Exhibit 10.1

EXECUTION COPY

COLLABORATION AND LICENSE AGREEMENT

between

ISIS PHARMACEUTICALS, INC.

and

ORTHO MCNEIL, INC.

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COLLABORATION AND LICENSE AGREEMENT

THIS COLLABORATION AND LICENSE AGREEMENT (the “Agreement” ) is made and entered into this September 12, 2007 (the “Execution Date” ), by and between Ortho McNeil, Inc., a New Jersey Corporation ( “OMI” ) having a place of business at 1000 US Route 202, Raritan, New Jersey, 08869 and Isis Pharmaceuticals, Inc. , a Delaware Corporation ( “Isis” ) having a place of business at 1896 Rutherford Road, Carlsbad, California 92008. OMI and Isis each may be referred to herein individually as a “Party,” or collectively as the “Parties.”

WHEREAS , Isis possesses certain patent rights, know-how and technology with respect to certain oligonucleotide based therapeutic compounds;

WHEREAS , Isis and OMI each desire to collaborate (the “Collaboration” ) to conduct:

•                                                                   a Development Program to advance ISIS 325568 and ISIS 377131 through human clinical trials and ultimately Commercialize them as Products; and

•                                                                   a Research Program to (i) [***] and (ii) at OMI’s option [***], in each case for OMI to advance into human clinical trials and ultimately Commercialize as Products.

WHEREAS , OMI will have exclusive rights to ISIS 325568 and ISIS 377131 and Products in the Research Program and (unless otherwise specified in the R&D Plan) will be solely responsible for the clinical development and Commercialization of Products worldwide, in each case on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties do hereby agree as follows.

ARTICLE 1 - DEFINITIONS

The terms used in this Agreement with initial letters capitalized, whether used in the singular or the plural, will have the meaning set forth in APPENDIX 1 , or if not listed in APPENDIX 1 , the meaning designated in places throughout the Agreement.

ARTICLE 2 -
GRANT OF RIGHTS; EXCLUSIVITY

Section 2.1                                                                                    License Grants to OMI.

(a)                                                                                                                                   Exclusive License. Subject to the terms and conditions of this Agreement, Isis hereby grants to OMI a worldwide, exclusive license, with the right to grant sublicenses as set forth in Section 2.2(a) below, under the Product Specific Patents and Product Specific Know-How to research, develop, make, have made, use, gain regulatory approval, commercialize, sell, offer for sale, have sold, export and import Compounds and Products for all uses.

(b)                                                                                                                                  Nonexclusive License. Subject to the terms and conditions of this Agreement and the limitations set forth in Section 2.4 below, Isis hereby grants to OMI a worldwide, nonexclusive license, with the right to grant sublicenses as set forth in Section 2.2 below, under the Isis Know-How, Isis Program Patents, the Isis Core Technology Patents and the Isis Manufacturing and Analytical Patents to research, develop, make, have made, use, gain regulatory approval, commercialize, sell, offer for sale, have sold, export and import Compounds and Products for all uses.

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(c)                                                                                                                                   Nonexclusive License to Manufacturing Improvements . Subject to the terms and conditions of this Agreement, the Parties grant to each a nonexclusive license to those Manufacturing Improvements provided in Sections 4.7.1 and 4.7.2, subject to the terms and restrictions set forth therein.

Section 2.2                                                                                    Sublicenses.

(a)                                                                                                                                   All Sublicenses. The licenses granted to OMI under Section 2.1 are sublicensable only in connection with a sublicense of a Compound or Product to any Affiliate of OMI or to any Third Party, in each case for the continued Research, Development and Commercialization of such Compound or Product in accordance with the terms of this Agreement.

(b)                                                                                                                                  Isis Manufacturing and Analytical Technology . In addition, OMI (or its Affiliate or Licensee) may only sublicense the Isis Manufacturing and Analytical Technology, if OMI (or its Affiliate or Licensee) (i) uses appropriate precautions and includes provisions in such sublicense to protect the Isis Know-How or Product Specific Know-How such that the sublicensee will not use any Isis Know How or Product Specific Know-How to manufacture any other compounds or products for Third Parties and (ii) promptly notifies Isis in writing specifically identifying the Isis Manufacturing and Analytical Technology to be disclosed to such Third Party and identifying by name such Third Party. At Isis’ reasonable request, OMI will enforce the provisions contemplated by clause (i) above against any sublicensee who is in breach of such provisions.

Section 2.3                                                                                    Exclusivity. During the Collaboration Term and continuing thereafter so long as the exclusive license granted to OMI under Section 2.1(a) is in effect and subject to the limitations set forth in Section 2.4 below, Isis agrees that it will not work independently of this Agreement for itself or any Third Party (including the grant of any license to any Third Party) with respect to discovery, research, development and/or commercialization activities with respect to ASOs whose primary mechanism of action is through its hybridization to  Collaboration Gene Target mRNA or pre-mRNA or products containing such ASOs. Isis agrees that it will not work with a Third Party on research and development relating to (i) a Collaboration Gene Target or (ii) during the Research Term, a gene target that is part of the Target Pool, in each case, unless such work is conducted in performance of the R&D Plan.

Section 2.4                                                                                    License Conditions; Limitations.

(a)                                                                                                                                   During the Research Term, in order to maintain the license granted to OMI under Section 2.1, OMI must meet its obligations to fund and perform its obligations under the Research Program and Development Program in accordance with Section 3.5 and 6.2. If OMI fails to meet such obligations, Isis will have the right, consistent with and pursuant to the provisions of Section 10.3, to terminate the Agreement, including the licenses granted to OMI under Section 2.1.

(b)                                                                                                                                  After the expiration of the Collaboration Term, in order to maintain the license granted to OMI under Section 2.1, on a Compound-by-Compound or Product-by-Product basis, OMI must meet its obligations to use Commercially Reasonable Efforts under Section 5.1 for the applicable Compound or Product. If OMI fails to meet its obligations to use Commercially Reasonable Efforts under Section 5.1 for a particular Compound or Product, Isis will have the right, consistent with and pursuant to the provisions of Section 10.4, to terminate the Agreement with respect to such Compound or Product, including the licenses granted to OMI under Section 2.1.

(c)                                                                                                                                   The nonexclusive license and exclusivity granted under Section 2.1(b) and 2.3 are subject to and limited by the (i) Isis In-License Agreements and (ii) Prior Third Party Agreements, each as listed in APPENDIX 6 attached hereto.

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(d)                                                                                                                                  In addition, notwithstanding any other provision of this Agreement, Isis retains the right to grant Permitted Licenses.

ARTICLE 3 -
COLLABORATION

Section 3.1                                                                                    Objective. The Parties will collaborate in carrying out a program to Develop Compounds directed to the Collaboration Gene Targets and ultimately Commercialize them as Products. The Development Program is outlined in the R&D Plan and includes the conduct of the [***] for GCGR and the [***] for GCCR (the “Development Program” ). In addition, the Parties will collaborate in carrying out a research program to (i) [***] and (ii) at OMI’s option, to [***] as provided for in the R&D Plan  (the “Research Program” ).

Section 3.2                                                                                    R&D Plan. The Collaboration will be carried out in accordance with a written research and development plan (the “R&D Plan” ) and corresponding written research and development budget (the “R&D Budget” ). The initial R&D Plan and R&D Budget, that have been agreed to by the Parties as of the Effective Date (as evidenced by separate signature of each Party on the cover page of the R&D Plan) are hereby incorporated by reference into this Agreement. The purpose of the R&D Plan is to detail the responsibilities and activities of Isis and OMI with respect to carrying out the Research Program and the Development Program. The R&D Plan will include a description of the specific activities to be performed by the Parties in support of the Collaboration, the estimated number of Isis FTEs to perform such activities and projected timelines for completion of such activities. The R&D Plan will include a list of subcontractors and consultants that Isis plans to use to fulfill its obligations under the R&D Plan. The R&D Budget will contain the estimated costs ([***]) associated with the tasks outlined in the R&D Plan. The R&D Plan and R&D Budget may only be amended with the unanimous approval of the R&D Committee (as permitted by the R&D Committee Charter). The R&D Plan and R&D Budget will be updated and amended from time to time, but at least annually. Therefore, [***] of each year of the Collaboration Term ([***]), the R&D Committee will review and update the R&D Plan and R&D Budget. In the event that the Parties cannot agree to updates or amendments to the R&D Plan and R&D Budget, the Parties will first pursue the dispute resolution provisions of the [***] APPENDIX 5 and thereafter follow the provisions of section 14.4.1.

Section 3.3                                                                                    Collaboration Term.

3.3.1                                                                                                                      The Development Program will begin on the Effective Date and will end [***] from the Effective Date (the “Development Program Term” ). In the event that Isis has not completed its responsibilities under the Development Program within the Development Program Term, OMI, at its sole discretion, may elect to take sole responsibility for the Development of Compounds and Isis will cooperate fully in the transfer of data, protocols and the like to facilitate OMI’s activities. The Research Program will be carried out during the period following the Effective Date and ending on the [***] of the Effective Date (the “Research Term” ).

3.3.2                                                                                                                      OMI will have the option to extend the Research Term for [***] of the Effective Date unless extended per Section 3.3.4 or 3.6.2. For each extension of the Research Term, the Parties will negotiate in good faith a mutually agreed amendment and restatement of the R&D Plan and R&D Budget. For each extension, if the Parties fail to reach agreement on a mutually agreed amendment and restatement of the R&D Plan and R&D Budget by the end of the then effective Research Term, there will be no further extension to that Research Term.

3.3.3                                                                                                                      In order to exercise its option to extend the Research Term, OMI must provide Isis a written notice exercising OMI’s right to extend the Research Term at least [***]s prior to the scheduled expiration of the Research Term. If OMI does not provide such written notice, the Research Term will end when scheduled. In addition, no earlier than the [***] prior to the scheduled expiration of the Research Term, Isis may request in writing from OMI a nonbinding, good faith indication of whether or not OMI intends to extend the Research Term. In

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such event, OMI will provide such nonbinding, good faith indication to Isis at least [***] prior to the scheduled expiration of the Research Term.

3.3.4                                                                                                                      In addition, if a new gene target is designated a Selected Gene Target, as defined in Section 3.6 of this Agreement the Parties will negotiate in good faith an amendment and restatement of the R&D Plan and R&D Budget, including if necessary an extension of the Research Term to allow for completion of the planned Research on such new Selected Gene Target. If no agreement is reached on the amendment and restatement of the R&D Plan and R&D Budget under this Section 3.3.4 then the R&D Plan proposed by OMI will take effect; however, in no event will Isis be required to allocate resources from the current R&D Plan for the benefit of the amendment and restatement of the R&D Plan and R&D Budget. In any event, if Isis does not wish to participate in a Development Program for the Selected Gene Target, OMI may, at its sole option, continue to work on the Selected Gene Target through the end of the Development Program Term and proceed consistent with the provisions of Section 3.6.6.

Section 3.4                                                                                    R&D Committee. The Parties will establish and maintain a joint research and development committee (the “R&D Committee” ) to oversee the conduct of the Collaboration, including, but not limited to approving any changes to the R&D Plan and R&D Budget. The R&D Committee will be established, operated and governed in accordance with the policies and procedures set forth in APPENDIX 5 attached hereto [***] may be amended with the unanimous approval of the R&D Committee members.

