COLLABORATION AGREEMENT

Collaboration Agreement

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CURAGEN CORP | SEATTLE GENETICS, INC.,

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Title: COLLABORATION AGREEMENT
Governing Law: Washington Date: 3/14/2006
Industry: Biotechnology and Drugs Sector: Healthcare

Exhibit 10.38

COLLABORATION AGREEMENT

This Agreement is entered into as of June 18, 2004 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 :

CURAGEN CORPORATION , a Delaware corporation, having its principal place of business at 555 Long Wharf Avenue, New Haven, CT 06511

(hereinafter referred to as “ Licensee ”).

WITNESSETH

WHEREAS, SGI owns or controls intellectual property rights relating to certain technology useful for linking certain proprietary cytotoxins to other molecules such as antibodies capable of directing such cytotoxins 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 Agreements (as such term is defined below);

WHEREAS, Licensee wishes to obtain an exclusive worldwide license under certain of SGI’s patent rights and know-how related to SGI’s proprietary cytotoxin and linker technology 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 cytotoxin and linker technology 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 cytotoxin and linker technology for use with certain of Licensee’s antigens and antibodies.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

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

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 19.3.4.

1.1.2 “ ADC ” or “ Antibody-Drug Conjugate ” means an Antibody that is linked to a cytotoxin or cytostatic agent 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:

1.1.6 Schedule A - Research Plan.

1.1.7 Schedule B - SGI Patents.

1.1.8 Schedule C - SGI In-Licenses.

1.1.9 Schedule D - Designated Antigens and Exclusive Antigens.

1.1.10 “ Antibody ” or “ Antibodies ” means any antibody, or [***], that binds to an Antigen.

1.1.11 “ Antigen ” means any [***], that is Controlled by Licensee.

1.1.12 “[***]” means [***] having a GenBank accession number of [***].

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

1.1.14 “ Breaching Party ” has the meaning set forth in Section 13.3.

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

1.1.16 “ Change in Control ” has the meaning set forth in Article 16.

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

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1.1.18 “ Combination Product ” means any Licensed Product that contains, in addition to an ADC, one or more other ingredients that (a) are not covered by SGI Technology, and (b) [***].

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

1.1.20 “ 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. [***].

1.1.21 “ Cost of Goods ” shall mean with respect to Drug Conjugate Materials supplied to Licensee (a) for manufacturing activities performed by Third Parties, [***], as well as [***], including without limitation [***]; and (b) for manufacturing activities performed by SGI or its Affiliates, the [***].

1.1.22 “ Designated Antigen ” means the [***] Antigens targeted by the ADCs prepared by SGI and designated as such in accordance with Section 2.5 of this Agreement.

1.1.23 “ [***] ” means the [***] that may be [***] pursuant to [***] of this Agreement.

1.1.24 “ Drug Conjugation Materials ” means the compound monomethyl Auristatin E and [***] and [***] thereof, including [***], as well as compounds that are useful in attaching such compounds to [***], in each case to the extent included in or covered by the SGI Technology. Drug Conjugation Materials shall also include Improvements to Drug Conjugation Materials and any additional cytotoxic or cytostatic compounds that are included in New Technologies and that the Parties agree to include under this Agreement pursuant to Section 3.7.2.

1.1.25 “ Drug Conjugation Technology ” means chemical compositions and methods that are useful to attach cytotoxins or cytostatic compounds to Antibodies, including the composition and methods of making and using cytotoxic or cytostatic compounds, as well as compositions and methods useful for attaching the foregoing cytotoxic or cytostatic compounds to Antibodies.

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

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

1.1.28 “ Exclusive Antigen ” means collectively, the First Exclusive Antigen, the Second Exclusive Antigen and any Replacement Antigen.

1.1.29 “ Exclusive License ” has the meaning set forth in Section 3.2.

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

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1.1.31 “ Existing Third Party Royalties ” has the meaning set forth in Section 6.5.1.

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

1.1.33 “ FDA ” means the United States Food and Drug Administration, and any successor agency thereto.

1.1.34 “ Field ” means the [***]; provided , that , with respect to use of the [***], the Field shall be limited to [***].

1.1.35 “ 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 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.

1.1.36 “ First Exclusive Antigen ” means Antigen CG56972 having a [***].

