1.63 “Reports” has the meaning set forth in Section 7.1.1.

 

1.1.64 “Research Fees” has the meaning set forth in Section 6.1.2.

 

1.1.65 “Research Fees Report” has the meaning set forth in Section 6.1.2.

 

1.1.66 “Research License” has the meaning set forth in Section 3.1.

 

1.1.67 “Research Plan” means the plan for the Research Program agreed upon by the Parties and attached hereto as Schedule A, as amended from time to time by mutual agreement of the Parties.

 

1.1.68 “Research Program” means the research program conducted during the Research Program Term pursuant to Article 2.

 

1.1.69 “Research Program Term” the period that is [***].

 

1.1.70 “Royalty Term” means, on an Exclusive Antigen-by-Exclusive Antigen basis and country-by-country basis, the period commencing on the First Commercial Sale of the first Licensed Product for an Exclusive Antigen in a country and ending upon the tenth (10^th) anniversary of the date of First Commercial Sale of such first Licensed Product for such Exclusive Antigen in such country, regardless of the number of different Licensed Products for that Exclusive Antigen being sold in such country; provided, however, that if after such tenth (10^th) anniversary a Licensed Product infringes a Valid Claim of an issued SGI Patent licensed to Licensee under this Agreement in such country, the Royalty Term shall continue in such country while such infringement exists.

 

1.1.71 “Second Exclusive Antigen” means a Designated Antigen, other than the First Exclusive Antigen, for which Licensee exercises the Option for an Exclusive License under Article 3 of this Agreement.

 

1.1.72 “SGI Indemnitee” has the meaning set forth in Section 14.1.1.

 

1.1.73 “SGI In-Licenses” means the following agreements between SGI and the indicated Third Parties: (a) the [***].

 

1.1.74 “SGI Know-How” means any and all technical information, processes, formulae, data, inventions, methods, chemical compounds, biological or physical materials, know-how and trade secrets, in each case that are not in the public domain, that relate to or are useful to practice the Drug Conjugation Technology and that are owned, in whole or in part, by SGI or its Affiliates on, before or after the Effective Date or are licensed to SGI as of the Effective Date or that are licensed to SGI under a Licensed Technology Acquisition Agreement after the Effective Date.

 

1.1.75 “SGI Patents” means any and all Patents: (a) that are owned in whole or in part by SGI or its Affiliates, or licensed to SGI or its Affiliates as of the Effective Date, (b) that become owned in whole or in part by SGI or its Affiliates at any time during the Term, or (c) that are licensed to SGI or its Affiliates after the Effective Date under a Licensed Technology

 

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Acquisition Agreement, in each case to the extent that such Patents would be infringed by (a) Drug Conjugation Technology and/or the discovery, development, manufacture or use thereof or (b) an Antibody linked to Drug Conjugation Material or the discovery, development, manufacture or use thereof. SGI Patents include, but are not limited to, rights to the Patents set forth in Schedule B.

 

1.1.76 “SGI Technology” means the SGI Patents and the SGI Know-How.

 

1.1.77 “Sublicensee” means any person or entity that is granted a sublicense under the SGI Technology by Licensee or its Affiliates in accordance with the terms of this Agreement, which term does not include Licensee’s distributors.

 

1.1.78 “Supply Fees” has the meaning set forth in Section 6.1.2.

 

1.1.79 “Technology Acquisition Agreement” shall mean any agreement entered into after the Effective Date between SGI or its Affiliates and a Third Party under which SGI or its Affiliates is granted a license to (a) any of such Third Party’s Patents that cover Drug Conjugation Technology or (b) any of such Third Party’s Know-How that reasonably relates to the foregoing.

 

1.1.80 “Term” has the meaning set forth in Section 13.1.

 

1.1.81 “Territory” means all countries in the world.

 

1.1.82 “Third Party” means any person or entity other than Licensee, SGI and their respective Affiliates.

