Exhibit 10.14
[NOTE: CERTAIN PORTIONS OF THIS
DOCUMENT HAVE BEEN MARKED TO INDICATE THAT CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED FOR CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
LICENSE AND RESEARCH COLLABORATION
AGREEMENT
BETWEEN
MERCK & CO., INC.
AND
DECODE GENETICS, EHF.
LICENSE AND RESEARCH COLLABORATION
AGREEMENT
THIS RESEARCH COLLABORATION AND
LICENSE AGREEMENT (this “Agreement”), which shall be
effective as of February 25, 2004 (the “Effective
Date”), is entered into by and between deCODE genetics, Ehf.,
a corporation organized under the laws of Iceland
(“deCODE”) and Merck & Co., Inc., a corporation
organized under the laws of the State of New Jersey, having an
office located at One Merck Drive, Whitehouse Station, New Jersey
08889 (“MERCK”).
PRELIMINARY STATEMENTS
A.
deCODE has expertise in conducting
research in the field of human genetics and genomics and in the
conduct of clinical trials.
B.
MERCK has certain expertise in drug
development and in the design and conduct of clinical trials to
demonstrate the safety and efficacy of its pharmaceutical
products.
C.
deCODE and MERCK wish to collaborate
on the design and conduct of Information Rich Clinical Trials
(terms with initial capitals as hereafter defined) on selected
MERCK compounds in specified Disease Areas in accordance with the
attached Work Plan.
D.
deCODE Parent (as hereinafter
defined) and MERCK are simultaneously entering into a separate
Stock and Warrant Purchase Agreement whereby MERCK shall purchase
shares of stock of deCODE Parent pursuant to the terms and
conditions set forth in that agreement.
NOW, THEREFORE, in consideration of
the foregoing Preliminary Statements and the mutual agreements and
covenants set forth herein, the Parties hereby agree as
follows:
1.
DEFINITIONS
Unless specifically set forth to the
contrary herein, the following terms, whether used in the singular
or plural, shall have the respective meanings set forth
below:
1.1
“AFFILIATE” shall mean
as to deCODE or MERCK, as the case may be (i) any corporation or
business entity of which fifty percent (50%) or more of the
securities or other ownership interests representing the equity,
the voting stock or general partnership interest are owned,
controlled or held, directly or indirectly, by MERCK or deCODE; or
(ii) any corporation or business entity which, directly or
indirectly, owns, controls or holds fifty percent (50%) (or the
maximum ownership interest permitted by law) or more of the
securities or other ownership interests representing the equity,
the voting stock or, if applicable, the general partnership
interest, of MERCK or deCODE.
1.2
“ASSOCIATED INFORMATION”
shall mean information about [CONFIDENTIAL TREATMENT REQUESTED] in
an IRCT performed as part of the Research Program which
[CONFIDENTIAL TREATMENT REQUESTED] in an Exclusive Disease Area or
a Non-exclusive Disease Area where the [CONFIDENTIAL TREATMENT
REQUESTED] is associated with the [CONFIDENTIAL TREATMENT
REQUESTED] within the Disease Area being studied in that
IRCT.
1.3
“BUDGET” shall mean the
projected expenditures for the upcoming year set out in Schedule
2.6
and more fully described in Section
2.6.
1.4
“CALENDAR QUARTER” shall
mean the respective periods of three (3) consecutive calendar
months ending on March 31, June 30, September 30 and December
31.
1.5
“CALENDAR YEAR” shall
mean each successive period of twelve (12) months commencing on
January 1 and ending on December 31.
