DRUG DISCOVERY COLLABORATION AGREEMENT

E XHIBIT 10.1

 

C ONFIDENTIAL M ATERIALS OMITTED AND FILED SEPARATELY WITH THE

S ECURITIES AND E XCHANGE C OMMISSION . A STERISKS DENOTE OMISSIONS .

 

D RUG D ISCOVERY C OLLABORATION A GREEMENT

 

BETWEEN

 

G ENENTECH , I NC .

 

AND

 

C URIS , I NC .

T ABLE OF C ONTENTS

 

 

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Exhibits

 

Exhibit A        Excluded Genentech IP

 

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D RUG D ISCOVERY C OLLABORATION A GREEMENT

 

T HIS D RUG D ISCOVERY C OLLABORATION A GREEMENT (“Agreement”) is made and entered into, effective as of April 1, 2005 (“Effective Date”), by and between Genentech, Inc., a Delaware corporation, having a principal place of business at 1 DNA Way, South San Francisco, California 94080 (“Genentech”) and Curis Inc., a Delaware corporation, having a principal place of business at 61 Moulton Street, Cambridge, Massachusetts 02138 (“Curis”), (collectively, the “Parties” or individually, a “Party”).

 

R ECITALS

 

A. Curis possesses proprietary technologies, including small molecules and biological screening assays, relating to [**] (as defined below). In addition, Curis possesses significant biological expertise in the discovery of drugs that modulate regulatory pathways, such as [**], that control repair and regeneration.

 

B. Genentech is engaged in the research, development, manufacture and sale of pharmaceutical products.

 

C. Curis and Genentech desire to enter into a collaborative relationship for, among other purposes, the discovery and characterization of compounds that modulate [**].

 

A GREEMENT

 

N OW , T HEREFORE , for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Genentech and Curis agree as follows:

 

Article 1

Definitions

 

Capitalized terms used in this Agreement, whether used in the singular or plural, shall have the meanings set forth below, unless otherwise specifically indicated herein. [Certain definitions have been deleted from Article 1]

 

“ Agonist Compound ” means any Compound (other than a Compound included by Genentech pursuant to Section Article 1(c)) the initial effect of which on [**] is to activate [**]; Genentech, after consulting with Curis, shall determine, based upon an objective standard to be determined by the Joint Research Committee (if possible), whether a given Compound is an Agonist Compound, and Genentech shall notify Curis in writing of such determination.

 

“ ANDA ” means an abbreviated new drug application filed with the FDA pursuant to 21 CFR Part 314, or any comparable filing with any relevant regulatory authority in any other jurisdiction.

 

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“ Approved ” or “ Approval by the JRC, ” “ JRC Approval, ” or the like, means, that the Joint Research Committee has made a particular decision (in the context of the reference), and that such decision is reflected in the approved minutes of a JRC meeting.

 

“ Collaboration Invention ” is defined in Section 8.2.

 

“ Collaboration IP ” means Collaboration Invention and/or Collaboration Patent.

 

“ Collaboration Patent ” is defined in Section 8.2.

 

“ Columbia University Stem Cell Assays ” means the stem cell assays and intellectual property rights related thereto that are licensed to Curis by The Trustees Of Columbia University In The City Of New York pursuant to that certain “Exclusive License Agreement,” effective as of September 1, 2004.

 

“ Commercially Reasonable Efforts ” means, with respect to development and commercialization of a product, Genentech’s use of those efforts and resources, consistent with the exercise of prudent scientific and business judgment, as are applied by Genentech to other pharmaceutical products of comparable commercial potential, stage of medical/scientific development, probability of technical success, technical and regulatory profile, and patent protection, in a particular geographic locale.

 

“ Competing Product ” means a product sold by a Third Party that (a) has Marketing Approval or a published clinical study in a peer reviewed journal in the same Therapeutic Area as a Licensed Product; and (b) modulates [**] as one of its primary mechanisms of action.

 

“ Compound ” means any molecule that, as one of its primary mechanisms of therapeutic action, (i) specifically binds to or interacts with at least one component of [**]; and/or (ii) modulates the signaling of [**]; provided, however, Compound shall exclude any molecule that is or incorporates:

 

(a) a polypeptide ( e.g. , an antibody, antibody fragment, peptide, protein) or a nucleic acid ( e.g. , antisense, RNAi oligos, DNA);

 

(b) an antagonist of the Hedgehog Pathway that was tested under the Hedgehog Agreement for activity in modulating the signaling of the Hedgehog Pathway before being tested under this Agreement, in which case, such molecule shall be governed by the Hedgehog Agreement; or

 

(c) a molecule that is (i) independently developed by Genentech (as provided in Section 4.2) or (ii) in-licensed by Genentech (including as may be subsequently modified by Genentech) from a Third Party, in the case of either (i) or (ii), unless Genentech elects, in its sole discretion, by written notice to Curis at any time while the Genentech License is in effect, to include such molecule as a Compound, in accordance with Section 3.4(a).