 

1.1.83 “Valid Claim” means (a) an unexpired claim of an issued patent which has not been cancelled, abandoned, disclaimed, or revoked and has not been found to be unpatentable, invalid or unenforceable by an unreversed and unappealable or unappealed decision of a court or other authority in the subject country; or (b) a pending claim of an application for a patent that is being maintained in good faith and which application has been pending for less than [***] from the earliest priority date to which such application is entitled.

 

1.2 Certain Rules of Interpretation in this Agreement and the Schedules.

 

1.2.1 Unless otherwise specified, all references to monetary amounts are to United States of America currency (U.S. Dollars or Dollars);

 

1.2.2 The preamble to this Agreement and the descriptive headings of Articles and Sections are inserted solely for convenience of reference and are not intended as complete or accurate descriptions of the content of this Agreement or of such Articles or Sections;

 

1.2.3 The use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;

 

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1.2.4 The words “include” and “including” have the inclusive meaning frequently identified with the phrases “without limitation” and “but not limited to”;

 

1.2.5 Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next business day following if the last day of the period is not a business day in the jurisdiction of the Party to make such payment or do such act;

 

1.2.6 Whenever any payment is to be made or action to be taken under this Agreement is required to be made or taken on a day other than a business day, such payment shall be made or action taken on the next business day following such day to make such payment or do such act;

 

1.2.7 The singular includes the plural and vice versa except if the context is otherwise; and

 

1.2.8 The word “or” is used in the inclusive sense and includes the conjunctive and disjunctive (and/or).

 

ARTICLE 2 - RESEARCH PROGRAM

 

2.1 Conduct of the Research Program.

 

2.1.1 Licensee intends to conduct a Research Program, with SGI’s support, to evaluate and select ADCs targeting the Designated Antigens and Exclusive Antigens for development and commercialization by Licensee as Licensed Products, as more fully described in the Research Plan.

 

2.1.1 SGI shall use commercially reasonable efforts to conduct work in accordance with the Research Plan, in a good scientific manner, and in compliance in all material respects with all requirements of applicable laws, rules and regulations and all applicable Good Laboratory Practice to attempt to achieve its objectives efficiently and expeditiously.

 

2.1.3 SGI shall maintain records in sufficient detail and in good scientific manner appropriate for regulatory purposes and the purpose of establishing and perfecting intellectual property (including patent rights), which shall fully and properly reflect all work done and results achieved in the conduct of the Research Plan. Licensee shall have the right during normal business hours and upon reasonable notice, to inspect and copy all such records of SGI. At Licensee’s reasonable request, SGI shall arrange for employees and/or consultants of Licensee involved in the activities contemplated under the Research Plan to visit the offices and laboratories of SGI during normal business hours and upon reasonable notice, to discuss the Research Plan and its results in detail with the technical personnel and consultants of SGI.

 

2.2 Term of the Research Program. The term of the Research Program shall be for the Research Program Term, unless terminated earlier in accordance with Article 13.

 

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2.3 Delivery of Drug Conjugation Materials. In support of the Research Program, during the Research Program Term, SGI will deliver Drug Conjugation Materials to Licensee that are available to SGI at mutually agreed upon times and in mutually agreed upon quantities to enable Licensee to attach such materials to Licensee’s Antibodies to create ADCs. At Licensee’s request, SGI will also provide Licensee with [***] provided to Licensee to [***]. All such Drug Conjugation Materials and other information provided by SGI to Licensee hereunder will be deemed Confidential Information of SGI pursuant to Article 8.

 

2.4 SGI Preparation of ADCs. The Parties acknowledge that SGI and Licensee have [***]. In order to identify the lead candidate for the First Exclusive Antigen and to identify the Second Exclusive Antigen during the Research Program Term, SGI will prepare and deliver to Licensee mutually agreed upon research quantities of ADCs using the Drug Conjugation Materials that are available to SGI targeted to the First Exclusive Antigen and to [***].