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

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

1.1.39 “ 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.

1.1.40 “ Improvements ” means all patentable or non-patentable inventions, discoveries, or other know-how developed and Controlled by either Party during the Term that utilize, incorporate, are derived from, or are made using, the SGI Technology; provided that Improvements shall not include any [***] or any of the foregoing developed by SGI that, within a reasonable time period after such inventions, discoveries or know-how are made or identified, [***], which instead shall be included in [***].

1.1.41 “ 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.

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

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

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1.1.44 “ Initial Agreements ” means (a) the [***] by and between the Parties and (b) the [***] by and between the Parties.

1.1.45 “ 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.

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

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

1.1.48 “ 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 cytotoxin or cytostatic agent included in the Drug Conjugation Materials: (a) the manufacture, use, sale, offer for sale or import of which [***]; or (b) [***].

1.1.49 “ 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 ADCs that bind to any Exclusive Antigen or Designated Antigen.

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

1.1.51 “ 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) the composition, method of using or method of making an Exclusive Antigen or Designated Antigen, or (b) the composition, method of using or method of making an Antibody that binds specifically to an Exclusive Antigen or Designated Antigen. [***].

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

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

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

(a) [***];

(b) [***];

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(d) [***].

All of the [***] from the gross invoiced sales prices of Licensed Products shall be determined in accordance with GAAP. In the event that Licensee, its Affiliates or Sublicensees make any adjustments [***] after the associated Net Sales have been reported pursuant to this Agreement, the adjustments shall be reported and reconciled in the next report and payment of any royalties due.

In the event a Licensed Product is sold as part of a Combination Product, the Net Sales from the Combination Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the Combination Product (as defined in the standard Net Sales definition above), during the applicable royalty reporting period, by [***]. In the event that such average sale price cannot be determined for the Licensed Product, on the one hand, and all other product(s) included in the Combination Product, on the other, Net Sales for the purposes of determining royalty payments shall be [***].

1.1.55 “[***]” means any [***], or other [***] that either: (a) are developed by SGI after the Effective Date and that, within a reasonable time period after such [***] are made or identified, SGI determines are [***] or (b) are in-licensed by SGI after the Effective Date, and that in each case either (x) [***], or (y) [***]. [***] shall include without limitation cytotoxic or cytostatic compounds other than those included in the Drug Conjugation Materials as of the Effective Date that SGI Controls during the Term.

1.1.56 “ Notice of Dispute ” has the meaning set forth in Section 19.3.1.

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

1.1.58 “ Option Period ” means, with respect to each Designated Antigen, the period commencing on the date such [***] and continuing until [***] (a) [***] or (b) [***]; provided that all Option Periods shall terminate when [***] pursuant to the terms hereof; and provided further that, if applicable, the Option Period for [***] shall be for a period of [***] after SGI notifies Licensee that [***].

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

1.1.60 “ 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.

1.1.61 “ 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.

1.1.62 “ Program Invention ” means any process, formula, method, chemical compound, biological or physical material, invention, technology, know-how, trade secret or data conceived or reduced to practice by either Party or jointly by both Parties in the conduct of the

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activities under this Agreement and/or under the Initial Agreements; provided , that any Program Inventions made pursuant to the Initial Agreements that are not related to a Designated Antigen or an Exclusive Antigen shall remain governed by the terms of the Initial Agreements.

1.1.63 “ Program Licensee Patents ” has the meaning set forth in Section 9.3.3.

1.1.64 “ Publication ” has the meaning set forth in Section 8.5.

1.1.65 “ Regulatory Approval ” means final regulatory approval (including, where applicable, pricing approval in the event that actual sales 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.

1.1.66 “ [***] ” means the Designated Antigen, if any, designated by Licensee to replace the [***] in accordance with [***] of this Agreement.

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

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

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

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

1.1.71 “ Research Plan ” means the plan for the Research Program agreed upon by the Parties and attached hereto as Schedule A .

1.1.72 “ Research Program ” means the research program conducted pursuant to Article 2.

1.1.73 “ Research Program Term ” means the term of the Research Program set forth in Section 2.2.