As needed, the R&D Committee will establish subcommittees and working groups that will report to the R&D Committee to further the objectives of the Collaboration.

The R&D Committee and any subcommittees and working groups established by the R&D Committee will dissolve at the end of the Collaboration Term.

Section 3.5                                                                                    Collaboration Staffing; Funding; and Resources.

3.5.1                                                                                                                      Staffing. OMI will fund at the FTE Rate, and Isis will supply, Isis FTEs during the Collaboration Term to perform activities in support of and in accordance with the then-current R&D Plan.

3.5.2                                                                                                                      Funding; Expenses.

(a)                                                                                                                                   Within [***] of receipt of invoice from Isis in the form provided as APPENDIX 7 , but not sooner than the Effective Date, OMI will pay Isis $[***] to reimburse Isis for the [***]. In addition, OMI will reimburse Isis for any [***] (such reimbursements to be added to and paid for under the invoice under Section 3.5.2(b) below).

(b)                                                                                                                                  Within [***] of receipt of an invoice from Isis in the form provided as APPENDIX 7 , but not sooner than the Effective Date, OMI will pay Isis for the OMI-funded Isis FTEs assigned to the R&D Plan in accordance with Section 3.5.1 for the period of time commencing on the Effective Date and ending on the last day of the Third Calendar Quarter of [***].

(c)                                                                                                                                   Thereafter, no earlier than [***] before the [***] of any Calendar Quarter during the Collaboration Term, Isis will invoice OMI in the form provided as APPENDIX 7 , and within [***] of receipt of such invoice from Isis, OMI will pay Isis for the OMI-funded Isis FTEs assigned to the R&D Plan in accordance with Section 3.5.1 for such Calendar Quarter (a prorated amount will be payable for any portion of a Calendar Quarter). Such FTE payment obligation of OMI will be subject to Isis providing such qualified FTE scientists. No later than [***] following the end of each Calendar Quarter, Isis will provide OMI with a report of the number of FTEs assigned to the Collaboration with a summary of their activities. Any overpayment by OMI may be applied by OMI to the funding of Isis FTEs in a subsequent Calendar Quarter.

(d)                                                                                                                                  Isis will bear its own costs, including costs related to research supplies, consumables and [***], in performing its obligations under the R&D Plan, provided that OMI will reimburse Isis for (i) [***] expenses identified in the R&D Budget ( “Program Costs” ) and

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(ii) the costs of [***]. The Program Costs may include, for example, [***], but will not include routine laboratory supplies. For each project under the R&D Plan, the R&D Committee will set a budget for the Program Costs. At the end of each Calendar Quarter during the Research Term, Isis will invoice OMI in the form provided as APPENDIX 7 for the Program Costs incurred during such Calendar Quarter, provided, however , that (x) for any particular item of such cost in excess of [***] of the amount allocated for such item in the budget will require the written approval of OMI prior to being incurred and (y) OMI will not be responsible for payment for those items of such cost in excess of [***] of the amount allocated for such item in the budget that are incurred by Isis without OMI’s prior written consent (which consent can be made by the R&D Committee, as evidenced by written minutes). OMI will pay any correct invoices within [***] after receipt thereof. Notwithstanding the foregoing , in no event shall the R&D Budget exceed [***] of the budgeted costs in a Calendar Quarter without the R&D Committee’s approval, except to the extent any Program Costs specifically allocated to a different Calendar Quarter in the R&D Budget are actually incurred in the Calendar Quarter in question.

Section 3.6                                                                                    Target Pool . The Target Pool, as defined herein ( “Target Pool” ),  identifies up to [***] gene targets including the gene targets selected for collaborative Research, Development and Commercialization under the Research Program (each such gene target is a “Selected Gene Target” ). The number of Selected Gene Targets is initially limited to [***], but this limit may be increased as contemplated by clause (iii) of Section 3.6.2 below or upon mutual written agreement of the Parties. The gene targets that are part of the Target Pool (including which of such gene targets are the Selected Gene Targets and whether such gene target is in “Stage 1” or “Stage 2” under the R&D Plan) will be listed on APPENDIX 12, which may be updated from time to time by the Parties in accordance with this Agreement. OMI will have [***] following the Effective Date to designate the initial gene targets it wants to place in the Target Pool. In addition, OMI, at a minimum, must select the first [***] Selected Gene Targets on or before the Effective Date.

3.6.1                                                                                                                      Target Substitution Procedures . At any time during the Research Term the Parties may mutually agree in writing to substitute and replace a gene target from the Target Pool for an existing Selected Gene Target. In addition, OMI can unilaterally (i.e. without Isis’ agreement) substitute a gene target from the Target Pool for an existing Selected Gene Target at any time during the Research Term; provided however , that OMI is only allowed one such unilateral substitution in any [***] period unless OMI is making a substitution pursuant to an Inquiry Response under Section 3.6.2 below or OMI is substituting to replace a Selected Gene Target for which OMI has Designated a Clinical Candidate (collectively, the “Substitution Conditions” ). OMI will provide Isis with written notice of its intent to substitute, indicating which Selected Gene Target it wishes to substitute out and which new gene target from the Target Pool (the “Proposed Substitution Target” ) it wishes to substitute in. Provided OMI has satisfied the Substitution Conditions, at such time, the Proposed Substitution Target will become a Selected Gene Target and the gene target substituted out will no longer be considered part of the Target Pool or a Collaboration Gene Target, Isis’ obligations (including but not limited to Section 2.3) and OMI’s licenses under this Agreement with respect to such gene target and any ASOs targeting such gene targets will terminate. In such event, OMI will be able to add a new gene target to the Target Pool in accordance with Section 3.6.3 below.

3.6.2                                                                                                                      Third Party Inquiries . If during the Research Term, Isis receives a [***] from a Third Party to obtain a license from or collaborate with Isis regarding a gene target that is in the Target Pool but is not a Selected Gene Target (a “Requested Target” ), Isis will promptly notify OMI in writing regarding such request (without any requirement to identify such Third Party) (an “Inquiry Notice” ). OMI will have [***] from receiving an Inquiry Notice to notify Isis in writing whether OMI wishes to (i) remove such Requested Target from the Target Pool, (ii) substitute out a Selected Gene Target for such Requested Target in accordance with Section 3.6.1 above, or (iii) mutually agree with Isis upon an appropriate expansion to the R&D Plan and

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R&D Budget such that the R&D Plan includes such Requested Target as a [***] (or [***], as the case may be) Selected Target (each such notice, an “Inquiry Response” ). If OMI provides Isis with an Inquiry Response contemplated by subpart (i) above or fails to provide Isis with an Inquiry Response within [***] of receiving an Inquiry Notice, the Requested Target will no longer be part of the Target Pool, will no longer be considered a Collaboration Gene Target, Isis’ obligations under this Agreement with respect to such Requested Target (including but not limited to Section 2.3) will terminate and OMI will be able to add a new gene target to the Target Pool in accordance with Section 3.6.3 below. If OMI provides Isis with an Inquiry Response contemplated by subpart (iii) above, Isis and OMI will mutually agree upon an appropriate expansion to the R&D Plan and R&D Budget such that the R&D Plan includes such Requested Target, in which event the Requested Target will be considered a Selected Gene Target.

3.6.3                                                                                                                      Adding Targets to Target Pool . If during the Research Term and as a result of Sections 3.6.1 or 3.6.2 above or because OMI has Designated as a Clinical Candidate a Compound to a Selected Gene Target, the Target Pool has less than [***] gene targets, OMI may add a new gene target to the Target Pool by providing Isis with a written notice (the “Request Notice” ) of the gene target it wishes to add to the Target Pool (the “Proposed Target” ). The Request Notice will include the gene name, the NCBI accession number or nucleic acid sequence for the Proposed Target. Within [***] of receipt of the Request Notice, Isis will give OMI written notice (i) stating if any of the criteria set forth in clauses (a) through (c) below applied to such Proposed Target at the time of Isis’ receipt of the Request Notice and (ii) fully disclosing all relevant Isis In-Licensed Agreements and prior Third Party Agreements and other potential encumbrances known by Isis and related to the Proposed Target ( “Target Encumbrances” ). If, at such time, the Proposed Target is (a) subject to Isis’ own internal program pursuant to which Isis has identified a lead compound, (b) encumbered by a contractual obligation between Isis and a Third Party that would preclude Isis from collaborating with OMI under this Agreement or from granting a license under Section 2.1 with respect to the Proposed Target, or (c) the subject of a [***] Isis has received from a Third Party regarding a potential license or collaboration, then, in each case, the Proposed Target will be rejected and will not become a part of the Target Pool. If the Proposed Target is rejected, OMI can request another gene target in accordance with the terms of this Section 3.6.3. If the Proposed Target is not rejected, the Proposed Target will become a member of the Target Pool; provided, however , that if the Proposed Target has any Target Encumbrances (and Isis has fully disclosed such Target Encumbrances to OMI), before such Proposed Target can become a Selected Gene Target, OMI must agree in writing (within [***] of receiving from Isis the description of such Target Encumbrances) to assume all applicable Target Encumbrances for such Proposed Gene Target. Target Encumbrances assumed by OMI under this Section will be considered Isis Third Party Payments under Section 6.5.2. In addition, whenever a gene target becomes part of the Target Pool, the R&D Committee will agree whether a Compound targeting such gene target is in [***] as set forth in the R&D Plan.

3.6.4                                                                                                                      Lapse of Third Party Interest . Notwithstanding the provisions of Section 3.6.2 and 3.6.3, if any gene target is either removed from the Target Pool pursuant to clause (i) of Section 3.6.2 or not included in the Target Pool pursuant to clause (c) of Section 3.6.3 and the proposed transaction/negotiation has not, within [***] of such removal or rejection resulted in a signed agreement preventing Isis from including such gene target in the Target Pool, Isis will notify OMI in writing. In such event, but within the [***] following receipt of such notice, OMI will have the right to include such gene target in the Target Pool in addition to the gene targets already in the Target Pool even if it increases the size of the Target Pool above [***] gene targets.

3.6.5                                                                                                                      Confidentiality . The fact that OMI has included a particular gene target in the Target Pool or has selected a gene target as a Selected Gene Target is Confidential Information of OMI.

3.6.6                                                                                                                      End of Research Term . Upon the expiration of the Research Term, any gene targets in the Target Pool that are not Selected Gene Targets will no longer be considered a Collaboration Gene Target and Isis’ obligations under this Agreement with respect to such gene

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targets (including but not limited to Section 2.3) will terminate. In addition, within [***] following the end of the Research Term, if a Research Compound targeting a Selected Gene Target has not satisfied the Designation of a Compound as Clinical Candidate, then such Selected Gene Target will no longer be considered a Collaboration Gene Target. Isis’ obligations (including but not limited to Section 2.3) and OMI’s licenses under this Agreement with respect to such gene target and any ASOs targeting such gene target will then terminate, and, subject to Article 11, Isis will own any data generated under the R&D Plan for such gene target and any ASOs targeting such gene target. OMI will have the right to use any data generated under the R&D Plan for its own internal research purposes that are unrelated to any Discontinued Products.