 

2.5 Availability of Antigens.

 

2.5.1 Licensee shall provide SGI with a [***], which Licensee desires to [***] for purposes of this Agreement and [***], SGI shall notify Licensee in writing whether the Exclusive License described in Article 3 of this Agreement is available with respect to such Antigen and hereby notifies Licensee that, with respect to the Antigen listed on Schedule D attached hereto, an Exclusive License is available as of the Effective Date. Schedule D to this Agreement will be amended from time to time to list the Designated Antigens and the Second Exclusive Antigen (including a description thereof) under this Agreement. The Parties hereby acknowledge and agree that an Antigen [***].

 

2.5.2 During the [***] after the Effective Date, Licensee shall have the [***].

 

2.6 Additional Activities under Research Program. Upon mutual written agreement of the Parties, the Research Program may also include technical assistance by SGI with respect to the [***].

 

2.7 Payment. Licensee shall pay SGI the amounts set forth in Section 6.1.2 for any research efforts or other assistance provided by SGI that was requested by Licensee in writing (including by email); provided that Licensee’s failure to request particular research efforts or assistance from SGI in writing shall not preclude Licensee’s payment obligations hereunder if SGI can reasonably demonstrate that such research efforts or assistance were in fact requested orally or in some other manner by an authorized employee or agent of Licensee.

 

2.8 Supply of Licensee Materials. From time to time during the Research Program Term, Licensee may supply SGI with Licensee Materials for use in the Research Program. In connection therewith, SGI hereby agrees that (a) it shall not use Licensee Materials for any purpose other than exercising any rights granted to it hereunder; (b) it shall use the Licensee Materials only in compliance with all applicable federal, state, and local laws and regulations; (c) it shall not transfer any Licensee Materials to any Third Party without the prior written consent of Licensee; (d) Licensee shall retain full ownership of all such Licensee Materials; and (e) upon the expiration or termination of this Agreement, SGI shall at the instruction of Licensee either destroy or return any unused Licensee Materials.

 

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2.9 Books and Records. SGI shall keep full and accurate records and books of account containing all particulars that may be reasonably necessary for the purpose of determining the FTEs that are charged to Licensee pursuant to this Agreement. Such books of account shall be kept by SGI at its places of business and, with all necessary supporting data shall, for the [***] following the end of the calendar year to which each shall pertain be open for inspection by an independent certified accountant selected by Licensee and reasonably acceptable to SGI upon reasonable notice during normal business hours at [***] for the sole purpose of verifying FTEs charged in compliance with this Agreement, but in no event more than [***] each calendar year and limited to the records of the [***] preceding the inspection. All information and data offered shall be used only for the purpose of verifying FTEs charged to Licensee. In the event that such inspection shall indicate in any calendar year that the charges paid by Licensee were overstated by [***] or more, then [***] shall pay the cost of the inspection. Licensee will invoice SGI for any overpayments, which shall become due and payable no later than [***] after receipt of an invoice from Licensee.

 

2.10 Disclaimers. EXCEPT AS MAY BE EXPRESSLY PROVIDED IN THIS AGREEMENT, SGI MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, REGARDING THE DRUG CONJUGATION MATERIALS OR ANY ADCs PREPARED BY SGI, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR USE OR PURPOSE. EXCEPT AS MAY BE EXPRESSLY PROVIDED IN THIS AGREEMENT, LICENSEE MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, REGARDING THE LICENSEE MATERIALS, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR USE OR PURPOSE.