1.1.74 “ Royalty Term ” means, on a Licensed Product-by-Licensed Product and country-by-country basis, until the later to occur of: (a) the (10 ^th ) tenth anniversary of the date of First Commercial Sale of the Licensed Product in such country; or (b) the expiration of the last to expire Valid Patent Claim that would be infringed by the sale of the Licensed Product in such country, if not for the licenses granted hereunder.

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

1.1.76 “ SGI In-Licenses ” means the following agreements between SGI and the indicated Third Parties: (a) the [***]); (b) [***]; and (c) any other license agreement between SGI and a Third Party covering [***] under which Licensee is [***].

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1.1.77 “ 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 have been, or hereafter are during the Term, Controlled by SGI. SGI Know-How shall include Improvements Controlled by SGI but shall exclude [***] unless [***].

1.1.78 “ SGI Patents ” means:

(a) any existing patents and patent applications listed in Schedule B to this Agreement, which shall be amended from time to time to reflect any other patents and patent applications;

(b) any patents and patent applications covering Improvements and, solely to the extent the Parties so agree [***], [***], in each case that are Controlled by SGI;

(c) any future patents issued from any patent applications referred to above and any future patents issued from any continuation, continuation-in part (to the extent Controlled by SGI), or divisional of any of the foregoing patent applications or any patent applications from which the foregoing patents issued, in each case to the extent Controlled by SGI; and

(d) any reissues, reexaminations, confirmations, renewals, registrations, substitutions, extensions, or counterparts of any of the foregoing, in each case to the extent Controlled by SGI.

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

1.1.80 “ Sublicensees ” 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.

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

1.1.82 “ Term ” has the meaning set forth in Article 13.

1.1.83 “ Territory ” means all countries in the world.

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

1.1.85 “ Valid Patent Claim ” means (a) an unexpired claim of an issued patent which has not been found to be unpatentable, invalid or unenforceable by an unreversed and unappealable decision of a court or other authority in the subject country; or (b) a claim of an application for a patent that has been pending for less than [***].

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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);

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;

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; and

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.

ARTICLE 2 - RESEARCH PROGRAM

2.1 Objective and Conduct of the Research Program . Licensee intends to conduct a Research Program, with SGI’s support, to evaluate ADCs for commercial development under this Agreement with the goal of using SGI Technology to identify [***] for further development by Licensee as Licensed Products, as more fully described in the Research Plan. Licensee acknowledges that, in addition to the licenses to the SGI Patents granted hereunder, the SGI Know-How transferred to Licensee under this Agreement contains valuable information that is critical to Licensee’s development of ADCs hereunder. All research work performed by Licensee and SGI hereunder shall be performed in a good scientific manner and in compliance with all applicable laws.

2.2 Term of the Research Program . The term of the Research Program shall initially be for a period of [***] after the Effective Date (the “ Research Program Term ”), unless terminated earlier in accordance with Article 13.

2.3 Delivery of Drug Conjugation Materials . In support of the Research Program, SGI will deliver Drug Conjugation Materials to Licensee 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 the [***] 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.

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2.4 SGI Preparation of ADCs . [***]. In order to identify the Second Exclusive Antigen during the Research Program Term, SGI will prepare mutually agreed upon research quantities of ADCs using the Drug Conjugation Materials for up to [***] targeted to up to [***] supplied by Licensee to SGI.

2.5 Availability of Antigens . Licensee shall provide SGI with a confidential written description of each Antigen, including to the extent available, the GenBank accession number and the cDNA and/or amino acid sequence for each Antigen, which Licensee desires to designate as a Designated Antigen for purposes of this Agreement. Within [***] following SGI’s receipt of such written notice with respect to a particular Antigen, SGI shall notify Licensee in writing whether the Exclusive License described in Article 3 of this Agreement is available with respect to such Antigen. In addition, SGI shall promptly notify Licensee in writing if at any time during the Research Program Term [***]. To the extent such Exclusive License to [***] is and/or becomes available as described in this Section 2.5, then [***] shall be deemed to be a Designated Antigen under this Agreement and Licensee shall have an Option Period of [***] thereafter to determine whether to exercise an Exclusive License to [***] as the Second Exclusive Antigen. 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 shall be available for designation by Licensee as a Designated Antigen unless (a) [***] or (b) [***]. Licensee may not designate Antigens as Designated Antigens following expiration of the Research Program Term. If, after designation of an Antigen as a Designated Antigen, a [***], SGI shall inform Licensee in writing, and Licensee shall have a period of [***] to inform SGI in writing that Licensee [***]. If Licensee does not exercise an Exclusive License for such Designated Antigen [***], then (a) [***] (b) below and (b) [***].