Section 3.7                                                                                    Collaboration Records. Each Party and its contractors will maintain complete and accurate records of all work conducted in the performance of the Collaboration and all results, data, inventions and developments made in the performance of the Collaboration. Such records will be in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Isis will maintain appropriate records sufficient to document the work performed by each of the individuals comprising the FTEs working in support of the Collaboration and the time such individuals spent working in support of the Collaboration. Upon reasonable prior written notice, Isis will provide OMI the right to inspect such records, and will provide copies of all requested records, to the extent reasonably required for the performance of OMI’s rights and obligations under this Agreement. Upon reasonable prior written notice, and solely with respect to Discontinued Products, OMI will provide Isis the right to inspect such records, and will provide copies of all requested records, to the extent reasonably required for the performance of Isis’ rights and obligations under this Agreement. In each case, each Party will maintain such records and the information it receives from the other Party in confidence in accordance with Article 8 hereof and will not use such records or information except to the extent otherwise permitted by this Agreement.

Section 3.8                                                                                    Disclosure of Results of Research Program and Development Program .  The results of all work performed by the Parties as part of the Collaboration will be promptly disclosed to the other Party in a reasonable manner as such results are obtained. In addition, Isis will periodically provide OMI with written reports of the work performed under the Collaboration and the results achieved by Isis. Isis and OMI will provide reports and analyses at each R&D Committee meeting, and more frequently on reasonable request by the R&D Committee, detailing the current status of the Research Program and Development Program. In addition, on reasonable request by a Party, the other Party will make presentations of its activities in the performance of the Collaboration to inform such Party of the details of the work done in the performance of the Collaboration. The results, reports, analyses and other information regarding the Collaboration disclosed by one Party to the other Party pursuant hereto may be used only in accordance with the rights granted and other terms and conditions under this Agreement. Upon reasonable request by OMI, Isis will provide OMI with additional data, results and other information with respect to the work performed by Isis in the performance of the Collaboration. Any reports required, excluding reports needed for submission to a Regulatory Agency, under this Section 3.8 may take the form of and be recorded in minutes of the R&D Committee that will contain copies of any slides relating to the results and presented to the R&D Committee. Reports needed to support regulatory submissions and updates to a Regulatory Agency will be provided [***] and in a format as agreed upon by the R&D Committee or designated sub committee.

In addition, within [***] of OMI’s request, Isis will transfer to OMI copies of all data, results, and information related to testing and studies of the Compounds (including analytical test results and non-clinical pharmacology and safety data) in the possession of Isis to the extent such data, results and/or information is necessary or useful for the continued

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Development and Commercialization of Products, including but not limited to any and all information directly relating to manufacturing methods (including related analytical methods) of the Compounds or Products.

Section 3.9                                                                                    Research Efforts; Resources, Scientific Manner. Each Party will use Commercially Reasonable Efforts to perform the Collaboration, including its responsibilities under the R&D Plan.

3.9.1                                                                                                                      Throughout the Collaboration Term, Isis will assign no less than the number of FTE qualified scientists specified in the R&D Plan to perform the work set forth in the then-applicable R&D Plan. The mixture of skills and levels of such FTEs will be appropriate to the scientific objectives of the Research Program or Development Program (as applicable).

3.9.2                                                                                                                      Each Party will maintain laboratories, offices, administrative support and all other facilities at its own expense and risk necessary to carry out its responsibilities under the Collaboration pursuant to the R&D Plan. Each Party agrees to make its employees reasonably available at their respective places of employment to consult with the other Party on issues arising during the performance of the Collaboration. OMI and Isis will cooperate with each other in carrying out the Collaboration, and each Party will contribute its relevant know-how and experience necessary to carry out the Collaboration.

3.9.3                                                                                                                      The Collaboration will be conducted by each Party in good scientific manner, and in compliance with all applicable GCP, GLP and GMP, and applicable legal requirements, to attempt to achieve efficiently and expeditiously the Objectives of the Collaboration. Each Party will comply with all Applicable Laws, in the performance of work under this Agreement.

3.9.4                                                                                                                      Isis will not perform any of its obligations under the R&D Plan through one or more subcontractors or consultants, without the prior written approval of OMI, such approval not to be unreasonably withheld. OMI will promptly notify Isis regarding any Third Party OMI uses to conduct research under the R&D Plan or that OMI transfers Compounds or Products to, including identifying such Third Party.

Section 3.10                                                                             Materials Transfer. In order to facilitate the Collaboration, either Party may provide to the other Party certain materials for use by the other Party in furtherance of the Collaboration. All such materials will be used by the receiving Party in accordance with the terms and conditions of this Agreement solely for purposes of performing its rights and obligations under this Agreement, and the receiving Party will not transfer such materials to any Third Party unless expressly contemplated by this Agreement or upon the written consent of the supplying Party. Any materials provided by OMI to Isis in support of the Collaboration , including but not limited to any biological materials with respect to screening assays, including any progeny, expression products, mutants, replicates, tissue samples, cells, derivatives and modifications thereof , (such materials being individually and collectively referred to as the “OMI Materials” ) will be used by Isis solely for purposes of performing the Collaboration and for no other purpose, and any remaining OMI Materials (including, as applicable, any progeny, expression products, mutants, replicates, tissue samples, cells, derivatives and modifications thereof ) will be returned to OMI (or destroyed as may be requested by OMI in writing) promptly following the end of the Research Term or earlier upon request by OMI. All information related to such OMI Materials will be OMI Confidential Information. All such materials must be used with prudence and appropriate caution in any experimental work, since all of their characteristics may not be known. Isis recognizes that OMI’s obligations under the R&D Plan will necessarily involve the transfer of materials to Third Party contractors and that is expressly contemplated by this Agreement.

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Section 3.11                                                                             Safety Database

3.11.1               OMI shall establish the global safety database of adverse events and pregnancy reports for the Compound/Product that will be used for regulatory reporting and responses to safety queries from Regulatory Authorities. Isis shall promptly transfer all clinical adverse event and drug exposure during pregnancy data that it has regarding the Compounds or Products to OMI for entry into the global safety database upon request from OMI.

3.11.2               [***] a database that includes information regarding the safety and tolerability of [***] drug compounds, individually and as a class, including information discovered during pre-clinical and clinical development (the “[***] Database” ).

(a)                                                                                                                                   In an effort to maximize understanding of the [***] will cooperate in connection with populating the [***] Database. In accordance with Applicable Law and any applicable informed consents or other Third Party obligations, [***] with copies of [***] serious adverse event final reports related to [***]. In addition, in connection with any reported serious adverse event (including any follow-up or amended reports), in accordance with Applicable Law and any applicable informed consents or other Third Party obligations and to the extent [***] has collected such data, [***], the following [***]  All such information [***] in connection with this Section will be [***] Confidential Information; provided, however , that [***] any Third Party so long as [***] does not disclose to any Third Party the [***] in connection with any such disclosure.

(b)                                                                                                                                  From time to time, [***] the information in the [***] Database to conduct analyses to keep [***] informed regarding class generic properties of [***], including with respect to safety. As such, if and when [***] that may be relevant to a Compound or Product (including potential class-related toxicity liabilities), [***] of such issues, and if requested, provide the data supporting [***] regarding such issues.

(c)                                                                                                                                   [***]

(d)                                                                                                                                  In addition, each Party will notify the other Party in writing if such Party confirms that a serious adverse event with respect to a Product has occurred. Such notice will be provided within [***] of confirming the serious adverse event.

ARTICLE 4 -
MANUFACTURING

Section 4.1                                                                                    Supply of ASO for Research Program . Isis agrees to manufacture and supply all ASOs for use in support of the Research Program. [***] will bear its own costs for the manufacture of all ASO needed for research through the [***] under the R&D Plan. Once a Selected Gene Target has [***] under the R&D Plan, OMI will order additional quantities of API for Research Compounds directed to such Selected Gene Target in [***] increments. Isis agrees to supply such quantities which will be supplied outside the Clinical Manufacturing & Supply Agreement; provided, however , that Isis will not charge for API used to [***]. The cost to manufacture such additional quantities of ASOs will be negotiated and agreed to in good faith by the Parties, but will not exceed $[***] per [***] for MOE Gapmers.

Section 4.2                                                                                    Supply of Existing Development Compounds. Within [***] of receipt of invoice from Isis in the form provided as APPENDIX 7 , the invoice received no sooner than the Effective Date, OMI will pay Isis $[***] for the [***] that is in Isis’ possession on [***]. The $[***] represents Isis’ out-of-pocket expenses incurred in connection with manufacturing such [***]). Such API and drug product will be used as outlined in the R&D Plan. The Parties acknowledge and agree that such API and drug product may be used between [***] to conduct activities outlined in the R&D Plan. Isis shall deliver such API as governed by the R&D Plan or as otherwise requested by OMI within a reasonable period of time after such request.

Section 4.3                                                                                    Clinical Supply of API Through Completion of [***]. Isis and OMI will enter into a manufacture and supply agreement(s) for the [***] (a “Clinical Supply Agreement” ) for each Designation of a Compound as a Clinical Candidate. Each Clinical Supply

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Agreement will include customary terms and conditions to be negotiated in good faith and the Clinical Supply Agreement is attached hereto as APPENDIX 8 for ISIS 325568 and ISIS 377131, which will serve as a template for future Clinical Supply Agreements.

Section 4.4                                                                                    Option to Supply GCGR and GCCR Compounds. At any time (including, but not limited to if OMI determines that Isis is unable or unlikely to meet Isis’ supply obligations), at OMI’s written request and consistent with the Supply Agreement, Isis will transfer to OMI or a Third Party manufacturer selected by OMI all documentation and information, including Isis Manufacturing and Analytical Technology and permit OMI to reference and use any regulatory filings, and otherwise fully cooperate with OMI to enable OMI to make or have made API for use by OMI in accordance with this Agreement.

Section 4.5                                                                                    [***] and Commercial Manufacturing and Supply of Compound and Product.

4.5.1                      Product Manufacturing Responsibility. Except as otherwise provided in this Agreement, the Parties acknowledge and agree that OMI will be solely responsible for the manufacturing of Compound and Product for [***] and commercial supply, including management of the overall manufacturing strategy and tactics, formulation, internal or contract manufacturer selection for API and finished Product, associated audits, stability testing, pricing, relationship with contract manufacturer(s) and any work proposals or contract negotiations or contracts themselves.

4.5.2                      Clinical Supply of ISIS 325568 and ISIS 377131 API for [***]. Solely at the discretion of OMI, OMI will notify Isis of OMI’s intent to require Isis to supply quantities of ISIS 325568 and ISIS 377131 as is necessary to fulfill OMI’s Product requirements for [***] Studies. OMI will notify Isis of its intent, leaving a reasonable time to permit the Parties to negotiate a [***] Clinical Supply Agreement, such that the supply agreement is in place no later than [***] prior to the planned delivery date for such API.