 

“Compound Approved for Curis Work” is defined in Section 5.6.

 

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“ Confidential Information ” means a Party’s nonpublic information, whether or not patentable, that is disclosed or provided by such Party to the other Party in connection with this Agreement, to the extent that such information does not fall within the exceptions set forth in Section 9.1. “Confidential Information” includes, without limitation, information regarding such Party’s research, technology, products, business information or objectives and other information of the type that is customarily considered to be confidential information by parties engaged in activities that are substantially similar to the activities being engaged in by the Parties pursuant to this Agreement. Notwithstanding the foregoing, whether or not disclosed by Genentech to Curis, Genentech’s solely owned Confidential Information shall include (a) information relating to [**] (including, without limitation, the identities of any targets of Compounds); and (b) chemical entities known by Curis to be Compounds, and any information specifically related to such Compounds; in the case of either (a) or (b), that arises under this Agreement.

 

“ Controlled by ” or “Control” means the possession by a Party of the right to grant a license, sublicense or other right to exploit, as provided for herein, without violating (a) any law or governmental regulation applicable to such license, sublicense or other right to exploit; or (b) the terms of any agreement with any Third Party that exists as of the Effective Date or, if such right is acquired after the Effective Date, as of the date such Party first gained possession of such right.

 

“ Covered by ” or “Covers” means the manufacture, use, sale, offer for sale or import of a given product would, in the country of sale, infringe a Valid Claim on the date of sale.

 

“ Curis Collaboration Invention ” is defined in Section 8.2.

 

“ Curis Collaboration IP ” means Curis Collaboration Invention and/or Curis Collaboration Patent.

 

“ Curis Collaboration Patent ” is defined in Section 8.2.

 

“ Curis Stem Cell License ” is defined in Section 5.3(b)(i).

 

“ Curis Compound ” means a compound that Curis develops through research and/or development utilizing cell lines created with Compounds pursuant to the Curis Stem Cell License.

 

“ Curis Ex Vivo Application License ” is defined in Section 5.5.

 

“ Designated Genentech Recipient ” is defined in Section 3.3(b).

 

“ Disclosing Party ” is defined in Section 9.1.

 

“ Distributor ” means a Third Party that is employed by or otherwise under written contract with Genentech or its Sublicensees to sell, promote, distribute, market, import, and/or export Licensed Products on behalf of or in partnership with Genentech or its Sublicensees.

 

“ Ex Vivo Application ” means the use of Compounds to manipulate cells in vitro solely for the purpose of autologous or heterologous cell therapy for Non-Oncology Indications in

 

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humans. Ex Vivo Application excludes any administration of a Compound, by any route of administration, to a subject for any purpose including, without limitation, any residual Compound, or active metabolite thereof, included in the final formulation of a therapeutic that is administered to a subject.

 

“ Excluded Curis IP ” means (a) Columbia University Stem Cell Assays; and (b) Curis’ screening assays to identify [**] modulators.

 

“ Excluded Genentech IP ” means any intellectual property for which the right to grant a license, sublicense or other right to exploit, as provided herein, would require a payment or other obligation to a Third Party. Excluded Genentech IP includes, without limitation, (a) the Cabilly Patents and (b) the Itakura/Riggs Patents, as each of the foregoing is defined in Exhibit A.

 

“ FDA ” means the United States Food and Drug Administration, or any successor entity thereto performing similar functions.

 

“ Field ” means any use excluding Ex Vivo Applications.

 

“ First Commercial Sale ” means, with respect to a particular Licensed Product for a specific Indication in a given country, the first bona fide commercial sale of such Licensed Product following Marketing Approval for such Indication in such country by or under authority of Genentech or its Sublicensees.

 

“ FTE ” means the equivalent of a full-time scientist’s work time over a twelve (12) month period (including normal vacations, sick days and holidays). The portion of an FTE year devoted by a scientist to a particular activity or program shall be determined by dividing the number of full working days during any twelve (12) month period devoted by such scientist to such activity or program by the total number of working days during such twelve (12) month period.

 

“ Funded Work ” means work performed on a Lead Compound by FTEs funded by Genentech pursuant to Section 3.1(d).

 

“ GAAP ” means United States generally accepted accounting principles, consistently applied by Genentech.

 

“ Genentech Collaboration Invention ” is defined in Section 8.2.

 

“ Genentech Collaboration IP ” means Genentech Collaboration Invention and/or Genentech Collaboration Patent.

 

“ Genentech Collaboration Patent ” is defined in Section 8.2.

 

“ Genentech License ” is defined in Section 5.1(a).

