Exhibit 10.324
* CERTAIN INFORMATION IN THIS
EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
COLLABORATION AND LICENSE
AGREEMENT
By and Between
PHARMACOPEIA, INC.
and
SCHERING-PLOUGH LTD.
Table of Contents
i
COLLABORATION AND LICENSE
AGREEMENT
This COLLABORATION AND LICENSE
AGREEMENT (the “Agreement”), dated as of the latest
date of signature appearing below (the “Execution
Date”) and to be effective as of the Effective Date (as
defined below), is made by and among: Pharmacopeia, Inc., a
Delaware corporation having its principal place of business at 3000
Eastpark Boulevard, Cranbury, New Jersey 08512, (hereinafter
referred to as “Pharmacopeia”); and Schering-Plough
Ltd., a Swiss corporation having its principal place of business at
Toepferstrasse 5, CH 6004 Lucerne, Switzerland, (hereinafter
referred to as “SPL”). Pharmacopeia and SPL are
sometimes referred to herein individually as a Party and
collectively as the Parties. References to “SPL”
and “Pharmacopeia” shall include their respective
Affiliates (as hereinafter defined).
WHEREAS, SPL and Pharmacopeia desire
to collaborate to design and conduct medicinal chemistry
optimization programs against SPL’s biological targets based
upon lead compounds selected by SPL; and
WHEREAS, SPL and Pharmacopeia also
desire for Pharmacopeia to conduct a separate program to identify
new lead compounds by screening certain of its internal compound
libraries for activity against biological targets selected by SPL;
and
WHEREAS, Pharmacopeia and
SPL’s Affiliate Schering Corporation have entered into a
collaboration and license agreement relating to the United States
of even date herewith; and
WHEREAS, SPL and Pharmacopeia wish
to modify and amend certain terms of the existing 1998 Agreements
(as defined below) between the Parties related to Optimization
Libraries (as defined in the 1998 Agreements);
NOW, THEREFORE, in consideration of
the covenants, conditions, and undertakings herein contained, SPL
and Pharmacopeia hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the
following capitalized terms, whether used in the singular or
plural, shall have the respective meanings set forth
below:
1.1 “ Acceptance
” shall mean, with respect to an IND, NDA or HRD submitted by
or on behalf of SPL or its Affiliate or Sublicensee, notice by the
FDA (or an analogous regulatory authority in another country) that
the IND, NDA or HRD has been accepted for review by the FDA (or
analogous regulatory authority). In the event that the FDA (or
analogous regulatory authority) is not required to provide such a
notice of acceptance of an IND, NDA or HRD, then
“Acceptance” shall be deemed to occur: (i) in the
case of an IND, thirty (30) days following the date of
submission, or if previously rejected any resubmission, of such
IND; or (ii) in the case of an NDA or HRD, sixty
(60) days following the date of submission, or if previously
rejected any resubmission, of such NDA or HRD, unless in each case
SPL or its Affiliates or Sublicensee receives notice from the FDA
(or analogous regulatory authority), during the applicable thirty
(30) or sixty (60) day period, that the NDA or HRD is not
acceptable for review.
1.2 “ Activity Criteria
” shall mean the threshold criteria to be agreed upon by the
Parties for identifying compounds having activity against the
relevant Screening Target.
1.3 “ Affiliate ”
shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, a Party to
this Agreement. For purposes of this Agreement, the direct or
indirect ownership of fifty percent (50%) or more of the
outstanding voting securities of an entity, or the right to receive
fifty percent (50%) or more of the profits or earnings of an
entity shall be deemed to constitute control, or if not meeting the
preceding requirements, any company owned or controlled by or
owning or controlling Pharmacopeia or SPL at the maximum control or
ownership right permitted in a country where such company
exists. Such other relationship as in fact results in actual
control over the management, business and affairs of an entity
shall also be deemed to constitute control. *.
1
1.4 “ Agreement
Compound ” shall mean any Lead Compound or Derivative
Compound, as well as *
1.5 “ Agreement Product
” shall mean any product containing an Agreement Compound,
including, without limitation, products for the therapeutic or
prophylactic treatment or prevention of diseases and conditions in
human beings or animals.
1.6 “ Carryover
Programs ” shall have the meaning set forth in
Section 2.02.
1.7 “ Collaboration
” shall mean the Optimization Programs and Screening Programs
to be performed at Pharmacopeia’s facilities by SPL or
Pharmacopeia under this Agreement to discover Agreement Compounds
for further development by SPL.
1.8 “ Collaboration
Committee ” shall have the meaning set forth in
Section 3.1.
1.9 “ Collaboration
Research Plan ” shall have the meaning set forth in
Section 2.1.
1.10 “ Collaboration
Target-Specific Technology ” shall mean Collaboration
Technology relating to assays, compound screening methods and
biological research tools, in each case which are discovered and
developed through Collaboration research directed to a specific
Target, or a small number of closely related Targets (e.g. a family
of biological receptor subtypes), and are not readily applicable to
other types of Targets; provided , however , that
Collaboration Target-Specific Technology shall not include any
rights in or to any Schering Technology (including, without
limitation, SPL’s proprietary Targets) or any Agreement
Compounds.
1.11 “ Collaboration
Technology ” shall mean Collaboration Patent Rights and
Collaboration Know-How.
1.11.1 “ Collaboration
Patent Rights ” shall mean: (i) all patents and
patent applications claiming any invention or discovery made by or
on behalf of Pharmacopeia in performance of the Collaboration
(including, without limitation, the synthesis and composition of
matter of any Agreement Compound, or method of use thereof); and
(ii) any divisions, continuations, continuations-in-part,
reissues, reexaminations, extensions or other governmental actions
which extend any of the subject matter of the patent applications
or patents in (i) above, and any substitutions, confirmations,
registrations, revalidations, or additions of any of the foregoing,
in each case, which is owned or controlled, in whole or part, by
license, assignment or otherwise by Pharmacopeia during the term of
this Agreement; provided , however , that
Collaboration Patent Rights shall not include any patents or patent
applications which are Schering Technology or Pharmacopeia
Technology.
1.11.2 “ Collaboration
Know-How ” shall mean all proprietary ideas, inventions,
data, know-how, instructions, processes, formulas, materials,
expert opinion and information (including, without limitation,
(i) biological, chemical, physical and analytical data and
information relating to Agreement Compounds, and (ii) any
structure-function data related to Lead Compounds or Derivative
Compounds), in each case which is developed by Pharmacopeia in
performance of the Collaboration; provided , however
, that Collaboration Know-How shall not include Collaboration
Patent Rights, Schering Technology or Pharmacopeia
Technology.
1.12 “ Combination
Product ” shall mean an Agreement Product which comprises
two (2) or more active therapeutic ingredients at least one
(1) of which is an Agreement Compound.
1.13 “ Derivative
Compound ” shall mean any compound derived by
Pharmacopeia in the performance of the Collaboration, in each case
from one or more Lead Compounds, and having activity against the
same Target as such Lead Compound(s). As used herein, a
compound shall be deemed to have been “derived from” a
Lead Compound if it *
2
1.14 “ Development
Candidate ” shall mean a Lead Compound, Derivative
Compound or Schering Derivative which possesses the desirable
properties of a therapeutic agent for the prevention or treatment
of a clinical condition, in the absence of required safety trials
necessary to begin human testing.
