Exhibit 10.20
CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY ASTERISKS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
COLLABORATION AND LICENSE
AGREEMENT
THIS COLLABORATION AND LICENSE
AGREEMENT (this “Agreement”
) is entered into as of December 20, 2004 (the
“Effective
Date” ) by and between ARENA PHARMACEUTICALS, INC. , a
Delaware corporation having an office at 6166 Nancy Ridge Drive,
San Diego, CA 92121 ( “Arena”
), and ORTHO-MCNEIL
PHARMACEUTICAL, INC. , a New Jersey corporation having
an office at 1000 U.S. Route 202, Raritan, New Jersey 08869 (
“J&J”
). Arena and J&J may each be referred to individually as
a “Party”, and collectively as the
“Parties”.
RECITALS
WHEREAS, Arena has
discovered and developed certain compounds that modulate the
activity of a G-protein coupled receptor referred to by Arena as
19AJ; and
WHEREAS, Arena has
expertise and intellectual property related to the above compounds
and 19AJ, including assays for identifying compounds that modulate
19AJ; and
WHEREAS, J&J is
engaged in the research, development and commercialization of
pharmaceutical products; and
WHEREAS, J&J
and Arena desire to enter into a collaborative relationship (as a
joint research agreement in accordance with 35 U.S.C.
§ 103(c)(3)) to identify and develop compounds that
modulate 19AJ for clinical development and commercialization by
J&J, subject to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1.
DEFINITIONS
1.1
“19AJ” means the G-protein coupled receptor
referred to by Arena as 19AJ, as more particularly described in
Exhibit A of this Agreement.
1.2
“Active Compound” means:
(a)
either of the lead molecules of Arena known as AR****** and
AR******, as more particularly described in Exhibit A of this
Agreement; or
(b)
any molecule deemed to be an Active Compound by unanimous written
consent of all members of the JSC; or
(c)
any other composition of matter, including a small molecule,
protein, antibody, or other compound:
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS
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(i)
that is Controlled by Arena or any of its Affiliates, or is owned
or licensed by J&J or any of their respective Affiliates, as of
the Effective Date or at any time prior to the first anniversary of
the end of the Research Term; and
(ii)
that (1) modulates (including antagonism, inverse agonism, agonism
and any variations thereof), or, in the case of a prodrug, that on
administration to a mammal, generates a species that modulates,
19AJ with an *********** equal to or less than ** ***************
(assay protocol attached in Exhibit B); and (2) affects or blocks
19AJ ****** ********************** with an **** equal to or less
than *************** (assay protocol attached in Exhibit B);
and
(iii)
for which the activity criteria in subsection (c)(ii) above
either:
(1)
is known to Arena and/or J&J (or an Affiliate of either of
them) as of the Effective Date; or
(2)
is discovered or identified by or on behalf of, or otherwise
becomes known to, Arena and/or J&J (or an Affiliate of either
of them) during the Research Term or the one year period after the
end of the Research Term, which shall include any compound:
(A) that is generically or specifically described within a claim,
describing a genus or species of compounds the utility of which is
given (in the applicable patent or patent application) as
modulation of 19AJ, in any pending or issued Arena Patent, J&J
Patent or Joint Patent filed in the United States or Japan or as a
European Patent Application, or as a Patent Cooperation Treaty
(“ PCT ”)
application designating the United States and the contracting
states of the European Patent Convention, and as to which at least
one member of such genus or species is one of the compounds in
subsection 1.2(a), or meets the requirements of subsections
1.2(c)(i) and 1.2(c)(ii), and (B) provided that such compound is
synthesized and assayed and determined to meet the requirements of
subsection 1.2(c)(ii) by or on behalf of Arena and/or J&J
(or an Affiliate of either of them) prior to the first anniversary
of the end of the Research Term.
1.3
“Affiliate” means, with respect to a Party, any
company or other entity controlled by, controlling, or under common
control with such Party where the term “controlled by”
(with correlative meanings for the terms “controlling”
and “under common control with”) means that the Party
owns or controls, directly or indirectly, at least 50% of the
voting power of the subject company or other entity which voting
power in the case of a corporation is entitled to vote for the
election of directors, or otherwise has the actual right and
ability to control and direct the management and business affairs
of the subject company or entity.
1.4
“Arena Know-How” means any Information that (a) is
Controlled by Arena on the Effective Date or during the Research
Term and the one year period thereafter, and (b) relates directly
to an Active Compound or is directly useful for purposes of the
Research Program or is necessary for the manufacture, use or sale
of any Collaboration Product, but excluding the Arena Patents and
Joint Patents and Information disclosed therein.
1.5
“Arena Patent” means any Arena Commercialization
Patent or Arena Research Patent.
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS
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(a)
“Arena Commercialization Patent” means any Patent
to the extent that the Patent: (i) is Controlled by Arena on
the Effective Date or at any time during the Term of the Agreement,
and (ii) claims (x) a Selected Compound (including a combination
containing a Selected Compound), or its manufacture or use, or (y)
an invention that is directly useful for the manufacture, use or
sale of any Collaboration Product, but excluding the Joint
Patents.
(b)
“Arena Research Patent” means any Patent to the
extent that the Patent: (i) is Controlled by Arena on the
Effective Date or during the Research Term and the one year period
thereafter, and (ii) claims (x) an Active Compound (including a
combination containing an Active Compound), or its manufacture or
use, or (y) an invention relating specifically to 19AJ or its use
that is directly useful for purposes of the Research Program, but
excluding the Joint Patents.
1.6
“Arena Technology” means the Arena Patents and
Arena Know-How.
1.7
“Business Day” means a day on which banking
institutions in New York, NY are open for business.
1.8
“Calendar
Quarter” means each one of four time periods in
any calendar year comprising approximately a three-month period
which will be determined in accordance with the Johnson &
Johnson Universal Calendar. The 2004 and 2005 Calendar is
attached hereto as Exhibit D. For any year during this
Agreement after 2005, J&J will provide Arena with the then
current Johnson & Johnson Universal Calendar as requested by
Arena.
1.9
“Collaboration Invention” means any Information
discovered, developed or created by either Party, or the Parties
jointly, and/or by their respective Affiliates pursuant to work
conducted under the Research Program during the Research Term, or
during the one-year period after the end of the Research Term
relating to work done under the Research Program or Active
Compounds.
1.10
“Collaboration Product” means any pharmaceutical
product that contains a Development Compound (or any prodrug,
ester, salt form, stereoisomer, crystalline polymorph, hydrate or
solvate thereof), and including all formulations, line extensions
and modes of administration thereof.