1.6 A
“CHANGE IN CONTROL”
shall mean the occurrence of any of the following:
(a) An acquisition of any voting
securities of deCODE Parent (the “Voting Securities”)
by any “Person” (as the term “person” is
used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)),
immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of (1) the
then-outstanding shares of common stock of deCODE Parent (or any
other securities into which such shares of common stock are changed
or for which such shares of common stock are exchanged) (the
“Shares”) or (2) the combined voting power of deCODE
Parent’s then-outstanding Voting Securities;
(b) The individuals who, as of
Effective Date, are members of the board of directors of deCODE
Parent (the “Incumbent Board”), following a Merger (as
hereinafter defined), do not for any reason constitute at least a
majority of the members of the board of directors of (x) the
corporation resulting from such Merger (the “Surviving
Corporation”), if fifty percent (50%) or more of the combined
voting power of the then-outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or
indirectly, by another Person (a “Parent Corporation”)
or (y) if there is one or more than one Parent Corporation, the
ultimate Parent Corporation; PROVIDED, HOWEVER, that, any
individual becoming a director subsequent to the date hereof
whose
election, or nomination for election
by such company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the board of directors of deCODE Parent (a “Proxy
Contest”), including by reason of any agreement intended to
avoid or settle any Proxy Contest;
(c) At least eighty (80%) percent of
voting securities of deCODE are no longer owned directly or
indirectly by deCODE Parent; or
(d) The consummation of:
(i)
A merger, consolidation or
reorganization (1) with or into deCODE Parent or a direct or
indirect subsidiary of deCODE Parent or (2) in which securities of
deCODE Parent are issued (both 1.5(c)(i)(1) and (2) are defined as
a “Merger”), unless such Merger is a “Non-Control
Transaction.” A “Non-Control Transaction” shall
mean a Merger in which:
(A) the stockholders of deCODE
Parent immediately before such Merger own directly or indirectly
immediately following such Merger at least fifty percent (50%) of
the combined voting power of the outstanding voting securities of
(x) the Surviving Corporation, if there is no Parent Corporation or
(y) if there is one or more than one Parent Corporation,
the
ultimate Parent
Corporation;
(B) the individuals who were members
of the Incumbent Board immediately prior to the execution of the
agreement providing for such Merger constitute at least a majority
of the members of the board of directors of (x) the Surviving
Corporation, if there is no Parent Corporation, or (y) if there is
one or more than one Parent Corporation, the ultimate Parent
Corporation; and
(C) no Person other than (1) deCODE
Parent, or (2) any Person who, immediately prior to the Merger had
Beneficial Ownership of fifty percent (50%) or more of the then
outstanding Shares or Voting Securities, has Beneficial Ownership,
directly or indirectly, of fifty percent (50%) or more of the
combined voting power of the outstanding voting securities or
common stock of (x) the Surviving Corporation, if fifty percent
(50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially
Owned, directly or indirectly by a Parent Corporation, or (y) if
there is one or more than one Parent Corporation, the ultimate
Parent Corporation; PROVIDED, HOWEVER, that any Person described in
clause (2) of this subsection (C) may not, immediately following
the Merger, Beneficially Own more than thirty percent (30%) of the
combined voting power of the outstanding voting securities of the
Surviving Corporation or the Parent Corporation, as applicable, for
the Merger to constitute a Non-Control Transaction.
(ii) A complete liquidation or
dissolution of deCODE Parent; or
(iii) The sale or other disposition
of all or substantially all of the assets of deCODE Parent and its
Subsidiaries taken as a whole to any Person (other than (x) a
transfer under conditions that would constitute a Non-Control
Transaction, with the disposition of assets being regarded as a
Merger for this purpose or (y) the distribution to deCODE
Parent’s stockholders of any other assets).
Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the then outstanding
Shares or Voting Securities as a result of the acquisition of
Shares or Voting Securities by deCODE Parent which, by reducing the
number of Shares or Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject
Persons; provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of
Shares or Voting Securities by deCODE Parent and, after such share
acquisition by deCODE Parent, the Subject Person becomes the
Beneficial Owner of any additional Shares or Voting Securities and
such Beneficial Ownership increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
1.7
“COLLABORATION DATE”
shall be February 25, 2004.
1.8
“COLLABORATION INFORMATION AND
INVENTION” shall mean any discoveries, Improvements,
processes, methods, protocols, formulas, data, inventions, know-how
and trade secrets, patentable or otherwise, that arise from the
Research Program.
1.9
“COLLABORATION PATENTS”
shall mean any and all patents and patent applications in the
Territory (which for the purposes of this Agreement shall be deemed
to include certificates of invention
and applications for certificates of
invention) that a Party or its Affiliates owns, Controls or through
license or otherwise acquires rights during the term of this
Agreement which claim, cover or relate to Collaboration Information
and Inventions or are divisions, continuations,
continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates, utility, models and the like
of any such patents and patent applications and foreign equivalents
thereof.
1.10
“COMBINATION PRODUCT”
shall mean a Product which includes one or more active ingredients
other than IRCT Compound or Related IRCT Compound in combination
with IRCT Compound or Related IRCT Compound. All references to
Product in this Agreement shall be deemed to include Combination
Product.
1.11
“COMPETITIVE PRODUCT”
shall mean a product containing the IRCT Compound or Related IRCT
Compound which has or attains on a Calendar Year basis
a market share of [CONFIDENTIAL
TREATMENT REQUESTED] or more in a country of sale as measured by
prescriptions or other similar information in the country of
sale.
