COLLABORATION AND LICENSE AGREEMENT

Exhibit 10.1

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

COLLABORATION AND LICENSE AGREEMENT

T HIS C OLLABORATION AND L ICENSE A GREEMENT (“ Agreement ”) is entered into as of March 24, 2009 (the “ Effective Date ”) by and between ACADIA P HARMACEUTICALS I NC . , a Delaware corporation (“ ACADIA ”), having an address of 3911 Sorrento Valley Boulevard, San Diego, CA 92121, and M EIJI S EIKA K AISHA , L TD . , a corporation organized under the laws of Japan (“ MSK ”), having an address of 4-16, Kyobashi 2-Chome, Chuo-ku, Tokyo 104-8002, Japan.

R ECITALS

W HEREAS , ACADIA is developing the Licensed Molecules and Products for use in the Field;

W HEREAS , MSK is engaged in the research, development and commercialization of pharmaceutical products;

W HEREAS , the parties intend to collaborate on the development of the Licensed Molecules and Products in accordance with the terms and conditions of this Agreement; and

W HEREAS , MSK desires to obtain from ACADIA, and ACADIA wishes to grant to MSK, an exclusive license to research, develop, manufacture and commercialize the Licensed Molecules and Products in the Field in the Territory, subject to the terms and conditions of this Agreement.

A GREEMENT

N OW , T HEREFORE , in consideration of the foregoing premises and the mutual promises, terms, conditions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ACADIA and MSK hereby agree as follows:

1. D EFINITIONS

For purposes of this Agreement, initially capitalized terms used in this Agreement, whether used in the singular or plural, shall have the following meanings, unless the context clearly requires otherwise:

1.1 “ACADIA Affiliate” shall mean any entity that is an Affiliate of ACADIA; provided that, effective upon Change of Control of ACADIA, the term “ACADIA Affiliate” shall mean only any entity that is, directly or indirectly, through one or more intermediaries, controlled (as such term is defined in Section 1.8) by ACADIA, but for only so long as such control exists.

1.2 “ACADIA Data” shall mean all non-clinical (including chemistry, manufacturing and control) and clinical data and regulatory filings (including Regulatory Filings), correspondence and approvals pertaining to the Licensed Molecules or Products in the Field outside the Territory that ACADIA or any ACADIA Affiliate Controls as of the Effective Date or during the Term.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.3 “ACADIA Indemnitee” shall have the meaning provided in Section 11.2.

1.4 “ACADIA Inventions” shall mean all Inventions discovered, made, conceived, or conceived and reduced to practice, solely by one or more employees, consultants or contractors of ACADIA or any ACADIA Affiliate in the course of development activities conducted pursuant to this Agreement.

1.5 “ACADIA Know-How” shall mean all Information that ACADIA or any ACADIA Affiliate Controls as of the Effective Date or during the Term that is necessary or useful for the research, development, manufacture, use, marketing, import, offer for sale or sale of any Licensed Molecule or Product in the Field, including any replication or any part of such Information. The ACADIA Know-How includes the ACADIA Data.

1.6 “ACADIA Patents” shall mean (a) the patent and patent applications listed on Exhibit A , (b) all additions, divisions, continuations, continuations-in-part, provisionals, substitutions, reissues, re-examinations, extensions, restorations by existing or future extension or restoration mechanisms, registrations, patent term extensions, supplemental protection certificates or the equivalent thereof, and renewals of a patent or patent application, inventor’s certificates, and any confirmation patent or registration patent or patent of addition based on any such patent and patent applications set forth in (a), and (c) Patents claiming or covering ACADIA Inventions, but excluding ACADIA’s interest in any Joint Patents.

1.7 “ACADIA Technology” shall mean the ACADIA Know-How and ACADIA Patents.

1.8 “Affiliate” shall mean, with respect to a given party, any corporation, company, partnership, joint venture, or any other entity that, directly or indirectly, through one or more intermediaries, is controlled by, controlling, or under common control with such party, as the case may be, but for only so long as such control exists. As used in this Section 1.8, “control” shall mean direct or indirect beneficial ownership of more than fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital or other equity interest in any corporation, company, partnership, joint venture, or other entity.

1.9 “Annual Net Sales” shall mean Net Sales generated in a particular calendar year beginning on January 1 and ending on December 31.

1.10 “Business Day(s)” shall mean a day on which banks are open for business in both Tokyo, Japan and San Diego, California, excluding Saturdays and Sundays.

1.11 “Calendar Quarter” shall mean each respective period of three consecutive months ending on March 31, June 30, September 30, and December 31.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.12 “Change of Control” shall mean, with respect to a party, either: (a) a sale of all or substantially all of the assets of a party, including the Licensed Molecules and Products, in one or a series of related transactions not in the ordinary course of business to a Third Party; or (b) the acquisition of a party by a Third Party by means of any transaction or series of related transactions to which such party is a party (including, any stock acquisition, merger or consolidation); in either case of subsection (a) or (b), in which transaction or series of transactions the holders of outstanding voting securities of such party immediately prior to such transaction do not beneficially own, directly or indirectly, at least fifty percent (50%) of the combined outstanding voting power of the acquiring entity (or of such party if it is the surviving entity in such transaction described in subsection (b)), or its direct or indirect parent entity, immediately after such transaction or series of related transactions.

1.13 “Collaboration Term” shall mean the period during which the parties shall collaborate on development of the Licensed Molecules and Products for the Primary Indication, commencing on the Effective Date and ending at the completion of activities specified in the Development Plan for the hPOC.

1.14 “Commercially Reasonable Efforts” shall mean those efforts, consistent with the exercise of customary scientific and business practices as applied in the pharmaceutical industry for development and commercialization activities conducted with respect to other products of similar potential and market size.

1.15 “Confidential Information” shall mean any Information possessed, obtained, developed, or created by or on behalf of a party that is disclosed by or on behalf of such party to the other party or its Affiliates under this Agreement.