4.5.3                      Transfer of Manufacturing and Analytical Technology.

(a)                                                                                                                                   As soon as is practicable after Isis receives a written request from OMI to transfer any Isis Manufacturing and Analytical Technology to OMI, but not later than 30 days after receipt of such request, Isis will initiate transfer to OMI, or at OMI’s option, to such Third Party Manufacturer, the Isis Manufacturing and Analytical Technology. For such purpose, Isis will transfer to OMI or such Third Party Manufacturer all documentation and information, and permit OMI to reference and use any regulatory filings, and otherwise fully cooperate with OMI to enable OMI to make or have made API and finished drug Product for use by OMI in accordance with this Agreement at no cost to OMI. In addition, upon request by OMI, Isis will provide OMI with a reasonable level of technical assistance and consultation in connection with the transfer of such manufacturing and analytical technology to help enable OMI or such Third Party manufacturer (as applicable) to manufacture and release such API and finished drug Product. For such purpose Isis will provide OMI with reasonable access by teleconference or in-person at Isis’ facilities to Isis personnel involved in the manufacturing and release of API and finished drug Product, provided that if OMI requests such technical assistance in excess of [***] of technical assistance, [***]. Such payment will be made to Isis within [***] after OMI’s receipt of an invoice by Isis in the form provided as APPENDIX 7 reasonably detailing Isis’ time expended, together with reasonable substantiation of any out-of-pocket expenses incurred.

(b)                                                                                                                                  OMI and/or its Third Party manufacturer will use any Isis Know-How or Product Specific Know-How and other documentation and information transferred pursuant to Section 4.4 and Article 4.5  solely for the purpose of manufacturing API and Product for OMI’s (or its Affiliate’s or Licensee’s) benefit pursuant to the exercise of OMI’s rights under this Agreement, and for no other purpose. OMI acknowledges and agrees that any such transfer of such manufacturing technology to a Third Party manufacturer must satisfy the conditions set forth in Section 2.2(b) and will be subject to a written agreement between such Third Party

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manufacturer and OMI that contains obligations of confidentiality substantially equivalent to those of this Agreement.

Section 4.6                                                                                    Supply of Finished Drug Product. Except as otherwise specified in the R&D Plan or Clinical Manufacturing and Supply Agreement, the Parties acknowledge and agree that [***] will be solely responsible for the manufacturing, stability testing and supply of finished drug Product.

Section 4.7                                                                                    Manufacturing Improvements.

4.7.1                      The entire right, title, and interest in and to all Manufacturing Improvements developed or invented solely by employees, or consultants of OMI during the Term will be the sole and exclusive property of OMI. OMI hereby grants Isis a [***] license to practice under OMI’s rights to any Know-How or Patent claiming Manufacturing Improvements to [***] and to the extent that such Manufacturing Improvements are under the control of OMI. Notwithstanding the foregoing, Isis recognizes that OMI may not own or control Manufacturing Improvements developed or invented by a contract manufacturer. The license granted under this Section 4.7.1 falls within the restrictions [***].

4.7.2                      The entire right, title, and interest in and to all Manufacturing Improvements developed or invented solely by employees, or consultants of Isis during the Term will be the sole and exclusive property of Isis. Isis hereby grants OMI [***] license to practice under Isis’ rights to any Know-How, Product Specific Know-How or Patent claiming such Manufacturing Improvements to make and have made Products. The license granted under this Section 4.7.2 will be sublicensable by OMI solely in connection with the grant of a license to develop, make, use, import, offer for sale and sell a Product.

4.7.3                      The entire right, title, and interest in and to all Manufacturing Improvements developed or invented jointly by employees or consultants of Isis and OMI during the Term will be the joint property of Isis and OMI. Each Party will have an undivided joint ownership interest in such Manufacturing Improvements, and may license its rights under such Manufacturing Improvements for its own account and without the consent of the other Party, subject to the exclusivity granted to OMI under Section 2.3.

4.7.4                      During the first [***], if requested by a Party, the Parties will meet annually to review Manufacturing Improvements developed by either of the Parties [***] of the Collaboration. At such time, the Parties will disclose all such Manufacturing Improvements Controlled by such Party in reasonable detail as to enable the other Party to [***] will have the right to [***] with respect to the commercialization of one or more [***]

Section 4.8                                                                                    Isis Regulatory Inspections. Isis will cooperate in good faith with respect to the conduct of any inspections by any Regulatory Authority of an Isis site or a contractor’s site and facilities if such inspection concerns work being performed under the R&D Plan and the Clinical Manufacturing and Supply Agreement. OMI shall be given the opportunity to attend any inspections by any Regulatory Authority of Isis’ or Isis’ contractor’s site and facilities if such inspections concern work being performed under the R&D Plan and the Clinical Manufacturing and Supply Agreement, and the summary (or wrap up) meeting with a Regulatory Authority at the conclusion of such site inspection. In the event that during an inspection of the Isis facilities, the facilities are found by a Regulatory Authority to be non-compliant with one or more GLP, GMP, GCP or current standards for pharmacovigilance practice compliance standards and such facilities are being used to conduct work under the R&D Plan and the Clinical Manufacturing and Supply Agreement, Isis will promptly notify OMI of such finding and will submit a proposed recovery/corrective action plan, including a time line for implementation of the plan, within [***] of such notification of non-compliance.

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Section 4.9                                                                                    Quality Agreement. A quality agreement (the “Quality Agreement” ) will be negotiated simultaneously with the present Agreement and is attached hereto as APPENDIX 9 .

ARTICLE 5 -
DEVELOPMENT & COMMERCIALIZATION

Section 5.1                                                                                    Development, Commercialization and Regulatory Responsibilities. Other than Isis’ responsibilities under the R&D Plan, OMI will have sole responsibility, including without limitation sole responsibility for all funding, resourcing and decision-making, for all further Development and Commercialization with respect to the Compounds and Products. OMI hereby assumes all regulatory responsibilities in connection with Compounds and Products, including sole responsibility for all Regulatory Documentation and for obtaining all Approvals. OMI will comply with all Applicable Laws in connection with the Development and Commercialization of Compounds and Products. OMI (by itself or through its Affiliates, Licensees, (sub)contractors or agents, as applicable) will use Commercially Reasonable Efforts to Develop and Commercialize at least one Compound or Product for each Collaboration Gene Product. For clarity, it is understood and acknowledged that Commercially Reasonable Efforts in the Development of a Product in a particular country may include sequential implementation of clinical trials and/or intervals between clinical trials for data interpretation and clinical program planning and approval, to the extent such implementation is consistent with the scientific, technical and commercial factors relevant to Development of such Product in such country. All INDs, NDAs, MAAs and other regulatory filings and Approvals for Products will be owned by OMI. In addition, upon reasonable notice by OMI and during normal business hours, Isis will provide OMI with a reasonable level of assistance in the preparation of regulatory filings for Products and in interactions with any Regulatory Authority in connection with the Development of Products; provided that if OMI requests such assistance in excess of [***] of assistance, [***] after receipt by OMI of an invoice by Isis in the form provided as APPENDIX 7 reasonably detailing Isis’ time expended, together with reasonable substantiation of any out-of-pocket expenses incurred.

Section 5.2                                                                                    Reports by OMI after the Collaboration Term. After the Collaboration Term with respect to any Compound or Product that OMI is developing, at Isis’ request, OMI will provide a report to Isis summarizing OMI’s activities over the [***] with respect to the identified Compound or Product and an appropriate number of representatives from each Party will meet at least [***] to review Development activities. OMI will consider Isis’ input regarding such activities. The reports provided by OMI under this Section 5.2 will contain sufficient information to allow Isis to reasonably determine whether OMI is in compliance with its obligations to use Commercially Reasonable Efforts under Section 5.1.

Section 5.3                                                                                    Product Development Plans; Integrated Product Plans. For each Product that OMI is clinically developing under this Agreement, OMI will prepare a development plan outlining key aspects of the clinical development of such Product through Approval. Each development plan will contain information customarily contained in OMI’s development plans for its similar products at similar stages of development (each a “ Product Development Plan” ) . In addition, prior to the launch of a Product, OMI will prepare a global integrated Product plan outlining the key aspects of market launch and commercialization (the “Integrated Product Plan” or “IPP” ). The Integrated Product Plan will contain information customarily contained in OMI’s commercialization plans. Each Product Development Plan and IPP will be updated annually by OMI. OMI will provide to Isis a copy of the final draft of the Product Development Plans and IPPs (original and updates) for each of the [***], if available. OMI and Isis will meet on [***] to discuss the draft of each Product Development Plan and IPP and OMI will consider, in its sole discretion, any proposals and comments made by Isis for incorporation in the final

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Product Development Plan or IPP (as the case may be). Furthermore, to the extent OMI intends to make any claims in a Product label that are class generic to MOE Gapmers, OMI will provide such claims to Isis in advance and will consider, in its sole discretion, any proposals and comments made by Isis.

ARTICLE 6 -
FINANCIAL PROVISIONS

Section 6.1                                                                                    Up-Front Payment. In partial consideration for the licenses and other rights granted under this Agreement, within [***] following the Effective Date, OMI will pay Isis [***] $45,000,000.

Section 6.2                                                                                    Collaboration Funding. OMI will provide Collaboration funding to Isis as set forth in Section 3.5.2.

Section 6.3                                                                                    Milestone Payments by OMI. OMI will give Isis notice promptly upon achievement of each Milestone Event provided in Table 1. Upon receipt of an invoice, as set forth in Appendix 7, OMI will pay Isis the following milestone payments within [***] after receipt of such notice, with the proviso that with respect to the [***] Milestone for GCGR, payment shall be due [***] after notice and invoice by Isis of achievement of such Milestone.:

6.3.1                                                                                                                      Development Milestones .

(a)                                                                                                                                   For each Selected Gene Target, the milestone payments under Column 1 of Table 1 below will be payable by OMI to Isis for the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first Research Compound or Research Product that targets such Selected Gene Target to reach the specified milestone event.

(b)                                                                                                                                  The milestone payments under Column 2 of Table 1 below will be payable as set forth below for the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first GCGR Compound or GCGR Product to reach the specified milestone event.

(c)                                                                                                                                   The milestone payments under Column 3 of Table 1 below will be payable as set forth below after the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first GCCR Compound or GCCR Product to reach the specified milestone event.

Table 1

6.3.2                                                                                                                      Approval Milestones .

(a)                                   For each Selected Gene Target, the milestone payments under Column 1 of Table 2 below will be payable by OMI to Isis for the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first Research Compound or Research Product that target such Selected Gene Target to reach the specified milestone event.

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(b)                                  The milestone payments under Column 2 of Table 2 below will be payable as set forth below after the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first GCGR Compounds or GCGR Products to reach the specified milestone event.

(c)                                   The milestone payments under Column 3 of Table 2 below will be payable as set forth below after the first achievement of the specified milestone events by OMI, its Licensees or their Affiliates for the first GCCR Compounds or GCCR Products to reach the specified milestone event.

Table 2

In the event that an original Compound or Product for a Collaboration Gene Target fails in development and is replaced by OMI with a back-up Compound or Product targeting the same Collaboration Gene Target, any milestone payments previously paid with respect to such original Compound or Product shall be fully creditable toward the same milestone due with respect to the back-up Compound or Product, and OMI shall notify Isis in writing of the selection of the back-up Compound or Product. The Parties acknowledge that, after the approval milestone payments for a Second Indication are paid to Isis, OMI shall not be obligated to make any additional approval milestone payments with respect to a Product comprising the same Compound or Product or its back-up Compound or Product, regardless of the number of additional indications for which such Compound or Product is developed. The Parties also acknowledge that different formulations (e.g., dosage strength, delivery forms) of a Compound or Product (back-up Compound or Product) or bioequivalents therefore (i.e., salts, esters, polymorphs) shall be deemed the same Compound or Product, and all milestones due shall be payable one time only per Compound or Product.