1.12
“COMPETITOR” shall mean
a company in the pharmaceutical business sector with reported
annual gross revenues from the sale of pharmaceuticals in excess
[CONFIDENTIAL TREATMENT REQUESTED] for each of its [CONFIDENTIAL
TREATMENT REQUESTED].
1.13
“CONTROL”,
“CONTROLS” OR “CONTROLLED BY” shall mean
either (a) being an Affiliate of either MERCK or deCODE; or (b)
with respect to any item of or right under Collaboration Patents,
Patents or Know-How, the possession of (whether by ownership or
license, other than pursuant to this Agreement) or the ability of a
Party to grant access to, or a license or sublicense of, such items
or right as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party existing at the
time such Party would be required hereunder to grant the other
Party such access or license or sublicense.
1.14
“deCODE INFORMATION AND
INVENTIONS” shall mean all Collaboration Information and
Inventions developed or invented solely by employees of deCODE or
other persons not employed by MERCK acting on behalf of
deCODE.
1.15
“deCODE KNOW-HOW” shall
mean all secret, substantial and identified information and
materials, including, but not limited to, discoveries,
Improvements, processes, formulas, data, inventions(including
without limitation deCODE’s Information and Inventions and
deCODE’s rights in Joint Information and Inventions),
know-how and trade secrets, patentable or otherwise, which arise
from the Research Program and during the term of this Agreement (i)
are in deCODE’s possession or control, (ii) are not generally
known and (iii) are necessary or useful to MERCK in connection with
the Research Program or the research, development, manufacture,
marketing, use or sale of IRCT Compound, Related IRCT Compound,
Tests or Product in the
Territory.
1.16
“deCODE COLLABORATION
PATENTS” shall mean Collaboration Patents that claim, cover
or relate to deCODE Information and Inventions excluding deCODE
Information and Inventions relating to deCODE Generalized
Technology.
1.17
“deCODE COMPOUNDS” shall
mean compounds[CONFIDENTIAL TREATMENT REQUESTED].
1.18
“deCODE GENERALIZED
TECHNOLOGY” shall mean any Technical Information relating to
generalized methods for conducting genomics research and
characterizing the function of genes or any raw data useful in
generalized genomics research tools which at any time is owned or
controlled by deCODE or its Affiliates (provided deCODE or its
Affiliates have the right to license or otherwise make available
such Technical Information to MERCK).
1.19
“deCODE GENOMICS DATA”
shall mean (a) [CONFIDENTIAL TREATMENT
REQUESTED] as may be created,
developed or acquired by deCODE from time to time during the term
of this Agreement or as may be existing or have been created as of
the Effective Date, and (b) deCODE’s proprietary inventions,
processes and other assets directly relating to the use, creation,
maintenance, development, operation, access, analysis, reporting,
storage, protection, and/or transmission of such proprietary
databases, including proprietary methods, procedures and
techniques, procedure manuals, personal and scientific data,
computer technical expertise and software, in each case
independently developed by or on behalf of deCODE and such software
useful for the analysis of the information included in such
databases.
1.20
“deCODE PARENT” shall
mean deCODE genetics, Inc., a corporation organized and existing
under the laws of the State of Delaware.
1.21
“deCODE PATENTS” shall
mean Patents, that deCODE or its Affiliates Control prior to the
Effective Date or during the term of this Agreement, including but
not limited to those listed on Schedule 1.21, that are necessary or
useful to MERCK in connection with the Research Program or the
research, development, manufacture, marketing, use or sale of IRCT
Compound, Tests or Product in the Territory including Patents
claiming deCODE Genomics Data but excluding any part of Patents
claiming deCODE Generalized Technology.
1.22
“deCODE PRIOR KNOW-HOW”
shall mean all secret, substantial and identified information and
materials, including, but not limited to, discoveries,
Improvements, processes, formulas, data, inventions, know-how and
trade secrets, patentable or otherwise, which existed prior to the
Effective Date and during the term of this Agreement (i) are in
deCODE’s possession or control, (ii) are not generally known
and (iii) are necessary or useful to MERCK in connection with
the
Research Program or the research,
development, manufacture, marketing, use or sale of IRCT Compound,
Tests or Product in the Territory including deCODE Genomics Data
but excluding deCODE Generalized Technology and deCODE
Know-How.
1.23
“DISEASE AREAS” shall
mean Exclusive Disease Areas and Non-exclusive Disease
Areas.
1.24
“EXCLUSIVE DISEASE
AREAS” shall mean at least one of the following:
[CONFIDENTIAL TREATMENT
REQUESTED].