1.16 “Control” or “Controlled” shall mean, with respect to any Information, Patent or other intellectual property right, the legal authority or right (whether by ownership, license or otherwise but without taking into account any rights granted by one party to the other party under the terms of this Agreement) of a party to grant access, a license or a sublicense of or under such Information, Patent or other intellectual property rights to another party hereto, or to otherwise disclose proprietary or trade secret information to such other party, without breaching the terms of any agreement with a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

1.17 “Cost of Goods Sold” or “COGs” shall mean the actual and bona fide and verifiable manufacturing and supply costs including labor, material and factory costs, and including amounts payable to Third Party manufacturers specifically associated with the manufacture and supply by ACADIA or any of its Affiliates of the Licensed Molecules or Products supplied to Licensee, in each case, as recorded in the applicable party’s accounting system according to its standard accounting practices and generally accepted accounting principles for such party.

1.18 “Development Expenses” shall mean the actual and direct costs and expenses, excluding labor or other indirect costs and expenses, relating to the research and development of the Licensed Molecules and Products for the Primary Indication, incurred by either party or any ACADIA Affiliate or MSK Affiliate during the Collaboration Term pursuant to the Development Plan. Expenses shall include payments and accruals recorded in such party’s accounting system according to its standard accounting practices and generally accepted accounting principles for such party.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.19 “Development Plan” shall mean the plan and budget describing the parties’ development activities during the Collaboration Term with respect to the research and development of the Licensed Molecules and Products for the Primary Indication, including the prioritization of development activities aimed at achievement of hPOC, as agreed to by the parties by letter agreement in writing as of the Effective Date and as may be amended from time to time by the JSC.

1.20 “Dropped Product” shall have the meaning provided in Section 5.3.

1.21 “EU” shall mean […***…] countries that are members of the European Union and any successor thereto (as of the applicable time during the Term), or of the European Economic Community, as applicable, which includes, […***…].

1.22 “Executive Officers” shall have the meaning provided in Section 2.3(c).

1.23 “FDA” shall mean the U.S. Food and Drug Administration, or any successor agency thereto.

1.24 “Field” shall mean all human therapeutic and prophylactic uses.

1.25 “First Commercial Sale” shall mean, on a Product-by-Product and country-by-country basis, (a) in the case of ACADIA, the first sale by ACADIA or any of its Affiliates to a Third Party for end use or consumption of a Product in a given country outside the Territory after Regulatory Approval has been granted with respect to such Product in such country, and (b) in the case of MSK, the first sale by MSK or any of its Affiliates or Sublicensees to a Third Party for end use or consumption of a Product in a given country in the Territory after Regulatory Approval has been granted with respect to such Product in such country. Any sale by a party to an Affiliate, Sublicensee (in the case of MSK), or Licensee (in the case of ACADIA), shall not constitute a First Commercial Sale.

1.26 “Human Proof of Concept” or “hPOC” shall mean, with respect to any Licensed Molecule or Product, the establishment of the first proof-of-concept in humans for the Primary Indication, as described in the Development Plan in detail, which shall only be changed by a writing signed by both parties.

1.27 “ICH” shall mean the International Conference on Harmonization (of Technical Requirements for Registration of Pharmaceuticals for Human Use).

1.28 “Information” shall mean all tangible and intangible scientific, technical, trade, financial or business information including: (a) cells, cell lines, organisms, animal models, genes, gene fragments, gene sequences and loci, probes, DNA, RNA, cDNA libraries, plasmids, vectors, expression systems, antibodies, proteins, and biological substances, and any constituents, progeny, mutants, derivatives or replications thereof or therefrom; and (b) compounds, solid state forms, compositions of matter, formulations,

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

techniques, processes, methods, trade secrets, formulae, procedures, tests, data, results, analyses, documentation, reports, testing information (including pharmacological, toxicological, non-clinical (including chemistry, manufacturing and control), and clinical test design, methods, protocols, data, results, analyses, and conclusions), quality assurance and quality control information, knowledge, know-how, skill, and experience.

1.29 “IND” shall mean an investigational new drug application filed with the applicable Regulatory Authority, which application is required to commence human clinical trials in the applicable country.

1.30 “Inventions” shall mean all inventions discovered, made, conceived, or conceived and reduced to practice, in the course of development activities conducted pursuant to this Agreement.

1.31 “Joint Inventions” shall mean all Inventions discovered, made, conceived, or conceived and reduced to practice, jointly by one or more employees, consultants or contractors of ACADIA or any ACADIA Affiliate and one or more employees, consultants, or contractors of MSK or any MSK Affiliate in the course of development activities conducted pursuant to this Agreement.

1.32 “Joint Patents” shall mean all Patents, other than an ACADIA Patent or a MSK Patent, that claim or disclose Joint Inventions.

1.33 “Joint Development Committee” or “JDC” shall mean the committee composed of an equal number of representatives from each of MSK and ACADIA to be formed as set forth in Section 2.4.

1.34 “Joint Steering Committee” or “JSC” shall mean the committee composed of an equal number of representatives from each of MSK and ACADIA during the Collaboration Term to be formed as set forth in Section 2.1.

1.35 “License Agreement” shall mean an agreement granting a Licensee a license or sublicense under the ACADIA Technology, MSK Technology, Joint Inventions or Joint Patents to research, develop, make, have made, use, market, import, offer for sale or sell the Licensed Molecules and Products in the Field outside the Territory.

1.36 “Licensed Molecules” shall mean any and all compounds that are claimed or covered by an ACADIA Patent, including […***…] whose chemical structures are shown in Exhibit B , and the salts, metabolites and pro-drugs of such compounds.