1.11
“Commercial Sale” means, with respect to a
Collaboration Product, the sale of such Collaboration Product
intended for end use or consumption in a country after the
governing health regulatory authority of such country has granted
Regulatory Approval of the Collaboration Product (which will
include sales of a Collaboration Product occurring prior to
Regulatory Approval in a country if such sold Collaboration
Products are intended to be used by end user in such country after
Regulatory Approval is obtained in such country). Sale to an
Affiliate or Sublicensee will not constitute a Commercial Sale
unless the Affiliate or Sublicensee is the end user of the
Collaboration Product.
1.12
“Confidential Information” has the meaning provided
in Section 10.1.
1.13
“Controlled” means, with respect to any
Information, Patent or other intellectual property right, that the
applicable Party owns or has a license to such Information, Patent
or other
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intellectual property right and has the ability
to disclose same to the other Party and to grant such other Party a
license or a sublicense (as applicable) under same as provided in
this Agreement without violating the terms of any agreement or
other arrangement with any Third Party.
1.14
“Development Compound” means a Selected Compound
that has been selected for further pre-clinical research and
clinical development pursuant to a Drug Evaluation Acceptance, as
provided in Section 3.2.
1.15
“Development Costs” means, with respect to a
particular Development Compound, the actual costs and expenses
incurred by or on behalf of a Party in conducting research or
development of the Development Compound under the applicable Early
Development Plan or Late Stage Development Plan or otherwise
pursuant to this Agreement.
1.16
“Development Plan” means an Early Development Plan
or a Late Stage Development Plan, as applicable.
1.17
“ Diligent
Efforts” means carrying out tasks or obligations
in a manner consistent with the efforts the applicable Party
devotes to a product at a similar stage of development or
commercialization and of similar market potential resulting from
its own research efforts, based on conditions then
prevailing. A Party that is required to use Diligent Effort
with respect to a task or obligation must: (i) promptly
assign responsibility for such task or obligation to specific
employee(s) who are held accountable for progress and monitor such
progress on an on-going basis, (ii) establish means for and
consistently seek to achieve such task or obligation, and (iii)
consistently make and implement decisions and allocate resources
designed to advance progress with respect to such task or
obligation.
1.18
“Drug Evaluation Acceptance” means the decision by
the appropriate committees or personnel of J&J (or its
Affiliate) to select a particular preclinical compound for Drug
Evaluation (as such term is used generally by J&J as of the
Effective Date), which means the decision to transfer a compound
from discovery to drug evaluation in order to commence a program of
GLP toxicology, GMP scale-up and/or related pre-clinical studies on
such compound needed to develop the data necessary for preparing
and filing an IND for such compound and subsequent early clinical
studies, and as such decision may be renamed or otherwise referred
to by J&J and/or its Affiliate.
1.19
“Early Stage Development” means the development
activities that are conducted in connection with a Development
Compound during the period of time beginning on the date a
Development Compound achieves Drug Evaluation Acceptance through
the completion of Phase IIa Clinical trials and ending at the start
of Phase IIb Clinical Trials.
1.20
“Early Development Plan” means the plan, prepared
by J&J and approved by the JSC pursuant to Section 3.2 for
a particular Development Compound, for conducting the GLP
toxicology and related work needed to prepare and file an IND for
such Development Compound and for conducting clinical development
of such Development Compound through completion of Phase IIa
clinical trials in all appropriate countries and jurisdictions in
the Territory, and including the budget and timeline for all such
work, and as such plan may be updated or modified by the JSC as
provided in Section 3.3.
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1.21
“EU Major Market Country” means any of the United
Kingdom, France, Germany, Italy or Spain.
1.22
“FDA” means the United States Food and Drug
Administration, or any successor agency thereto having the
administrative authority to regulate the marketing of human
pharmaceutical products or biological therapeutic products,
delivery systems and devices in the United States of America.
1.23
“Field of Use” means all therapeutic, prognostic,
and diagnostic indications and applications for human and non-human
purposes.
1.24
“FTE” means the equivalent of the work of one (1)
employee full time for one (1) calendar year (consisting of a total
of 1880 hours per calendar year) of work on the Research pursuant
to the Research Plan. Any employee who devotes less than 1880
hours per calendar year on the Research Program shall be treated as
an FTE on a pro-rata basis calculated by dividing the actual number
of hours worked on the Research Program during such calendar year
by 1880. Each Party understands and agrees that the other
Party retains complete discretion to change the identity of any
individual employee or consultant devoted to the Research Program
and/or the frequency and the time during which such individual
employee’s or consultant’s efforts are devoted to the
Research Program, and that either Party’s scientists who are
working on the Research Program also may be working (during periods
that do not count towards the FTE allocation devoted to the
Research Program) on other of the Party’s independent
projects.
1.25
“IND” means an Investigational New Drug Application
filed with the FDA, or the equivalent application or filing filed
with any equivalent agency or governmental authority outside the
United States of America (including any supra-national such as the
European Union) necessary to commence and conduct human clinical
trials in such jurisdiction.
1.26
“Indication” means a separate and distinct disease,
disorder or medical condition that a Collaboration Product is
intended to treat, prevent, cure, or ameliorate, or that is the
subject of a clinical trial on a Development Compound where an
endpoint of the trial is demonstrating an effect by the Development
Compound in treating, preventing, curing, or ameliorating such
disease, disorder or medical condition and where it is intended
that the data and results of such clinical trial (if successful)
will be used to support a regulatory submission and approval that
is intended to result in distinct labeling within the indications
section of the label relevant to usage in the disease,
disorder or medical condition that is separate and distinct from
another disease, disorder or medical condition.
1.27
“Information” means all tangible and intangible
(a) information, techniques, technology, practices, trade
secrets, inventions (whether patentable or not), methods,
knowledge, know-how, skill, experience, data, results (including
pharmacological, toxicological and clinical test data and results),
analytical and quality control data, results or descriptions,
software and algorithms and (b) compositions of matter, cells,
cell lines, assays, animal models and physical, biological or
chemical material.
1.28
“J&J Know-How” means any Information that (a)
is Controlled by J&J or its Affiliate on the Effective Date or
during the Research Term and the one year period thereafter,
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and
(b) relates directly to an Active Compound or is directly useful
for purposes of the Research Program or is necessary for the
manufacture, use or sale of any Collaboration Product, but
excluding the J&J Patents and Joint Patents and Information
disclosed therein.
1.29
“J&J Patent” means any J&J
Commercialization Patent or J&J Research Patent.
(a)
“J&J Commercialization Patent” means any Patent
that: (i) is Controlled by J&J on the Effective
Date or at any time during the Term of the Agreement, and (ii)
claims (x) any Active Compound that is not a Selected Compound
(including a combination containing such Active Compound), or its
manufacture or use, or (y) an invention to the extent relating
specifically to 19AJ or modulators thereof that is directly useful
for the manufacture, use or sale of product that contains such
Active Compound (which is not a Selected Compound), but excluding
the Joint Patents.