1.25
[CONFIDENTIAL TREATMENT
REQUESTED]
1.26
[CONFIDENTIAL TREATMENT
REQUESTED]
1.27
[CONFIDENTIAL TREATMENT
REQUESTED]
1.28
“NON-EXCLUSIVE DISEASE
AREAS” shall mean [CONFIDENTIAL TREATMENT
REQUESTED].
1.29
[CONFIDENTIAL TREATMENT
REQUESTED]
1.30
“ELECTED DISEASE” shall
have the meaning set out in Section 3.1(d).
1.31
“EXCLUSIVE LICENSE FEE”
shall have the meaning set out in Section 3.1(d).
1.32
“EXECUTIVE COMMITTEE”
shall mean the committee made up of one senior
executive of each Party as more
fully described in Section 2.5.1.
1.33
“FILING” of an NDA shall
mean the acceptance by a Regulatory Authority of an NDA for
filing.
1.34
“FIRST COMMERCIAL SALE”
shall mean, with respect to any Product or Test, the first sale for
end use or consumption of such Product or Test in a country after
all required approvals, including Marketing Authorization, have
been granted by the Regulatory Authority of such
country.
1.35
“FULL TIME EQUIVALENT”
or “FTE” shall mean the equivalent of a full-time
scientist’s work time over a twelve-month period (including
normal vacations, sick days and holidays). The portion of an FTE
year devoted by a scientist to the Research Program shall be
determined by dividing the number of full days during any
twelve-month period devoted by such employee to the Research
Program by the total number of working days during such
twelve-month period.
1.36
“IMPROVEMENT” shall mean
any enhancement, whether or not patentable, in the manufacture,
formulation, ingredients, preparation, presentation, means of
delivery, dosage or packaging of IRCT Compound, Related IRCT
Compound, Tests or Product.
1.37
“INFORMATION” shall mean
any and all information and data, including without limitation all
MERCK Know-How, deCODE Know-How, and all other scientific,
pre-clinical, clinical, regulatory, manufacturing, marketing,
financial and commercial information or data, whether communicated
in writing or orally or by any other method, which is provided by
one Party to the other Party in connection with this
Agreement.
1.38
“INFORMATION RICH CLINICAL
TRIAL OR IRCT” shall mean a clinical trial which includes the
following, as specified in the protocol for such clinical trial:
[CONFIDENTIAL TREATMENT REQUESTED]
1.39
“INVENTION” means any
process, method, composition of matter, article of manufacture,
discovery or finding that is conceived and reduced to
practice.
1.40
“IRCT COMPOUND” shall
mean a Selected Compound that has [CONFIDENTIAL TREATMENT
REQUESTED] in accordance with the Agreement.
1.41
“JOINT INFORMATION AND
INVENTIONS” shall mean all discoveries, Improvements,
processes, methods, protocols, formulas, data, Inventions, know-how
and trade secrets, patentable or otherwise, arising from the
Research Program developed or invented jointly by employees of
MERCK and deCODE or others acting on behalf of MERCK and
deCODE.
1.42
“JOINT COLLABORATION
PATENTS” shall mean Collaboration Patents that claim, cover
or relate to Joint Information and Inventions.
1.43
“MARKETING
AUTHORIZATION” shall mean any approval (including without
limitation all applicable pricing and governmental reimbursement
approvals) necessary to receive permission from the relevant
Regulatory Authority to market and sell a Product or Test in any
country.
1.44
“MERCK COMPOUND OPTION”
shall have the meaning set out in Section 3.1(e) (i).
1.45
“MERCK COMPOUND PATENT”
shall mean any Patent that claims, covers or relates to an IRCT
Compound, Related IRCT Compound, Test or Product Controlled by
MERCK.
1.46
“MERCK EXERCISE NOTICE”
shall have the meaning set out in Section 3.1(e) (iii).
1.47
“MERCK INFORMATION AND
INVENTIONS” shall mean all discoveries, Improvements,
processes,
methods, protocols, formulas, data,
Inventions, know-how and trade secrets, patentable or otherwise,
arising from the Research Program developed or invented solely by
employees of MERCK or other persons not employed by deCODE acting
on behalf of MERCK.
1.48
“MERCK KNOW-HOW” shall
mean any information and materials, including but not limited to,
discoveries, Improvements, processes, methods, protocols, formulas,
data, inventions (including without limitation MERCK’s
Information and Inventions and MERCK’s rights in Joint
Information and Inventions), know-how and trade secrets, patentable
or otherwise, which arise from the Research Program and during the
term of this Agreement, (i) are in MERCK’s possession or
control, (ii) are not generally known and (iii) are in
MERCK’s opinion necessary to deCODE in the performance of its
obligations under the Research Program.