1.15 “ Effective Date
” shall have the meaning set forth in
Section 2.01.
1.16 “ Excluded
Compound ” shall have the meaning set forth in
Section 2.9.3.
1.17 “ FDA ”
shall mean the United States Food and Drug Administration or any
corresponding foreign registration or regulatory
authority.
1.18 “ First Commercial
Sale ” shall mean, with respect to any Agreement Product,
the first sale for end use of such Agreement Product in the
Territory after receipt of the requisite Regulatory
Approval.
1.19 “ FTE ”
shall mean a full-time employee dedicated to the conduct of the
Collaboration or, in the case of less than full-time dedication, a
full-time equivalent person-year, based on a total of forty-six and
one-fourth (46.25) weeks or one thousand eight hundred fifty
(1,850) hours per year, of work on or directly related to the
Collaboration.
1.20 “ Hit ”
shall mean a Pharmacopeia Compound identified by Pharmacopeia
during the term and in performance of the Collaboration as meeting
the Activity Criteria with respect to the given Screening
Target.
1.21 “ HRD ”
shall mean a health registration dossier or its equivalent covering
an Agreement Product filed in any country outside the United States
and which is analogous to an NDA and including, where applicable,
applications for pricing, pricing reimbursement approval, labeling
and Regulatory Approval.
1.22 “ IND ”
shall mean an Investigational New Drug application, as defined in
the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder for initiating clinical trials in the United
States, or any corresponding foreign application, registration or
certification.
1.23 “ Lead Compound
” shall mean any Hit or Schering Compound with respect to
which the Parties agree to initiate a program of medicinal
chemistry to identify a Development Candidate based upon the
structure of such Hit or Schering Compound.
1.24 “ Major Market
” shall mean Japan or any three (3) of the following
countries; France, Germany, Italy, Spain or the United
Kingdom.
1.25 “ NDA ”
shall mean a New Drug Application, Product License Application, or
Biologic License Application, as defined in the U.S. Food, Drug and
Cosmetics Act and regulations promulgated thereunder, or the
equivalent filed with the FDA seeking approval to market and sell
an Agreement Product in the United States.
1.26 “ Net Sales
” shall mean, with respect to each country in the Territory,
the invoice price billed by SPL or its Affiliates, or their
respective Sublicensees, to Third Parties (whether an end-user, a
distributor or otherwise) for the sale of Agreement Products, and
exclusive of intercompany transfers or sales among SPL, its
Affiliates and/or Sublicensees in the Territory, less the
reasonable and customary deductions from such gross amounts
including: (i) normal and customary trade, cash and
quantity discounts, allowances and credits; (ii) credits
or allowances actually granted for damaged goods, returns or
rejections of Agreement Product and retroactive price
reductions; (iii) sales or similar taxes (including
duties or other governmental charges levied on, absorbed or
otherwise imposed on the sale of Agreement Product including,
without limitation, value added taxes or other governmental charges
otherwise measured by the billing amount, when included in
billing); (iv) freight, postage, shipping, customs duties
and insurance charges, when included in billing; (v) charge
back payments and rebates granted to managed health care
organizations or their agencies, and purchasers and reimbursers or
to trade customers, including but not limited to, wholesalers and
chain and pharmacy buying groups; (vi) commissions paid
to Third Parties other than sales personnel and sale
representatives or sales agents; and (vii) rebates (or
equivalents thereof) granted to or charged by national, state or
local governmental authorities in a country in the Territory. In
determining Net Sales of an Agreement Product any of the above
discounts shall be accounted for and apportioned based on the list
price of each such Agreement Product.
3
In the event that an Agreement
Product is sold in the form of a Combination Product, Net Sales for
such Combination Product will be calculated by multiplying actual
Net Sales of such Combination Product by the fraction A/(A+B)
where: A is the invoice price of the Agreement Product contained in
the Combination Product if sold separately by SPL, an Affiliate or
Sublicensee; and B is the invoice price of any other active
therapeutic ingredients in the Combination Product if sold
separately by SPL, an Affiliate or Sublicensee. In the event
that the Agreement Product is sold in the form of a Combination
Product containing one or more active therapeutic ingredients other
than an Agreement Product and one or more such active therapeutic
ingredients of the Combination Product are not sold separately,
then the above formula shall be modified such that A shall be
the fully allocated manufacturing cost to SPL, its Affiliates or
Sublicensee of the Agreement Product and B shall be the fully
allocated manufacturing cost to SPL, its Affiliate or Sublicensee
of any other active therapeutic ingredients in the combination, in
each case, determined in accordance with the schedule of fully
allocated manufacturing costs set forth in Exhibit C.
1.27 “ Optimization
Program ” shall mean a medicinal chemistry research
program to discover one or more Development Candidates with respect
to a given Target based upon one or more Lead Compounds.
1.28 “ Pharmacopeia Change
in Control ” shall mean any of the
following: (i) a reorganization, merger or consolidation
of Pharmacopeia with a Major Pharmaceutical Company if the
shareholders of Pharmacopeia (determined immediately prior to the
reorganization, merger or consolidation taking effect) hold,
directly or indirectly, less than fifty percent (50%) of the
surviving corporation (determined immediately after such
reorganization, merger or consolidation takes effect); (ii) an
acquisition by a Major Pharmaceutical Company of direct or indirect
beneficial ownership of voting stock of Pharmacopeia representing
more than fifty percent (50%) of the total current voting
power of Pharmacopeia then issued and outstanding; (iii) a
sale of all or substantially all the assets of Pharmacopeia’s
Drug Discovery division to a Major Pharmaceutical Company; or
(iv) a liquidation or dissolution of Pharmacopeia. As
used in this Section 1.28, the term “Major
Pharmaceutical Company” shall mean any entity (including any
corporation, joint venture, partnership or unincorporated entity),
as well as any Affiliates or division(s) of such entity, that is
engaged in the research, development, manufacturing, registration
and/or marketing of drug products that are approved under NDAs,
HRDs, ANDAs or Biologics License Applications, having annual sales
of pharmaceutical products of *.
1.29 “ Pharmacopeia
Compound ” shall mean a compound synthesized and
characterized by Pharmacopeia and which is contained in one of
Pharmacopeia’s proprietary internal compound
libraries.
1.30 “ Pharmacopeia
Technology ” shall mean Existing Pharmacopeia Patent
Rights, Existing Pharmacopeia Know-How, and Pharmacopeia
Improvements.
1.30.1 “ Existing
Pharmacopeia Patent Rights ” shall mean (i) all
patents and patent applications existing as of the Effective Date
that claim the synthesis or composition of matter of a Lead
Compound which is a Hit (and/or any other Hits from the same
Screening Program as such Lead Compound) or a corresponding
Derivative Compound, or the method of use thereof, and
(ii) any divisions, continuations, continuations-in-part,
reissues, reexaminations, extensions or other governmental actions
which extend any of the subject matter of the patent applications
or patents in (i) above, and any substitutions, confirmations,
registrations, revalidations, or additions of any of the foregoing,
in each case, which is owned or controlled, in whole or part, by
license, assignment or otherwise by Pharmacopeia during the term of
this Agreement, and subject to any limitations and prohibitions of
such license or sublicense.