 

“ Genentech Modified Product ” means [**].

 

“ Genentech Research License ” is defined in Section 5.2.

 

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“ GLP ” means the then current FDA regulations and guidelines for “Good Laboratory Practice,” as promulgated by the FDA under 21 CFR Part 58, as amended from time to time, or any foreign equivalents thereto in the country in which such studies are conducted.

 

“ Hedgehog Agreement ” means that certain “Collaborative Research, Development and License Agreement” by and between Curis and Genentech, entered into as of June 11, 2003, including any amendments thereto.

 

“ Hedgehog Pathway ” is as defined in the Hedgehog Agreement.

 

“ IND ” means an investigational new drug application filed with the FDA pursuant to 21 CFR Part 312 before the commencement of clinical trials of a product, or any comparable filing with any relevant regulatory authority in any other jurisdiction.

 

“ Indication ” means any illness, sickness, interruption, cessation or disorder of a particular bodily function, system or organ. A distinct Indication will not exist solely on the basis of severity of the ailment, the frequency or route of any treatment and/or the demographics or genetics of the patient class.

 

“ Initial Research Term ” is defined Section 0.

 

“ Joint Collaboration Invention ” is defined in Section 8.2.

 

“ Joint Collaboration IP ” means Joint Collaboration Invention and/or Joint Collaboration Patent.

 

“ Joint Collaboration Patent ” is defined in Section 8.2.

 

“ Joint Research Committee ” or “JRC” is defined in Section 2.2(a).

 

“ Know-How ” means information or materials including, without limitation, data, assays, protocols, methods, processes, techniques, models, designs, libraries and trade secrets.

 

“ Know-How Product ” means any formulation of a Lead Compound that is not a Valid Claim Product, a Genentech Modified Product, or a Non-Collaboration Product. In no event shall a Valid Claim Product, a Genentech Modified Product, or a Non-Collaboration Product be subject to Royalty Payments, on a country-by-county basis, as a Know-How Product.

 

“ Lead Compound ” means a Compound that is Approved by the Joint Research Committee for further research (whether or not as part of the Research Plan), development and/or commercialization under this Agreement.

 

“ Licensed IP ” means all inventions (whether or not patentable), Patents and Know-How (a) owned or Controlled by Curis prior to or as of the Effective Date; or (b) owned or Controlled by Curis thereafter during the term of the Agreement (including, without limitation, under Curis’ interests in the Collaboration IP), to the extent the foregoing are necessary or useful for Genentech to perform its obligations and exercise its licenses and other rights under the Agreement. Notwithstanding the foregoing, unless otherwise agreed by the Parties in writing, Licensed IP excludes the Excluded Curis IP.

 

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“Licensed Product” means any Valid Claim Product, Genentech Modified Product, Know-How Product and/or Non-Collaboration Product. References in the Agreement to “each Licensed Product,” “a particular Licensed Product,” or the like, mean a Licensed Product that contains a unique Lead Compound (which includes the salts, solvates, isomers, polymorphs and prodrugs of such Lead Compound). Notwithstanding the foregoing, if Curis performs Funded Work on any salts, solvates, isomers, polymorphs and/or prodrugs of a given Lead Compound, each new Lead Compound resulting from such Funded Work shall be deemed a unique Lead Compound.

 

“ Losses ” is defined in Section 12.1.

 

“ Major Market ” means each of France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

 

“ Marketing Approval ” means, with respect to a particular product for a specific Indication in a given country, all approvals, licenses, registrations or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacturing, use, storage, import, transport and sale of such product for such Indication in such country. For countries where governmental approval is required for pricing or reimbursement for such product for such Indication to be reimbursed by national health insurance, “Marketing Approval” shall not be deemed to occur until such pricing or reimbursement approval is obtained.

 

“ Marketing Approval Application ” or “MAA” means a new drug application (as defined in 21 CFR § 314.50 et. seq. ), or a comparable filing for Marketing Approval (not including pricing or reimbursement approval) in a country, in each case with respect to a Licensed Product in such country.

 

“ Milestone Payment ” is defined in Section 6.3(a).

 

“ Minimum Royalty Rates ” are defined in the table in Section 7.1.

 

“ Net Sales ” means, with respect to a particular time period, the gross amount invoiced by Genentech and its Sublicensees (or Distributors on behalf of the foregoing parties) for sales of Licensed Products (such Licensed Products being in final form intended for use by the end user) in arms length transactions with Third Parties during such time period, less the following estimated and/or incurred charges or expenses, to the extent each is actually incurred and included in the invoiced gross sales price:

 

trade, cash and quantity discounts or rebates actually allowed or taken;

 

credits or allowances given or made for rejection or return of, and for uncollectible amounts on, previously sold Licensed Products or for retroactive price reductions (including rebates similar to Medicare and/or Medicaid);

 

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taxes, duties or other governmental charges levied on or measured by the billing amount, as adjusted for rebates or refunds, that are borne by the seller thereof and that are not refundable and to the extent non-creditable;

 

charges for freight and insurance directly related to the distribution of the Licensed Products (to the extent not paid by the Third Party customer); and

 

credits or allowances given or made for wastage replacement, indigent patient and similar programs.