1.49
“MERCK COLLABORATION
PATENTS” shall mean Collaboration Patents that claim, cover
or relate to MERCK Information and Inventions.
1.50
“MERCK PATENTS” shall
mean Patents Controlled by MERCK prior to the Effective Date or
during the term of this Agreement (provided MERCK has the right to
license or otherwise make available such Patents to deCODE) and are
necessary or useful to deCODE in connection with the Research
Program.
1.51
“MERCK PRIOR KNOW-HOW”
shall mean any information and materials, including but not limited
to, discoveries, Improvements, processes, methods, protocols,
formulas, data, inventions, know-how and trade secrets, patentable
or otherwise, which existed prior to the Effective Date and during
the term of this Agreement, (i) are in MERCK’s possession or
control, (ii) are not generally known and (iii) are in
MERCK’s opinion necessary to deCODE in the performance of its
obligations under the Research Program excluding MERCK
Know-How.
1.52
“MERCK SHARE”
[CONFIDENTIAL TREATMENT REQUESTED].
1.53
“NET SALES” shall mean
the gross invoice price of Product or Tests sold by MERCK or its
Related Parties to the first Third Party after
deducting, if not previously
deducted, from the amount invoiced or received:
(a)
trade and quantity discounts other
than early pay cash discounts;
(b)
returns, rebates, chargebacks and
other allowances;
(c)
retroactive price reductions that
are actually allowed or granted;
(d)
sales commissions paid to Third
Party distributors and/or selling agents;
(e)
a fixed amount equal to
[CONFIDENTIAL TREATMENT REQUESTED] of the amount invoiced to cover
bad debt, sales or excise taxes, early payment cash discounts,
transportation and insurance, custom duties, and other governmental
charges; and
(f)
the standard inventory cost of
devices or delivery systems used for dispensing or administering
Product or Tests, as applicable. With respect to sales of
Combination Products, Net Sales shall be calculated on the basis of
the gross invoice price of Product(s) containing the same strength
of IRCT Compound or Related IRCT Compound sold without other active
ingredients. In the event that Product is sold only as a
Combination Product, Net Sales shall be calculated on the basis of
the gross invoice price of the
Combination Product multiplied by a
fraction, the numerator of which shall be the inventory cost of
IRCT Compound or Related IRCT Compound in the Product and the
denominator of which shall be the inventory cost of all of the
active ingredients in the Combination Product. Inventory cost shall
be determined in accordance with MERCK’s regular accounting
methods, consistently applied. The deductions set forth in
paragraphs (a) through (f) above will be applied in calculating Net
Sales for a Combination Product. In the event that Product is sold
only as a Combination Product and either Party reasonably believes
that the calculation set forth in this Paragraph does not fairly
reflect the value of the Product relative to the other active
ingredients in the Combination Product, the Parties shall
negotiate, in good faith, other means of calculating Net Sales with
respect to Combination Products.
1.54
“PARTY OR PARTIES” shall
mean either MERCK or deCODE or both as the context
requires.
1.55
“PATENT RIGHTS” shall
mean deCODE Collaboration Patents, and deCODE’s interest in
Joint Collaboration Patents.
1.56
“PATENTS” shall mean any
and all patents and patent applications in the Territory (which for
the purposes of this Agreement shall be deemed to include
certificates of invention and applications for certificates of
invention) that a Party owns, Controls or through license or
otherwise acquires rights prior to the Effective Date or during the
term of this Agreement which: (i) claim, cover or relate to a
Selected Compound, Test and/or Product; or (ii) claim, cover or
relate to Inventions; or (iii) are divisions, continuations,
continuations-in-part, reissues,
renewals, extensions, supplementary
protection certificates, utility, models and the like of any such
patents and patent applications and foreign equivalents
thereof.
1.57
“PRODUCT(s)” shall mean
any therapeutic preparation in final form containing (a) an IRCT
Compound for sale by prescription, over-the-counter or any other
method for any and all uses that arise from the [CONFIDENTIAL
TREATMENT REQUESTED] in the Disease Area or (b) a Related IRCT
Compound, including without limitation in the case of either
1.57(a) or (b) any Combination Product.
1.58
“RELATED PARTIES” shall
mean a Party’s Affiliates or sublicensees, but shall not mean
a Party’s distributors.
1.59
“REGULATORY AUTHORITY”
shall mean any applicable government regulatory authority involved
in granting approvals for the manufacturing, marketing,
reimbursement and/or pricing of a Product or Test, as applicable,
in the Territory, including, in the United States, the United
States Food and Drug Administration and any successor governmental
authority having substantially the same function.