(b)
“J&J Research Patent” means any Patent
that: (i) is Controlled by J&J on the Effective
Date or during the Research Term and the one year period
thereafter, and (ii) claims (x) an Active Compound (including a
combination containing an Active Compound), or its manufacture or
use, or (y) an invention to the extent relating specifically to
19AJ or modulators thereof that is directly useful for purposes of
the Research Program, but excluding the Joint Patents.
1.30
“J&J Technology” means the J&J Patents and
J&J Know-How.
1.31
“Joint Inventions” means Collaboration Inventions
made or discovered by employees (or contractors) of Arena jointly
with employees (or contractors) of J&J and/or its
Affiliate.
1.30
“Joint Research
Committee” or “JRC” has the meaning recited in
Section 2.2.
1.32
“Joint Patents” means all Patents that claim or
disclose a Joint Invention.
1.33
“Joint Steering Committee” or “JSC” means the
committee formed by the Parties pursuant to Section 2.3 to
oversee the Research Program and the Early Stage Development of
Collaboration Products, as more specifically recited in
Section 2.4.
1.34
“Late Stage Development” means the development
activities that are conducted in connection with a Development
Compound during the period of time beginning on the date a
Development Compound enters Phase IIb Clinical Trials up to and
including Regulatory Approval.
1.35
“Late Stage Development Plan” means the plan
prepared by J&J pursuant to Section 3.4, with respect to a
particular Development Compound that has completed all needed Phase
IIa clinical trials, for conducting all subsequent clinical
development of the Development Compound through achieving
Regulatory Approval in all appropriate countries and jurisdictions
in the Territory, and including the budget and timeline for all
such work.
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1.36
“NDA” means a New Drug Application (as more fully
defined in 21 C.F.R. 314.5 et
seq. or its successor regulation) and all amendments and
supplements thereto filed with the FDA, or the equivalent
application filed with any equivalent agency or governmental
authority outside the United States of America (including any
supra-national agency such as in the European Union), including all
documents, data, and other information concerning a pharmaceutical
product which are necessary for gaining Regulatory Approval to
market and sell such pharmaceutical product.
1.37
“Net Sales” means the
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the following to the extent actually allowed or incurred with
respect to such sales:
(a)
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(b)
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(c)
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(e)
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Sales of Collaboration
Product by and between J&J and its Affiliates and their
distributors and Sublicensees are not sales to Third Parties and
shall be excluded from Net Sales calculations for all purposes
provided that such purchasers resell the product. Sales of
Collaboration Product for use in conducting clinical trials of
Collaboration Product in a country in order to obtain the first
Regulatory Approval of Collaboration Product in such country shall
be excluded from Net Sales calculations but solely to the extent such sales
are at the selling party’s actual costs. Net Sales
shall be determined in a manner consistent for all products sold by
or on behalf of J&J and in accordance with applicable U.S.
generally accepted accounting principles as consistently applied
across the J&J pharmaceutical product lines.
If a particular
Collaboration Product contains one or more other active
pharmaceutical drug ingredients in addition to the Development
Compound(s) in such Collaboration Product (a “Combination
Product”), *************************************************
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CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS
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Regardless of which of the above methods is
used to determine the fraction, such fraction cannot in any event
be less than 0.5.
1.38
“Patents” means (a) United States patents,
re-examinations, reissues, renewals, extensions and term
restorations, and foreign counterparts thereof, and
(b) pending applications for United States patents, including,
without limitation, provisional applications, continuations,
continuations-in-part, divisional and substitute applications,
inventors’ certificates, and extensions, and foreign
counterparts of any of the foregoing.
1.39
“Phase I Clinical Trial” means that portion of the
clinical development program which provides for the first
introduction into humans of a Collaboration Product with the
purpose of determining human toxicity, metabolism, absorption,
elimination and/or other pharmacological action, as more fully
defined in 21 C.F.R. § 312.21(a), or its successor
regulation, or the equivalent in any foreign country.
1.40
“Phase IIa Clinical Trial” means that portion of
the clinical development program which provides for the initial
trials of a Collaboration product on a limited number of patients
for the purpose of determining whether the Collaboration Product
affects a surrogate marker or indicator of pharmacological or
clinical activity in the proposed therapeutic indication, as more
fully described in 21 C.F.R. § 312.21(b), or its
successor regulation, or the equivalent in any foreign country.
1.41
“Phase IIb Clinical Trial” means that portion of
the clinical development program which provides for the definitive,
well controlled clinical trials of a Collaboration Product in
patients for the purpose of determining the safe and effective dose
range in the
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS
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proposed therapeutic indication, as more fully
described in 21 C.F.R. § 312.21(b), or its successor
regulation, or the equivalent in any foreign country.
1.42
“Phase III Clinical Trial” means that portion of
the clinical development program which provides for continued
trials of a collaboration Product on sufficient numbers of patients
to establish the safety and efficacy of a Product and (if
applicable) generate pharmaco-economic data to support Regulatory
Approval in the proposed therapeutic indication, as more fully
defined in 21 C.F.R. § 312.21(c), or its successor
regulation, or the equivalent in any foreign country.
1.43
“Regulatory Approval” means any and all approvals
(including price and reimbursement approvals, if required prior to
sale in the applicable jurisdiction), licenses, registrations, or
authorizations of any country, federal, supranational, state or
local regulatory agency, department, bureau or other government
entity that are necessary for the manufacture, use, storage,
import, transport and/or sale of a particular Collaboration Product
in the jurisdiction.
1.44
“Research” means all the work performed by the
Parties or on their behalf under the Research Program, which is
directed towards or in connection with the discovery,
identification, synthesis and preclinical research on Active
Compounds during the Research Term in accordance with the Research
Plan.
1.45
“Research Plan” means the plan for conducting the
Research Program, as amended from time to time by the JSC.
The initial Research Plan has been agreed upon by the Parties in
writing as of the Effective Date.
1.46
“Research Program” means a collaborative research
program carried out by Arena and J&J during the Research Term
pursuant to Articles 2 and 3 to identify and conduct
pre-clinical research on compounds that ***************** modulate
the activity of 19AJ in a manner that may be useful in treating
**************** type 2 diabetes ****************** ******* and
other
Indications*****************************************************
********** as such program is more fully described in the Research
Plan.
1.47
“Research Term” means the period beginning on the
Effective Date and ending on the 2nd anniversary of the Effective
Date, as such period may be extended if the Research Program is
extended in accordance with Section 2.13, or earlier
terminated on early termination of this Agreement or the Research
Program in accordance with Article 11.
1.48
“Selected Compound” means any Active Compound, up
to a maximum of ***** **** compounds, that has been selected by
J&J as provided in Section 3.1. For clarity, all
Development Compounds are deemed Selected Compounds.