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Section 6.4                                                                                    Royalty Payments by OMI. In consideration of the licenses granted to OMI by Isis hereunder and the assignments made pursuant to Section 9.2.3 (b) OMI will pay Isis royalty payments on Products as follows:  Subject to the other provisions of this Agreement, OMI will pay to Isis the royalty rate under Column 1 of Table 3 below for each Research Product. Subject to the other provisions of this Agreement, OMI will pay to Isis the royalty rate under Column 2 of Table 3 below for each GCGR Product. Subject to the other provisions of this Agreement, OMI will pay to Isis the royalty rate under Column 3 of Table 3 below for each GCCR Product. The royalty rate payable with respect to each particular Product will be based on the level of annual worldwide Net Sales of such Product in a given Calendar Year period by OMI, its Affiliates and Licensees, with the royalty rate tiered based upon the level of such worldwide Net Sales in such Calendar Year period as set forth in the table below.

Table 3

For example, in the instance of a full Calendar Year, if annual OMI Net Sales of GCGR Product in such Calendar Year worldwide are $[***], the amount due will be $[***] ([***]% of the [***] (or $[***]) in the first increment, plus [***]% of the next $[***] (or $[***]) in the second increment, plus [***]% of the remaining $[***] (or $[***]) in the third increment).

Section 6.5                                                                                    Third Party Payment Obligations.

6.5.1                                                                                                                      Isis In-License Agreements.

(a)                                                                                                                                   Certain of the Isis Patent Rights Controlled by Isis as of the Effective Date that are licensed to OMI under Section 2.1 are in-licensed or were acquired by Isis under agreements with Third Party licensors or sellers, and certain milestone and/or royalty payments may become payable by Isis to such Third Party under such license or purchase agreements based on the Development and Commercialization of a Compound and Product by OMI under this Agreement (such license or purchase agreements in effect as of the Effective Date being the “Isis In-License Agreements” ). The Parties acknowledge that whether a milestone and/or royalty payment becomes payable by Isis to such Third Party licensor depends on the terms and conditions of the Isis In-License Agreement.

(b)                                                                                                                                   Isis will be responsible for paying [***]% of the Isis Supported Payments as they apply to any Compound or Product.

6.5.2                                                                                                                      Additional Third Party Agreements.

(a)                                                                                                                                   After the Effective Date, Isis may wish to in-license or acquire rights to Know-How or Third Party Patents (such a Third Party in-license or acquisition agreement being an “Additional Third Party Agreement” ) which, if so licensed or acquired, may be included in the Isis Patent Rights licensed to OMI under Section 2.1. In such event (and to the extent permitted by Isis’ confidentiality agreement with the applicable Third Party), Isis will notify OMI regarding the nature of the technology and status of negotiations related to the Additional Third Party Agreement through the R&D Committee. Once Isis has executed such Additional Third

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Party Agreement, Isis will offer such Third Party Patents or Know-How to OMI (including a description of the payments paid or potentially payable by Isis thereunder). At such time, if OMI wishes to include such Third Party Patents under the licenses granted under Section 2.1, OMI will notify Isis of its desire to do so [***], if appropriate. As part of this [***], Isis will share with OMI, in reasonable detail, the [***]. If OMI does not [***], and to [***] as set forth below, then [***] will not be [***] under this Agreement.

(b)                                                                                                                                   In the event that a milestone payment or a payment on net sales of Product becomes payable by Isis to a Third Party under an Additional Third Party Agreement, and such milestone or payment obligation is based on [***]. (such milestone and/or payments being the “Isis Third Party Payment” ), then [***] will be responsible for the payment of such Isis Third Party Payment obligation as long as [***]. In the event that a milestone payment or a royalty payment on net sales of Product becomes payable by Isis to a Third Party under an Additional Third Party Agreement, and such milestone or royalty payment obligation is based on [***], then as long as [***] will be responsible for the payment of such Isis Third Party Payment obligation. In both cases [***] under this Agreement.

(c)                                                                                                                                   Any Pass Through Obligations OMI is responsible for paying under this Section 6.5.2 will be [***] and OMI will satisfy such obligation by paying Isis directly.

6.5.3                                                                                                                      OMI Third Party Licenses. OMI will be responsible for negotiating and entering into any Third Party licenses that OMI determines may be necessary or useful or may relate to the Development or Commercialization of Products. If OMI, in its reasonable judgment, is required to obtain a license from any Third Party under any patent covering technology necessary or useful for the Development or Commercialization of a Product, and the infringement of such patent cannot reasonably be avoided by OMI, and if OMI is required to pay to such Third Party in consideration for such license for a Product any royalty payment calculated on sales of a Product (such royalty payments collectively being a “OMI Third Party Royalty Payment” ) then OMI may reduce the royalty payable to Isis under Section 6.4 by up to [***]% of the amount of the OMI Third Party Royalty, subject to the limitation set forth in Section 6.5.4. Notwithstanding the foregoing, no reduction of the royalties payable to Isis under Section 6.4 will be permitted with respect to OMI Third Party Payments with respect to any Third Party patent covering (x) methods or materials used in the [***], (y) any [***] which is not a Compound (i.e., a non-Compound active ingredient in a Combination Product) or (z) [***].

6.5.4                                                                                                                      For any additional royalty rate payments payable by OMI under Section 6.5.2 or 6.5.3, OMI may reduce its obligation to pay Isis royalty payments under Section 6.4 by [***]% of the amount of such additional payments payable by OMI as set forth in Sections 6.5.2 and 6.5.3; provided, however that no such reduction(s) in the aggregate will reduce the royalty payments payable to Isis under Section 6.4 in any given Calendar Quarter period below [***] of Isis’ [***] royalty under Section 6.4 (i.e. [***]% multiplied by [***] of the applicable royalty rate under Section 6.4 [***] the royalty payments payable by Isis under Section 6.5.1(b)). For example, royalty payments payable for GCGR may not be reduced below [***]% (in the first increment) [***]% (hypothetical example of Isis Supported Payments under Section 6.5.1(b)) multiplied by [***]%, or [***]% ([***]% - [***]% = [***]% x [***]% = [***]%). In this instance, royalty payments payable in the first increment for GCGR would not be reduced below [***]% ([***]% + [***]% = [***]%).

Section 6.6                                                                                    [***]. If the portion of [***] (calculated in accordance with Appendix 16 attached hereto) for the [***] sold in the US and EU (the “[***]” ) exceeds [***]% of annual Net Sales in the U.S. and EU in a given year, then the royalty rate provided in Section 6.4, Table 3 payable for worldwide sales of such Product for such year will be [***]. Notwithstanding the foregoing , at no time will, as the result of this calculation and allowance, the Royalty Rate provided in Section 6.4, Table 3 be reduced below [***]. The parties will use Commercially Reasonable Efforts and work in good faith to [***]

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Section 6.7                                                                                    The royalty rates under Section 6.4 will be subject to the following conditions:

(a)  that only one royalty rate will be due to Isis hereunder with respect to the same unit of Product;

(b)  that no royalty payment will be due upon the sale or other transfer of a Product among OMI, its Affiliates or Licensees, but in such cases a royalty payment will be due and calculated upon OMI’s or its Affiliate’s or Licensee’s sale of Product to the first unaffiliated Third Party customer, where Net Sales is as defined in APPENDIX 1 ;

(c)  no royalty payments will be due on the disposition of Product in reasonable quantities by OMI, its Affiliates or Licensees as part of an Expanded Access Program to include compassionate use, named patients or other similar use or as part of Phase 4 Trials or as bona fide samples or as donations to non-profit institutions or government agencies for non-commercial purposes, provided , in each case, that neither OMI, its Affiliate or Licensees receives any payment or other in-kind consideration for such Product;[***]

(d)  a Product will only be eligible for the full royalty rate designated under Section 6.4 in a given country, if, as of the date of the First Commercial Sale of such Product in such country, the making, using or selling of such Product (or the Compound contained in such Product) in that country is [***];

(e)  if, as of the date of the First Commercial Sale of a Product in a given country, the making, using or selling of such Product (or the Compound contained in such Product) in that country is either (i) not [***] or (ii) only [***], then the Net Sales in that country will be reduced by [***]% before adding such Net Sales to the Net Sales of all of the other countries used in arriving at the aggregate annual Net Sales upon which the royalty is based;

(f)  If no royalty payment is due in a country on a Product but a royalty payment is still payable by Isis under the Isis Supported Payments or as the result of any Target Encumbrance under 3.6.3, then OMI will pay Isis a royalty equal to the amount the applicable royalty under the Isis Supported Payments and Target Encumbrances for so long as and in the amount that such royalty payment is owing. Once a Product is determined to be eligible for the applicable base royalty payment under part (d) or (e) above, it will continue to be eligible at such base rate for the applicable Royalty Term, subject to the other terms and conditions of this Agreement (including but not limited to any applicable adjustment under Section 6.5, 6.6 or 6.8).

Section 6.8                                                                                    Generic Competition. Solely with respect to Products for which the full royalty applies under part (d) of Section 6.6 above, if there are one or more unauthorized Third Parties selling a Generic Product, then the Net Sales in that country will be reduced by [***]% before adding such Net Sales to the Net Sales of all of the other countries used in arriving at the aggregate annual Net Sales upon which the royalty is based ; provided, however , that, in no event will the royalties payable to Isis under 6.4 above be reduced below [***].

Section 6.9                                                                                    Royalty Term. Royalties payable under Section 6.4 (subject to and including any reduction set forth in Sections 6.5, 6.6 and 6.7) will be payable for each Product on a Product-by-Product and country-by-country basis from the First Commercial Sale of the applicable Product in such country until the date that is the later of (i) [***] after the First Commercial Sale of the Product in such country or (ii) the expiration of the last to expire Valid Claim within the Product Specific Patents or Isis Core Technology Patents which would be infringed by the sale of the applicable Product in the applicable country by an unauthorized party or (iii) the expiration of any applicable period of exclusivity as contemplated under Section 9.6 for the Product in the applicable country. Such period during which royalties are payable with respect to a Product in a country is referred to herein as the “Royalty Term” in such country with respect to such Product.

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Section 6.10                                                                             Royalty Report and Payment. During the Term following the First Commercial Sale of any Product, within [***] after the end of each Calendar Quarter, OMI will pay to Isis royalty payments payable for such Calendar Quarter and provide a royalty report showing, on a Product-by-Product and country-by-country basis:

(a)                                   the Net Sales of Products sold by OMI, its Licensees and their respective Affiliates during such Calendar Quarter reporting period; and

(b)                                  the royalties which will have accrued hereunder with respect to such Net Sales.

In addition, during the Term following the First Commercial Sale of any Product, within [***] after the end of each Calendar Quarter, OMI will provide Isis a preliminary non-binding quarterly royalty report showing the total Net Sales of Product and royalty payable for such Calendar Quarter. Furthermore, OMI agrees to supply Isis the information Isis reasonably requires to comply with any Pass Through Obligations.