1.30.2 “ Existing
Pharmacopeia Know-How ” shall mean all ideas, inventions,
data, know-how, instructions, processes, formulas, expert opinion
and information, including, without limitation, biological,
chemical, physical and analytical data and information, existing as
of the Effective Date, owned or controlled in whole or part by
Pharmacopeia by license, assignment or otherwise, which is
necessary for the discovery, development, manufacture or use of
Lead Compounds based on Hits (and/or any other Hits from the same
Screening Program as such Lead Compound) or corresponding
Derivative Compounds and/or the discovery, development,
manufacture, use, sale or commercialization of corresponding
Agreement Products, in each case, to the extent Pharmacopeia has
the right to license or sublicense the same, and subject to any
limitations and prohibitions of such license or
sublicense.
4
1.30.3 “ Pharmacopeia
Improvements ” shall mean all patentable inventions
conceived and reduced to practice, solely or jointly, by
Pharmacopeia or SPL in the conduct of the Collaboration that are
within the scope of a claim of an issued patent within the Existing
Pharmacopeia Patent Rights (i) which patent issued prior to
the Effective Date or (ii) which claim has an effective filing
date prior to the Effective Date; provided , however
, that Pharmacopeia Improvements shall not include Pharmacopeia
Independent Technology (as defined in
Section 2.10.1).
1.31 “ Phase III
” shall mean Phase III clinical trials as prescribed by
applicable FDA regulations, regardless of whether such trials are
conducted in the United States or elsewhere.
1.32 “ Regulatory
Approval ” shall mean any applications or approvals,
including any INDs, NDAs, supplements, amendments, pre- and
post-approvals, marketing authorizations based upon such approvals
(including any prerequisite manufacturing approvals or
authorizations related thereto) and labeling approval(s),
technical, medical and scientific licenses, registrations or
authorizations of any national, regional, state or local regulatory
agency, department, bureau, commission, council or other
governmental entity, necessary for the manufacture, distribution,
use, import, export or sale of Agreement Product(s) in the
Territory.
1.33 “ Schering
Compound ” shall mean a compound which is independently
discovered by or on behalf of SPL, without the use of Collaboration
Technology or Pharmacopeia Technology as demonstrated by documented
evidence created at the time of such discovery, and which is active
against a specific Target.
1.34 “ Schering
Derivative ” shall mean any compound derived by SPL
during the term of the Collaboration or for a period of * the
expiration or earlier termination of the Collaboration, in each
case from any Derivative Compound(s) or from a Lead Compound which
is a Hit, and having as its primary mode of action *As used
herein, a compound shall be deemed to have been “derived
from” such a Lead Compound or a Derivative Compound if
it*.
1.35 “ Schering
Technology ” shall mean Schering Patent Rights, Schering
Know-How and Schering Improvements.
1.35.1 “ Schering Patent
Rights ” shall mean (i) all existing patents and
patent applications owned or controlled in whole or in part by SPL
or its Affiliates as of the Effective Date (including, without
limitation, those which claim the synthesis or composition of
matter of a Lead Compound or Derivative Compound, or the method of
use thereof, or which relate to any Target or any assay provided by
SPL for use in the Collaboration or the corresponding Targets for
such assays), (ii) all patents and patent applications
claiming any invention or discovery made by or behalf of SPL or its
Affiliates, other than in performance of the Collaboration, in
connection with the discovery and/or development of any Agreement
Compounds and/or Schering Compounds, and/or the development and
commercialization of any Agreement Product, and (iii) any
divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which
extend any of the subject matter of the patent applications or
patents in (i) or (ii) above, and any substitutions,
confirmations, registrations, revalidations, or additions of any of
the foregoing.
1.35.2 “ Schering
Know-How ” shall mean all ideas, inventions, data,
know-how, instructions, processes, formulas, materials, expert
opinion and information, including, without limitation, biological,
chemical, pharmacological, toxicological, pharmaceutical, physical
and analytical, clinical, safety, manufacturing and quality control
data and information (except for any of the above arising in
performance of the Collaboration) owned or controlled in whole or
part by SPL by license, assignment or otherwise, which is necessary
for the discovery, development, manufacture, use, sale or
commercialization of Agreement Products, in each case, to the
extent SPL has the right to license or sublicense the same, and
subject to any limitations and prohibitions of such license or
sublicense; provided , however , that Schering
Know-How does not include Schering Patent Rights.
1.35.3 “ Schering
Improvements ” shall mean all patentable inventions
conceived and reduced to practice solely or jointly by SPL or
Pharmacopeia in the conduct of the Collaboration that are within
the scope of the claims of any issued patent within the Schering
Patent Rights (i) which patent issued prior to the Effective
Date or (ii) which claim has an effective filing date prior to
the Effective Date.
5
1.36 “ Screening
Program ” shall mean a program to screen
Pharmacopeia’s internal compound libraries for activity
against one or more Screening Targets for the purpose of
identifying Hits.
1.37 “ Screening Target
” shall mean a Target agreed to by the Parties pursuant to
Section 2.1.2.
1.38 “ Sublicensee
” shall mean with respect to a particular Agreement Product,
a Third Party to whom SPL has granted a sublicense under the
applicable Pharmacopeia Technology, Schering Technology or
Collaboration Technology to make, use and/or sell such Agreement
Product. As used in this Agreement, it is understood that
“Sublicensee” shall also include a Third Party or Third
Parties to whom SPL has granted the right to distribute such
Agreement Product, provided that such Third Party or parties has
(have) the primary responsibility for marketing and promotion at
its (their) expense of such Agreement Product within the field or
territory for which such distribution rights are granted, which
marketing and promotional activities are not subsidized directly or
indirectly by SPL.
1.39 “ Target ”
shall mean a biomolecular entity (including, without limitation,
receptors, enzymes, nucleic acids and proteins, and/or fragments
thereof) that a small molecule is screened against in order to
determine whether the small molecule demonstrates a specific
biochemical or pharmaceutical effect.
1.40 “ Territory
” shall mean all of the countries and territories in the
world, except for the United States and its territories,
possessions and commonwealths.
1.41 “ Third Party
” shall mean any Party other than Pharmacopeia and its
Affiliates, SPL and its Affiliates, Schering Corporation and its
Affiliates, and their permitted assigns.
1.42 “ 1994 Agreements
” shall have the meaning set forth in
Section 11.17.
1.43 “ 1998 Agreements
” shall have the meaning set forth in
Section 11.17.
1.44 “ US Agreement
” shall mean that certain Collaboration and License Agreement
entered into by and between Pharmacopeia and Schering Corporation
of even date herewith.
1.45 “ Valid Claim
” shall mean a composition-of-matter or method-of-use claim
of an issued and unexpired patent included within the Collaboration
Patent Rights or Pharmacopeia Patent Rights, and in each case which
has not been revoked or held unenforceable or invalid by a decision
of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and
which has not been disclaimed, denied or admitted to be invalid or
unenforceable through reissue or disclaimer or
otherwise.