 

The specific deductions taken under, and the general provisions of, 0 through 0 above shall be adjusted periodically as necessary to reflect amounts actually incurred. Sales between Genentech and its Sublicensees (or Distributors of the foregoing parties) shall be disregarded for purposes of calculating Net Sales. Notwithstanding anything herein to the contrary, in all cases Net Sales shall be determined in accordance with GAAP.

 

In the event a Licensed Product is sold in combination with one or more other active pharmaceutical ingredients (as used in this definition of Net Sales, a “Combination”), then Net Sales shall be calculated by multiplying the Net Sales of such Combination by the fraction A/B, where A is the gross selling price of the Licensed Product sold separately and B is the gross selling price of the Combination. In the event that no such separate sales are made, Net Sales for royalty determination shall be calculated by multiplying Net Sales of the Combination by the fraction C/(C+D), where C is the fully allocated cost of the Licensed Product and D is the fully allocated cost of the other active pharmaceutical ingredient(s) in the Combination.

 

“ Non-Collaboration Product ” is defined in Section 3.4(a).

 

“ Non-Oncology Indication ” means an Indication that is not an Oncology Indication.

 

“ Oncology Indication ” means (a) an Indication that is cancer or neoplastic disease of any kind; (b) hematopoiesis including, without limitation, bone marrow transplantation, anemia and neutropenia; or (c) diagnostics related to (a) or (b).

 

“ Patents ” means all United States and foreign patents and patent applications and any patents issuing therefrom, and any reissues, extensions, registrations, continuations, divisions, continuations-in-part, reexaminations, substitutions or renewals thereof, and supplementary protection certificates based thereon.

 

“ Phase ” means the phase ( e.g. , II, II/III or III) designated in the protocol submitted to the FDA, or any comparable filing with any relevant regulatory authority in any other jurisdiction, for a given clinical trial.

 

“ Receiving Party ” is defined in Section 9.1.

 

“ Research Plan ” means a written research plan setting forth the responsibilities of each Party for the Research Program during the Research Term, as may be amended from time to time by the Joint Research Committee. The initial Research Plan shall be Approved by the JRC within sixty (60) days following the Effective Date. The Research Plan shall include a detailed

 

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list of the information and materials to be provided by Curis to Genentech (which may include, without limitation, Compound samples, reagents, cell lines and relevant animal models), at no cost to Genentech.

 

“ Research Program ” is defined in Section 2.1.

 

“ Research Term ” means the two (2) year period commencing on the Effective Date (“Initial Research Term”); provided, however, the Research Term may be extended, for up to two (2) additional years, in accordance with Section 2.6, or as otherwise agreed by the Parties in writing.

 

“ Royalty Offsets ” is defined in Section 7.3.

 

“ Royalty Payments ” is defined in Section 7.1.

 

“ Royalty Rates ” is defined in the table in Section 7.1.

 

“ Royalty Terms ” is defined in Section 7.2(a).

 

“ Sublicensee ” means, with respect to a particular Licensed Product, a Third Party to whom Genentech has granted a sublicense, under the Genentech License, of the right to make, use, sell, offer for sale and/or import such Licensed Product.

 

“ Territory ” means worldwide.

 

“ Therapeutic Area ” means an area of medical practice that encompasses groupings of specific diseases and/or disorders generally treated by a specific medical specialty, such as oncology, cardiovascular, neurology or hematology. All cancers and neoplastic diseases shall be considered within the oncology Therapeutic Area, regardless of the tissue involved or the medical specialty treating such cancer or neoplastic disease.

 

“ Third Party ” means any entity other than Curis or Genentech.

 

“ Valid Claim ” means a claim of an issued, unexpired patent that has not been found to be unpatentable, invalid or unenforceable by a decision of a court or other authority in the country of the patent, from which decision no appeal is taken or can be taken.

 

“ Valid Claim Product ” means any formulation of a Lead Compound that is Covered by the Licensed IP; provided, however, Valid Claim Product excludes any (a) Genentech Modified Product; (b) Licensed Product that is Covered by a Genentech Collaboration Patent and is not Covered by either a Curis Collaboration Patent or a Joint Collaboration Patent; and (c) Non-Collaboration Product.

 

[**].