1.37 “Licensee” shall mean a Third Party to whom a license or sublicense under the ACADIA Technology, MSK Technology, Joint Inventions or Joint Patents has been granted by ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) to research, develop, make, have made, use, market, import, offer for sale or sell the Licensed Molecules and Products in the Field outside the Territory. For the avoidance of doubt, the parties agree that a Third Party or Affiliate of ACADIA that acquires all or substantially all of the business or assets of ACADIA relating to the Licensed Molecules and Products, whether by merger, consolidation, divesture, restructure, sale of stock, sale of assets, or otherwise, shall not be a Licensee.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.38 “Licensee Revenues” shall mean the total gross amount of consideration received and the value of any other consideration received or obtained by ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) from any and all Licensee(s) pursuant to and in consideration for rights granted to such Licensee under the ACADIA Technology, MSK Technology, Joint Inventions or Joint Patents in the Field outside the Territory under any agreement, including a License Agreement, entered into by ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) and such Licensee(s) after the Effective Date, including (a) license fees, (b) milestone payments, (c) other payments of any kind including royalties based on sales of Products by such Licensee including its permitted sublicensees, (d) payments made in exchange for securities of ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) to the extent that such payments represent a premium over the fair market value of such […***…] and (e) the amount of any net profits of ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) obtained by supplying the Licensed Molecules and Products to such Licensee (i.e. the transfer price from ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) to such Licensee less COGs); but excluding all consideration paid to ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) by such Licensee(s): (i) with respect to research, development and sales and marketing or promotional activities to be performed on and after the execution of the License Agreement by or on behalf of ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) specifically relating to the Licensed Molecules and Products, to the extent such cost does not exceed an amount which is reasonably typical under similar circumstances, (ii) that constitute reimbursement of patent prosecution or enforcement expenses for patent rights or a payment of a share of amounts recovered in enforcing patent or other intellectual property rights excluding a payment of a share of compensatory damages relating to the Products (including without limitation, lost sales or lost profits with respect to the Products) recovered in enforcing any ACADIA Patents, MSK Patents or Joint Patents, (iii) in exchange for securities of ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) to the extent that such payments represent the fair market value of such securities as determined as aforesaid, (iv) as loans, credit lines or other amounts subject to repayment in full, (v) with respect to research, development and sales and marketing or promotional activities or other services by or on behalf of ACADIA, any of its Affiliates or its successor (in case of Change of Control of ACADIA) unrelated to the Licensed Molecules or Products, or (vi) are allocable to or constitute consideration for rights granted to such Licensee with respect to technology Controlled by ACADIA that is not ACADIA Technology, Joint Inventions or Joint Patents. ACADIA confirms that, as of the Effective Date, ACADIA has not entered into any License Agreement.

1.39 “Losses” shall have the meaning provided in Section 11.1.

1.40 “Materials” shall have the meaning provided in Section 3.4.

1.41 “Most Recent Milestone” shall have the meaning provided in Section 5.3.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.42 “MSK Affiliate” shall mean any entity that is an Affiliate of MSK; provided that, effective upon Change of Control of MSK, the term “MSK Affiliate” shall mean only any entity that is, directly or indirectly, through one or more intermediaries, controlled (as such term is defined in Section 1.8) by MSK, but for only so long as such control exists.

1.43 “MSK Data” shall mean all non-clinical (including chemistry, manufacturing and control) and clinical data and regulatory filings (including Regulatory Filings), correspondence and approvals pertaining to the Licensed Molecules or Products in the Field in the Territory that MSK or any MSK Affiliate Controls as of the Effective Date or during the Term.

1.44 “MSK Indemnitee” shall have the meaning provided in Section 11.1.

1.45 “MSK Inventions” shall mean all Inventions discovered, made, conceived, or conceived and reduced to practice, solely by one or more employees, consultants or contractors of MSK or any MSK Affiliate in the course of development activities conducted pursuant to this Agreement.

1.46 “MSK Know-How” shall mean all Information that MSK or any MSK Affiliate Controls as of the Effective Date or during the Term that is necessary or useful for the research, development, manufacture, use, marketing, import, offer for sale or sale of any Licensed Molecule or Product in the Field, including any replication or any part of such Information. The MSK Know-How includes the MSK Data.

1.47 “MSK Patents” shall mean all Patents that MSK or any MSK Affiliate Controls as of the Effective Date or during the Term that claim any Licensed Molecule or Product or its method of manufacture or use in the Field, including Patents claiming or covering MSK Inventions, but excluding MSK’s interest in any Joint Patents.

1.48 “MSK Technology” shall mean MSK Know-How and MSK Patents.

1.49 “MSK Threshold” shall have the meaning provided in Section 5.2(a).

1.50 “NDA” shall mean a new drug application filed with the applicable Regulatory Authority, which application is required for marketing approval for the applicable Product in the applicable country.

1.51 “Net Sales” shall mean, with respect to each Product, the gross amounts invoiced by (a) in the case of any country outside the Territory in which ACADIA and its Affiliates is the selling party, by ACADIA or its Affiliates and (b) in the case of any country in the Territory in which MSK, MSK Affiliate and Sublicensee is the selling party, by MSK, its Affiliates and Sublicensees, for sales or other dispositions of such Product to Third Parties that are not Sublicensees of the selling party (unless such Affiliate or Sublicensee is the end user of such Product, in which case the amount billed therefor shall be deemed to be the amount that would be billed to a Third Party end user in an arm’s-length transaction), less the following items, as allocable to such Product (if not previously deducted from the amount invoiced): (a) trade, quantity or cash discounts actually allowed (provided that such discounts are not applied disproportionately to Product when compared to other products of the selling party and its Affiliates and, in the case of

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

MSK, Sublicensees in the Field), including charge back payments, administrative fees, and rebates granted to managed care organizations, purchasers and reimbursers or to trade customers, including wholesalers and chain and pharmacy buying groups, (b) credits actually allowed for claims, allowances for damaged goods, retroactive price reductions or returned goods, (c) prepaid freight, postage, shipping, customs duties and insurance charges and (d) sales taxes, value added taxes, duties and other governmental charges, rebates or charge backs actually paid in connection with the sale, to the extent not reimbursed (but excluding what are commonly known as income taxes).

1.52 “Nondisclosure Agreement” shall mean the nondisclosure agreement between the parties dated March 11, 2005 and amended as of January 31, 2008.

1.53 […***…].

1.54 “Patents” shall mean all patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, provisionals, substitutions, reissues, re-examinations, extensions, restorations by existing or future extension or restoration mechanisms, registrations, patent term extensions, supplemental protection certificates or the equivalent thereof, and renewals of a patent or patent application, inventor’s certificates, and any confirmation patent or registration patent or patent of addition based on any such patents and patent applications.