ARTICLE II
COLLABORATION
2.0 Effective Date; 1998
Agreements .
2.01 Effective Date
. SPL and Pharmacopeia have signed this Agreement on the
Execution Date as evidence of their mutual desire to establish a
collaborative alliance to discover and develop Agreement Products
effective against certain Targets. *
2.02 Relationship to 1998
Agreements . As of
the Effective Date, all of SPL’s remaining obligations to
provide research funding for Pharmacopeia FTEs under Sections 2.4
and 5.2 of the 1998 Agreements, and all of Pharmacopeia’s
remaining obligations to provide FTEs under Section 2.5.1 of
the 1998 Agreements, shall terminate. In addition, as of the
Effective Date, any and all ongoing research programs at
Pharmacopeia *shall continue to be performed using the
Pharmacopeia FTEs to be provided under this Agreement, as
determined by the Collaboration Committee. As of the Effective
Date, any and all such ongoing programs (hereinafter
“Carryover Programs”) shall be treated under this
Agreement as Optimization Programs; provided ,
however , that notwithstanding
6
anything herein to the contrary, the provisions
of this Agreement related to diligence, milestone payments,
royalties, ownership, exclusivity, patent related activities and
any and all other rights or obligations with respect to *shall
be governed by the terms and conditions of the 1998 Agreements, and
SPL shall have no milestone or royalty payment obligations under
this Agreement with respect thereto. Except as expressly
modified and amended by this Agreement, all other terms and
conditions of the 1998 Agreements shall remain in full force and
effect.
2.1 Collaboration Research
Programs .
2.1.1 Optimization
Programs . Within
thirty (30) days of the Effective Date, the Collaboration
Committee shall agree upon a written overall plan for each of the
Optimization Programs to be conducted by the Parties (the
“Collaboration Research Plan”). The Collaboration
Research Plan shall be periodically revised and updated (at least
annually) by the Collaboration Committee during the term of the
Collaboration. The Collaboration Research Plan shall set forth
the responsibilities of each of the Parties with respect to
performance of the Optimization Programs. The Collaboration
Committee shall have responsibility for monitoring the performance
of Optimization Programs against the current Collaboration Research
Plan. Notwithstanding the foregoing, the Parties acknowledge
and agree that SPL, in its sole discretion, shall have primary
responsibility and decision making authority with respect to the
selection of the Targets and Lead Compounds and the specific
Optimization Programs to be conducted during the Collaboration;
provided that Pharmacopeia shall not be obligated to
undertake an Optimization Program for a Target selected by SPL if
Pharmacopeia reasonably determines that the performance of an
Optimization Program based upon that Target would constitute a
breach one or more of Pharmacopeia’s existing contractual
obligations to Third Parties; and provided further ,
that Pharmacopeia’s obligation to undertake such an
Optimization Program shall be subject to
Section 2.12.
2.1.2 Screening
Programs . Within
thirty (30) days after the Effective Date, SPL shall notify
Pharmacopeia in writing of the identity of*Screening
Targets. Such notice shall include the applicable Activity
Criteria recommended by SPL for each proposed Screening Target,
which Activity Criteria shall constitute Schering
Know-How. Such Activity Criteria shall include, without
limitation, *Pharmacopeia shall have the right to reject any
proposed Targets as Screening Targets if: (i) it has a
pre-existing contractual obligation to any Third Party that
provides for exclusivity and/or non-compete obligations with
respect to such Target; or (ii) Pharmacopeia has previously
screened one or more Pharmacopeia Compounds against the same Target
and there are less than two million (2,000,000) Pharmacopeia
Compounds that have not previously been screened against the
Target; or (iii) in accordance with the terms of
Section 2.12. In addition, in the event that Pharmacopeia
reasonably believes (based upon objective scientific information)
that the Activity Criteria recommended by SPL for a proposed
Screening Target are not reasonably attainable, then the
Collaboration Committee shall promptly meet to agree in good faith
upon mutually acceptable Activity Criteria. Pharmacopeia shall
promptly notify in writing whether it accepts or rejects each such
Target as a Screening Target. SPL shall have the right to
propose a replacement Target for each Target rejected by
Pharmacopeia, which replacement Target may be accepted or rejected
by Pharmacopeia, as described above. The Parties shall use
reasonable efforts to agree on *SPL shall propose*additional
Targets for acceptance by Pharmacopeia as Screening Targets for
Screening Programs. Pharmacopeia shall have the right to
accept or reject such Targets, as described above, and the Parties
shall use reasonable efforts to agree on *new Screening
Targets for Screening Programs to be conducted by
Pharmacopeia *To the extent that SPL will be funding *the
Parties shall use reasonable efforts to agree upon *new
Targets (to be proposed by SPL *as Screening Targets for
Screening Programs to be conducted by
Pharmacopeia *
2.2 Collaboration Term
. The term of the Collaboration
shall be *and, unless extended pursuant to Section 2.2.1,
or earlier terminated pursuant to Section 2.2.2 or
Article X, shall expire on the third anniversary of the
Effective Date.
2.2.1 Extension of Collaboration
Term . In the event
that SPL continues to fund the Collaboration *in accordance
with Section 2.5.2, then the Collaboration may be extended
for *as provided below. The first *shall be
effective upon agreement by SPL *shall be effective upon
agreement by SPL *Each of the *shall become effective
upon written notice by SPL to Pharmacopeia that it agrees to
the *in accordance with Section 2.8.3. * shall be at
SPL’s sole discretion and shall be for the purpose of
completing any Optimization Programs which are still in progress at
the end *The *extension, if any, shall be effective upon
written notice by SPL to Pharmacopeia at least * If SPL
does not provide such notice, the Collaboration shall expire
on *.
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2.2.2 Wind Down Period
. The parties acknowledge
that*of the Collaboration is intended to serve as a wind down
period during which any then ongoing Optimization Programs can be
completed. Thus, if SPL does not elect to *during
the *shall be the wind down period. In the event that SPL
is *during *of the Collaboration and SPL does not agree
to *during *of the Collaboration based upon one or
more *then the Collaboration shall continue for a wind down
period of *to enable the Parties to complete and wind down any
remaining Optimization Programs then ongoing. SPL’s
funding obligations during the *period shall be governed by
the terms of Section 2.5.2*, 2.5.4*, or 2.5.3*, as
applicable.
2.2.3 Termination of
Collaboration Upon Pharmacopeia Change in Control
. In the event of a
Pharmacopeia Change in Control during the term of the
Collaboration, SPL shall have the right, in its discretion,
(i) to terminate the Agreement pursuant to
Section 10.4.1, below, or (ii) to terminate the
Collaboration and not the Agreement upon ninety (90) days
written notice to Pharmacopeia after such Change in Control
expressly stating its intention to terminate the
Collaboration. In the event that SPL elects to terminate the
Collaboration and not the Agreement, then (a) SPL will not be
obligated to make the payments set forth in Section 5.2 for
the period after the effective date of such termination,
(b) Pharmacopeia shall not be obligated to conduct any
Collaboration research activities after the effective date of such
termination, and (c) the remaining terms and conditions of
this Agreement, including without limitation the licenses and
royalty obligations set forth herein, shall remain in full force
and effect until the Agreement expires or is terminated as set
forth in Article X, below.