 

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Article 2

Research Program

 

2.1 Research Program Overview. The Parties agree, pursuant and subject to the terms and conditions of this Agreement, to establish a research program under which Curis shall perform certain research on [**], with assistance from Genentech, with the goal of identifying and developing Compounds in the fields of oncology and non-oncology, in accordance with the Research Plan (“Research Program”). Each Party shall use commercially reasonable efforts, in accordance with standard industry practice, to perform its respective responsibilities under the Research Plan, and shall cooperate with and provide reasonable support to the other Party in such other Party’s performance of its responsibilities thereunder. Other than as expressly specified in this Agreement (including pursuant to the Research Plan), or as agreed to in writing by the Parties, development and/or commercialization of Licensed Products incorporating such Compounds, shall be in accordance with Section 3.4.

 

2.2 Joint Research Committee.

 

(a) The JRC. Promptly after the Effective Date, the Parties shall establish a Joint Research Committee (“Joint Research Committee” or “JRC”), which shall be responsible for monitoring the Research Program and planning and coordinating activities under the Research Plan. The JRC shall be composed of representatives designated by each Party. Either Party may replace any or all of its representatives at any time upon prior written notice to the other Party; provided, however, if a Party’s representative is unable to attend a meeting, such Party may designate an alternate to attend such meeting and perform the functions of such representative. From time to time, the JRC may establish subcommittees to oversee particular projects or activities, and such subcommittees will be constituted as the JRC approves.

 

(b) Responsibilities of JRC. The Joint Research Committee shall perform the following functions:

 

(i) draft, review and amend the Research Plan in writing, as needed, taking into account the activities for which each Party is responsible as set forth in Section 2.3;

 

(ii) Approve particular Compounds (which shall be proposed to the JRC in accordance with Section 2.4) as Lead Compounds;

 

(iii) if possible, establish an objective standard for determining whether a given Compound is an Agonist Compound;

 

(iv) review and approve the allocation of resources and efforts for the Research Program;

 

(v) evaluate the progress of the Research Program, as compared to the objectives set forth in this Agreement and the Research Plan;

 

(vi) in accordance with Section 3.3(b), coordinate, and be the primary conduit for, the transfer of materials and Confidential Information between the Parties; and

 

(vii) perform such other functions referred to in the Research Plan, and as appropriate to further the purposes of the Research Program, or as otherwise specified in this Agreement or agreed to by the Parties.

 

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(c) Decision Making Authority. With respect to the responsibilities of the Joint Research Committee, each Party shall have collectively one (1) vote in all decisions, and the Parties shall attempt to make decisions by consensus. However, if the JRC cannot reach consensus, then Genentech shall have final decision making authority; provided, however, Curis shall not be obligated, as a result of a final decision by Genentech, to violate any obligation or agreement it may have with any Third Party, or to incur any extraordinary costs. By way of example, the JRC shall not obligate Curis to perform activities under the Research Plan beyond those that could reasonably be expected to be performed by the number of FTEs funded by Genentech during the relevant time period or to acquire extraordinarily expensive or large quantities of materials for use under the Research Plan.

 

(d) Meetings; Minutes. The Joint Research Committee shall meet quarterly, or as more or less often as otherwise agreed by the Parties, at such locations as the Parties agree. The JRC may meet in person, by teleconference, videoconference or as otherwise agreed. Minutes of the JRC meetings shall be taken, and shall, at a minimum, record all decisions made. Such minutes shall be approved by both Parties. A Party may, with the prior consent of the other Party, invite a reasonable number of consultants or scientific advisors to attend the meetings of the JRC, provided that such invitees are bound by appropriate confidentiality obligations. A Party may also, without the prior consent of the other Party, invite a reasonable number its employees to attend JRC meetings.

 

(e) Other Communications. In addition to formal meetings, the Joint Research Committee representatives shall communicate as necessary to ensure the appropriate direction of the Research Program. Genentech shall have reasonable access to Curis’ facilities and personnel to achieve this goal, including visits by Genentech personnel, upon reasonable notice, and regular phone or electronic mail communications ( e.g. , up to several times a week when needed). Curis shall use reasonable efforts to accommodate such requests.

 

(f) Term of JRC Operations. The Joint Research Committee shall meet during the Research Term. Thereafter, the JRC shall cease operations and have no further functions hereunder.

 

2.3 Responsibilities Under the Research Plan.

 

(i) Curis. During the Research Term, Curis shall be primarily responsible for the following activities, among others, as specified in the Research Plan: [**] Genentech. During the Research Term, Genentech shall be responsible for the following activities, among others, as specified in the Research Plan: [**] .

 

2.4 Proposal of Compounds as Lead Compounds. Either Curis or Genentech may propose to the Joint Research Committee a particular Compound that was identified by Curis as a Lead Compound. Only Genentech may propose other Compounds as Lead Compounds.