1.60
“RELATED IRCT COMPOUND”
shall mean a compound Controlled by MERCK that [CONFIDENTIAL
TREATMENT REQUESTED].
1.61
“RESEARCH PROGRAM TERM”
shall mean the duration of the Research Program and “Extended
Research Program Term” shall mean any period of the Research
Program as it may be extended by mutual agreement of the Parties,
as described more fully in Section 2.10.
1.62
“RESEARCH PROGRAM” shall
mean the research activities undertaken by the Parties hereto as
set forth in Article 2 and Attachment 2.1.
1.63
“SELECTED COMPOUND”
shall mean any compound proposed by MERCK and accepted by
the
Operating Committee to be evaluated
in Information Rich Clinical Trials.
1.64
“OPERATING COMMITTEE”
shall mean the joint research committee established to facilitate
the Research Program as more fully described in Section
2.5.1.
1.65
“SUCCESSFUL CLINICAL
RESULT” shall mean result(s) [CONFIDENTIAL TREATMENT
REQUESTED].
1.66
“TECHNICAL INFORMATION”
shall mean information, data or know-how (whether patentable or
unpatentable), including without limitation, formulas,
manufacturing methods, procedures, designs, compositions of matter,
plans, applications, specifications, drawings, techniques,
materials (including without limitation biological materials such
as tissue samples, plasma samples, cell lines, RNA, DNA, DNA
fragments, organisms, proteins, polypeptides, plasmids, vectors and
the like), compounds, samples, inventions, discoveries, and the
like, as well as improvements related thereto.
1.67
“TERRITORY” shall mean all of the countries in the
world, and their
territories and
possessions.
1.68
“THERAPEUTIC FIELD”
shall mean any and all application of technology to [CONFIDENTIAL
TREATMENT REQUESTED].
1.69
“TESTS” shall mean
pharmacogenomic tests aimed at predicting the response or
non-response and side-effects to an IRCT Compound that are
developed, discovered or identified through the Research
Program.
1.70
“THIRD PARTY” shall mean
an entity other than MERCK and its Affiliates, and deCODE and its
Affiliates.
1.71
“VALID PATENT CLAIM”
shall mean a claim of an issued and unexpired patent included
within the MERCK Compound Patent which claims IRCT Compound,
Related IRCT Compound, Tests or Product as a composition of matter,
which has not been revoked or held unenforceable or invalid by a
decision of a court or other governmental agency of competent
jurisdiction, and which is not appealable or has not been appealed
within the time allowed for appeal, and which has not been
disclaimed, denied or admitted to be invalid or unenforceable
through reissue, re-examination or disclaimer or
otherwise.
1.72
“WORK PLAN” shall mean
Schedule 2.1-X describing the tasks to be performed by each of the
Parties in furtherance of the Research Program. It is anticipated
that there will be separate work plans relating to each IRCT
conducted by the Parties which shall be appended to the Agreement
in sequential order.
2.
RESEARCH PROGRAM
2.1
GENERAL
deCODE and MERCK shall engage in the
Research Program upon the terms and conditions set forth in this
Agreement. The activities to be undertaken in the course of each
IRCT pursuant to the Research Program will be set forth in a Work
Plan (Schedule 2.1-X) wherein X shall begin with 1 continue in
succession. Prior to the initiation of any IRCT herein the Parties
shall agree in writing signed by members of the Executive Committee
or their designees on what is a Successful Clinical Result and the
signed writing shall become part of the corresponding
Work
Plan for that IRCT. The Work Plan
may be amended from time to time upon the mutual written agreement
by authorized representatives of the Parties. All Work Plans
including Schedule 2.1-0 attached hereto are part of the Agreement.
Notwithstanding any provision of the Agreement to the contrary,
neither Party shall be obligated to conduct any activities which it
reasonably believes would be in violation of any statute,
regulation, law, or terms of any ongoing deCODE project in a
Non-exclusive Disease Area.
2.2
CONDUCT OF RESEARCH
deCODE and MERCK each shall conduct
the Research Program in good scientific manner, and in compliance
in all material respects with all requirements of applicable laws,
rules and regulations and all
applicable good laboratory practices
to attempt to achieve their objectives efficiently and
expeditiously. deCODE and MERCK each shall proceed diligently with
the work set out in the Work Plan by using their respective good
faith efforts to allocate sufficient time, effort, equipment and
facilities to the Research Program and to use personnel with
sufficient skills and experience as are required to accomplish the
Research Program in accordance with the terms of this Agreement and
Work Plan.
deCODE and MERCK shall be entitled
to utilize the services of their Affiliates to perform their
respective Research Program activities. Each Party shall also be
entitled to utilized the services of Third Parties to perform their
respective Research Program activities only upon the prior written
consent of the other Party or as specifically set forth in Work
Plan. Notwithstanding any such consent, both Parties shall remain
at all times fully liable for its respective responsibilities under
the Research Program.