2.2.4 Early Termination of
Screening Programs . In the event that Pharmacopeia fails to
identify any Hits meeting the applicable Activity Criteria from any
of the Screening Programs conducted during * then SPL shall
have the right to terminate all further obligations with regard to
Screening Programs in *This right shall be exercisable by SPL,
in its sole discretion, by providing written notice to that effect
to Pharmacopeia within *In the event that the Screening
Programs are terminated pursuant to this Section 2.2.4, then
Pharmacopeia shall not conduct any further Screening Programs under
this Agreement during the remaining term of the
Collaboration. In addition, notwithstanding anything herein to
the contrary: (i) the Collaboration shall be limited to a
total *being a wind down year in which SPL shall only be
obligated to fund *chemists, as provided in
Section 2.5.2; and (ii) the number of FTEs to be funded
during * consisting of*chemistry FTEs and*biology FTEs, to
conduct the Optimization Programs *In the event that following
such early termination of the Screening Programs by SPL, or during
any other wind down period under Section 2.2.2, Pharmacopeia
undertakes any new Optimization Programs based upon Lead Compounds
which are Schering Compounds (“Wind Down Programs”),
then notwithstanding anything herein to the contrary, Pharmacopeia
shall be entitled to receive milestone payments with respect to any
new Agreement Compounds resulting from such Wind Down Programs
under Section 5.4.1(a), but shall not be entitled to receive
any royalty payments under Section 5.5 on sales of any
Agreement Products containing an Agreement Compound resulting from
such Wind Down Programs or with respect to any pharmaceutical
products containing a Schering Compound having primary activity
against the Target which was the subject of the Wind Down
Program.
2.3 Pharmacopeia
Responsibilities . Pharmacopeia shall use commercially
reasonable efforts to provide:
(i) the number of scientist FTEs
agreed to by the Parties, as set forth in Section 2.5, and
such additional scientists as may be mutually agreed to in writing
by the Parties and paid for by SPL, for performance of the
Collaboration during each year of the Collaboration (it being
understood and agreed that FTEs provided by Pharmacopeia for the
Collaboration under the US Agreement shall also be deemed to be
provided to this Collaboration for purposes of determining the
number of FTEs provided by Pharmacopeia hereunder);
(ii) research facilities,
laboratories and equipment sufficient to enable the Collaboration
scientists (including Pharmacopeia employees and one (1) SPL
employee to be provided pursuant to Section 2.4(i)) to perform
the Collaboration in a fashion similar to the operation of
Pharmacopeia’s own operations. The chemistry FTEs shall
work in dedicated laboratories at Pharmacopeia’s research
facilities in New Jersey; and
(iii) administrative services
necessary to conduct the business of the Collaboration in a manner
comparable to that of Pharmacopeia’s own business
activities.
8
It is understood and agreed that, except as may
be mutually agreed by the Parties, Pharmacopeia shall not be
obligated hereunder to conduct research or development activities
in the Collaboration which are outside the scope of the
Collaboration Research Plan or the Screening Programs.
2.4 SPL
Responsibilities . SPL shall provide research funding for
the Collaboration as set forth in Section 5.2 and shall use
commercially reasonable efforts to provide:
(i) one scientific director provided
by SPL, in combination with Schering Corporation, to work full-time
on the Collaboration managing the day-to-day operations of the
Collaboration (the “Collaboration
Director”);
(ii) additional support for
Collaboration research projects, including, without limitation,
scientists, facilities and materials to perform biological research
to identify Targets, assay development, compound screening,
medicinal chemical research and analytical support services;
and
(iii) the research materials,
procedures and Schering Know-How necessary to conduct the Screening
Programs, as provided in Section 2.8.
2.5 Collaboration
Staffing .
2.5.1 Pharmacopeia Initial FTE
Commitments .
During *Pharmacopeia will provide *FTEs, consisting
of *synthetic/medicinal chemists *and the
remaining *biology FTEs to be allocated, as determined by the
Collaboration Committee, between bioassay support for Optimization
Programs and performance of Screening Programs. The Parties
agree that the Collaboration Committee shall have the right to
(i) increase or decrease the total number of FTEs to be
provided by Pharmacopeia and funded by SPL during any year of the
Collaboration, and/or (ii) to adjust the allocation of the
total number of FTEs working on the Collaboration between chemistry
and biology FTEs, in each case as necessary to carry out the
Collaboration Research Plan; provided , however ,
that any such adjustments must be agreed upon by the Collaboration
Committee in advance in writing, shall not be made more than once
in any given quarter, and shall not *or *in any wind down
year. Pharmacopeia’s obligation to provide FTEs
during*as well as during any extension of the Collaboration
pursuant to Section 2.2.1 or wind down period pursuant to
Section 2.2.2, shall be determined in accordance with Sections
2.5.2, 2.5.3 or 2.5.4, as applicable. All of the Pharmacopeia
chemistry FTEs assigned to work on the Collaboration *On or
before the Effective Date, Pharmacopeia will provide to SPL a list
individually identifying those Pharmacopeia chemistry FTEs assigned
to the Collaboration, which list shall be updated from time to time
during the term of the Collaboration as FTEs assigned to work
exclusively for the Collaboration are added, removed and/or
replaced. During the term of the Collaboration, upon
initiating each Optimization Program, Pharmacopeia will also
individually identify a biology FTE as the primary contact at
Pharmacopeia for the performance of assays and other biology
related activities for such Optimization Program, it being
understood that such individuals may have responsibility for more
than one Optimization Program. It is understood that, in the
aggregate, the education, training and experience levels of all
Pharmacopeia FTEs assigned to the Collaboration will be reasonably
representative of Pharmacopeia employees working on
Pharmacopeia’s internal research programs. Within
fifteen (15) business days after the Effective Date,
Pharmacopeia will provide SPL with: (i) a copy of the
Collaboration Business Conduct Policy (as described in
Section 7.6) to be observed by all Pharmacopeia FTEs assigned
to work on the Collaboration; and (ii) Pharmacopeia’s
written representation and warranty that all such FTEs assigned to
the Collaboration have read and understand the terms of the
Collaboration Business Conduct Policy.
2.5.2 Pharmacopeia FTE
Commitments for * In
the event that during *the Parties have initiated, or SPL has
agreed to initiate, *Optimization Programs *then
Pharmacopeia shall continue to provide, and SPL will continue to
fund, *FTEs during *If at least *then SPL shall have
the right (in its sole discretion) to reduce the number of FTEs to
be provided by Pharmacopeia and funded by SPL; provided that
the number of Pharmacopeia FTEs to be funded by SPL during the
third year of the Collaboration shall be *FTEs; and
provided further that all such FTEs shall be
chemistry FTEs dedicated to work full time on the
Collaboration.