1.55 “Percentage-Based Payments” shall have the meaning provided in Section 5.8.

1.56 “Phase I Clinical Study” shall mean a human clinical study conducted in a small number of healthy volunteers designed or intended to establish an initial safety profile, pharmacodynamics, or pharmacokinetics of a Product.

1.57 “Phase II Clinical Study” shall mean a study of a Product in human patients to determine initial efficacy before embarking on Phase III Clinical Studies.

1.58 “Phase III Clinical Study” shall mean a study in human patients with a defined dose or a set of defined doses of a Product designed to ascertain efficacy of such Product for inclusion in an application to be submitted for Regulatory Approval to the competent Regulatory Authorities.

1.59 “Primary Indication” shall mean the indication to be pursued as a top priority during the Collaboration Term. It is the mutual understanding between the parties that the Primary Indication shall be schizophrenia and its related diagnosed disorders, including, but not limited to, […***…]. The Primary Indication shall only be changed by a writing signed by both parties.

1.60 “Product” shall mean a pharmaceutical product containing at least one Licensed Molecule, including all dosage forms, formulations, line extensions and modes of administration thereof.

1.61 “Quarterly Report” shall have the meaning provided in Section 5.2(b).

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.62 “Regulatory Approval” shall mean any and all approvals, licenses, registrations, or authorizations of any country, federal, supranational, state or local regulatory agency, department, bureau or other government entity that are necessary for the manufacture, use, storage, import, transport and/or sale of a Product in a given jurisdiction.

1.63 “Regulatory Authority” shall mean any national, provincial or local regulatory agency, department, bureau or other government entity, that has responsibility in its applicable jurisdiction over the research, development, manufacture and/or commercialization of the Licensed Molecules and Products in a given jurisdiction.

1.64 “Regulatory Filing” shall mean any IND or NDA filed with the applicable Regulatory Authority in a given country.

1.65 “Replacement Product” shall have the meaning provided in Section 5.3.

1.66 “Research Agreement” shall mean the Research and Option Agreement between the parties entered into on March 30, 2007, and as amended as of April 18, 2007, July 9, 2007, October 17, 2007, December 21, 2007 and February 14, 2008.

1.67 “Royalty Term” shall mean, on a Product-by-Product and country-by-country basis, the period of time commencing on the First Commercial Sale of a Product in the Field in a country and ending at the later of either (a) […***…] years after the date of the First Commercial Sale of such Product in such country and (b) […***…].

1.68 “SEC” shall mean the U.S. Securities and Exchange Commission or any successor entity.

1.69 [ …***…].

1.70 “Sublicensee” shall mean a Third Party or Affiliate of MSK to whom MSK has granted a license or sublicense to research, develop, make, have made, use, market, import, offer for sale or sell Products (either independently from or in cooperation with MSK) in the Field in the Territory, beyond the mere right to purchase Products from MSK or its Affiliates. For the avoidance of doubt, the parties agree that a Third Party or Affiliate of MSK that acquires all or substantially all of the business or assets of MSK relating to the Licensed Molecules and Products, whether by merger, consolidation, divesture, restructure, sale of stock, sale of assets, or otherwise, shall not be a Sublicensee.

1.71 “Term” shall have the meaning provided in Section 10.1.

1.72 “Territory” shall mean Japan, Bangladesh, Brunei, Cambodia, China, India, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

1.73 “Third Party” shall mean any entity other than ACADIA or MSK or an Affiliate of ACADIA or MSK.

1.74 “Unachieved Payment” shall have the meaning provided in Section 5.4.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

1.75 “US” shall mean the United States of America, including the District of Columbia.

1.76 “Valid Claim” shall mean a claim of an issued and unexpired patent within any ACADIA Patent, MSK Patent or Joint Patent, […***…], which claim has not been revoked or held unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction from which no further appeal can be taken, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

1.77 “Withdrawal Notice” shall have the meaning provided in Section 2.5.

2. D EVELOPMENT G OVERNANCE

2.1 Joint Steering Committee Formation and Meetings.

(a) Formation; Composition. Promptly after the Effective Date, the parties will form the Joint Steering Committee. The JSC shall have three (3) representatives from each of ACADIA and MSK. The JSC shall remain in place during the Collaboration Term. Each party may change the identity of any or all of its members on the JSC at any time in its sole discretion. One member of the JSC shall be selected to act as the chairperson of the JSC, with each chairperson acting for a term of twelve (12) months. The chairperson shall be selected alternately by ACADIA and MSK, and ACADIA shall designate the first chairperson.

(b) Meetings. The JSC shall meet at pre-scheduled meetings four (4) times per year and at any other meetings called from time to time by the mutual agreement of the parties. Such meetings may be conducted by videoconference, teleconference or in person, as agreed by the parties, and the parties shall agree upon the time of meetings. Each member of the JSC may be represented at any JSC meeting by a designee appointed by such member for such meeting, provided that such member shall designate such designee in writing to the chairperson of the JSC at least two (2) days prior to such JSC meeting. A reasonable number of additional representatives of a party may attend meetings of the JSC in a non-voting capacity upon written notice to the other party. The chairperson of the JSC or his or her designee shall prepare minutes of each meeting of the JSC and shall circulate such minutes no later than four (4) weeks following such meeting. At each meeting of the JSC, following the first meeting, the prior meeting’s minutes will be approved by the JSC with such changes to the minutes as may be agreed to by the members of the JSC. Any costs and expenses incurred by each party related to a JSC meeting, including, if applicable, travel and/or telecommunication expenses, shall be borne by each party, and shall not be deemed Development Expenses.

2.2 Joint Steering Committee Functions and Powers. The responsibilities of the JSC shall be as follows:

(a) oversight of the joint research and development of the Licensed Molecules and Products by the parties during the Collaboration Term, including reviewing and discussing non-clinical (including chemistry, manufacturing and control) and clinical study results, patent strategies for any Joint Patent, regulatory strategies, and process and product development and supply of the Licensed Molecules and Products under the Development Plan during the Collaboration Term;

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

(b) review and approve amendments to the Development Plan; and

(c) so long as the JSC remains in effect, act as a mechanism for the parties to share information with respect to the research and development and commercialization of the Licensed Molecules and Products.