If no royalty or payment is due for any royalty period hereunder, OMI will so report. OMI will keep, and will require its Licensees and their respective Affiliates to keep (all in accordance with GAAP, consistently applied), complete and accurate records in sufficient detail to properly reflect the Net Sales and to enable the royalties payable hereunder to be determined. Upon reasonable request by Isis (but no more frequently than once in any 12-month period), OMI will report to Isis the quantity of Product not subject to royalties distributed by OMI, its Affiliates or Licensees as part of an Expanded Access Program to include compassionate use, named patients or other similar use or as part of Phase 4 Trials or as bona fide samples or as donations to non-profit institutions or government agencies for non-commercial purposes. All information disclosed by OMI to Isis under this Section 6.9 will be OMI Confidential Information.

Section 6.11                                                                             Manner of Payment and Exchange Rate. All payments to be made by OMI to Isis hereunder will be made by deposit of [***] by wire transfer in immediately available funds in the requisite amount to such bank account Isis may from time to time designate by notice to OMI. [***]

Section 6.12                                                                             Audits, including Audits  of Royalty Reports.

6.12.1 Audits of Royalty Reports. Upon the written request of Isis and not more than once in each Calendar Year, OMI will permit an independent certified public accounting firm of nationally recognized standing selected by Isis and reasonably acceptable to OMI, at Isis’ expense and upon execution of a confidentiality agreement with OMI, to have access during normal business hours to such records of OMI and/or its Affiliates as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than [***] prior to the date of such request. These audit rights (but not any obligation to pay unpaid royalties for such periods) with respect to any Calendar Year will terminate [***] after the end of any such Calendar Year. Isis will provide OMI with a copy of the accounting firm’s written report within [***] of completion of such report.

If such accounting firm concludes that an overpayment or underpayment was made, then the owing Party will pay the amount due within [***] of the date Isis delivers to OMI such accounting firm’s written report so correctly concluding. Isis will bear the full cost of such audit unless such audit correctly discloses that the additional payment payable by OMI for the audited period is more than [***]% of the amount of the royalties paid for that audited period, in which case OMI will pay the reasonable fees and expenses charged by the accounting firm. However, if the result of the audit is contested, then the Parties agree to retain a mutually acceptable independent certified public accounting firm or equivalent thereof within [***] to review the relevant books and records and to submit to the Parties its written determination as to the amount in dispute and the basis for its determination. The determination by the accounting firm will be binding on the Parties absent manifest error. If such accounting firm determines that

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the result of the original audit was correct (within a margin of error of [***]%) then the Party who contested the original audit will pay the fees and expenses of the accounting firm for such determination and vice versa .

OMI will include in each sublicense granted by it to any Licensee a provision requiring the Licensee to maintain records of sales made pursuant to such license and to grant access to such records by OMI’s independent accountant to the same extent and under the same obligations as required of OMI under this Agreement. OMI will advise Isis in advance of each audit of any Licensee with respect to Product sales. OMI will provide Isis with a summary of the results received from the audit and, if Isis so requests, a copy of the audit report with respect to Product sales. OMI will pay the reasonable fees and expenses charged by the accounting firm, except that Isis will pay for all additional services requested exclusively by Isis from OMI’s independent accountant unless the audit discloses that the additional payments payable to Isis for the audited period differ by more than [***]% from the amount of the royalties otherwise paid.

All financial information subject to review under this Section or under any license agreement with a Licensee will be OMI Confidential Information and will be treated in accordance with the confidentiality provisions of this Agreement. As a condition precedent to Isis’ audit rights under this Section, Isis’ accounting firm will enter into a confidentiality agreement with OMI obligating it to treat all such financial information in confidence pursuant to such confidentiality agreement. Isis may provide Third Parties to which Isis owes Pass Through Royalties on Products information in such audit report that are relevant and required to comply with such Third Party’s audit rights under the applicable license agreement between Isis and such Third Party, provided that such Third Party agrees in writing to keep such information confidential under terms no less restrictive than Isis’ obligations of confidentiality under this Agreement.

6.12.2 Audit by OMI . OMI shall have the right to audit Isis’ books and records, and the records of any successors hereto for the purpose of accurate accounting and compliance with the terms of this agreement including its activities under the R&D Plan. Isis shall maintain complete and accurate records in accordance with GAAP, which are relevant to costs, expenses and payments under this Agreement and such records shall be made available to OMI upon its reasonable request but no more than [***], during reasonable business hours for a period of [***] from creation of individual records, for examination at OMI’s expense by an independent certified public accounting firm selected by OMI and acceptable to Isis for the sole purpose of verifying the correctness of calculations or such costs, expenses or payments made under this Agreement. In the absence of material discrepancies (in excess of [***] percent ([***]%) in any audit period resulting from such audit, the accounting expense shall be paid by OMI. If such material discrepancies do result, Isis shall bear the reasonable audit expense and shall promptly pay the amount of discrepancy. All financial information subject to review under this Section will be Isis Confidential Information and will be treated in accordance with the confidentiality provisions of this Agreement.

Section 6.13                                                                             Taxes.

(a)   OMI will make all payments to Isis under this Agreement without deduction or withholding for taxes except to the extent that any such deduction or withholding is required by law in effect at the time of payment.

(b)  Any tax required to be withheld on amounts payable under this Agreement will promptly be paid by OMI on behalf of Isis to the appropriate governmental authority, and OMI will furnish Isis with proof of payment of such tax. Any such tax required to be withheld will be an expense of and borne by Isis.

(c)  OMI and Isis will cooperate with respect to all documentation required by any taxing authority or reasonably requested by OMI to secure a reduction in the rate of applicable withholding taxes.

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If OMI had a duty to withhold taxes in connection with any payment it made to Isis under this Agreement but OMI failed to withhold, and such taxes were assessed against and paid by OMI, then Isis will indemnify and hold harmless OMI from and against such taxes (including interest but excluding any penalties).

Section 6.14                                                                             Blocked Currency. In each country where the local currency is blocked and cannot be removed from the country, royalties accrued in that country will be paid to Isis in the country in local currency by deposit in a local bank designated by Isis, unless the Parties otherwise agree.

Section 6.15                                                                             Sublicenses. In the event OMI grants licenses or sublicenses to a Licensee to sell Products which are subject to royalties under Section 6.4, such licenses or sublicenses will include an obligation for the Licensee to account for and report its sales of Products on the same basis as if such sales were Net Sales by OMI.

Section 6.16                                                                             Interest. If OMI fails to make any payment due to Isis under this Agreement, then interest will accrue on a [***]; provided, however , that if OMI cures such late payment as provided for in Article 10 and OMI has not been late with respect to any other payment under this Agreement in the same Calendar Year, then no such interest will accrue during the applicable cure period for such first late payment.

ARTICLE 7 -
PRESS RELEASES & PUBLICATIONS

Section 7.1                                                                                    Press Releases; Public Disclosure.

7.1.1                                                                                                                      Upon execution of this Agreement, the Parties may issue a press release announcing the existence of this Agreement in a form and substance mutually agreed to in writing, in advance of the Execution Date, by the Parties. Each Party agrees not to issue any other press release or other public statement disclosing other information relating to this Agreement or the transactions contemplated hereby without the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, provided however , that each Party may make disclosures permitted by, and in accordance with, Article 8. Each Party agrees to provide to the other Party a copy of any public announcement regarding this Agreement or the subject matter thereof as soon as reasonably practicable under the circumstances prior to its scheduled release. Except under extraordinary circumstances, each Party will provide the other with an advance copy of any such announcement at least [***] prior to its scheduled release. Each Party will have the right to expeditiously review and recommend changes to any such announcement and, except as otherwise permitted by Article 8, the Party whose announcement has been reviewed will remove any information the reviewing Party reasonably deems to be inappropriate for disclosure. The contents of any announcement or similar publicity which has been reviewed, approved and released by the reviewing Party can be re-released by either Party without a requirement for re-approval. Notwithstanding the foregoing and subject to Article 8, the Parties agree that such Public Disclosures shall minimize the disclosure of financial information.

7.1.2                                                                                                                      Each Party will immediately notify (and provide as much advance notice as possible to) the other of any event materially related to Products (including any regulatory approval) so that the Parties may analyze the need to or desirability of publicly disclosing or reporting such event. Notwithstanding Section 7.1.1 above, any press release or other similar public communication by either Party related to a Product’s efficacy or safety data and/or results, will be submitted to the other Party for review and approval at least [***] [***] in advance of such proposed public disclosure. Except as permitted by Article 8, such public disclosures shall be permitted at the sole discretion of OMI.

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Section 7.2                                                                                    Publication of Research Results. During the Collaboration Term, neither Party will publish, present or otherwise disclose to the public the Research Results exclusively licensed to OMI hereunder or information relating to Collaboration Gene Targets, except as specifically approved by the R&D Committee. The R&D Committee will agree upon the form and timing of any publication or presentation or other disclosure (such as an abstract, manuscript or presentation) to the public of the Research Results exclusively licensed to OMI hereunder or information relating to Collaboration Gene Targets. For clarification, this Section 7.2 will not apply with respect to the use and disclosure of Confidential Information as specifically provided for in Section 7.1 or Article 8 (i.e., a disclosure expressly permitted and made in accordance with Section 7.1 or Article 8). At the termination of the Collaboration Term and solely with respect to Selected Gene Targets for which OMI has Designated a Compound as a Clinical Candidate, OMI may publish, present or otherwise disclose Research Results to the public at its sole discretion subject to Article 8; however, OMI will notify Isis [***] in advance of the publication.

ARTICLE 8 -
CONFIDENTIALITY

Section 8.1                                                                                    Disclosure and Use Restriction. Each Party agrees that, for so long as this Agreement is in effect and for a period of [***] thereafter, a Party (the “Receiving Party” ) receiving Confidential Information of the other Party (the “Disclosing Party” ) will (i) maintain in confidence such Confidential Information using not less than the efforts such Receiving Party uses to maintain in confidence other proprietary industrial information of similar kind and value, (ii) not disclose such Confidential Information except to the Receiving Party’s employees, or Affiliates of the Receiving Party having a need-to-know such Confidential Information solely for purposes of performing Receiving Party’s obligations under this Agreement, (iii) not disclose such Confidential Information to any Third Party without the prior written consent of the Disclosing Party, except for disclosures expressly permitted by this Agreement, and (iv) not use such Confidential Information for any purpose except those expressly permitted by this Agreement. For avoidance of doubt, Isis will be permitted to use the OMI Confidential Information solely for purposes of performing the Research Program in accordance with the R&D Plan and for no other purpose. Upon completion of the Research Program or earlier upon written request by OMI, Isis will return to OMI or destroy any OMI Confidential Information.

Section 8.2                                                                                    Authorized Disclosure. To the extent (and only to the extent) that it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement, a Party may disclose Confidential Information belonging to the other Party in the following instances:

(a)                                   filing or prosecuting patent applications in accordance with this Agreement;

(b)                                  communicating with the Regulatory Authorities as necessary for the Development or Commercialization of a Product in a country, as required in connection with any filing, application or request for Approval, and including any marketing or promotional information related to the Product; provided, however, that reasonable measures will be taken to assure confidential treatment of such information;

(c)                                   prosecuting or defending litigation;

(d)                                  complying with applicable governmental laws and regulations (including, without limitation, the rules and regulations of the Securities and Exchange Commission or any national securities exchange, and compliance with tax laws and regulations) and with judicial process, if (i) in the reasonable opinion of the Receiving Party’s counsel, such disclosure is necessary for such compliance and (ii) such disclosure is made in accordance with Section 8.3 or 8.4 as applicable; and

(e)                                   disclosure, in connection with the performance of this Agreement and solely on a need-to-know basis,  potential or actual collaborators (including potential Licensees), potential or

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actual investment bankers, investors, lenders, or acquirers, or employees, independent contractors (including without limitation consultants and clinical investigators) or agents, each of whom prior to disclosure must be bound by written obligations of confidentiality and non-use no less restrictive than the obligations set forth in this Article 8; provided, however , that the Receiving Party will remain responsible for any failure b y any Person who receives Confidential Information pursuant to this Article 8 to treat such Confidential Information as required under this Article 8.