2.5.3 Pharmacopeia FTE
Commitments During * If the term of the Collaboration
is *pursuant to Section 2.2.1, SPL shall continue to fund
and Pharmacopeia shall continue to provide *FTEs during *
if applicable. If SPL extends the Collaboration *pursuant
to Section 2.2.1, then the level of FTE support to be provided
by Pharmacopeia and funded by SPL shall be determined by the
Parties based *to be completed during*
9
2.5.4 Pharmacopeia FTE
Commitments * SPL
shall have the right (in its sole discretion) to decrease the level
of FTE support to be provided by Pharmacopeia and funded by SPL
during*as determined pursuant to Section 2.2.2) *
provided that the number of Pharmacopeia FTEs to be funded
by SPL during *shall be *nd provided
further that all such FTEs shall be chemistry FTEs dedicated
to work full time on the Collaboration.
2.5.5 SPL FTE
Commitments . During
the term of the Collaboration SPL shall, in combination with
Schering Corporation under the US Agreement, provide a single
scientific director as set forth in Section 2.4(i). Such
director shall be subject to Pharmacopeia’s confidentiality
restrictions such as limited access to laboratories and access only
to data that specifically relate to the Collaboration. It is
understood that the scientific director shall remain an employee of
Schering Corporation, and that SPL shall remain responsible for,
and indemnify Pharmacopeia for any claims arising from or relating
to, the conduct, activities, salary and benefits of such director,
except to the extent caused by the gross negligence or willful
misconduct of Pharmacopeia. In addition, SPL shall provide
such additional FTEs located at SPL’s research facilities as
SPL determines, in its sole discretion, are reasonably necessary to
support the ongoing research programs of the Collaboration,
including, without limitation, assay development, screening,
medicinal chemistry, analytical services and animal testing
services.
2.6 Capital
Expenditures . In
the event that the Parties reasonably determine that one or more
Optimization Programs to be performed at Pharmacopeia, as
identified in the applicable Collaboration Research Plan, will
require capital expenditures to provide Pharmacopeia with access to
specialized equipment needed to perform such Optimization Program,
SPL shall be responsible (at its expense) for the purchase of such
specialized equipment, and for purchasing, or reimbursing
Pharmacopeia for the out-of-pocket costs of, any specialized
consumables that are uniquely necessary for the proper operation of
such specialized equipment. The Parties will make arrangements
for the delivery and installation of such specialized equipment at
Pharmacopeia’s facilities; provided that the specialized
equipment is and shall remain the sole and exclusive property of
SPL. Pharmacopeia shall have the right to utilize the
specialized equipment in performance of Optimization Programs and
shall not use the specialized equipment for any other activities or
programs whatsoever. Pharmacopeia shall be responsible (at its
own expense) for all routine operating costs incurred in connection
with the use of any specialized equipment provided by SPL under
this Section 2.6, including without limitation, any utility
costs and the costs of reagents, solvents or other supplies
necessary for the operation of the specialized
equipment. Pharmacopeia shall ensure that all Pharmacopeia
employees operating the specialized equipment have been properly
trained in its use and shall use the specialized equipment in
accordance with the instructions and operating procedures to ensure
its proper use. Pharmacopeia shall be responsible (at its
expense) for any damage (excluding ordinary wear and tear) to any
of SPL’s specialized equipment provided to Pharmacopeia
pursuant to this Section 2.6 resulting from
Pharmacopeia’s use of the specialized equipment. Upon
expiration or earlier termination of the Collaboration,
Pharmacopeia shall fully cooperate with SPL to promptly return the
specialized equipment to SPL. Alternatively, the Parties may
decide to permit Pharmacopeia to retain the specialized equipment
following the expiration or termination of the Collaboration, in
which case the Parties shall arrange for the purchase and transfer
of ownership of the specialized equipment to Pharmacopeia on
financial terms to be agreed to by the Parties based upon the then
current fair market value of the specialized equipment.
2.7 Record Keeping and Inspection
of Records . Each of SPL
and Pharmacopeia, and their respective Affiliates, shall maintain
records of its Collaboration activities (or cause such records to
be maintained) in sufficient detail and in good scientific manner
appropriate for patent and regulatory purposes as will properly
reflect all work performed and the results achieved in performance
of the Collaboration. SPL shall also maintain analogous
records of its development activities with respect to Agreement
Compounds and Agreement Products. Such records may include
books, records, reports, research notes, charts, graphs, comments,
computations, analyses, recordings, photographs, computer programs
and documentation thereof, computer information storage media,
samples of materials and other graphic or written data generated in
connection with the Collaboration, including any data required to
be maintained pursuant to all requirements of applicable laws,
rules and regulations, or as directed by the Collaboration
Committee. Pharmacopeia’s records shall also document by
name which individuals assigned to the Collaboration pursuant to
Section 2.5 are working on each specific Collaboration
research project (identifying the Target(s) involved). During
the Collaboration and for five (5) years thereafter, each of
SPL and Pharmacopeia shall have the right, upon at least five
(5) business days’ prior notice,
10
to inspect all such records of the other Party
(or legible copies thereof) during normal business hours. Each
Party’s rights under this Section 2.7 shall be limited
to one (1) inspection in any calendar year. In each case,
the Party conducting the inspection shall maintain such records and
the information disclosed therein in confidence in accordance with
Section 7.1, and shall use such information solely for
purposes of this Agreement. Upon request and tender of payment
for the actual cost in providing copies, Pharmacopeia and/or SPL,
as appropriate, shall provide to the requesting Party copies of
such records.