2.3 Joint Steering Committee Decision-Making.

(a) Decisions of the JSC shall be made by unanimous vote, with the JSC representatives of ACADIA collectively having one vote and the JSC representatives of MSK collectively having one vote.

(b) If the JSC is unable to reach a unanimous vote on any matter, then the matter shall be referred to the most senior research and development executive of each of ACADIA and MSK for further discussion and resolution. These individuals shall have thirty (30) calendar days to attempt in good faith, with due consideration for the parties’ respective territorial rights and economic interests, to resolve the matter and thereby make the decision on behalf of the JSC.

(c) If the individuals referred to in Section 2.3(b) above are unable to reach an agreement by the end of such thirty (30) calendar days, then the matter shall be referred to the Chief Executive Officer of ACADIA and the President of Pharmaceutical Company of MSK (the “ Executive Officers ”). The Executive Officers shall have twenty (20) calendar days to attempt in good faith, with due consideration for the parties’ respective territorial rights and economic interests, to resolve the matter and thereby make the decision on behalf of the JSC. If the Executive Officers cannot resolve the issue then it will be settled by arbitration as provided for in Section 12.1.

2.4 Joint Development Committee. Prior to the earlier of (i) the commencement of development of any Licensed Molecule or Product by MSK in the Territory or (ii) the end of the Collaboration Term, the parties shall establish a Joint Development Committee. The JDC shall have three (3) representatives from each of ACADIA and MSK. The JDC shall provide the forum, with respect to the Licensed Molecules and Products, for (a) oversight of and sharing information about the development activities and plan in the Field in and outside the Territory; (b) planning and coordination regarding a possible implementation of the international clinical trials including Japanese population and/or sites; (c) planning and coordination regarding a possible implementation of the non-clinical studies, including, but not limited to, long-term toxicity studies, carcinogenicity studies, which shall be commonly necessary in and outside the Territory from the standpoint of regulations; (d) coordination of global safety database for the Licensed Molecules and/or Products under development and commercialization; and (e) such other functions and powers as mutually agreed upon by the parties in writing on a case-by-case basis. Any costs and expenses incurred by each party related to a JDC meeting, including, if applicable, travel and/or telecommunication expenses, shall be borne by each party.

2.5 Withdrawal. At any time during the Term and for any reason, ACADIA shall have the right to withdraw from participation in the JSC and/or JDC upon written notice to MSK, which notice shall be effective immediately upon receipt by MSK (the “ Withdrawal Notice ”). Following the issuance of a Withdrawal Notice and subject to this Section 2.5, ACADIA’s representatives on

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

the JSC or JDC, as applicable, shall not participate in any meetings of such committee, nor shall ACADIA have any right to vote on any decision within the authority of such committee. If, at any time, following the issuance of a Withdrawal Notice, ACADIA wishes to resume participation in the applicable committee, ACADIA shall notify MSK in writing and, thereafter, ACADIA’s representatives on such committee shall be entitled to attend any subsequent meeting of such committee and to participate in the activities of, and decision-making by, such committee, as provided in this Section 2 as if a Withdrawal Notice had not been issued by ACADIA. Following ACADIA’s issuance of a Withdrawal Notice, unless and until ACADIA resumes participation in the applicable committee in accordance with this Section 2.5, (i) all meetings of the applicable committee may be held at MSK’s facilities at MSK’s sole discretion; (ii) MSK shall have the right to make the final decision on all matters within the scope of authority of the applicable committee; and (iii) ACADIA shall have the right to continue to receive the minutes of the applicable committee meetings, but shall not have the right to approve the minutes for any committee meeting held after ACADIA’s issuance of a Withdrawal Notice with respect to such committee. Notwithstanding the foregoing, in the event that ACADIA withdraws from the JSC, any changes to the Development Plan after such withdrawal must be approved by both ACADIA and MSK.

2.6 Limited Authority. Notwithstanding the creation of the JSC and JDC, each party shall retain the rights and powers granted to it hereunder, and the JSC and JDC shall not be delegated or vested with such rights or powers unless such delegation or vesting is expressly provided herein or both parties expressly so agree in writing. The JSC and JDC shall not have the power to amend or modify this Agreement, and its decision shall not be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by the JSC and JDC are only those specific issues that are expressly provided for in this Agreement to be decided by the JSC and JDC.

3. D EVELOPMENT AND C OMMERCIALIZATION

3.1 Development Activities.

(a) Development Prior to hPOC. Subject to the terms and conditions of this Agreement, during the Collaboration Term, each party shall be responsible for managing and controlling its respective research and development activities in accordance with the Development Plan under the leadership and oversight of the JSC, which shall specify the product and process development and supply activities to be conducted by the parties. The costs of such joint research and development activities during the Collaboration Term shall be allocated in accordance with Section 5.2.

(b) MSK’s Development Obligation in the Territory. MSK shall solely be responsible, at its sole cost and expense, for development and commercialization activities for the Licensed Molecules and Products in the Field in the Territory that are not covered by the Development Plan, including product and process development and supply of the Licensed Molecules and Products in the Territory.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

(c) Conduct of Development. Each party shall use its Commercially Reasonable Efforts during the Collaboration Term to perform its development activities under this Agreement in accordance with the Development Plan and the terms and conditions of this Agreement. The initial Development Plan has been agreed upon in writing by the parties by letter agreement dated concurrently herewith and may be amended by the JSC. Each party shall conduct its development activities under this Agreement in good scientific manner and in compliance in all material respects with all requirements of applicable laws, rules and regulations. Each party hereby certifies that it will not and has not employed or otherwise used in any capacity the services of any person debarred under Section 21 USC 335a or comparable law in performing any development activities hereunder. Each party shall proceed diligently and in a timely manner with the work set out in the Development Plan by using its good faith efforts to allocate sufficient time, effort, equipment and facilities to such development activities and to use personnel with sufficient skills and experience as are required to accomplish such development activities in accordance with the terms of this Agreement. Each party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved by or on behalf of such party in the performance of its development activities under this Agreement.