1.49
“Sublicensee” means a Third Party to whom J&J
or any of its Affiliates has granted a license or sublicense of the
right to make, have made, import, offer for sale, and/or sell one
or more Collaboration Products.
1.50
“Territory” means the entire world.
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS
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1.51
“Term” has the meaning provided in
Section 11.1.
1.52
“Third Party” means any entity other than Arena or
J&J or an Affiliate of Arena or J&J.
1.53
“Valid Claim” means (a) an unexpired claim of
an issued patent within the Arena Patents, Joint Patents or J&J
Patents which has not been found to be unpatentable, invalid or
unenforceable by a court or other authority in the subject country,
from which decision no appeal is taken or can be taken; or
(b) a claim of a pending application within the Arena Patents,
Joint Patents or J&J Patents, which application claims a first
priority no more than seven years prior to the date upon which
pendency is determined.
2.
RESEARCH PROGRAM AND COMMITTEE STRUCTURE
2.1
Research Overview. Commencing on the Effective Date, the
Parties will each use Diligent Efforts to conduct the Research
Program on a collaborative basis and in accordance with this
Agreement, with the goal of discovering, identifying, synthesizing
and performing preclinical research on Active Compounds, and with
the further goal of identifying and selecting certain Active
Compounds that are suitable for clinical development by J&J as
Development Compounds and, if Regulatory Approval is obtained, for
commercialization by J&J as Collaboration Products as soon as
reasonably practicable. The Parties will conduct the Research
Program in accordance with the Research Plan (as amended or revised
by the JRC from time to time) and subject to the oversight of the
JSC. The Research Plan, among other things as further
specified in Section 2.6, will specify the scientific
direction and research activities, and allocate Research Program
responsibilities and resources between the Parties in a manner
consistent with this Agreement.
2.2
Joint
Research Committee. Promptly after the Effective Date, the
Parties shall form a Joint Research Committee (the
“JRC”). The JRC shall be comprised of 2 representatives
of each Party, unless otherwise agreed to by the Parties. One
member of the JRC will be selected to act as the chairperson of the
JRC, with each chairperson acting for a term of 12 months.
The chairperson will be selected alternately by Arena and J&J,
and J&J will designate the first chairperson. The purpose
of the JRC is to coordinate the Research efforts of the Parties and
expedite the progress of the work being done under the Research
Plan. The JRC will set specific Research goals, evaluate the
results of the Research, discuss information relating to the
Research, assign FTEs their responsibilities, manage resources and
priorities and ensure that there is appropriate scientific
direction for the collaboration of the Parties under the Research
Plan. The JRC may modify the Research Plan as needed and submit it
to the JSC for review and approval. Regardless of the number
of representatives, each Party will present one consolidated view
and have one vote. All decisions of the JRC will be made by
unanimous vote, with each Party having one vote, except as
otherwise expressly provided elsewhere in this Agreement. If
the JRC fails to reach consensus, the matter will be submitted to
the JSC for decision, subject to the provisions of
Section 2.5. The JRC shall have meetings from time to
time in person and by phone or video conference.
2.3
Joint
Steering Committee. Promptly after the Effective Date, the Parties
will form a Joint Steering Committee (the “JSC”
) comprised of three representatives of each of J&J
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and
Arena, unless otherwise agreed by the Parties. One member of
the JSC will be selected to act as the chairperson of the JSC, with
each chairperson acting for a term of 12 months. The
chairperson will be selected alternately by Arena and J&J, and
J&J will designate the first chairperson. The JSC will
meet at least four times per year during the Research Term and
semi-annually during Early Stage Development or at such greater
frequency as the JSC agrees. The JSC shall only address
activities carried out during the Research Term and Early Stage
Development. After the end of the Research Term, and once all
Development Compounds have moved past Early Stage Development, the
JSC shall cease to function until such time as another Development
Compound enters Early Stage Development, in which case the JSC will
recommence meetings under this Section. Such meetings may be
conducted by videoconference, teleconference or in person, as
agreed by the Parties (except that at least one of such meetings
per year will be conducted in person). The JSC will agree
upon the time and location of the meetings. The chairperson
or his or her designee will circulate an agenda for each meeting
approximately one week before the date scheduled for the meeting,
and will include all matters requested to be included on such
agenda by either Party. The chairperson, or his or her
designee, will take complete and accurate minutes of all
discussions occurring at the JSC meetings and all matters decided
upon at the meetings except that matters reflecting legal advice of
counsel will not be included in such minutes. A copy of the
draft minutes of each meeting will be provided to each Party by the
chairperson or his or her designee within 20 days after each
meeting, or as soon thereafter as practical, and such minutes will
be reviewed by the JSC, any needed changes discussed and final
minutes agreed to and provided to each Party by the end of the next
JSC meeting, or as soon thereafter as practical. Within
30 days after each meeting, or as soon thereafter as
practical, the JSC chairperson or his or her designee will provide
the Parties with a written report describing, in reasonable detail,
the status of the Research Program and all Early Stage Development
programs, a summary of the results and progress to date, the issues
requiring resolution, and the agreed resolution of previously
reported issues. A reasonable number of additional
representatives of a Party may attend meetings of the JSC in a
non-voting capacity.
2.4
Joint Steering Committee Functions and Powers. The
responsibilities of the JSC will be as follows:
(a)
encouraging and facilitating communication between the Parties with
respect to the Research Program and the development of Development
Compounds in Early Stage Development;
(b)
reviewing and approving the Research Plan and other plans for
accomplishing the goals and budget of the Research Program;
(c)
monitoring the progress of the Research Program and each
Party’s diligence in carrying out its responsibilities
thereunder;
(d)
recommending to J&J appropriate Active Compounds for selection
as Development Compounds;
(e)
reviewing and commenting on the Early Development Plan;
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(f)
monitoring the progress of the development program for each
Development Compound during Early Stage Development; and
(g)
carrying out the other duties and responsibilities described for it
in this Agreement.
2.5
JSC Decision Making. All decisions of the JSC will be
made by unanimous vote, with each member having one vote, except as
otherwise expressly provided elsewhere in this Agreement. No
vote of the JSC may be taken unless at least two of each
Party’s representatives on the JSC vote. If after
reasonable discussion and consideration of each of the
Parties’ views on a particular matter before the JSC, the JSC
is unable to reach a decision by unanimous vote on that matter,
then J&J in its reasonable good-faith judgment will have the
final decision on such matter, except that in no event can J&J
make such a decision on the matter which would have the effect of
increasing Arena’s payment obligations or obligations to
conduct research or development activities already contemplated
under this Agreement, decreasing the level of J&J-funded FTEs
of Arena dedicated to conducting the Research, requiring Arena to
conduct Research activities beyond its existing expertise and
resources, determining whether or not J&J has met its diligence
obligations under the Agreement, or designating a compound as an
Active Compound. For clarity, in no event will the JSC (or
J&J’s decision of a matter for which the JSC cannot reach
agreement) have the authority or ability to amend or modify the
terms of the Agreement, which can only be amended as provided in
Section 14.2.