2.8 Performance of Screening
Programs . With respect
to each Screening Target, the Parties agree that promptly following
the acceptance by Pharmacopeia of each Screening Target in
accordance with Section 2.1.2, SPL will provide Pharmacopeia
(free of charge) with reasonable quantities of the Screening Target
protein and any of SPL’s other proprietary reagents required
to perform assays to identify compounds having activity against
such Screening Target. All such proteins and other reagents
are and shall remain the property of SPL, shall be used by
Pharmacopeia solely in performance of the Screening Program, and
shall not be transferred or otherwise made available to any Third
Party without SPL’s prior written consent (which consent may
be granted or withheld in SPL’s sole discretion.) Upon
receipt of such *Pharmacopeia shall use diligent efforts to
initiate and conduct a Screening Program to identify Pharmacopeia
Compounds having activity against such Screening Target. Such
efforts shall include any assay development work or assay
modifications necessary to enable Pharmacopeia to perform the
relevant assays to determine whether or not the applicable Activity
Criteria are met for such Screening Target. Except as
otherwise provided in Section 2.6, Pharmacopeia shall be
solely responsible *Effective upon acceptance by Pharmacopeia
of each Screening Target under Section 2.1.2, Pharmacopeia
shall not conduct any screening of Pharmacopeia Compounds, either
for itself or for any Third Party, against the same Target as such
Screening Target (as determined pursuant to Section 2.11.1)
for the period *
2.8.1 Hits
. Any Pharmacopeia Compound(s)
identified as meeting the Activity Criteria against a Screening
Target through screening of the Pharmacopeia Compounds by
Pharmacopeia during the term of the Collaboration, shall be
designated a Hit. Upon completion by Pharmacopeia of the Screening
Program for a given Screening Target, Pharmacopeia shall promptly
notify SPL of all Hits identified with respect to that Screening
Target, which notice shall identify the Screening Target and the
available data generated by Pharmacopeia regarding*but shall not
disclose the chemical structure of the Hits, or in the event that
no Hits are identified from the Screening Program, Pharmacopeia
shall notify SPL to that effect. *information and samples of
Hits solely for the purpose of confirming that such Pharmacopeia
Compound meets the Activity Criteria for the Screening
Target. This will include the performance by SPL of any tests
necessary to confirm *SPL agrees, however, not to conduct, or
have conducted, *
2.8.2 * Within *SPL shall notify Pharmacopeia in
writing of those compounds which SPL has confirmed are
Hits *Promptly after receipt of such notice, Pharmacopeia
shall disclose to SPL *Upon receipt of the *SPL shall
ensure that those employees having access to the*shall only use
such information for *
2.8.3 Lead Compounds from
Screening Programs . *SPL shall notify Pharmacopeia which (if
any) of those confirmed Hits are acceptable to SPL as Lead
Compounds for initiation of new Optimization
Programs. Following notice from SPL that one or more Hits are
acceptable as Lead Compounds, the Parties shall, as soon as
reasonably practicable, initiate a new Optimization Program based
upon such Lead Compound(s) in accordance with
Section 2.9. The Parties acknowledge and agree that if
SPL notifies Pharmacopeia that at least one Hit is acceptable to
SPL as a Lead Compound for a given Screening Target, then the
licenses granted to SPL under Article 4 with respect to such
Lead Compound shall also include *The restrictions set forth
in Section 2.8.2 regarding disclosure, access and use of
structural information with respect to confirmed Hits shall no
longer apply following notice of acceptance by SPL of one or more
such Hits as a Lead Compound pursuant to this Section 2.8.3.
Upon acceptance by SPL of one or more Hits as a Lead Compound
pursuant to this Section 2.8.3, the duration of the
restriction on screening by Pharmacopeia against the relevant
Screening Target, as set forth in the last sentence of
Section 2.8, *
2.8.4 Hits Not Accepted by
SPL . In the event
that SPL does not accept any of the Hits identified by Pharmacopeia
with respect to a given Screening Target as Lead Compounds for an
Optimization Program, Pharmacopeia shall have the right to *In
the event that Pharmacopeia decides to *Following receipt of
any*by SPL, the Parties agree that for *
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2.9 Performance of Optimization
Programs . The first
Optimization Programs to be performed under this Agreement are the
ongoing research programs for Optimization Libraries (as defined in
the 1998 Agreements) listed in Exhibit D, which shall be subject to
the terms and conditions of Section 2.0. All new
Optimization Programs to be initiated by the Parties after the
Effective Date shall be programs based upon Lead Compounds selected
under the terms and conditions of this Agreement and
Section 2.0 shall not apply to any such new Optimization
Programs. It is anticipated that the Parties will generally seek to
maintain *ongoing Optimization Programs during each year of
the Collaboration in which SPL is funding research at the full
level of *FTEs in accordance with Section 2.5;
provided , however , that the Parties acknowledge
that the actual number of ongoing Optimization Programs at any
given time may vary and shall be subject in part to
Pharmacopeia’s success in identifying Hits from Screening
Programs. If the Parties are unable to maintain *of
Optimization Programs based upon Lead Compounds which are Hits from
Screening Programs, SPL will use commercially reasonable efforts to
approve and initiate new Optimization Programs based upon Lead
Compounds which are Schering Compounds as necessary in order
maintain a reasonable number of ongoing Optimization Programs based
upon the available Pharmacopeia FTEs working on the Collaboration;
provided , however , failure by SPL to provide Lead
Compounds which are Schering Compounds shall not constitute a
breach under this Agreement. If SPL ceases funding the
Collaboration at the full level in *in accordance with
Sections 2.5.2, 2.5.3 and 2.5.4, then SPL will not be obligated to
initiate any new Optimization Programs *The Collaboration
Committee shall be responsible for allocation of the FTEs and other
resources among the various Optimization Programs selected by
SPL. This will include allocation of the medicinal chemistry
FTEs, as well as additional FTEs to provide bioassay support, as
necessary, for each Optimization Program to generate primary assay
data for Lead Compounds and Derivative Compounds. In the event
that all FTEs are fully allocated among the various ongoing
Optimization Programs, any new Optimization Programs will be
initiated as resources become available within the Collaboration,
based upon prioritization determined by SPL. Any delay in
initiating an Optimization Program based upon a Lead Compound which
is a Hit from a Screening Program shall not have any effect on the
acceptance of such Hit as a Lead Compound and Pharmacopeia shall
not acquire any *.
2.9.1 Preparation of Derivative
Compounds . In
performing each Optimization Program, Pharmacopeia shall undertake
the synthesis of analogs and other Derivative Compounds based upon
the relevant Lead Compounds. Pharmacopeia will also conduct
primary screening assays of all such Derivative Compounds to
determine activity against the applicable Target. Pharmacopeia
will provide the Collaboration Committee with regular (at least
quarterly) written reports of the data and results generated in
performance of each Optimization Program. Such reports will
identify the chemical structure of any and all Derivative Compounds
prepared by Pharmacopeia in performance of the Optimization Program
(whether or not such compounds are identified as active against the
Target), and all test data with respect thereto.
2.9.2 *
2.9.3 * Notwithstanding the provisions of
Section 2.9.2, in the event
* 2.9.4 Leads Based Upon Schering
Compounds . SPL shall not be obligated to disclose the
structure of any Schering Compound(s) proposed as Lead Compounds
unless and until Pharmacopeia has agreed, pursuant to
Section 2.1.1, to conduct an Optimization Program against the
relevant Target. Upon Pharmacopeia’s agreement to
conduct an Optimization Program based upon one or more Lead
Compounds which are Schering Compounds, SPL shall disclose to
Pharmacopeia the structure of such Schering
Compounds. Effective upon the date Pharmacopeia agrees to
perform an Optimization Program based upon one or more Lead
Compounds which are Schering Compounds, *for the period
extending from
* 2.10 Pharmacopeia Independent
Research Activities .
2.10.1 Activities Outside the
Collaboration . The
Parties acknowledge that during and after the term of the
Collaboration Pharmacopeia may (either alone or in collaboration
with one or more Third Parties) perform independent research and
development activities with respect to Targets (including, without
limitation, to identify, develop and commercialize products), which
activities are not within the scope of this Agreement;
provided that Pharmacopeia shall not use any Schering
Technology, and except as otherwise expressly set forth in this
Agreement shall not use any Collaboration Technology, in connection
with any such independent research and development
activities.
12
Any data, information, materials, compounds,
products or other technology resulting from such independent
research and development activities is the property of Pharmacopeia
(“Pharmacopeia Independent Technology”). The
Parties further acknowledge that Pharmacopeia Independent
Technology may include technology independently acquired,
discovered or developed by Pharmacopeia (as demonstrated by
documented evidence created at the time of such acquisition,
discovery or development) and which coincidentally is substantially
the same as technology within the scope of Collaboration Technology
and/or Schering Technology. SPL shall have no rights or
licenses whatsoever to any Pharmacopeia Independent
Technology.