 

2.5 Information and Reports. During the Research Term, (a) at least once quarterly (and, if the Joint Research Committee is meeting quarterly, at least one week in advance of the JRC meeting), Curis shall provide to a Designated Genentech Recipient a written summary of the research carried out by Curis under the Research Plan and the results of such research including, without limitation, Compounds synthesized or discovered, and results of in vitro and

 

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in vivo studies, with significant discoveries or advances being communicated promptly after such results are obtained or their significance is appreciated; and (b) Curis shall also promptly provide to a Designated Genentech Recipient the raw data for work carried out by Curis under the Research Plan, to the extent reasonably requested by Genentech.

 

2.6 Extension of Research Term. The Research Term may be extended by Genentech in accordance with either or both of the provisions set forth in this Section 2.6.

 

(a) Oncology Field. No later than sixty (60) days prior to the last day of the Initial Research Term, Genentech shall elect, in its sole discretion, by written notice to Curis, whether or not to extend the Research Term for an additional year to continue collaborative research activities with respect to the field of oncology, subject to Genentech funding FTEs in accordance with Section 3.1(b). The Joint Research Committee shall determine what activities will be performed during such extended Research Term, and such activities will be reflected in an amended Research Plan. In the event that Genentech elects to extend the Research Term under this Section 2.6(a) for such additional year, no later than sixty (60) days prior to the last day of such extended Research Term, Genentech shall make the same election as set forth in the first sentence of this Section.

 

(b) Non-Oncology Field.

 

(i) No later than ninety (90) days prior to the last day of the Initial Research Term, Curis shall provide to Genentech a written proposal defining collaborative research activities with respect to the field of non-oncology to be performed during an additional year and specifying the number of FTEs (at each of Curis and/or its Third Party contractors) that Genentech would be obligated to fund to perform such activities. No later than sixty (60) days prior to the last day of the Initial Research Term (or sixty (60) days after receiving such written proposal, if later), Genentech shall elect, in its sole discretion, by written notice to Curis, whether or not to extend the Research Term for an additional year to continue collaborative research activities with respect to the field of non-oncology, subject to Genentech funding FTEs in accordance with Section 3.1(c). The Joint Research Committee shall make a final determination of what activities will be performed during such extended Research Term, and such activities will be reflected in an amended Research Plan. In the event that Genentech elects to extend the Research Term under this Section 2.6(b) for such additional year, Curis shall submit a proposal for one more additional year and Genentech shall make the same election, within the same time periods (with respect to the extended Research Term), as set forth in the first two sentences of this Section.

 

(ii) In the event that Genentech elects to not extend the Research Term pursuant to this Section 2.6(b) (at either time of election), Genentech’s rights with respect to Agonist Compounds shall terminate, as of the effective date of the written notice of such election, in accordance with Sections 4.1(c) and 5.1(b), and the provisions of Section 5.4 shall apply. In the event that Genentech elects to extend the Research Term at both times of election pursuant to this Section 2.6(b), Genentech’s rights with respect to Agonist Compounds shall remain in full force and effect in accordance with the terms of this Agreement other than Sections 4.2 and 5.1(b).

 

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Article 3

Rights and Responsibilities Generally and Outside of the Research Plan

 

3.1 Genentech Funded FTEs. Genentech shall fund FTEs under this Agreement (as set forth in this Section 3.1, or as otherwise expressly provided in this Agreement or agreed to in writing by the Parties with reference to this Agreement), and payments for FTEs shall be made in accordance with Section 6.2. Any FTE funded by Genentech under this Agreement shall be skilled in small molecule drug discovery and/or preclinical development, shall possess a bachelor’s degree or higher in a relevant scientific discipline, with the exception of FTEs in the Curis animal facility. At Genentech’s request, Curis shall provide resumes or curriculum vitae for funded FTEs who are Curis employees. Nothing herein is intended to preclude Curis, in its sole discretion, from using unfunded employees or Third Party contractors to perform activities under this Agreement on its behalf, at its expense.

 

(a) Initial Research Term. During the Initial Research Term, Genentech shall fund [**] FTEs per year to perform activities for which Curis is responsible under the Research Plan. Unless otherwise decided by the Joint Research Committee, each year, [**] of such FTEs shall be assigned to work in the field of oncology and [**] shall be assigned to work in the field of non-oncology. Unless otherwise agreed by the Parties, each year, at least [**] of such FTEs shall be Curis employees.

 

(b) Extended Research Term for the Oncology Field. If Genentech elects to extend the Research Term in the field of oncology in accordance with Section 2.6(a), unless otherwise agreed in writing by Curis, Genentech shall fund that number of FTEs as is reasonably necessary to perform the activities for which Curis is responsible under the Research Plan for such extended Research Term.