2.6
Research Plan. The Research Plan is agreed to by the
Parties as of the Effective Date (in the form exchanged by the
Parties by signed letter on the Effective Date), and it sets forth
the specific research tasks to be undertaken and objectives to be
achieved, the specific responsibilities of each Party, and the
total number of FTEs to be devoted by each Party to the Research
Program (subject to Section 2.7 with respect to Arena’s
FTE commitments). The JSC will be responsible for reviewing
and approving any updates or amendments to the Research Plan
submitted to it by the JRC.
2.7
Arena Research Commitment and Performance. During the
Research Term, Arena will devote to the Research Program *********
Arena FTEs, subject to J&J’s compliance with its funding
obligations under Section 6.2. Arena shall use Diligent
Efforts to ensure that the * Arena FTEs devoted to the Research
carry out its obligations under the Research Program as specified
in the Research Plan. The mix of these ****** FTEs (between
biology, chemistry and other technical areas) to be devoted by
Arena in the Research Program is as set forth in the Research
Plan. The number of Arena FTEs devoted to the Research
Program will not be reduced during the first two (2) years of the
Research Term. Arena may, at its expense and at its
discretion, devote additional of its FTEs to conduct work relating
to the Research Program activities. Arena will conduct its
activities under the Research Program in accordance with good
scientific standards and practices and in compliance in all
material respects with the requirements of applicable laws and
regulations and with applicable good laboratory practices, to
attempt to achieve its objectives efficiently and
expeditiously. Arena will maintain laboratories, offices and
all other facilities reasonably necessary to carry out the
activities to be performed by it pursuant to the Research
Plan. In conformity with standard pharmaceutical and
biotechnology industry practices and the terms and conditions of
this Agreement, Arena will prepare and maintain, or will cause to
be prepared and maintained, complete and accurate written
records,
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accounts, notes, reports and data with respect
to activities conducted pursuant to the Research Plan and, upon
J&J’s written request and at its expense, will send
legible copies of the aforesaid to J&J. Arena will not be
required to undertake any additional efforts or expend any
additional amounts or resources in conducting the Research Program
other than devoting the number of FTEs to the Research Program as
set forth in the Research Plan (******** FTEs for the initial
Research Term). Notwithstanding the foregoing, Arena shall,
at its sole cost, supply any research reagents, similar materials
and any standard laboratory equipment currently owned by Arena (and
any replacements thereto) that it needs to carry out its duties
under the Research Plan, but any needed additional capital
equipment or other extraordinary expenses, to the extent that the
JRC has discussed and agreed on the need for such equipment or
expenses and the Research Plan contemplates Arena acquiring such
equipment or incurring such expenses, shall be paid for by J&J
(or otherwise by the Parties if they so agree), except that if Arena makes an Early
Development Election under Section 3.6, then J&J will only
be responsible for *********
******************************************************* of such
expenses relating to such Early Stage Development activities if the
JSC so approves unanimously.
2.8
J&J Research Commitment and Performance. During the
Research Term, J&J will devote to the Research Program such
number of J&J FTEs as are necessary for J&J to fulfill its
obligations under the Research Plan. J&J will be
responsible for the payment of all costs and expenses for the FTEs
and other activities it undertakes in conducting its
responsibilities under the Research Plan. J&J will
conduct its activities under the Research Program in accordance
with good scientific standards and practices and in compliance in
all material respects with the requirements of applicable laws and
regulations and with applicable good laboratory practices, to
attempt to achieve its objectives efficiently and
expeditiously. J&J will maintain laboratories, offices
and all other facilities reasonably necessary to carry out the
activities to be performed by it pursuant to the Research
Plan. In conformity with standard pharmaceutical and
biotechnology industry practices and the terms and conditions of
this Agreement, J&J will prepare and maintain, or will cause to
be prepared and maintained, complete and accurate written records,
accounts, notes, reports and data with respect to activities
conducted pursuant to the Research Plan and, upon Arena’s
written request and at its expense, will send legible copies of the
aforesaid to Arena. J&J shall, at its sole cost, supply
any research reagents and similar materials and any needed capital
equipment or other materials to carry out its duties under the
Research Plan.
2.9
Research Reports. Each Party will keep the other informed
as to all progress achieved and results, discoveries and technical
developments made in the course of performing activities under the
Research Program. Each Party will report to the other Party
promptly after such Party is aware of any significant Collaboration
Inventions. In addition, each Party will prepare, and
distribute to all members of the JSC no later than 10 days
prior to the next JSC meeting, a reasonably detailed written
summary report, in such form and format and setting forth such
information regarding the results and progress of performance of
the Research Program as determined from time to time by the
JSC. Each Party will identify in each such written summary
report summaries of all material Collaboration Inventions made,
discovered or developed. Nothing herein will require either
Party to disclose information received from or generated for a
Third Party that remains subject to bona fide confidentiality
obligations to such Third Party.
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2.10
Subcontracts. Arena may not perform any of its
obligations under this Agreement through one or more subcontractors
or consultants, without the prior written approval of J&J, such
approval not to be unreasonably withheld, provided that Arena will have the
right to use such subcontractors and consultants as it selects,
with J&J being deemed to have approved without prior Arena
request, for conducting its development activities under an Early
Stage Development program for which Arena has made an Early
Development Election under Section 3.6(a). If Arena has
the approval to use a subcontractor or consultant, then Arena may
perform its obligations under this Agreement through that
consultant or subcontractor, provided that (a) none of the
rights of either Party under this Agreement are, to the knowledge
of Arena at the time, diminished or otherwise adversely affected as
a result of such subcontracting, and (b) the subcontractor
undertakes in writing obligations of confidentiality and non-use
regarding Confidential Information which are substantially the same
as those undertaken by the Parties pursuant to Article 10
hereof. In the event Arena performs any of its obligations
under the Research Plan through a subcontractor, then Arena will be
responsible at all times for the performance and payment of such
subcontractor.
2.11
Technology Transfer. Commencing promptly after the
Effective Date and from time to time thereafter during the Research
Term, Arena will disclose to J&J such Arena Technology as Arena
reasonably determines is directly useful for J&J to perform its
tasks under the Research Program and to exercise the licenses
granted to J&J under Article 5 hereof. Commencing
promptly after the Effective Date and from time to time thereafter
during the Research Term, J&J will disclose to Arena such
J&J Technology as J&J reasonably determines is directly
useful for Arena to perform its tasks under the Research Program
and to otherwise exercise the licenses granted to Arena under
Article 5 hereof. During the Term, Arena will provide
J&J with reasonable technical assistance relating to the use of
the Arena Technology by J&J solely to the extent permitted
under the license granted to J&J under Article 5.