2.11 SPL’s Screening
Programs . The
Parties acknowledge that SPL shall have the right to conduct its
own independent screening programs against any and all Targets, and
that except as expressly set forth in this
Section 2.11, *resulting from such independent screening
programs. SPL shall have the right *The Parties
acknowledge and agree that any pharmaceutical products discovered,
developed and commercialized as a result of *are and shall be
treated as Agreement Products and shall be subject to *but
shall not be subject to *
2.11.1 Differentiation of
Targets . A Target
will encompass *
2.12 Third Party
Patents . The
Parties acknowledge and agree that Pharmacopeia shall have the
right to reject and shall not be obligated to undertake any
Screening Program or Optimization Program, or any new research
activities in connection with an ongoing Screening Program or
Optimization Program, pursuant to this Agreement if Pharmacopeia
reasonably determines, in good faith, that such program or
activities cannot be performed without infringing an issued US
patent held by a Third Party. It is further understood and
agreed that, unless SPL obtains a license for Pharmacopeia, or
grants Pharmacopeia a sublicense under a license held by SPL, to
conduct such program or research activities, Pharmacopeia’s
failure to conduct such program or research activities shall not
constitute a breach of this Agreement. Pharmacopeia shall
promptly inform SPL in the event that Pharmacopeia determines in
accordance with this Section 2.12 that it will be unable to
undertake any proposed Screening Program, Optimization Program or
research activities due to Third Party patents. *
ARTICLE III
COLLABORATION
MANAGEMENT
3.1 Collaboration
Committee . The
Parties shall establish a Collaboration Committee to oversee,
review and coordinate the conduct of the Collaboration. The
Collaboration Committee shall be comprised of three
(3) representatives from each of SPL and Pharmacopeia, or such
other equal number of representatives as the Parties may agree,
each Party’s members selected by that Party. Each of
Pharmacopeia and SPL may replace its Collaboration Committee
representatives at any time upon written notice to the other
Party. The Collaboration Committee shall be chaired by the
Collaboration Director appointed by SPL, unless otherwise agreed by
the Parties. From time to time the Collaboration Committee may
establish various subcommittees, constituted as agreed by the
Collaboration Committee, to oversee particular projects or
activities within the Collaboration.
3.2 Collaboration Committee
Meetings . During the
term of the Collaboration, including as it may be extended, the
Collaboration Committee shall meet at least four (4) times per
year, or more often as agreed by the Parties, at such locations as
the Parties shall agree. At such meetings the Collaboration
Committee’s responsibilities will include:
(i) formulating and reviewing the Collaboration objectives
with respect to each Optimization Program; (ii) monitoring the
progress of the Collaboration toward those objectives;
(iii) evaluating Hits identified by Pharmacopeia from
Screening Programs; (iv) initially reviewing recommendations
by Pharmacopeia to SPL for Hits proposed to be accepted as Lead
Compounds for new Optimization Programs; and (v) taking such
other actions as may be specified under this Agreement or which the
Parties deem appropriate. The Collaboration Committee may
designate a patent committee comprised of employees or
representatives of the Parties to oversee the patent prosecution
and/or enforcement activities described in Article VI, and to
facilitate communication and agreement between the Parties
regarding inventorship of inventions made in the Collaboration and
the classification of such inventions (e.g., as Schering
Improvements, Pharmacopeia Improvements, Collaboration Technology,
etc.). Additional non-voting representatives or consultants
from either Party may from time to time be invited by SPL or
Pharmacopeia to attend and participate in Collaboration Committee
meetings (e.g., to evaluate and advise on business or scientific
issues) subject to compliance with the confidentiality provisions
of Section 7.1. Each Party shall be responsible for its
own expenses in connection with the Collaboration
Committee.
13
3.3 Collaboration Committee
Decisions . Decisions of the Collaboration Committee
shall be based upon the consensus of all the members. In the
event that the Collaboration Committee cannot or does not, after
good faith efforts, reach agreement on an issue, such issue shall
be referred to the President of SPL’s Affiliate, the
Schering-Plough Research Institute (“SPRI”), and the
President and Chief Operating Officer of Pharmacopeia Drug
Discovery for resolution. In the event that these officers are
unable to resolve the issue within fifteen (15) business days
after submission of the issue to them, then the unresolved issue
may be submitted by either Party to binding arbitration pursuant to
Section 11.3 of this Agreement, except that the decision shall
be made by one (1) arbitrator with expertise in pharmaceutical
product development, and the decision of the arbitrator shall be
rendered within six (6) months of initiation of the
arbitration. During the pendency of any such arbitration
proceedings, the Parties shall proceed with performance of the
Collaboration following the course of conduct determined by SPL;
provided , however , that notwithstanding the
foregoing, Pharmacopeia shall not be obligated to (i) perform
any action that would violate its obligations to any Third Party or
contravene Section 2.12, (ii) spend or forego receiving
any amounts of money (except as necessary in connection with the
fulfillment of Pharmacopeia’s responsibilities under
Section 2.3), or (iii) knowingly prepare or deliver to
SPL any compounds previously licensed to any Third
Party. Notwithstanding the foregoing, SPL, in its sole
discretion, shall have complete and final control over SPL’s
research, development and commercialization of Schering Compounds,
Agreement Compounds and/or Agreement Product(s) in accordance with
the terms and conditions of this Agreement.
3.4 Development Status; Notice of
Sale of Agreement Products . During the term of this Agreement, SPL
shall provide Pharmacopeia written annual reports within thirty
(30) days after the first and each subsequent anniversary of
the Effective Date, which reports shall provide: (i) a brief
report summarizing the development status of each Lead Compound
and/or Development Candidate under development at SPL;
(ii) the status of all patent applications claiming any
Library Compounds or Derivative Compounds, and (iii) copies of
all such patent applications which have published during the
relevant twelve (12) month period and were not previously
provided to Pharmacopeia. Such reports shall contain
information sufficient to allow Pharmacopeia to monitor the status
of SPL’s efforts with respect to the accomplishment of the
milestones set forth in Section 5.3; provided ,
however , that nothing hereunder shall be construed as
requiring SPL to provide Pharmacopeia with any specific research
data or results, including, without limitation, information
relating to Targets or data obtained from screening programs being
conducted at SPL. Until the First Commercial Sale of each
Agreement Product by or on behalf of SPL hereunder, SPL shall keep
Pharmacopeia reasonably informed as to the status of the
pre-clinical, clinical and commercial development of such Agreement
Product by providing Pharmacopeia with annual written reports
summarizing such activities with respect to each potential
Agreement Product under development during the term of this
Agreement. Within thirty (30) days of the First
Commercial Sale of any Agreement Product, SPL shall give
Pharmacopeia written notice thereof, which notice shall describe
the relevant Agreement Product, identify the active ingredients in
such Agreement Product, and identify the specific Target(s) which
led to the development of such Agreement Product.
3.5 Diligence
. The Parties acknowledge and
agree that all business decisions regarding research, development
and commercialization of Agreement Products (including, without
limitation, decisions relating to the development and
manufacture
