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COLLABORATION AND TECHNOLOGY TRANSFER AGREEMENT

Collaboration Agreement

COLLABORATION AND TECHNOLOGY TRANSFER AGREEMENT You are currently viewing:
This Collaboration Agreement involves

Genomic Health, Inc | Incyte Genomics, Inc

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Title: COLLABORATION AND TECHNOLOGY TRANSFER AGREEMENT
Governing Law: California     Law Firm: Pillsbury Winthrop    

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Exhibit 10.7.1

*** Confidential Treatment Requested. Confidential portions of this document have been redacted
and have been separately filed with the Commission.

COLLABORATION AND TECHNOLOGY TRANSFER AGREEMENT

     This Collaboration and Technology Transfer Agreement (the “Agreement”), effective as of March 30, 2001 (the “ Effective Date ”), is made by and between Genomic Health, Inc., a Delaware corporation, with a place of business at 101 University Ave, Suite 220, Palo Alto, CA 94301 (“GHI”) , and Incyte Genomics, Inc., a Delaware corporation, with a place of business at 3160 Porter Drive, Palo Alto, CA 94304 (“Incyte”).

BACKGROUND

     Incyte and GHI wish to collaborate on a research and development relating to “Paraffin Extraction Technology” (as defined below); and

     GHI desires to receive from Incyte, and Incyte desires to transfer to GHI, certain Technology and Materials (as defined below); and

     The parties wish to grant each other certain rights and licenses on the terms set forth in this Agreement.

      NOW THEREFORE , for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows:

1. DEFINITIONS

     1.1 “ Control ” or “ Controlled ” shall mean possession of the ability to grant the right and licenses provided for herein, without violating the terms of any agreement or other arrangement with any Third Party, and which a Party has the right to disclose or provide to the other Party without a resulting obligation to pay royalties or other amounts to a Third Party.

     1.2 “ Development Period ” shall mean the period commencing on the Effective Date and ending fifteen (15) months after the Effective Date, unless earlier terminated or extended by mutual written agreement of the Parties in accordance with the terms of this Agreement.

     1.3 “ Development Program ” shall mean the activities conducted pursuant to this Agreement, which activities are primarily directed to the development of Paraffin Extraction Technology.

     1.4 “ Diagnostic Field of Use ” shall mean the research, development, manufacture, importation, use and/or sale of Diagnostic Product(s). The Diagnostic Field of Use excludes the Personalized Research Field of Use, the Incyte Field of Use and the Homebrew Field of Use.

     1.5 “ Diagnostic Product(s )”: shall mean an assay provided as a product or service performed on a human tissue or other human biological sample containing nucleic acids or proteins that are collectively intended to establish or identify an association between the presence or absence of such nucleic acids or proteins and

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               (a) diagnosis of the presence of, or absence of, a specific disease(s), state(s) or condition(s) in humans;

               (b) predisposition to the presence of, or absence of, a specific disease(s), state(s) or condition(s) in humans;

               (c) response or lack of response to disease therapy(ies) in humans or preventative strategies in humans;

               (d) prediction of the disease course in humans, and or other changes in state(s) or condition(s) in humans over time;

               (e) clinical traits in humans for which a medical professional should be consulted; or variation(s) in specific trait(s) and/or characteristics among individuals;

               (f) variation(s) in specific trait(s) and/or characteristics among individuals; and/or

               (g) predisposition to development of toxicities to disease therapies or preventative strategies in humans.

the results of which are provided to payors, providers or patients, and for which FDA approval (or comparable regulatory agency in other jurisdictions) is required. Diagnostic Products exclude Homebrew Products, Personalized Research Products and GHI Database Products.

     1.6 “ Full-Time Equivalent ” or “ FTE ” shall mean a full-time employee, or in the case of less than a full-time dedicated person, a full-time, equivalent person-year performing activities under the Development Program.

     1.7 “ GHI Database Field of Use ” shall mean the research, development, manufacture, importation, use and/or sale of GHI Database Product(s) to end users.

     1.8 “ GHI Database Products ” shall mean a collection of information derived from or by testing a person or persons in the Diagnostic Field of Use, Homebrew Field of Use or the Personalized Research Field of Use. GHI Database Products exclude Diagnostic Products, Homebrew Products, and Personalized Research Products.