 

(c) Extended Research Term for the Non-Oncology Field. If Genentech elects to extend the Research Term in the field of non-oncology in accordance with Section 2.6(b), the provisions of this Section 3.1(c) shall apply to each year for which Genentech makes such election. Genentech shall fund at least [**] FTEs to perform activities at Curis; provided, however, if the scope of the activities that will be performed at Curis (as defined in the written proposal from Curis pursuant to Section 2.6(b)) does not require [**] FTEs, Genentech may fund fewer than [**] FTEs to perform activities at Curis. In addition to FTEs to perform activities at Curis, Genentech may fund Curis to engage Third Parties as FTEs to perform work on behalf of Curis.

 

(d) Additional Research and/or Preclinical Studies. At any time during the Agreement, in addition to FTEs funded by Genentech pursuant to the other provisions of this Section 3.1, upon a request by Genentech, if reasonably possible, Curis shall provide Curis employees as FTEs to perform research and/or preclinical studies on Lead Compounds, subject to Genentech’s funding the FTEs required to perform such activities. If such activities are to be performed during the Research Term, the specifics of the activities to be performed shall be included in the Research Plan. If the Parties agree, and such activities are to be performed after the Research Term, the Parties shall agree, in writing, to the specifics of such activities (including, without limitation, the number of FTEs required, the expected timeframes for performance, and the materials, data and information that the Parties will exchange).

 

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(e) Termination of FTE Funding Obligations. In the event that Curis has less than four million dollars ($4,000,000) in cash and cash equivalents and marketable securities with maturities of less than one year, at the end of a calendar quarter, Genentech may elect upon thirty (30) days written notice, in its sole discretion, to terminate any obligations it has under this Agreement to fund FTEs beyond such calendar quarter.

 

3.2 Costs Other than Genentech Funded FTEs. Except as otherwise expressly provided herein (including, without limitation, for FTE support under Section 3.1 and as provided in Sections 2.2(c) and 5.9), or agreed to by the Parties in writing, each Party shall be responsible for any and all costs it incurs in performing its obligations under the Research Plan, or otherwise under this Agreement, including, without limitation, the costs of work performed by Third Parties on behalf of a Party.

 

3.3 Curis Responsibilities.

 

(a) Provision of Information. Upon the Effective Date, and during the term of the Agreement, in addition to information specified in the Research Plan, Curis shall promptly provide to Genentech all information in Curis’ possession (whether or not Confidential Information) necessary or useful for research, development, manufacturing and/or commercialization of Compounds including, without limitation, information relating to the chemical or molecular structures, patents and patent applications, preclinical data ( e.g. , PK, ADME and toxicology) and reports on all Compounds within the scope of the licenses granted to Genentech under the Agreement.

 

(b) Transfer of Information and Materials. Except as otherwise expressly provided in the Agreement or with Genentech’s written agreement, any of Curis’ Confidential Information and materials that Curis or its Third Party contractors provide to Genentech under this Agreement (whether or not under the Research Plan) shall be transferred to Genentech in accordance with the provisions of this Section 3.3(b). Genentech shall notify Curis in writing of one or more Genentech employees who are designated by Genentech to receive such Confidential Information and materials (each, a “Designated Genentech Recipient”); provided, however, Genentech may replace any or all of such Designated Genentech Recipients at any time upon prior written notice to Curis. Curis acknowledges and agrees that any Confidential Information or materials that are not transferred in accordance with the provisions of this Section (including by its Third Party contractors) shall not be subject to any limitations on use, transfer or disclosure by Genentech, notwithstanding anything to the contrary in this Agreement.

 

3.4 Development and Commercialization of Licensed Products.

 

(a) Non-Collaboration Products. If, pursuant to Section Article 1(c), Genentech elects to include a molecule as a Compound, such Compound shall be deemed to be a Lead Compound as of the effective date of the written notice of such election, and the provisions of this Section 3.4(a) shall apply following such election. If Curis does not perform Funded Work on such Lead Compound, any formulation of such Lead Compound shall be referred to as a “Non-Collaboration Product.” If Curis performs Funded Work on such Lead Compound, any formulation of such Lead Compound that is Covered by the Licensed IP, other than a Genentech Collaboration Patent, shall be deemed a Valid Claim Product. If Curis performs Funded Work on such Lead Compound, any formulation of such Lead Compound that is Covered by a Genentech Collaboration Patent and not by other Licensed IP, shall be deemed a Genentech Modified Product. Upon agreement by the Parties as to whether or not Curis will perform Funded Work,

 

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Genentech shall provide written notice to Curis documenting the classification of such Lead Compound as a Non-Collaboration Product, a Valid Claim Product or a Genentech Modified Product.