2.6 Additional Activities under Research Program . Upon mutual agreement of the Parties, the Research Program may also include the development by SGI of a technology transfer program for the conjugation of toxins to Antibodies, including the associated purification and analytics.

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.

2.8 Supply of Licensee Materials . From time to time during the 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.

2.9 Disclaimers . EXCEPT AS MAY BE OTHERWISE PROVIDED IN ARTICLE 12, SGI MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR

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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 OTHERWISE PROVIDED IN ARTICLE 12, 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 . Upon payment of the ADC Access Fee set forth in Section 6.1.1, subject to the terms and conditions of this Agreement, SGI shall automatically be deemed to have granted to Licensee a non-exclusive, worldwide, royalty-free license under the SGI Technology solely to conduct the Research Program in accordance with Article 2 of this Agreement (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 make, have made, use or sell a Licensed Product or any SGI Technology. Notwithstanding the foregoing, [***], a form of which has been provided by Licensee to SGI. The Research License shall continue for the Research Program Term, unless earlier terminated pursuant to Article 13; provided that the Research License shall terminate when Licensee no longer has the right to designate any Designated Antigen(s) as either a Replacement Antigen or a Second Exclusive Antigen pursuant to the terms hereof.

3.2 Exclusive License Grants . Upon payment of the ADC Access Fee set forth in Section 6.1.1 with respect to the First Exclusive Antigen, and the Option Exercise Fee set forth in Section 6.3 of this Agreement with respect to the Second Exclusive Antigen, subject to the terms and conditions of this Agreement, and commencing as of the date SGI has received the ADC Access Fee or Option Exercise Fee, as the case may be, from Licensee, SGI shall automatically be deemed to have granted to Licensee an exclusive (even as to SGI), royalty-bearing license under the SGI Technology, with the right to sublicense as permitted in Section 3.6, to discover, develop, have developed, make, have made, import, use, offer for sale, and sell Licensed Products that bind specifically to the Exclusive Antigen within the Field in the Territory (each, an “ Exclusive License ” and collectively, the “ Exclusive Licenses ”). Each Exclusive License shall continue for the Royalty Term, unless earlier terminated pursuant to Article 13, subject to payment of applicable milestones, royalties and the Exclusive License Maintenance Fees set forth in Section 6.2 of this Agreement applicable to such Exclusive License.

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 the Second Exclusive Antigen (the “ Option ”) during the Option Period.

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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. 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 shall be deemed to have been 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 [***] . If at any time during the period commencing on the Effective Date and continuing for a period of [***] thereafter, Licensee reasonably determines [***] for purposes of this Agreement by providing SGI with written notice of same. Licensee shall have the right to designate [***] as a [***] in accordance with the procedure described in Sections 2.5 and 3.4 of this Agreement. Once the [***] becomes a [***] (a) [***], (b) [***] and (c) [***].

3.6 Rights to Sublicense .

3.6.1 Licensee shall have the right to grant sublicenses of each Exclusive License to any Affiliate or Third Party with respect to any Licensed Product for which Licensee has either retained marketing rights or upon which Licensee has expended material research and/or development effort, it being understood that any Licensed Product that contains a Designated Antigen and/or an Antibody to a Designated Antigen developed by Licensee shall be deemed to have satisfied the foregoing condition and that Licensee shall have the right to grant sublicenses under the Exclusive License with respect to such Licensed Product, subject to the remainder of this Section 3.6.1. Licensee agrees to contractually obligate any Sublicensee to make all payments due to SGI pursuant to this Agreement by reason of achievement of any milestones set forth in Section 6.6 or owed on Net Sales of any Licensed Products by any such Sublicensee pursuant to Sections 6.4 and 6.5, as well as to comply with all terms of this Agreement and the SGI In-Licenses applicable to Licensee (including all terms of this Agreement identified as applicable to 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.