     1.9 “ Homebrew Field of Use ” shall mean the research, development, manufacture, importation, use and/or sale of Homebrew Product(s). The Homebrew Field of Use excludes the Diagnostic Field of Use, the Internal Research Field of Use and the Personalized Research Field of Use.

     1.10 “ Homebrew Product(s )”: shall mean a Single Analyte Assay(s) provided as a product or a service performed by a service provider that would constitute a Diagnostic Product with the sole exception that it is provided prior to receipt of approval by the FDA or comparable regulatory agency in any jurisdiction outside of the United States. Homebrew Products exclude Diagnostic Products, Personalized Research Products and GHI Database Products. For purposes of the

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foregoing, “Single-Analyte Assays” shall mean a assay designed for testing or measuring only a single analyte.

     1.11 “ Improvements ” shall mean any all inventions and all associated Intellectual Property: (a) made by Incyte or GHI commencing on the Effective Date and continuing until twelve (12) months after the expiration or termination of the Development Period using (i) the Program Technology, and/or (ii) Confidential Information provided by the other Party to the inventing Party, and in each case, which comprise an improvement, modification, or derivative of any of the foregoing relating to the Program Technology , and (b) Controlled by a Party.

     1.12 “ Incyte Background Technology ” shall mean the Intellectual Property that Incyte Controls as of the Effective Date and during the Development Program which is necessary for the conduct of the Development Program and the exploitation of the Program Technology and/or the Improvements , and which is directed to (a) the recovery and extraction of native nucleic acids, polypeptides, peptides and/or proteins from tissues embedded in paraffin for use in the research, development and commercialization of assays, including without limitation microarrays (“Paraffin Extraction”); or (b) the selective amplification, labeling or conjugation of RNA segments in a close to linear fashion (“RNA Amplification”). Incyte Background Technology shall exclude those patents licensed to GHI under the Patent License Agreement

     1.13 “ Incyte Field ” shall mean all internal research and development applications of Paraffin Extraction Technology or Improvements, including the use of such technology to develop therapeutic products and the use of such technology in connection with the commercialization of research tools, such as databases, use of a biochemical test for detecting and/or quantifying a specific nucleic acid target sequence within a nucleic acid mixture which is designed and intended “For Research Use Only” or “For Investigational Use Only” or as a general purpose laboratory reagent. For the avoidance of doubt, the Incyte Field shall exclude any, Diagnostic Field of Use, Homebrew Field of Use, and Personal Research Field of Use.

     1.14 “ Incyte Technology ” shall mean any protocols, training materials and computer software listed in Exhibit A to this Agreement, in the form used by Incyte in connection with the conduct of microarray fabrication and gene expression service businesses in Fremont, California and St. Louis, Missouri, as of the date of the technology transfer activities described in Article 3 of this Agreement, which relate to (a) sample storage and tracking; (b) LIMS systems; (c) microarray manufacturing protocols; (d) hybridization protocols; (e) quality control and quality assurance protocols; (f) microarray scanning protocols; and (g) data analysis.

     1.15 “ Intellectual Property ” shall mean trade secrets, Patents, copyrights, Know-How, and similar rights of any type under the laws of any governmental authority, domestic or foreign, including all applications and registrations relating to any of the foregoing.

               (a) “ Patents ” shall mean (i) all patents worldwide including without limitation, all substitutions, reissues, renewals, reexaminations, patents of addition, and inventor’s certificates thereof; (ii) all term extensions or other government action which provides exclusive rights to an Invention beyond the original patent expiration date; and (iii) all pending patent applications (including provisional applications, divisions, continuations, continued prosecutions and continuations-in-part).

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*** Confidential material redacted and filed separately with the Commission.

               (b) “ Know-How ” shall mean all knowledge, ideas, inventions, data, instructions, biological or other tangible materials, processes, formulas, expert opinions and information, including, without limitation, biological, chemical, analytical, clinical, manufacturing and quality control data and information, materials, methods, processes, techniques, and data. For the avoidance of doubt, Know-How does not include any Patent Rights.

     1.16 “ Net Sales ”: shall mean invoiced sales by GHI or a GHI Affiliate on all sales of Products (in final form for end use) to an unaffiliated third party, and exclusive of intercompany transfers or sales, less the following deductions from such invoiced sales, which are actually incurred, to the extent that they are reasonable and customary, and to the extent that they do not exceed *** percent (***%) of invoiced sales during any calendar quarter:

               (a) credits or allowances actually granted for damaged Products, returns or rejections of Product and retroactive price reductions;

               (b) freight, postage, shipping, customs duties and insurance charges;

               (c) normal and customary trade, cash and quantity discounts, allowances and credits; and

               (d) uncollected amounts to the extent not exceeding *** percent (***%) of invoiced sales for a calendar quarter; and

               (e) sales, value added or similar taxes measured by the billing amount, when included in billing.