During the Term, J&J will provide Arena with reasonable
technical assistance relating to the use of the J&J Technology
by Arena solely to the extent permitted under the license granted
to Arena under Article 5.
2.12
Materials Transfer. In order to facilitate the Research
Program, either Party may provide to the other Party certain
biological materials or chemical compounds Controlled by the
supplying Party, including Active Compounds or other compounds for
testing against 19AJ, (collectively, the “Materials”
) for use by the other Party in furtherance of the Research
Program. For the avoidance of doubt, it is agreed that only
those Materials comprising Arena Technology or J&J Technology
will be disclosed under the foregoing, and all such Materials will
be used by the other Party only as permitted under the applicable
license rights granted under Article 5 and subject to all the
other restrictions and obligations under this
Agreement. Except as otherwise provided under this
Agreement, all such Materials delivered to the other Party will
remain the sole property of the supplying Party, will be used only
in furtherance of the Research Program in accordance with this
Agreement, will not be used or delivered to or for the benefit of
any Third Party except as otherwise permitted under this Agreement
without the prior written consent of the supplying Party, and will
be used in compliance with all applicable laws, rules and
regulations. The Materials supplied under this Agreement must
be used with prudence and appropriate caution in any experimental
work because not all of their characteristics may be known.
Except as expressly set forth herein, THE MATERIALS ARE PROVIDED
“AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED,
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INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR
PURPOSE OR EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT ANY
WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE
ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD
PARTY.
2.13
Research Term
Extension(s). At J&J’s option,
exercisable by written notice to Arena given no less than
90 days prior to the 2nd anniversary of the Effective Date,
J&J may extend the Research Term by one full year until the 3rd
anniversary of the Effective Date. In the event of such
extension, Arena will devote to the Research Program ***** FTEs
funded by J&J during such additional year of the Research Term,
or such other number of FTEs funded by J&J as the Parties may
agree at that time in writing, subject to J&J’s
compliance with its funding obligations (including any modification
to the per FTE rate) as provided in Section 6.2. Upon
such extension, the JRC will promptly meet and amend the Research
Plan as appropriate to cover the Research Program work to be
conducted during the extension period. Any additional
extensions to the Research Program would be on such terms as agreed
to in writing by the Parties at the time of any such extension.
3.
DEVELOPMENT OF DEVELOPMENT COMPOUNDS
3.1
Selection of Selected Compounds. At any time prior to
the first anniversary of the end of the Research Term, J&J may
by written notice to Arena select a particular Active Compound as a
Selected Compound, up to a maximum of a total of **********
Selected Compounds.
3.2
Development of Compounds. In order for J&J or its
Affiliates to initiate development of any Active Compound, J&J
or its Affiliate will first: (a) have selected such Active
Compound as a Selected Compound (which selection must have occurred
in any event, as provided in Section 3.1, prior to the first
anniversary of the end of the Research Term), and (b) provide
written notice to Arena of the occurrence of Drug Evaluation
Acceptance with respect to such Selected Compound and thereby
notify Arena of J&J’s selection of the compound as a
Development Compound. J&J will use Diligent Efforts to
effect Drug Evaluation Acceptances of such number of Development
Compounds as is commercially reasonable, as soon as
practical. The JSC may also from time to time recommend that
J&J select a particular Active Compound as a Selected Compound
and as a Development Compound. J&J will consider any such
recommendations in good faith, but the decision to select a
particular Active Compound as a Selected Compound and to effect a
Drug Evaluation Acceptance as to such Selected Compound will be
made by J&J in its sole discretion, subject to its compliance
with its diligence obligations under this Section and
Section 3.7. Subject to the terms and conditions of this
Agreement, J&J will control and be responsible for the
worldwide development and for obtaining Regulatory Approvals of
Development Compounds, including all pre-clinical work necessary to
prepare and file INDs covering the Development Compounds (other
than such work that is covered by the Research Plan), the planning
and conduct of clinical trials and related studies of Development
Compounds, the worldwide supply of Development Compounds in
appropriate formulations and packaging for use in development
through Regulatory Approval and the planning, filing and
prosecution of applications for Regulatory Approval. J&J
will use Diligent Efforts to conduct all the tasks and meet on a
timely basis all the objectives and milestones under each
Development
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Plan. At J&J’s request and
expense, Arena will use reasonable efforts to contribute support in
the area of clinical development to support J&J’s
development of Development Compounds, any such efforts
*********************************************
****************************************************************************************************
implementing and conducting each Early Development Plan, except as
otherwise provided in Section 3.6, and for implementing and
conducting each Late Stage Development Plan.
3.3
Early Development Plans. Promptly after J&J (or its
Affiliate) selects a Development Compound, J&J will prepare an
Early Development Plan for such Development Compound, which shall
be submitted to the JSC for review and comment. Each such
Early Development Plan will set forth the specific pre-clinical
tasks to be undertaken and objectives to be achieved in order to
prepare and file INDs covering such Development Compound, the
initial clinical plan and regulatory strategy for the Development
Compound through Phase IIa Clinical Trials, and the timeline and
budget for such development. Each such Early Development Plan
will be considered in good faith by the members of the JSC at the
meeting, with at least 2 members of each Party voting at such
meeting. J&J will be responsible for conducting all the
work under each such Early Development Plan, except as otherwise
provided in Section 3.6, and subject to the assistance of
Arena as contemplated in Section 3.2 and to the possibility
the JSC may agree to allocate certain specific development tasks to
Arena, as agreed between the Parties at the time, which tasks would
be fully funded by J&J. The JSC will be responsible for
updating and amending each Early Development Plan at least
quarterly, based on the progress and results of the applicable
development program, and any relevant progress and results from
development of Development Compounds. For purpose of
assisting the Arena members of the JSC in their function to review
and comment on the Early Development Plans, J&J will provide
Arena a new Development Report (as defined in Section 3.5
below) at least 10 days prior to a JSC meeting, if the most recent
prior Development Report would be more than 75 days old as of the
date of such JSC meeting.
3.4
Late Stage Development Plans. For each Development
Compound that has entered Phase IIb clinical trials, J&J shall
prepare a Late Stage Development Plan for such Development
Compound, which it shall submit to Arena for review and
comment. Each such Late Stage Development Plan will set forth
the clinical plan and regulatory strategy for the Development
Compound through completion of all clinical trials expected to be
needed to seek Regulatory Approval of a Collaboration Product
containing the applicable Development Compound, the regulatory
strategy for seeking such Regulatory Approvals, and the timeline
and budget for such Development Compound. It is anticipated
the J&J will be responsible for conducting all of the work
under each such Late Stage Development Plan, subject to the
assistance of Arena as contemplated in Section 3.2.