If and whenever any Confidential Information is disclosed in accordance with this Section 8.2, such disclosure will not cause any such information to cease to be Confidential Information except to the extent that such permitted disclosure results in a public disclosure of such information (other than by breach of this Agreement). Where reasonably possible and subject to Sections 8.3 and 8.4, the Receiving Party will notify the Disclosing Party of the Receiving Party’s intent to make such disclosure pursuant to clauses (a) through (d) of this Section 8.2 sufficiently prior to making such disclosure so as to allow the Disclosing Party adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information.

For purposes of this Article 8, during the Collaboration Term, the Research Results will be treated as Confidential Information of both Parties. After the expiration of the Collaboration Term, the Research Results will be treated as Confidential Information of OMI (unless such Research Results are transferred to Isis under Article 11).

Section 8.3                                                                                    Required Disclosure. A Receiving Party may disclose Confidential Information pursuant to interrogatories, requests for information or documents, subpoena, civil investigative demand issued by a court or governmental agency or as otherwise required by Law; provided however , that the Receiving Party will notify the Disclosing Party promptly upon receipt thereof, giving (where practicable) the Disclosing Party sufficient advance notice to permit it to oppose, limit or seek confidential treatment for such disclosure, and to file for patent protection if relevant; and provided, further , that the Receiving Party will furnish only that portion of the Confidential Information which it is advised by counsel is legally required whether or not a protective order or other similar order is obtained by the Disclosing Party.

Section 8.4                                                                                    Securities Filings. In the event either Party proposes to file with the Securities and Exchange Commission or the securities regulators of any state or other jurisdiction a registration statement, periodic report, or any other disclosure document which describes or refers to this Agreement under the Securities Act of 1933, as amended, the Securities Exchange Act, of 1934, as amended, or any other applicable securities Law, the Party will notify the other Party of such intention and will provide such other Party with a copy of relevant portions of the proposed filing not less than three (3) business days prior to such filing ( provided that, whenever practicable, such portions will be provided not less than 5 business days prior to such filing) (and any material revisions to such portions of the proposed filing a reasonable time prior to the filing thereof), including any exhibits thereto relating to the Agreement, and will obtain confidential treatment of any information concerning the Agreement that such other Party requests be kept confidential ( except to the extent advised by counsel that confidential treatment is not available for such information), and will only disclose Confidential Information which it is advised by counsel is legally required to be disclosed. No such notice will be required under this Section 8.4 if the substance of the description of or reference to this Agreement contained in the proposed filing has been included in any previous filing made by the either Party hereunder or otherwise approved by the other Party.

Section 8.5                                                                                    Terms of Agreement. The existence and the terms and conditions of the Agreement that the Parties have not specifically agreed to disclose pursuant to Article 6 or Section 8.4 will be considered Confidential Information of both Parties. Either Party may disclose such terms to a bona fide potential Licensee, investor, investment banker, acquirer,

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merger partner or other potential financial partner, and their attorneys and agents, provided that each such Person to whom such information is to be disclosed is informed of the confidential nature of such information and has entered into a written agreement with the Party requiring such Person to keep such information confidential.

Section 8.6                                                                                    Injunctive Relief. The Parties hereto understand and agree that remedies at Law may be inadequate to protect against any breach of any of the provisions of this Article 8 by either Party or their employees, agents, officers or directors or any other person acting in concert with it or on its behalf. Accordingly, each Party may be entitled to seek injunctive relief by a court of competent jurisdiction against any action that constitutes any such breach of this Article 8.

ARTICLE 9 -
PATENTS

Section 9.1                                                                                    Ownership of Inventions and Patents.

(a)                                   Title to inventions, discoveries, improvements and other technology, whether or not patentable, conceived, made or reduced to practice in the performance of the Research Program and Development Program under this Agreement (collectively, the “Program Inventions” ) and any Patents claiming such Program Inventions ( “Program Patents” ), are retained by the Party that is the employer of the inventor (or, in the case of consultants and (sub)contractors, the Party for which the consultant or (sub)contractor is providing its services). The Parties agree that the United States federal patent law on inventorship will determine the inventorship of any invention and the names of the inventors on any patent filings, whether sole or joint inventions, which arise in connection with activities conducted pursuant to this Agreement. OMI will own Program Inventions, including those inventions described in Section 4.7.1, invented solely by employees, consultants and/or (sub)contractors of OMI (the “OMI Inventions” ) and any Patents claiming such Program Inventions (the “OMI Program Patents” ). Isis will own Program Inventions, including those inventions described in Section 4.7.2, invented solely by employees, consultants and/or (sub)contractors of Isis (the “Isis Inventions” ) and any Patents claiming such Program Inventions (the “Isis Program Patents” ). Isis and OMI will own jointly such Program Inventions, including those inventions described in Section 4.7.3, invented jointly by employees, consultants and/or (sub)contractors of Isis and OMI (the “Joint Inventions” ) and any Patents claiming such Program Inventions (the “Joint Patents” ). Isis will promptly disclose to OMI any such Isis Invention or Joint Invention, and OMI will promptly disclose to Isis any OMI Invention or Joint Invention, arising from or made in the performance of the Research Program and any patent or patent application claiming such Program Invention.

(b)                                  This Agreement will be understood to be a joint research agreement to discover Compounds and associated uses and to Develop Products in accordance with 35 U.S.C. § 103(c)(3).

Section 9.2                                                                                    Filing, Prosecution and Maintenance of Patents.

9.2.1                                                                                                                      Solely Owned Patents. Subject to the other sections of this Article 9, including the other subsections of this Section 9.2 below, each Party will have the sole right, at its cost and expense and at its sole discretion, to prepare, file, prosecute (including, without limitation, to control any interferences, reissue proceedings, oppositions and reexaminations), maintain, enforce and defend throughout the world any Patents solely owned or Controlled by such Party, including with respect to Isis, the Isis Core Technology Patents and the Isis Manufacturing and Analytical Patents.

9.2.2                                                                                                                      Filing, Prosecution and Maintenance of Isis Core Technology Patents and Isis Manufacturing and Analytical Patents.

(a)                                   As between Isis and OMI, Isis will be responsible for the preparation, filing, prosecution (including, without limitation, any interferences, reissue proceedings, oppositions and reexaminations) and maintenance of Isis Core Technology Patents and Isis

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Manufacturing and Analytical Patents, and Isis will be responsible for all costs incurred by Isis with respect to such preparation, filing, prosecution and maintenance of Isis Core Technology Patents and Isis Manufacturing and Analytical Patents. At OMI’s reasonable request, Isis, or its outside counsel, will promptly provide OMI with an update of the filing, prosecution and maintenance status for each of the Isis Core Technology Patents and Isis Manufacturing and Analytical Patents, including without limitation an update of APPENDIX 3 and 4 .

9.2.3                                                                                                                      Filing, Prosecution and Maintenance of Product Specific Patents.

(a)                                                                                                                                   [***] . In accordance with this Section 9.2.3 and subject to Section 9.2.4, for Product Specific Patents related to Selected Gene Targets that OMI has [***] Isis will have lead responsibility (using internal or outside counsel selected by Isis) for preparing, filing, prosecuting (including, without limitation, any interferences, reissue proceedings, oppositions and reexaminations) and maintaining such Product Specific Patents at Isis’ expense. In addition, within [***], for each Selected Gene Target, Isis will have filed a patent application claiming at a minimum the specific composition of matter of the Research Compound(s) targeting such Selected Gene Target. OMI will cooperate with Isis in the filing and prosecution of such patent applications, including consulting with and assisting Isis and its patent counsel in drafting patent applications and responses. At OMI’s reasonable request, Isis, or its outside counsel, will promptly provide OMI with an update of the filing, prosecution and maintenance status for each of the Product Specific Patents [***].

(b)                                                                                                                                  [***]. In accordance with this Section 9.2.3, for Product Specific Patents related to Selected Gene Targets that OMI [***] , Isis will assign to OMI, in the form provided as provided in Appendix 17, all of Isis’ rights, title and interest in all Product Specific Patents, Research Results and data from the R&D Plan that relate to such Compound or Product.

(c)                                                                                                                                   Cooperation .                            In each case under Section 9.2.3 subparagraph (a) or (b) above, upon request by the Party prosecuting Product Specific Patents (the “Prosecuting Party” ), the other Party will provide such assistance and execute such documents as are reasonably necessary to permit the filing, prosecution and/or maintenance of such Product Specific Patents or the issuance, maintenance and/or extension of any resulting patent or permit enforcement of such patent application or any such patent. At the request of the other Party, the Prosecuting Party, or its outside counsel, will provide the other Party with an update of the filing, prosecution and maintenance status for each of the Product Specific Patents on a periodic basis for which the Prosecuting Party assumes lead responsibility and will reasonably consult with and cooperate with the other Party with respect to the preparation, filing, prosecution and maintenance of such Product Specific Patents. If requested in writing by the other Party, the Prosecuting Party, or its outside counsel, will provide to the other Party copies of any papers relating to the filing, prosecution and maintenance of such Product Specific Patents promptly upon their being filed or received.

(d)                                                                                                                                  Election Not to File, Prosecute, or Maintain Product Specific Patents. In the event that the Prosecuting Party elects not to pursue or continue the filing, prosecution (including any material reduction in claim scope) or maintenance of any Patents or subject matter included in such Product Specific Patents in any country, it will provide the other Party with an opportunity to assume responsibility and costs for such filing, prosecution or maintenance of such Product Specific Patents as set forth in this Section 9.2.3. The Prosecuting Party will not knowingly permit any such Product Specific Patent to be abandoned in any country, or elect not to file a new patent application claiming priority to a patent application within such Product Specific Patents either before such patent application’s issuance or within the time period required for the filing of an international (i.e., Patent Cooperation Treaty), regional (including European Patent Office) or national application, without the other Party’s written consent or the other Party otherwise first being given an opportunity to assume full responsibility (at the assuming Party’s expense) for the continued prosecution and maintenance of such Product Specific Patents, or the filing of such new patent application. Accordingly, the Prosecuting Party, or its outside counsel, will, to the extent that it is able, provide the other Party with notice of the

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allowance and expected issuance date of any patent within the Product Specific Patents, or any of the aforementioned filing deadlines, and the other Party will provide the Prosecuting Party with prompt notice as to whether the other Party desires the Prosecuting Party to file any such new patent application.