3.6.2 Licensee shall notify SGI of each sublicense 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.

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3.7 Improvements and New Technologies .

3.7.1 Improvements . In the event that, during the Research Program Term, either Party conceives, develops or reduces to practice an Improvement, such Party shall promptly notify the other Party of the discovery of such Improvement. SGI shall own all Improvements and, to the extent that any Improvements shall have been conceived, developed or reduced to practice by Licensee, Licensee hereby assigns all of its right, title and interest therein to SGI. SGI’s interest in any such Improvements shall be included in the SGI Technology and made available to Licensee via the Research License and Exclusive License provided in Article 3.

3.7.2 [***] . Subject to the [***], Licensee shall have the right to practice any [***] pursuant to the Exclusive Licenses granted under Article 3 as follows: SGI shall [***] of any [***] by providing to Licensee a written [***] of the [***], including all [***] under which [***] would be able to access such [***]. If Licensee is interested in practicing such [***], the Parties shall discuss in good faith modifications to this Agreement to reflect the terms governing Licensee’s access to any [***] pursuant to this Agreement, which shall include without limitation Licensee’s agreement to [***] attributable to Licensee’s use of such [***] and; provided that the [***] shall be deemed to include [***] (as applicable) relating to or covering such [***] only after the Parties execute an amendment to this Agreement specifying such modified terms. Except as set forth in the foregoing sentence and any modifications to this Agreement including any such modification relating to [***] for [***], SGI shall be responsible for [***] of all consideration (including all [***]) [***] under any agreements covering [***].

3.7.3 [***] . [***] shall be amended from time to time to [***] Controlled by SGI [***] in accordance with this Section 3.7.

3.8 Compliance with the SGI In-Licenses .

3.8.1 Licensee, its Affiliates and Sublicensees shall comply with all obligations, covenants and conditions of the SGI In-Licenses listed in Schedule C applicable to Licensee and its Affiliates and Sublicensees, and any amendments thereto following written disclosure thereof to Licensee, that apply under each of the SGI In-Licenses. 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.

3.8.2 SGI will not [***] any [***] to an [***] that [***] or [***] of the [***] hereunder [***].

3.9 License to SGI . Subject to the provisions of this Agreement, Licensee hereby grants to SGI during the Research Program Term a non-exclusive, royalty-free, sublicenseable license under the Licensee Patents and Licensee Know-How, to enable SGI to perform or have performed its responsibilities under the Research Program.

ARTICLE 4 - TECHNOLOGY DISCLOSURE

4.1 Disclosure of Drug Conjugation Technology . During the Term, SGI shall (a) disclose to Licensee such SGI Know-How as is reasonably useful to enable Licensee to use the

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Drug Conjugation Materials and Drug Conjugation Technology as provided in the Research Plan or to practice the Research License and Exclusive Licenses, and 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. Licensee shall pay to SGI for such assistance an amount equal to the FTE Fees in accordance with Section 6.1.2 for SGI employees providing such assistance.

ARTICLE 5 - DEVELOPMENT AND COMMERCIALIZATION; MANUFACTURING

5.1 Diligence . Licensee shall use commercially reasonable efforts to develop, commercialize and market Licensed Products, such efforts to be consistent with the exercise of prudent scientific and business judgment and comparable to the efforts Licensee applies to its other projects of similar potential and market size. Without limiting the foregoing, Licensee shall, as commercially prudent, (a) conduct such preclinical and clinical trials as are necessary to obtain Regulatory Approvals for Licensed Products in major markets therefor, (b) diligently obtain any necessary approvals to market such Licensed Products in major markets therefor (including, as relevant, pricing and reimbursement approval), and (c) market such Licensed Products in each country in which Licensee has received Regulatory Approval therefor. Licensee shall comply with all applicable laws, rules and regulations (including Good Laboratory Practices, and good clinical and manufacturing practices, to the extent applicable) in the development and commercialization of such Licensed Products, and shall cause its Affiliates and Sublicensees to do the same.

5.2 Funding and Progress Reports . Except as expressly set forth herein, as between SGI and Licensee, Licensee shall be solely responsible for funding all costs of the development and commercialization of Licensed Products. Licensee shall keep SGI informed in a timely manner as to the progres

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