 

(b) Development. Other than activities under the Research Plan, Genentech shall be solely responsible, at its expense, for undertaking a development program to obtain regulatory approval for Licensed Products in the Field in the Territory. Such program shall include preclinical, clinical, manufacturing and other activities as are necessary or appropriate to bring Licensed Products to market. Genentech shall designate a single point of contact for Curis to contact with questions regarding the preclinical and clinical developmental status of Licensed Products. In addition, Genentech shall provide (and/or cause its Sublicensees to provide) an annual written summary to Curis regarding the status of Licensed Products under clinical development.

 

(c) Commercialization. Other than the provision of materials by Curis under the Research Plan, Genentech shall be solely responsible for manufacturing Licensed Products and for establishing, controlling and implementing strategies, plans and budgets for the marketing and promotion of Licensed Products in the Field in the Territory.

 

(d) Diligence. Genentech shall use Commercially Reasonable Efforts to research, develop and/or commercialize at least one (1) Licensed Product in the Field in the Territory. Genentech shall be deemed to be fulfilling such diligence obligation during the first three (3) years following the Effective Date.

 

3.5 First Right to Negotiate License for Ex Vivo Applications. Curis hereby grants to Genentech a “first right to negotiate” pursuant to which Curis shall (a) notify Genentech in writing if it wishes to license to another party rights to develop and/or commercialize a given Ex Vivo Application; and (b) provide to Genentech all material information related to such Ex Vivo Application that exists and is available to Curis at the time of such notification. Genentech shall notify Curis within forty-five (45) days after receiving such notice and information whether it elects to exercise such first right to negotiate. If Genentech does not so notify Curis, Curis shall be free to grant the rights specified in the original notice to a Third Party. If Genentech does so notify Curis, Curis shall negotiate exclusively with Genentech with respect to such rights for a period not to exceed six (6) months. If an agreement regarding the fundamental terms is not reached within such period, Curis will be free to grant such rights to a Third Party on terms no more favorable to such Third Party than those last offered to Genentech. However, if Curis cannot reach agreement with any Third Party within nine (9) months after concluding negotiations with Genentech, it shall again offer Genentech such rights before offering such rights to another Third Party. Genentech may at any time, in its sole discretion, terminate its rights under this Section 3.5, including terminating any negotiations in progress with Curis.

 

3.6 First Right to Negotiate License for Curis Compounds. Curis hereby grants to Genentech a “first right to negotiate” pursuant to which Curis shall (a) notify Genentech in writing if it wishes to license to another party rights to develop and/or commercialize a given Curis Compound; (b) identify in such notice the Therapeutic Area in which Curis is developing, or intends to develop, such Curis Compound; and (c) provide to Genentech all material

 

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information related to such Curis Compound that exists and is available to Curis at the time of such notification. Genentech shall notify Curis within forty-five (45) days after receiving such notice and information whether it elects to exercise such first right to negotiate; provided, however, Genentech may only exercise such right if, at that the time Genentech notifies Curis that it elects to do so, Genentech is actively researching and/or developing a compound (including, without limitation, Compounds, polypeptides and nucleic acids) in the same Therapeutic Area as that identified in such notice for the Curis Compound, and such compound (y) specifically binds to or interacts with at least one component of [**]; and/or (z) modulates the signaling of [**]. If Genentech does not so notify Curis, Curis shall be free to grant the rights specified in the original notice to a Third Party. If Genentech does so notify Curis, Curis shall negotiate exclusively with Genentech with respect to such rights for a period not to exceed six (6) months. If an agreement regarding the fundamental terms is not reached within such period, Curis will be free to grant such rights to a Third Party on terms no more favorable to such Third Party than those last offered to Genentech. However, if Curis cannot reach agreement with any Third Party within nine (9) months after concluding negotiations with Genentech, it shall again offer Genentech such rights before offering such rights to another Third Party. Genentech may at any time, in its sole discretion, terminate its rights under this Section 3.6, including terminating any negotiations in progress with Curis.

 

3.7 Development by Curis Outside of Research Plan. Genentech may, in its sole discretion, offer to Curis, on terms to be decided by Genentech, the opportunity to perform research and development with respect to a specific Licensed Product in the field of non-oncology, other than pursuant to the Research Plan. Curis has no obligation to accept such offer.

 

Article 4

Exclusivity / Independent Program for [**]

 

4.1 Exclusivity by Curis.

 

(a) Exclusivity by Curis. Other than in the performance of activities under this Agreement or under the Curis Stem Cell License, Curis shall not (i) engage in any screening, research, development or commercialization activities for the intended purpose of modulating [**], other than Ex Vivo Applications; or (ii) grant any rights enabling any Third Parties to do so including, without limitation, rights to use the Columbia University Stem Cell Assays to identify, discover or research Compounds.

 

(b) Exclusivity by Third Par