     1.17 “ Paraffin Extraction ” shall mean the recovery and extraction of native nucleic acids, polypeptides, peptides and/or proteins from tissues embedded in paraffin.

     1.18 “ Paraffin Extraction Technology ” shall mean all Program Technology relating to the recovery and extraction of native nucleic acids, polypeptides, peptides and/or proteins from tissues embedded in paraffin and its use in the research, development and commercialization of assays, including without limitation microarrays. Paraffin Extraction Technology excludes RNA Amplification Technology.

     1.19 “ Party ” or “ Parties ” shall mean individually Incyte or GHI, and collectively Incyte and GHI.

     1.20 “ Patent License Agreement ” shall mean that certain patent license agreement by and between Incyte and GHI, titled the “Patent License Agreement”, as of March 30, 2001, including without limitation the rights granted thereunder in and to the Cancer Marker Patent Rights, Layton Patent Rights, Montefiore Patent Rights, and Stanford Patent Rights (each as defined therein).

     1.21 “ Personal Research Field of Use ” shall mean the research, development, manufacture, importation, use and/or sale of Personalized Research Product(s). The Personalized Research Field of Use excludes the Diagnostic Field of Use, the Homebrew Field of Use, and the Incyte Field of Use.

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     1.22 “ Personal Research Products ” shall mean shall mean a Multi-Analyte Assay(s) provided as a product or a service containing nucleic acids or proteins that are collectively intended to establish or identify an association between the presence or absence of such nucleic acids or proteins and:

               (a) diagnosis of the presence of, or absence of, a specific disease(s), state(s) or condition(s) in humans;

               (b) predisposition to the presence of, or absence of, a specific disease(s), state(s) or condition(s) in humans;

               (c) response or lack of response to disease therapy(ies) in humans or preventative strategies in humans;

               (d) prediction of the disease course in humans, and or other changes in state(s) or condition(s) in humans over time;

               (e) clinical traits in humans for which a medical professional should be consulted;

               (f) variation(s) in specific trait(s) and/or characteristics among individuals; and/or

               (g) predisposition to development of toxicities to disease therapies or preventative strategies in humans.

Such an assay will be considered a “Personalized Research Product” only where the results are provided directly to the tested individual and/or to the tested individual’s health care provider, and where the approval by the FDA or comparable regulatory agency in any jurisdiction outside of the United States is not required. “Personalized Research Products” exclude Homebrew Products, Diagnostic Products and GHI Database Products. For purposes of the foregoing, “Multi-Analyte Assay(s)” shall mean an assay designed for testing or measuring more than a single analyte.

     1.23 “ Products ” shall mean GHI Database Products, Personalized Research Products, Homebrew Products and/or Diagnostic Products.

     1.24 “ Program Technology ” shall mean all Intellectual Property created by Incyte or GHI after the Effective Date and during the Development Period (i) in the course of performing the Development Program, or (ii) using Confidential Information provided by the other Party to the inventing Party in connection with the Development Program.

     1.25 “ RNA Amplification ” shall mean the selective amplification, labeling or conjugation of RNA segments in a close to linear fashion.

     1.26 “ RNA Amplification Technology ” shall mean all Program Technology relating to the selective amplification, labeling or conjugation of RNA segments in a close to linear fashion.

     1.27 “ Term ” shall mean the period set forth in Section 12.1.

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*** Confidential material redacted and filed separately with the Commission.

     1.28 “ Third Party ” shall mean any Party other than Incyte or GHI.

     1.29 “ Valid Claim ” shall mean a claim of an issued and unexpired patent which has not been held unenforceable, unpatentable or invalid by a decision of a court or governmental body of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, rendered unenforceable due to disclaimer or otherwise, or lost through an interference proceeding.

2. DEVELOPMENT PROGRAM

     2.1 Development Program .

          2.1.1 Development Program . The parties shall conduct the Development Program during the Development Period. Each Party agrees to use diligent efforts to conduct the Development Program in accordance with the terms of this Agreement. Subject to the terms of this Agreement, including without limitation the definition of the field of research and the provisions of Section 2.1.3 regarding Development Program Staffing, GHI shall control decisions regarding the direction of research efforts undertaken in connection with the Development Program.