 

ARTICLE 3 – LICENSES; OPTION; DROPPED ANTIGENS

 

3.1 Research License Grants. Subject to the terms and conditions of this Agreement, SGI grants to Licensee a non-exclusive, worldwide, royalty-free license under the SGI Technology solely to conduct the Research Program as set forth in the Research Plan with respect to ADCs for Designated Antigens (the “Research License”). The Research License shall include the right to evaluate and conduct research on ADCs that bind to any Designated Antigen solely for the purpose of determining Licensee’s interest in exercising the Option for such Designated Antigen, but shall not include (a) the right to grant sublicenses thereto to any Third Party, (b) the right to initiate any human clinical trial utilizing such ADCs in any country or (c) the right to sell an ADC with respect to an Antibody for a Designated Antigen. Except for Patents owned by Licensee pursuant to Section 9.1, [***], subject to the terms and conditions of this Agreement. [***]. The Research License shall continue for the Research Program Term, unless earlier terminated pursuant to Article 13; provided that the Research License shall terminate in the event Licensee exercises its Option for the Second Exclusive License pursuant to the terms hereof.

 

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3.2 Exclusive License Grants.

 

3.2.1 Subject to the terms and conditions of this Agreement, SGI agrees to grant and hereby grants to Licensee an exclusive (even as to SGI), royalty-bearing license under the SGI Technology, with the right to sublicense as permitted in Section 3.5, to discover, research, develop, have developed, make, have made, import, use, offer for sale, and sell Licensed Products within the Field in the Territory (with respect to each Exclusive Antigen, an “Exclusive License” and, for the First Exclusive Antigen and the Second Exclusive Antigen, collectively, the “Exclusive Licenses”). Each Exclusive License shall continue for the Royalty Term thereof, unless earlier terminated pursuant to Article 13. It is expressly understood and agreed that the Exclusive License with respect to Licensed Product for the First Exclusive Antigen is effective as of the Effective Date and that the Exclusive License with respect to the Second Exclusive Antigen shall automatically take effect on the Option Exercise Date.

 

3.2.2 Licensee acknowledges that Licensee has been granted a license with respect to SGI Patents and SGI Know-How. As a result, pursuant to this Agreement, during the Royalty Term, Licensee has agreed to pay royalties to SGI based on Net Sales of Licensed Product.

 

3.3 Grant of Option. Subject to the provisions of this Agreement, SGI hereby grants Licensee an option to obtain the Exclusive License described in Section 3.2 of this Agreement to a Designated Antigen as the Second Exclusive Antigen (the “Option”) during the Option Period.

 

3.4 Procedure to Exercise Option. At any time during the Option Period, Licensee shall have the right to notify SGI in writing that it desires to obtain the Exclusive License to the Second Exclusive Antigen by providing written notice to SGI of the Designated Antigen that is the Second Exclusive Antigen. Licensee shall pay SGI the Option Exercise Fee described in Section 6.3 of this Agreement (the date of payment by Licensee of the Option Exercise Fee being referred to herein as the “Option Exercise Date”) whereupon (a) such Designated Antigen shall be deemed to be the Second Exclusive Antigen for purposes of this Agreement and (b) Licensee is automatically granted an Exclusive License with respect to such Second Exclusive Antigen in accordance with Section 3.2 of this Agreement, without any further action of the Parties. [***].

 

3.5 Rights to Sublicense.

 

3.5.1 Licensee shall have the right to grant sublicenses of each Exclusive License to any Affiliate or Third Party with respect to any Licensed Product. Licensee agrees to contractually obligate each Sublicensee to comply with all terms of this Agreement, the SGI In-Licenses and any Licensed Technology Acquisition Agreements, in each of such cases, that are applicable to a Sublicensee. Licensee shall also require any such Sublicensee to agree in writing to keep books and records and permit SGI to review the information concerning such books and records in accordance with the terms of this Agreement.

 

3.5.2 Licensee shall notify SGI of each sublicense under an Exclusive License granted to Affiliates or Third Parties and shall provide SGI with the name and address of each Sublicensee and a description of the rights granted and the territory covered by each Sublicensee.

 

3.5.3 [***].

 

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3.6 Technology Acquisition Agreements.