(d) Consideration of Supply Proposal. At any time, during or after the Collaboration Term, ACADIA shall consider in good faith any proposal by MSK to supply the Licensed Molecules and/or Products to ACADIA for use in the Field outside the Territory, which proposal shall include terms and conditions for quality, quantity, back-up supply rights and pricing that are competitive with terms available from potential Third Party suppliers considered by ACADIA at such time. In the event that the parties reach mutual agreement for MSK to supply the Licensed Molecules and/or Products to ACADIA for use in the Field outside the Territory, such agreement shall be set forth in a separate written agreement between the parties.

3.2 Disclosure of Technology. To facilitate the further development of the Licensed Molecules and Products by the parties, (i) ACADIA shall within thirty (30) days from the Effective Date, or a later time that is mutually acceptable to both parties, make available to MSK the ACADIA Technology existing as of the Effective Date and (ii) MSK shall within thirty (30) days from the Effective Date, or a later time that is mutually acceptable to both parties, make available to ACADIA the MSK Technology existing as of the Effective Date. In addition, each party shall from time to time, but in no event less frequently than once every three (3) months, notify the other party in writing of any Information generated or obtained by or on behalf of such party in the course of development activities conducted under this Agreement and any Patents filed claiming Inventions, in each case in sufficient detail to enable the other party to practice such Inventions and Information pursuant to the licenses granted hereunder.

3.3 Use of Subcontractors. Each party may perform some of its development activities under this Agreement through one or more subcontractors, provided that (a) none of the other party’s rights hereunder are diminished or otherwise adversely affected as a result of such subcontracting, and (b) the subcontractor undertakes in writing obligations of confidentiality and non-use regarding Confidential Information which are substantially the same as those undertaken by the parties pursuant to Section 9. In the event a party performs any of its development activities hereunder through a subcontractor, then such party will at all times be fully responsible for the performance and payment of such subcontractor.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

3.4 Materials Transfer. In order to facilitate the development activities contemplated by this Agreement, either party may provide to the other party certain biological materials or chemical compounds Controlled by the supplying party (collectively, “ Materials ”) for use by the other party in furtherance of such development activities. Except as otherwise provided for under this Agreement, all such Materials delivered to the other party will remain the sole property of the supplying party, will be used only in furtherance of the development activities conducted in accordance with this Agreement, will not be used or delivered to or for the benefit of any Third Party, except for subcontractors pursuant to Section 3.3, without the prior written consent of the supplying party, and will be used in compliance with all applicable laws, rules and regulations. The Materials supplied under this Agreement must be used with prudence and appropriate caution in any experimental work because not all of their characteristics may be known. Except as expressly set forth in this Agreement, THE MATERIALS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

3.5 Disclosure Regarding Development Efforts. ACADIA will share with MSK on a quarterly basis information regarding the development of the Licensed Molecules and Products in the Field outside the Territory and (to the extent the license granted under Section 4.2(b) is exercised) in the Territory by ACADIA, its Affiliates and Licensees, including the results of non-clinical (including chemistry, manufacturing and control) studies and clinical trials conducted by, or on behalf of, ACADIA, its Affiliates and Licensees in the Field outside the Territory and (to the extent the license granted under Section 4.2(b) is exercised) in the Territory, and ACADIA shall provide MSK with prompt written notice of (i) the initiation of any Phase I Clinical Study, Phase II Clinical Study and Phase III Clinical Study and (ii) the making of any Regulatory Filing and the receipt of any Regulatory Approval outside the Territory, in each case in any country. MSK will share with ACADIA on a quarterly basis information regarding the development of the Licensed Molecules and Products in the Field in the Territory and (to the extent the license granted under Section 4.1(b) is exercised) outside the Territory by MSK, its Affiliates and Sublicensees, including the results of non-clinical (including chemistry, manufacturing and control) studies and clinical trials conducted by, or on behalf of, MSK and its Affiliates and Sublicensees in the Field in the Territory and (to the extent the license granted under Section 4.1(b) is exercised) outside the Territory, and MSK shall provide ACADIA with prompt written notice of (i) the initiation of any Phase I Clinical Study, Phase II Clinical Study and Phase III Clinical Study and (ii) the making of any Regulatory Filing and the receipt of any Regulatory Approval in the Territory, in each case in any country. Sharing of information under this Section 3.5 may be accomplished by providing such information through the JDC.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

3.6 Commercialization.

(a) Outside the Territory. Subject to the terms and conditions of this Agreement, ACADIA, and as applicable its Affiliates and Licensees, shall control, and be solely responsible for the costs associated with, the registration and commercialization of the Licensed Molecules and Products in the Field outside the Territory, including the supply of the Licensed Molecules and Products necessary for the foregoing activities.

(b) In the Territory. Subject to the terms and conditions of this Agreement, MSK, and as applicable its Affiliates and Sublicensees, shall control, and be solely responsible for the costs associated with, the registration and commercialization of the Licensed Molecules and Products in the Field in the Territory, including the supply of the Licensed Molecules and Products necessary for the foregoing activities. MSK agrees to use Commercially Reasonable Efforts (directly and/or through one or more Affiliates and Sublicensees) to obtain Regulatory Approval for and, after such Regulatory Approval is obtained, commercialize at least one Product in the Field in Japan, however, both parties understand that (i) the failure to obtain such Regulatory Approval and to achieve such commercialization due to poor efficacy or safety issues or other commercially justifiable reasons shall not be deemed a breach of this Agreement and (ii) the delay or suspension of obtaining Regulatory Approval and the commercialization of the Licensed Molecules and Products in the Territory shall not be deemed a breach of this Agreement if such delay or suspension is due to the development and commercialization of the corresponding Licensed Molecules and Products outside the Territory being delayed or suspended.