          2.1.2 Substitution and Addition of Projects . Upon notice from GHI to Incyte, individual projects in the Development Program may be dropped, added or changed, provided that such changes do not extend the Development Program into areas other than Paraffin Extraction Technology, and provided further that such changes shall not affect the resources to be provided by Incyte under this Agreement or the duration of the Development Period unless Incyte has agreed in writing to such changes.

          2.1.3 Development Program Staffing .

               (a) During the Development Program, unless otherwise agreed in writing by Incyte and GHI, Incyte will devote to the conduct of the Development Program three (3) Incyte FTEs during the Development Period. In addition, in GHI’s sole discretion, GHI may provide up to three (3) GHI FTEs to assist with the Development Program.

               (b) The Development Program will be conducted at Incyte under the direction of *** (the “Principal Director”). In the event the Principal Director becomes unavailable to participate in the Development Program for any reason, and the parties are unable to agree on a reasonable successor with comparable skills and qualifications within ninety (90) days following the date he becomes unavailable, GHI may terminate this Agreement . GHI’s payment obligations under Section 4.1.1 shall be suspended during any such period of unavailability or until the parties agree on such reasonable successor.

               (c) Incyte and GHI shall agree in advance on the technical and scientific qualifications of the GHI FTEs and other Incyte FTEs who will participate in the Development Program. If GHI becomes dissatisfied with the work of any Incyte FTE participating in the Development Program, GHI shall have the right to so notify Incyte in writing, and Incyte will use reasonable efforts to identify an alternate FTE with appropriate qualifications.

          2.1.4 Visiting Personnel . It is understood that in the course of the Development Program there may be occasions where one Party’s personnel (“Visiting Personnel”) may be

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stationed at the other Party’s facilities on a temporary basis. Such Visiting Personnel shall agree to be bound by all orders, rules and regulations pertaining to the hosting Party’s facilities during the entire time at such facilities.

     2.2 Development Program Funding .

          2.2.1 Funding . Except for the amounts provided by GHI pursuant to Article 4 to fund the Development Program, each Party shall bear its own costs in conducting the Development Program.

          2.2.2 Third Party Technology . GHI will be responsible for determining whether the parties should cooperate in obtaining licenses to Intellectual Property or technology of one or more Third Parties for the conduct of the Development Program and for acquiring such licenses for purposes of the Development Program. Each Party shall be responsible for acquiring such Intellectual Property or technology of one or more Third Parties as it considers necessary or desirable in connection with its use of Program Technology following completion or other termination of the Development Program.

          2.2.3 Capital Expenditures . If GHI determines that the conduct of the Development Program can be facilitated by the purchase of specialized capital equipment, GHI shall be responsible for obtaining such equipment, at GHI’s expense, and GHI shall own all such equipment.

     2.3 Record Keeping: Reports .

          2.3.1 Records . Each Party shall maintain records of its activities under the Development Program in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Development Program. Each Party shall provide the other with access to all records, materials and data generated with respect to the Development Program at reasonable times and in a reasonable manner.

          2.3.2 Reports . Each Party shall report and provide to the other Party with copies of all data, results, information, inventions, discoveries and developments achieved or obtained in the course of performing the Development Program, on an on-going basis throughout the Development Period or as otherwise specified as part of the Development Program.

3. TECHNOLOGY TRANSFER

     3.1 Disclosures . Incyte shall provide the Incyte Technology to GHI according to a schedule described generally in Exhibit A, as such schedule may be modified by mutual agreement of Incyte and GHI. The LIMS system portion of the Incyte Technology will be transferred to GHI either digitally via the internet or modem to GHI or via the “load and leave” process, where the LIMS system will be installed by Incyte onto GHI’s equipment. Incyte will retain title, possession and control over all physical forms of property at all times during the installation process. Upon completion of the installation, Incyte shall not leave with GHI any form of tangible personal property other than instruction documentation. GHI is authorized to make a backup copy of the LMIS system for archival purposes.

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*** Confidential material redacted and filed separately with the Commission.