(e)                                                                                                                                   National Phase Filing Decisions for Product Specific Patents . At the time that a Product Specific Patent is ready to enter National Phase outside of the United States, the Prosecuting Party shall provide notice to the other Party at least 30 Business Days prior to the National Phase deadline that an election of countries is required. OMI will provide notice to Isis of the countries it intends to elect and OMI shall bear the reasonable costs of such election.. At a minimum, OMI must elect the countries in which OMI typically enters National Phase for OMI’s products (collectively, the “Minimum OMI Countries” ). The Minimum OMI Countries as of the Execution Date are set forth in APPENDIX 13 attached hereto. Isis shall have the right and option to elect other countries for National Phase entry in writing with notice to OMI. Upon such notice to Isis, Isis shall promptly notify OMI of its election and OMI will use Commercially Reasonable Efforts to comply with Isis’ election. Each Party shall bear the costs of their respective elections and prosecution. In the case where a Party wishes to pursue subject matter the Prosecuting Party (under subparagraph (a) or (b) above as the case may be) has deleted from a claim (where such Prosecuting Party has elected to not otherwise pursue the subject matter of such claim in the same or another application), the other Party may pursue at its own cost (including costs associated with transfer, filing, prosecution or maintenance) such subject matter in a corresponding continuation or divisional application (where permissible under law) in accordance with and subject to this Section 9.2.3.

(f)                                                                                                                                     Filing, Prosecution and Maintenance of Product Specific Patents by OMI. . For so long as OMI retains lead responsibility under this Section 9.2.3 with respect to a particular Product Specific Patent, OMI will not knowingly take any action or knowingly fail to take any action during the filing, prosecution and/or maintenance of such product Specific Patents that would result in claims that no longer cover the Product. In the case where OMI assumes responsibility, under subsection (b) of this section, for the preparation, filing, prosecution or maintenance of any patent or patent application as set forth above, and has used all good faith, reasonable efforts to comply with its obligations to provide notice and information as set forth in this Section 9.2.3, OMI will not be liable to Isis in any way with respect to its handling of, or the results obtained from, the filing, prosecution, issuance, extension or maintenance of such application or any resulting patent or any failure by it to so file, prosecute, extend or maintain.

(g)                                                                                                                                  Filing, Prosecution and Maintenance of Product Specific Patents by Isis. For so long as Isis retains lead responsibility under Section 9.2.3 with respect to a particular Product Specific Patent, Isis will not knowingly take any action or knowingly fail to take any action during the filing, prosecution and/or maintenance of such Product Specific Patents that would materially adversely affect such Product Specific Patents (including any material reduction in claim scope), without providing OMI written notice and information as set forth above. In the case where Isis assumes responsibility, under subsection (a) of this section, for the preparation, filing, prosecution or maintenance of any patent or patent application as set forth above, and has used all good faith, reasonable efforts to comply with its obligations to provide notice and information as set forth in this Section 9.2.3, Isis will not be liable to OMI in any way with respect to its handling of, or the results obtained from, the filing, prosecution, issuance, extension or maintenance of such application or any resulting patent or any failure by it to so file, prosecute, extend or maintain.

9.2.4                      Filing, Prosecution and Maintenance of Certain Program Patents, including Joint Patents.

(a)                                                                                                                                   This Section 9.2.4 will apply to Program Patents that are not Product Specific Patents (the preparation, filing, prosecution and maintenance of the Program Patents that are Product Specific Patents are governed by Section 9.2.3) and to Joint Patents under Section 9.1(a). Each Party will have lead responsibility for Program Patents invented solely by its own

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employees as provided in Section 9.1(a), and OMI will cooperate fully, with respect to the preparation, filing, prosecution (including, without limitation, any interferences, reissue proceedings, oppositions and reexaminations) and maintenance of the Program Patents with respect to Joint Patents claiming Program Inventions for the Term. Each Party will be responsible for all of its own out-of-pocket costs with respect to such preparation, filing, prosecution and maintenance of Program Patents that are not Product Specific Patents.

(b)                                                                                                                                  With respect to Joint Inventions claming Program Patents that are not Product Specific Patents, pursuant to 9.1(a), OMI will promptly disclose to Isis such Joint Inventions, and Isis will have the right, and bear the costs, in accordance with this Section 9.2.4 to file and prosecute any new patent application claiming such inventions. OMI will cooperate with Isis in the filing and prosecution of such patent applications, including consulting with and assisting Isis and its patent counsel in drafting patent applications and responses. In addition, upon request by Isis, OMI will provide such assistance and execute such documents as are reasonably necessary to permit the filing, prosecution or maintenance of such patent or patent application or the issuance, maintenance or extension of any resulting patent or permit enforcement of such patent application or any such patent. Isis, or its outside counsel, will provide OMI with an update of the filing, prosecution and maintenance status for each of the Program Patents on a periodic basis for which Isis assumes lead responsibility and will reasonably consult with and cooperate with OMI with respect to the preparation, filing, prosecution and maintenance of such Joint Patents, including providing OMI with drafts of proposed filings in sufficient time to allow OMI’s review and comment before such filings are due. Isis, or its outside counsel, will provide to OMI copies of any papers relating to the filing, prosecution and maintenance of such Joint Patents promptly upon their being filed or received. In the event that Isis elects not to pursue or continue the filing, prosecution or maintenance of any Joint Patents in any country, Isis will provide OMI with an opportunity to assume responsibility for such filing, prosecution or maintenance of such Patents to the same manner and under the same conditions that Isis is able to assume responsibility for Product Specific Patents from OMI as provided in Section 9.2.3, such that such Program Patent Rights will be treated in the same manner as Product Specific Patents under Section 9.2.3. In the case where either Party assumes responsibility for the preparation, filing, prosecution or maintenance of any patent or patent application as set forth above, and has used good faith, reasonable efforts to comply with its obligations to provide notice and information as set forth is this Section 9.2.4, that Party will not be liable to the other Party in any way with respect to its handling of, or the results obtained from, the filing, prosecution, issuance, extension or maintenance of such application or any resulting patent or any failure by it to so file, prosecute, extend or maintain.

9.2.5                      Cooperation. In accordance with the foregoing, each Party will cooperate reasonably in the preparation, filing, prosecution, and maintenance of the Product Specific Patents and Program Patent Rights. Such cooperation includes (a) promptly executing all papers and instruments and requiring employees (and other persons under obligation to assign Patents to such Party) to execute such papers and instruments as reasonable and appropriate so as to enable such other Party, to prepare, file, prosecute, and maintain such Patents in any country; and (b) promptly informing such other Party of matters that may affect the preparation, filing, prosecution, or maintenance of any such Patents.

Section 9.3                                                                                    Patent Term Extension. Isis and OMI will each cooperate with one another and will use Commercially Reasonable Efforts in obtaining patent term restorations and/or extensions (including without limitation, any pediatric exclusivity extensions as may be available) or supplemental protection certificates or their equivalents in any country with respect to patent rights covering those Products licensed by OMI hereunder. If elections with respect to obtaining such patent term extensions or supplemental protection are to be made, OMI will have

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the right to make such election, provided that such election will be made in accordance with applicable Law so as to maximize the period of marketing exclusivity for the Product.

Section 9.4                                                                                    Enforcement of Patents

9.4.1                      Enforcement by OMI of Product Specific Patents. In the event that Isis or OMI becomes aware of a suspected infringement of any Product Specific Patent, or any such Product Specific Patent is challenged in any action or proceeding (other than any interferences, reissue proceedings, oppositions or reexaminations, which are addressed above), such Party will notify the other Party promptly, and following such notification, the Parties will confer. OMI will have the right, but will not be obligated, to defend any such action or proceeding or bring an infringement action with respect to such infringement to the extent relevant to OMI’s exclusive rights hereunder at its own expense, in its own name and entirely under its own direction and control, or settle any such action, proceeding or dispute by license (to the extent such sublicense is permitted under this Agreement), subject to the following. Isis will reasonably assist OMI in any action or proceeding being defended or prosecuted if so requested, and will lend its name to such actions or proceedings if reasonably requested by OMI or required by Applicable Law. OMI will reimburse Isis for the documented out-of-pocket costs Isis reasonably incurs in providing such assistance as specifically requested in writing by OMI. In the event Isis is a required party to the proceeding or action, Isis will have the right to be represented by its own counsel (such selection to be subject to OMI’s approval, such approval not to be unreasonably withheld), and OMI will reimburse Isis for the documented external costs Isis reasonably incurs that are reasonably related to the proceeding or action, including attorneys fees, provided that OMI will retain overall responsibility for the prosecution of such action or proceeding in such event. In the event that Isis is not a necessary party to the proceeding or action, Isis will have the right to participate and be represented in any such suit by its own counsel at its own expense, provided that OMI will retain overall responsibility for the prosecution of such action or proceedings in such event. No settlement of any such action or proceeding which restricts the scope, or adversely affects the enforceability, of an Isis Patent Right, or which could be reasonably expected to have a material adverse financial impact on Isis, may be entered into by OMI without the prior written consent of Isis, which consent will not be unreasonably withheld, delayed or conditioned.

9.4.2                      Enforcement by Isis. If OMI elects not to settle, defend or bring any action for infringement described in Section 9.4.1 and so notifies Isis, including following any request by Isis to do so, then Isis may defend or bring such action at its own expense, in its own name, provided however that, Isis agrees not to so settle, defend or bring any action for infringement of a Product Specific Patent Right upon OMI’s request based on OMI’s good faith reasonable determination, the basis for which will be provided to Isis, that it is not in the best interest of the Parties to so settle, defend or bring such action for infringement. In the case where Isis proceeds to settle, defend or bring an action for such infringement, the following will apply. OMI will reasonably assist Isis in any action or proceeding being defended or prosecuted if so requested, and will lend its name to such actions or proceedings if requested by Isis or required by Applicable Law. Isis will reimburse OMI for the documented external costs OMI reasonably incurs, including attorneys fees, in providing such assistance as specifically requested in writing by Isis. OMI will have the right to participate and be represented in any such suit by its own counsel at its own expense, provided that Isis will retain overall responsibility for the prosecution of such suit or proceedings in such event. No settlement of any action or proceeding defended or brought by Isis with respect to a Product Specific Patent, which restricts the scope, or adversely affects the enforceability, of a Product Specific Patent, or which could be reasonably expected to have a material adverse financial impact on OMI, may be entered into by Isis without the prior written consent of OMI, which consent will not be unreasonably withheld, delayed or conditioned. In addition, if OMI elects not to settle, defend or bring any action for infringement against an infringing Third Party described in Section 9.4.1, then any infringing products sold by

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such Third Party will not be included in the calculation of sales of Generic Products under Section 6.7.

9.4.3                      Withdrawal. In addition to Section 9.4.2, if either Party brings an action or proceeding under this Section 9.4 and subsequently ceases to pursue or withdraws from such action or proceeding, it will promptly notify the other Party and the other Party may substitute itself for the withdrawing Party and pursue such action or proceeding in accordance with the terms of this Section 9.4 (including but not limited to the proviso in the first sentence of Section 9.4.2).

9.4.4                      Enforcement and Defense of Joint Patent Rights. With respect to infringement of a Joint Patent that is not a Product Specific Patent, the Party responsible for filing, prosecution and maintenance of such Joint Patent under Section 9.2.5 will have the first right to bring and control any enforcement action or proceeding with respect to such Joint Patent, and will bear all expenses thereof, and the other Party will have the right, at its own expense, to be represented in any such action.

9.4.5                      Cooperation. The Party not enforcing the applicable Patent will provide reasonable assistance to the other Party (at such other Party’s expense), including providing access to relevant documents and ot