3.7 Adverse Event Reporting; Pharmacovigilance Agreement. As between the parties: (a) ACADIA shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Licensed Molecules and Products in the Field to the appropriate Regulatory Authorities outside the Territory; and (b) except as otherwise agreed in writing by the parties, MSK shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Licensed Molecules and Products in the Field to the appropriate Regulatory Authorities in the Territory; all in accordance with applicable laws, rules and regulations of the relevant countries and Regulatory Authorities. The parties shall enter into a pharmacovigilance agreement on terms no less stringent than those required by ICH guidelines, including: (i) providing detailed procedures regarding the maintenance of core safety information and the exchange of safety data relating to the Licensed Molecules and Products worldwide within appropriate timeframes and in an appropriate format to enable each party to meet both expedited and periodic regulatory reporting requirements; and (ii) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities on a worldwide basis for the reporting of safety data in accordance with standards stipulated in the ICH guidelines, and all applicable regulatory and legal requirements regarding the management of safety data.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

4. G RANT OF R IGHTS

4.1 License Grant to MSK

(a) Exclusive License in the Territory. Subject to the terms and conditions of this Agreement, ACADIA hereby grants to MSK, during the Term, an exclusive (except as to ACADIA, its Affiliates and its Licensee(s), as required to utilize the license granted in Section 4.2(b) for the limited purpose of such license grant under Section 4.2(b)), royalty-bearing license, with the right to sublicense subject to Section 4.1(c), under the ACADIA Patents that cover the Territory and the ACADIA Know-How and ACADIA’s rights under the Joint Inventions and the Joint Patents, to research, develop, make, have made, use, import, market, offer for sale and sell the Licensed Molecules and Products in the Field in the Territory. The license granted in this Section 4.1(a) includes the grant to MSK, during the Term, of the right to access, use and reference all ACADIA Data in order to practice the license granted in the foregoing sentence and the license granted in Section 4.1(b).

(b) Research and Manufacturing License Outside the Territory. ACADIA hereby grants to MSK, during the Term, a non-exclusive license, with the right to sublicense subject to Section 4.1(c), under the ACADIA Patents that cover outside of the Territory and the ACADIA Know-How and ACADIA’s rights under the Joint Inventions and Joint Patents, to research, develop and manufacture the Licensed Molecules and Products outside the Territory solely for the purpose of advancing the research, development and commercialization of the Licensed Molecules and Products in the Field in the Territory.

(c) Sublicenses. MSK shall have the right to grant sublicenses (through multiple tiers of sublicense) of any rights that have been granted to MSK under Sections 4.1(a) and (b) to a Sublicensee; provided that […***…]. Any such sublicense granted by MSK shall be set forth in a written agreement that binds such Sublicensee to all applicable provisions in this Agreement, including obligations with respect to ownership of intellectual property, confidentiality, indemnity and reporting, as well as access to Information and Patents as provided in this Section 4.1(c) and assignment of rights of Sublicensees in the event that such Sublicensees do not become direct licensees of ACADIA as set forth in Section 10.5(b)(vi). MSK shall provide ACADIA a copy of any agreement pursuant to which any rights granted to MSK under Sections 4.1(a) and (b) are sublicensed within twenty (20) calendar days of the execution of such sublicense agreement (from which MSK may redact any confidential provisions that are not related to such sublicense and the terms thereof). MSK shall obtain from each Sublicensee a license or other grant of rights to MSK of all Information (including all non-clinical (including chemistry, manufacturing and control) and clinical data and Regulatory Filings, correspondence and approvals pertaining to the Licensed Molecules or Products in the Field in the Territory) and Patents owned by or licensed to such Sublicensee (or its Affiliates or further sublicensees), which arise or are developed or acquired in the course of practicing the ACADIA Technology, the MSK Technology, Joint Inventions or Joint Patents and are necessary for the research, development, manufacture, use, marketing, import, offer for sale or sale of the Licensed Molecules and Products in the Field outside the Territory and for the research, development and manufacture of the Licensed Molecules and Products in the Territory for the limited purpose set forth in Section 4.2(b), as necessary so that rights to such Information and Patents are included in the MSK Technology licensed to ACADIA pursuant to Section 4.2(a) and (b). […***…].

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

4.2 License Grant to ACADIA.

(a) Exclusive License Outside the Territory. Subject to the terms and conditions of this Agreement, MSK hereby grants to ACADIA, during the Term, an exclusive (except as to MSK, its Affiliates and its Sublicensees as required to utilize the license granted in Section 4.1(b) for the limited purpose of such license grant under Section 4.1(b)), royalty-bearing, license, with the right to sublicense subject to Section 4.2(c), under the MSK Patents that cover outside of the Territory and MSK Know-How and MSK’s rights under the Joint Inventions and the Joint Patents to research, develop, make, have made, use, import, market, offer for sale and sell the Licensed Molecules and Products in the Field outside the Territory. The license granted in this Section 4.2(a) includes the grant to ACADIA, during the Term, of the right to access, use and reference all MSK Data in order to practice the license granted in the foregoing sentence and the license granted in Section 4.2(b) .

(b) Research and Manufacturing License in the Territory. MSK hereby grants to ACADIA, during the Term, a non-exclusive license, with the right to sublicense subject to Section 4.2(c), under the MSK Patents that cover the Territory and MSK Know-How and MSK’s rights under the Joint Inventions and Joint Patents, to research, develop and manufacture the Licensed Molecules and Products in the Territory solely for the purpose of advancing the research, development and commercialization of the Licensed Molecules and Products outside the Territory.

(c) Licenses and Sublicenses. ACADIA shall have the right to grant sublicenses (through multiple tiers of sublicense) of any rights that have been granted to ACADIA under Sections 4.2(a) and 4.2(b) to its Affiliates and to Third Parties. Any such sublicense granted by ACADIA shall be set forth in a written agreement that binds such sublicensee to all applicable provisions in this Agreement, including obligations with respect to ownership of intellectual property, confidentiality, indemnity and reporting, as well as access to Information and Patents as provided in this Section 4.2(c). ACADIA shall provide MSK a copy of any agreement pursuant to which any rights granted to ACADIA under Sections 4.2(a) and 4.2(b) are sublicensed within twenty (20) calendar days of the execution of such sublicense agreement (from which ACADIA may redact any confidential provisions that are not related to such sublicense and the terms thereof, except for the financial terms including royalties, upfront and license fees necessary to permit MSK to confirm the accuracy of the Licensee Revenues). ACADIA shall obtain from each Licensee and each such sublicensee a license or other grant of rights to ACADIA of all Information (including all non-clinical (including chemistry, manufacturing and control) and clinical data and Regulatory Filings, correspondence and approvals pertaining to the Licensed Molecules or Products in the Field outside the Territory) and Patents owned by or licensed to such Licensee or sublicensee (or its Affiliates or further sublicensees), which arise or are developed or acquired in the course of practicing the ACADIA Technology, the MSK Technology, Joint Inventions or Joint Patents and are necessary for the research, development, manufacture, use, marketing, import, offer for sale or sale of the Licensed Molecules and Products in the Field in the Territory and for the research, development and manufacture of the Licensed Molecules and Products outside the Territory for the limited purpose set forth in Section 4.1(b), as necessary so that rights to such Information and Patents are included in the ACADIA Technology licensed to MSK pursuant to Section 4.1(a) and (b). […***…].