J&J will be responsible for updating and amending each Late
Stage Development Plan at least yearly, based on the progress and
results of the applicable development program, and any relevant
progress and results from development of Development Compounds,
which shall be submitted to the Arena for review and comment.
3.5
Ongoing Disclosure Regarding Development. J&J will
keep Arena informed about all of J&J’s efforts to develop
the Development Compounds, including all results and data from such
development efforts, progress towards meeting all goals and
milestones in each Development Plan, significant findings and
developments, any reasons for any delays in meeting milestones or
timelines in any Development Plan, and any proposed changes in the
plan. Such
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disclosures will be made in a written report
(each, a “ Development
Report ”) provided to Arena at least once
semi-annually, or more often at J&J’s election or as
required in Section 3.3. Without limiting the generality
of the foregoing, the Development Reports will contain the
following:
(a)
Summary of development results and data, including progress of
initiation of sites and enrollment of patients in clinical trials
and any significant events occurring in the clinical development
program, including adverse events;
(b)
filing of an IND or NDA with respect to any Development Compound in
any jurisdiction;
(c)
initiation of Phase I Clinical Trials, Phase IIa Clinical Trials,
Phase IIb Clinical Trials, and Phase III Clinical Trials with
respect to any Development Compound in any jurisdiction; and
(d)
identification of significant development results and clinical
trial progress and Regulatory Approvals with respect to Development
Compounds in any jurisdiction.
In
addition, upon request by Arena on reasonable advance notice,
J&J shall make those of its employees with managerial
responsibility over development of Development Compounds who are
informed as to the status, results and plans of the development
programs for the Development Compounds reasonably available at
their respective places of employment to consult with Arena and
answer to the best of their ability all of Arena’s questions
regarding such development programs.
3.6
Arena Conduct of Early Development .
(a)
With respect to the ongoing J&J development program under an
Early Development Plan, if J&J does not comply with its
diligence obligations under Section 3.7(a) with respect to
such Early Development Plan, Arena may, on written notice to
J&J (an “ Early Development
Election ”), elect to assume control of
conducting the Early Stage Development of the applicable
Development Compound under such Early Development Plan. If
Arena makes an Early Development Election as to a particular
Development Compound and its respective Early Development Plan,
then the JSC, and appropriate additional representatives of each
Party with development expertise, will meet as soon as possible
thereafter and agree on a transition plan for Arena to undertake
the control of such Early Development Plan. The Parties shall
each act in good faith at such meeting to achieve a plan that
effects a transition that is as smooth and efficient and quick as
possible. As to such Early Development Plan, Arena shall
immediately direct and control the ongoing conduct of development
of the Development Compound under the terms of such Early
Development Plan using its own resources or a combination of Arena
and J&J resources as the Parties agree pursuant to the
transition plan.
(b)
All Development Costs incurred by either Party in the conduct of
any Early Development Plan for which Arena has made an Early
Development Election shall be shared ** **************************
after such election. Within 20 Business Days of the end of
each month during which such Arena-controlled development is
ongoing, each Party shall provide to the other a detailed
accounting of all Development Costs incurred by such Party in its
conduct of
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such development efforts in accordance with the
applicable Early Development Plan(s) and Arena’s
direction. The Parties shall then reconcile these reports
within 20 Business Days of the end of such month, with the Party
that **************************** of the total of such Development
Costs incurred by the Parties during the month paying the other
Party, within 20 Business Days of such reconciliation, an amount so
that each Party bore an equal share of such Development
Costs.
3.7
Development Diligence.
(a)
J&J will use Diligent Efforts to conduct the development
(including clinical trials and other studies) on Development
Compounds during Early Stage Development, to conduct all the tasks
and meet on a timely basis all the objectives and milestones under
each Early Development Plan, and in such a manner as to achieve
successful conclusion of Phase 2a Trials of the Development
Compounds in Early Stage Development as soon as practicable
throughout the Territory where it is commercially appropriate to do
so. J&J shall achieve the following regulatory milestone
events with respect to each Development Compound by the “Time
to Complete” dates indicated below, subject to any applicable
extensions of such deadlines as provided in the following (the
“Diligence Milestones”):
|
Diligence
Milestones
|
|
Time to
Complete
|
|
|
|
|
|
1. Provide First dose
to fifth patient or volunteer in Phase I Clinical Trial of a
Development Compound
|
|
Within twenty-four (24)
months from Drug Evaluation Acceptance of a Development
Compound.
|
|
|
|
|
|
2. Provide first dose
to fifth patient in Phase IIa Clinical Trial of a Development
Compound
|
|
Within twenty-four
months (24) of achieving Milestone 1.
|
(b)
If, notwithstanding J&J’s exercise of Diligent Efforts,
J&J is materially delayed in its ability to pursue Early Stage
Development of a Development Compound due to matters outside of its
control (such as delays imposed for the reason set forth below),
and such delays cause J&J to be unable to meet one of the above
milestones by the applicable deadline date, then J&J may notify
Arena of the specific delay and the causes of such delay.
Arena and J&J shall then discuss the matter in good faith and
agree in writing on a reasonable extension of the applicable
deadline (and, if appropriate, reasonable extensions of the
subsequent deadlines if any) for a period reasonably sufficient to
resolve the problem, including if necessary as needed to
identifying a substitute Development Compound. Without
limitation, the following are examples of the types of situations
in which J&J shall be entitled to seek such extension: If
J&J, after Drug Evaluation Acceptance of a Development
Compound, initiates development of GLP synthesis, toxicology
studies, ADME studies, formulation or Phase I Clinical Trials of a
Development Compound, and such Development Compound fails in such
development or is delayed in such development activities, either
(i) for reasons that are out of J&J’s control and
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could not reasonably have been anticipated, or
(ii) because of unanticipated new or different requirements imposed
by a regulatory agency.
(c)
If the Parties disagree as to whether J&J is entitled to an
extension of the Time to Complete for any Milestone specified in
the above table, or cannot agree on the length of a reasonable
extension, then upon the written request by either Party such shall
be resolved in accordance with Article 13. However,
notwithstanding any other provision of Article 13, the
arbitration shall be concluded within sixty (60) days after the
Panel of Arbitrators has been appointed in accordance with
Section 13.2, and the time periods recited in
Section 13.2 shall be reset accordingly to achieve the sixty
(60) day completion date. After the commencement of Phase IIa
Clinical Trials for a particular Development Compound,
J&J’s diligence obligations as to such Development
Compound shall be that specified in the first sentence of
Section 3.7(a) and in Section 3.7(e).