2.3
INFORMATION RICH CLINICAL
TRIALS
Each IRCT shall be conducted in
accordance with the Work Plan and a detailed protocol. A proposed
protocol and a draft proposal for what a Successful Clinical Result
will be, shall be prepared initially by the Operating Committee.
These draft proposals shall be further reviewed internally by the
appropriate committees within MERCK and deCODE. The draft
proposals, with any changes or revisions made by MERCK or deCODE,
shall then be considered and revised by the Operating Committee for
submission to the Executive Committee. deCODE shall be obligated to
provide support needed to conduct no more than five (5) IRCTs
concurrently at any time during the Research Program. Each IRCT
shall be conducted under the direction and control of the Operating
Committee in accordance with the terms and conditions set forth in
Schedule 2.3 and a Study Protocol for that Selected Compound. In
any given IRCT that is conducted under this Agreement the Parties
may modify and/or supplement the terms and conditions set forth in
Schedule 2.3 in accordance with Section 10.7 herein. All data and
results pertaining to any Selected Compound may be used by MERCK in
filings with Regulatory Authorities and all other rights to any
intellectual property that are embodied by those data and results
shall be governed by Article 3.
2.4
COMPOUND SELECTION
MERCK shall nominate MERCK compounds
during the Research Program for which Information Rich Clinical
Trials shall be conducted by the Parties according to the Work
Plan. deCODE shall be given the opportunity to review each proposed
compound to confirm that deCODE’s conduct of one or more
IRCTs on such compound under this Agreement would not
conflict with any other ongoing
deCODE project(s). The Operating Committee shall select which MERCK
nominated compounds will become Selected Compounds; PROVIDED,
HOWEVER, that solely with respect to compounds in the Non-exclusive
Disease Area, deCODE shall not be obligated to perform development
efforts with respect to any such compounds if it reasonably
believes that the performance of such efforts will conflict with
any ongoing deCODE project(s).
2.5
GOVERNANCE OF THE
COLLABORATION.
The Parties hereby establish process
to govern the conduct of the Research Program and each
party’s contribution to the Research Program as
follows:
2.5.1
MANAGERIAL OVERSIGHT.
There will be two levels of
managerial oversight of the Research Program. There will be an
Executive Committee and an Operating Committee. In addition each
Party shall designate Project Leaders for the Research
Program.
(a)
EXECUTIVE COMMITTEE
The Executive Committee shall
consist of one senior executive from each of MERCK and deCODE. The
Executive Committee shall have the ultimate authority for decisions
regarding the Research Program. The matters that require approval
by the Executive Committee shall include approval of financial
statements such as the Budget and approval of the Work
Plan.
(i)
Any disputes where the Executive
Committee cannot reach a mutually acceptable decision within thirty
(30) days after the matter was referred to them shall be decided by
the President of MERCK Research Laboratories and the final
determination of the issue that shall be binding on the Parties and
the Research Program; PROVIDED, HOWEVER, as set forth below in
Section 2.5.1 (a)(ii) regarding implementation of such decisions
and in all cases that to the extent such disputes materially affect
the rights or obligations of the Parties under this Agreement,
MERCK shall consult with deCODE and the Parties shall agree on a
course of action to lawfully avoid or minimize such effects upon
the rights or obligations of the Parties, to the extent
practicable.
(ii)
Any disputes arising with respect to
the manner in which decisions of the Operating Committee, the
Executive Committee or the President of Merck Research Laboratories
will be implemented that will affect relations with patients
participating in the Research Program, research sites, consultants,
investigators or vendors all of which are in Iceland, or any
governmental authority in Iceland (“Implementation
Disputes”), shall be decided by the Chief Executive Officer
of deCODE (or his designee) and the final determination of the
issue that shall be binding on the Parties and the Research
Program, who shall give good faith consideration to the comments of
MERCK’s Executive Committee member (or their respective
designees) in resolving such matter; PROVIDED, HOWEVER, that to the
extent such disputes materially affect the rights or obligations of
the Parties under this Agreement, deCODE shall consult with MERCK
and the Parties shall agree on a course of action to lawfully avoid
or minimize such effects upon the rights or
obligations of the Parties, to the
extent practicable.