 

3.6.1 Technology Acquisition Agreements. During the Term, if SGI proposes or desires to enter into a Technology Acquisition Agreement in order to obtain a license to one or more Patents that cover or potentially cover a Licensed Product that is being developed, marketed or sold by Licensee or its Affiliates or a Sublicensee, SGI [***]. After entering into any Technology Acquisition Agreement (whether or not covering technology referred to in the previous sentence), SGI [***]. In each Technology Acquisition Agreement, SGI [***]. Upon such written notice from Licensee that Licensee is sublicensed under such Technology Acquisition Agreement, such Technology Licensee Agreement shall automatically become a “Licensed Technology Acquisition Agreement.” [***].

 

3.6.2 Amendment of Schedule B. Schedule B shall be amended from time to time to add the patents and patent applications licensed under Licensed Technology Acquisition Agreements.

 

3.7 Compliance with SGI In-Licenses and Licensed Technology Acquisition Agreements.

 

3.7.1 Licensee, its Affiliates and Sublicensees shall comply with all obligations, covenants and conditions of the SGI In-Licenses and Licensed Technology Acquisition Agreements applicable to Licensee and its Affiliates and Sublicensees and, subject to Section 3.7.2 and Section 12.3, any amendments thereto following written disclosure thereof to Licensee, that apply under each of the SGI In-Licenses and/or Licensed Technology Acquisition Agreements. The Parties agree that BMS is a third party beneficiary of this Agreement solely to the extent SGI Technology licensed to Licensee hereunder includes technology sublicensed by SGI under the BMS Agreement.

 

3.7.2 SGI will [***] hereunder or [***].

 

3.8 [***].

 

3.8.1 [***].

 

3.8.2 [***].

 

ARTICLE 4 - TECHNOLOGY DISCLOSURE

 

During the Term, SGI shall (a) promptly disclose to Licensee all SGI Know-How licensed to Licensee that is reasonably useful to enable Licensee to use the Drug Conjugation Materials and Drug Conjugation Technology to practice the Research License and Exclusive Licenses, including manufacturing, analytical and formulation methods and procedures, and shall also provide regular updates regarding SGI Patents, in each case subject to the conditions of this Agreement and (b) upon Licensee’s reasonable request and with adequate notice to SGI, make available to Licensee at SGI’s facilities, SGI’s personnel to provide a reasonable amount of technical assistance and training to Licensee’s personnel; provided that after the expiration of the Research Program Term, SGI’s obligations hereunder shall be limited to disclosure of information relating to Licensee’s ongoing development, manufacturing, clinical trials,

 

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regulatory and other matters reasonably associated with Licensed Products, and shall not include SGI’s continued disclosure to Licensee for research purposes of new Drug Conjugation Materials and/or Drug Conjugation Technology developed after expiration or termination of the Research Program Term. Licensee shall pay to SGI for such assistance under this Article 4 an amount equal to the FTE Fees in accordance with Section 6.1.2 for SGI employees providing such assistance; [***]. Notwithstanding the foregoing, during the Term but after expiration or termination of the Research Program Term, SGI will, upon request from Licensee on no more than an annual basis, provide a [***]. For the purposes of clarity, this Article 4 does not reduce the scope of the licenses granted to Licensee pursuant to this Agreement.

 

ARTICLE 5 - DEVELOPMENT AND COMMERCIALIZATION; MANUFACTURING

 

5.1 Diligence.

 

5.1.1 Licensee agrees to use commercially reasonable efforts to, at its expense, develop a Licensed Product for the First Exclusive Antigen and for the Second Exclusive Antigen, if a Second Exclusive Antigen is selected by Licensee, in the United States, and thereafter as set forth in Section 5.1.5 in Europe and Japan.

 

5.1.2 If, in any calendar year, Licensee or its Affiliate(s) and/or a Sublicensee and/or a collaborator of Licensee (including work of SGI under the Research Program), alone or together, has [***] for such Exclusive Antigen:

 

(a)

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