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

4.3 Limitations.

(a) Limitations on MSK. To the extent not otherwise prohibited by law, MSK shall not, and shall cause its Affiliates and Sublicensees not to, (i) sell any Product to customers outside the Territory or to any Third Party in the Territory that MSK has reasonable grounds to believe is likely to export any Product outside of the Territory or (ii) sell any Product outside the Field in the Territory or to any Third Party in the Territory that MSK has reasonable grounds to believe is likely to sell such Product outside the Field. If MSK becomes aware that a Third Party is exporting Products acquired from MSK or its Affiliates or Sublicensees to a country outside the Territory, then MSK shall use Commercially Reasonable Efforts within its legal rights and the remedies afforded by applicable laws to stop or deter such Third Party from continuing such exportation, including by ceasing or limiting the supply of the Product to such Third Party. All inquiries or orders received by MSK or its Affiliates or Sublicensees for Products to be delivered outside the Territory or outside the Field shall be referred to ACADIA or its designee.

(b) Limitations on ACADIA. To the extent not otherwise prohibited by law, ACADIA shall not, and shall cause its Affiliates, Licensees and its sublicensees not to, sell any Product for use in the Field to customers in the Territory or to any Third Party that ACADIA has reasonable grounds to believe are likely to import any Product into the Territory for sale in the Field. If ACADIA becomes aware that a Third Party is exporting any Product acquired from ACADIA or its Affiliates or Licensee into the Territory for sale in the Field, then ACADIA shall use Commercially Reasonable Efforts within its legal rights and the remedies afforded by applicable laws to stop or deter such Third Party from continuing such exportation, including by ceasing or limiting the supply of such Product to such Third Party. All inquiries or orders received by ACADIA or its Affiliates or Licensees for Products to be distributed in the Territory for sale in the Field shall be referred to MSK or its designee.

4.4 Retained Rights; No Implied Licenses.

(a) ACADIA Retained Rights. For avoidance of doubt, the license granted in Section 4.1 shall not in any way be interpreted as granting MSK a license or sublicense with respect to the Licensed Molecules, Products and the ACADIA Technology and with respect to ACADIA’s rights under the Joint Inventions and Joint Patents, in each case, for use outside of the Territory (except as expressly provided in Section 4.1(b)) or for use outside of the Field within the Territory during the Term, which rights are reserved to ACADIA. ACADIA hereby expressly reserves the right to practice, and to grant licenses under, the ACADIA Technology and ACADIA’s rights in the Joint Inventions and Joint Patents for any and all purposes, except to the extent that MSK has been granted a license under Section 4.1. MSK agrees not to practice any ACADIA Technology except pursuant to the license expressly granted to MSK under Section 4.1 or any other written agreement between the parties.

 

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

(b) MSK Retained Rights. For avoidance of doubt, the license granted in Section 4.2 shall not in any way be interpreted as granting ACADIA a license or sublicense with respect to the MSK Technology and MSK’s rights under the Joint Inventions and Joint Patents for use in the Territory (except as expressly provided in Section 4.2(b)) and for use outside of the Field during the Term, which rights are reserved to MSK. MSK hereby expressly reserves the right to practice, and to grant licenses under, the MSK Technology and MSK’s rights in the Joint Inventions and Joint Patents for any and all purposes, except to the extent that ACADIA has been granted a license under Section 4.2. ACADIA agrees not to practice any MSK Technology except pursuant to the license expressly granted to ACADIA under Section 4.2 or any other written agreement between the parties.

(c) No Implied License. No right or license under any Patents or other intellectual property rights of a party is granted or shall be granted by implication to the other party, and each party agrees not to practice any Patents or other intellectual property rights of the other party except pursuant to the licenses expressly granted in this Agreement or any other written agreement between the parties. All such rights or licenses are or shall be granted only as expressly provided in the terms of this Agreement.

5. F EES AND P AYMENTS

5.1 License Fees.

(a) Initial Fee. Promptly following the Effective Date, but in any event within ten (10) Business Days after the Effective Date, MSK shall pay ACADIA a non-refundable, non-creditable fee of […***…] as partial consideration for the rights granted to MSK under this Agreement.

(b) Additional Fees. Subject to Section 5.4, [ …***…], MSK shall pay ACADIA a non-refundable, non-creditable fee of […***…] as partial consideration for the rights granted to MSK under this Agreement. […***…], MSK shall pay ACADIA a second non-refundable, non-creditable fee of […***…] as partial consideration for the rights granted to MSK under this Agreement.

5.2 Development Funding.

(a) Funding Obligation. During the Collaboration Term, subject to the terms of this Section 5.2, (i) MSK shall bear one hundred percent (100%) of the Development Expenses for the first fifteen million US Dollars (US$15,000,000) (the “MSK Threshold”), subject to its right to […***…], and (ii) once the MSK Threshold is reached, […***…]. If ACADIA or its successor (in case of Change of Control of ACADIA) enters into a License Agreement […***…].

(b) Payment. Following the end of each Calendar Quarter during the Collaboration Term, each party will provide a written report (each, a “ Quarterly Report ”) to the other party setting forth in reasonable detail the Development Expenses relating to such Calendar Quarter and, in case of ACADIA, the payment due to ACADIA from MSK in