(b)
OPERATING COMMITTEE
The Operating Committee shall be
based in Iceland and composed of MERCK representatives and deCODE
representatives and shall exist for [**] after termination or
expiration of the Research Program Term. The Operating Committee
shall perform the following functions (i) approve and, as the need
arises, determine the necessity to remove personnel working on the
Research Program, (ii) prepare the Budget, (iii) formulate and
adjust Work Plans, (iv) select Compounds; (v) oversee progress of
the Research Program and exchange of data between the Parties; and
(vi) appoint sub-committees of equal representation to fulfill any
of the enumerated tasks set forth in this Section 2.5.1(b). Each
Party shall have 1 vote. Each Party shall appoint its
representatives to the Operating Committee from time to time, and
may substitute one or more of its representatives, in its sole
discretion, effective upon notice to the other Party of such
change. These representatives shall have, individually or
collectively, appropriate technical credentials, experience and
knowledge, and ongoing familiarity with the Research Program.
Additional representatives or consultants may from time to time, by
mutual consent of the Parties, be invited to attend Operating
Committee meetings, in the case of consultants subject to such
consultant’s written agreement to comply with the
requirements of Section 4.1. Any member of the Operating Committee
may designate a substitute to attend and perform the functions of
that member at any meeting of the Operating Committee. A
chairperson and secretary of the Operating Committee shall serve
co-terminus one (1) year terms, commencing on the Collaboration
Date or an anniversary thereof, as the case may be. deCODE shall
have the right to name the chairperson and MERCK shall have the
right to name the secretary of the Operating Committee. Decisions
of the Operating Committee shall be made unanimously by the
members. In the event that the Operating Committee cannot or does
not, after good faith efforts, reach agreement on an issue, the
resolution and/or course of conduct shall be referred to the
Executive Committee. Each Party shall bear its own expenses related
to the attendance of such meetings by its representatives and
invitees.
2.5.2
MEETINGS AND MINUTES.
Meetings of the Operating Committee
require the participation of at least one member of the Operating
Committee from each Party. During the Research Program Term, the
Operating Committee shall meet in person at least once during every
Calendar Year. From time to time, a Party may give the other Party
reasonable notice of its desire to hold a meeting of the Operating
Committee. Unless otherwise agreed by the Parties, meetings of the
Operating Committee shall be held in person and shall
alternate between the offices of the
Parties, or meet in such other place as agreed by the Parties.
Instead of meeting in person, the members of the Operating
Committee may, for purposes of holding a Operating Committee
meeting, convene or be polled or consulted from time to time by
means of telecommunications, video conferences, electronic mail or
correspondence, as deemed necessary or appropriate by the
Parties.
With the sole exception of specific
items of the meeting minutes to which the chairperson and the
secretary cannot agree and which are escalated as provided below,
definitive minutes of all Operating Committee meetings shall be
finalized promptly after the meeting to which the minutes pertain,
as follows:
Promptly after each Operating
Committee meeting, the secretary shall prepare and distribute to
all members of the Operating Committee draft minutes of the
meeting. Such minutes shall provide a description, in reasonable
detail, of the discussions at the meeting and a list of any
actions,
decisions or determinations approved
by the Operating Committee and a list of any issues to be resolved
by the Executive Officers.
The chairperson shall then promptly
after receiving such draft minutes collect comments thereon from
the members of his or her Party and provide them to the
secretary.
The chairperson and the secretary of
the Operating Committee shall then discuss each other’s
comments and finalize the minutes. The secretary and chairperson
shall each sign and date the final minutes. The signature of the
chairperson and the secretary upon the final minutes shall indicate
each Party’s assent to the minutes.
If at any time during the
preparation and finalization of the Operating Committee meeting
minutes, the secretary and the chairperson do not agree on any
issue with respect to the minutes, such issue shall be resolved by
the decision making process as provided in Section 2.5.1(a). The
decision resulting from the decision making process shall be
recorded by the secretary in amended finalized minutes for said
meeting.
2.5.3
PROJECT LEADERS.
MERCK and deCODE each shall appoint
a person (a “Project Leader”) from the Operating
Committee to coordinate its part of the Research Program. The
Project Leaders shall be the primary contact between the Parties
and the Operating Committee with respect to the Research Program.
Each Party shall notify the other within thirty (30) days of the
date of the Agreement of the appointment of its Project Leader and
shall notify the other Party as soon as practicable upon changing
this appointment.
2.6
ANNUAL BUDGET .
All costs in personnel time,
expenses, goods and Third Party services shall be estimated in
advance for the subsequent Calendar Year according to the Budget to
be set forth in Schedule 2.6. The Budget