     3.2 Assistance . Incyte agrees to provide GHI with up to three (3) days of training, as GHI may reasonably request, following installation of the LIMS system at GHI (to occur during 2001), to understand and implement the sample storage and tracking and LIMS system portions of the Incyte Technology. Prior to December 31, 2002, at GHI’s reasonable request, and subject to availability, Incyte shall allow up to five (5) GHI employees to participate in Incyte’s periodically scheduled training sessions for new Incyte employees or customers with respect to microarray manufacturing protocols, hybridization protocols, quality control and quality assurance protocols, microarray scanning protocols, and data analysis portions of the Incyte Technology. Upon mutual agreement of Incyte and GHI, GHI employees may also visit Incyte facilities for such periods as GHI and Incyte may agree to observe Incyte’s use of the Incyte Technology. If GHI wishes to obtain any additional services from Incyte regarding GHI’s implementation or modification of the Incyte Technology, Incyte’s obligation to provide such services will be subject to a separate, written agreement between the parties that will describe the services to be provided by Incyte and the fees payable by GHI.

     3.3 Incyte Know How License . Incyte hereby grants to GHI a worldwide, perpetual, irrevocable, non-transferable (except as provided in Section 14.6, below), royalty-free, fully paid-up, non-exclusive license under the Incyte Know-How, as is Controlled by Incyte, to develop, make, use, duplicate, modify, make derivative works, publicly perform, display, and disclose the Incyte Technology for the internal operation of GHI’s businesses, to exploit the rights and license granted under the Patent License Agreement and/or granted herein this Agreement, in each case in the GHI Database Field of Use, Diagnostic Field of Use, Homebrew Field of Use, and Personal Research Field of Use.

     3.4 Retained Rights . It is understood and agreed that no license or right is granted by Incyte to GHI under this Article 3 other than as expressly granted herein. No other license or rights, including without limitation any license or right to any other intellectual property owned or controlled by Incyte, shall be granted or created by implication, estoppel or otherwise.

4. PAYMENTS; CONSIDERATION

     4.1 Development Program Funding .

          4.1.1 Funding . In full consideration for Incyte’s undertaking the Development Program, GHI shall pay to Incyte *** Dollars ($***). GHI shall pay the foregoing amount in equal quarterly installments during the 2002 calendar year, with each such payment due during the first ten (10) business days of each such quarter.

          4.1.2 Limitations . Except as provided in Section 2.2 or this Section 4.1, in no event shall GHI be responsible for any other costs, expenses or obligations incurred by Incyte in performing the Development Program without GHI’s prior written consent.

     4.2 Technology Transfer Payment . In full consideration for the disclosure and transfer of the Incyte Technology pursuant to Section 3.1, the assistance provided by Incyte pursuant to Section 3.2, and the rights and licenses granted to GHI under Section 3.3, GHI shall pay to Incyte *** Dollars ($***). GHI shall pay the foregoing amount

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*** Confidential material redacted and filed separately with the Commission.

in equal quarterly installments during the 2002 calendar year, with each such payment due during the first ten (10) business days of each such quarter.

     4.3 Royalties . In consideration for the licenses granted to GHI by Incyte under Section 6.2.2(b) hereof, on the Effective Date, GHI shall pay to Incyte royalties on Net Sales of *** percent (***%) for Personalized Research Product(s) and Homebrew Product(s) and *** percent (***%) for Diagnostic Product(s), in each case, which Product(s) would, but for the licenses granted herein, infringe a Valid Claim under (i) the Incyte Background Technology directed to RNA Amplification and/or (ii) the RNA Amplification Technology.

          4.3.1 Combination Products . In the event that a Product is sold in combination with other product(s) and/or service(s) for which no royalty would be due hereunder if sold separately, Net Sales from such combination sales for purposes of calculating the amounts due under this Section 4.3 shall be calculated by multiplying the Net Sales of the combination product by the fraction A/(A + B), where A is the average gross selling price during the applicable calendar quarter of the Product sold separately to the same category of customers (e.g. patients, health care providers, or Diagnostic Product distributors) and B is the average gross selling price during the applicable calendar quarter of the other product(s) and/or services. In the event that such separate sales were not made during the previous calendar quarter then the Net Sales shall be calculated by multiplying the Net Sales of the combination product by the fraction C/(C + D), where C is the average cost of goods sold during the applicable calendar quarter of the Product and D is the average cost of good sold during the applicable calendar quarter of the other product(s) and/or service(s) , in each case calculated in accordance with standard and customary accounting principles.

          4.3.2 Third Party Royalties . In the event that GHI pays royalties to third parties in connection with the sale of Products either under agreements for patent rights (including applications therefor) or other technologies


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