(d)
If in conducting Early Stage Development of a Development Compound,
J&J fails to meet any Diligence Milestone by the applicable
deadline for such development program (as such deadline may be
extended by written agreement of the Parties), then Arena may elect
to proceed under Section 3.6 above. If J&J otherwise
is not exercising Diligent Efforts in Early Stage Development, then
Arena may submit the matter for resolution under the provisions of
Article 13.
(e)
J&J will use Diligent Efforts to conduct the development
(including clinical trials and other studies) of Development
Compounds during Late Stage Development, in such a manner as to
obtain Regulatory Approval of Collaboration Products as soon as
practicable, in each country and regulatory jurisdiction throughout
the Territory where it is commercially appropriate to do so.
If Arena believes that J&J is not complying with the above
diligence obligations, then Arena may submit the matter for
resolution under the provisions of Article 13.
3.8
Regulatory Matters. J&J will have the sole authority
and responsibility, at its cost and expense, but subject to the
following terms, for all regulatory matters relating to conducting
clinical trials on Development Compounds and seeking and obtaining
Regulatory Approvals, including: (a) filing, maintaining and
updating any INDs and NDAs for Development Compounds and
Collaboration Products (as applicable), (b) reporting all adverse
drug experience events and serious adverse drug experience events,
to the extent required and on the applicable report forms, to the
FDA and/or other appropriate governmental or regulatory
authorities, (c) submitting or filing with the FDA the required
product labeling and related marketing materials for Collaboration
Products, and (d) handling medical and technical complaints and
disputes with the FDA, patients and physicians regarding any
Collaboration Product. J&J (through the JSC, if it is
still meeting) will consult with Arena in all stages of planning
for and seeking INDs and Regulatory Approvals and in preparing NDAs
for the Collaboration Products throughout the Territory.
J&J will provide Arena with regular reporting on the status and
progress in its efforts to obtain INDs and Regulatory Approvals,
and of any material communications with the FDA. Arena will
report in writing to J&J within five calendar days (and within
24 hours in the case of the death of or serious injury to a subject
or patient taking a Collaboration Product) any information that
comes into Arena’s possession relevant to J&J’s
responsibilities under this Section 3.8 and will provide
J&J with such assistance as is reasonably requested by J&J
from
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time to time to perform its responsibilities
under this Section 3.8, provided that the actual internal and
external costs of Arena associated with such assistance will be
reimbursed by J&J.
3.9
Product Recalls. J&J (and its Affiliates and
Sublicensees, as applicable) will have sole authority over and
responsibility for any and all proposed, recommended or required
recalls of Collaboration Products throughout the Territory.
4.
COMMERCIALIZATION OF COLLABORATION PRODUCTS
4.1
Exclusive Commercialization Rights. J&J will use
Diligent Efforts to seek to obtain Regulatory Approval of
Collaboration Products as soon as practicable, in each country and
regulatory jurisdiction throughout the Territory where it is
commercially reasonable to do so. Subject to the foregoing,
and to the other terms and conditions of this Agreement (including
Section 3.6), J&J will have the sole decision on the
Development Compounds (if any) it will include in Collaboration
Products for which it files regulatory applications seeking
Regulatory Approvals, and will control and have exclusive rights
over the worldwide commercialization of all approved Collaboration
Products, including the worldwide supply of Collaboration Products
for use in all such commercialization activities. J&J
will be solely responsible for all costs and expenses in the
commercialization of Collaboration Products.
4.2
Commercial Diligence. For each Collaboration Product
that achieves Regulatory Approval in a particular country or
jurisdiction, J&J will use Diligent Efforts to commercialize
and sell the Collaboration Product in such country or
jurisdiction. If Arena believes that J&J is not complying
with the above diligence obligations, then Arena may submit the
matter for resolution under the provisions of Article 13,
including Section 13.4.
4.3
Commercialization Efforts Reporting. J&J will keep
Arena informed about all of J&J’s efforts to
commercialize the Collaboration Products, including summaries of
J&J’s (and its Affiliates’ and Sublicensees’)
global marketing plans (as updated), progress towards meeting
the goals and milestones in the global marketing plan,
significant developments in the commercialization of the
Collaboration Products, any reasons for any deviations or variances
(either in time or in sales or other numerical figures) in meeting
sales projections, milestones or timelines in any such global
marketing plans, and any proposed changes in the marketing
plans. Such disclosures will be made in a written report
(each, a “ Marketing
Report ”) provided to Arena at least once
every six months while Collaboration Products are being sold
anywhere in the Territory.
Upon request by Arena on reasonable advance
notice, J&J shall make those of its and its Affiliates’
employees with managerial responsibility over promotion, marketing
and sales of Collaboration Products who are informed as to the
status, results and plans of the commercialization efforts for the
Collaboration Products reasonably available at their respective
places of employment to consult with Arena and answer to the best
of their ability all of Arena’s questions regarding such
commercialization efforts and results. J&J shall also
require that its Sublicensees make their applicable employees
available to meet with Arena on the same basis as the
foregoing.
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5.
LICENSES AND RELATED RIGHTS AND OBLIGATIONS
5.1
License Grants.
(a)
By Arena.
(i)
Research License. Subject to the terms and conditions of
this Agreement, Arena hereby grants to J&J and its Affiliates,
during the Research Term and for one year thereafter, a
co-exclusive, worldwide, royalty-free license, without the right to
sublicense, under the Arena Know-How, the Arena Research Patents
and Arena’s interest in the Joint Patents solely to perform
J&J’s obligations under the Research Plan to seek to
identify and to conduct research on Active Compounds.
(ii)
Development License. Subject to the terms and conditions
of this Agreement, Arena hereby grants to J&J an exclusive
(even as to Arena, except for Arena’s rights as provided in
Article 3), worldwide, royalty-free license, with the right to
sublicense to J&J Affiliates, under the Arena Technology and
Arena’s interest in the Joint Patents solely to conduct
development on Development Compounds, and to make, have made, and
use such Development Compounds as needed for such development
efforts. J&J will at all times be responsible for the
performance of its Sublicensees and Third Party contractors under
this Agreement.
(iii)
Commercialization License. Subject to the terms and
conditions of this Agreement, Arena hereby grants to J&J an
exclusive (even as to Arena), worldwide, royalty bearing license,
with the right to sublicense, under the Arena Know-How, Arena
Commercialization Patents and Arena’s interest in the Joint
Patents to make, have made, use, sell, offer for sale, and import
Collaboration Products in the Field of Use. J&J will at
all times be responsible for the performance of its Sublicensees
and Third Party contractors under this Agreement.
(b)
By J&J. Subject to the terms and conditions of this
Agreement, J&J hereby grants to Arena and its Affiliates,
during the Research Term, a non-exclusive, worldwide, royalty-free
license, without the right to sublicense, under the J&J
Know-How and J&J Research Patents and J&J’s interest
in the Joint Patents solely to perform Arena’s obligations
under the Re
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