EXHIBIT 10.40
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CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. §§ 200.80(b)4, AND 240.24b-2
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C
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F I D E
N T I A
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PRE-CLINICAL DEVELOPMENT
COLLABORATION AGREEMENT
This Pre-Clinical Development
Collaboration Agreement (this “Agreement”) is entered
into effective as of March 23, 2007 (the “Effective
Date”) by and between Isis Pharmaceuticals, Inc. , a
Delaware corporation (“Isis”) and Korea Institute of
Toxicology , a Korean government-established institute for
non-clinical research (“KIT”).
WHEREAS, Isis designs and develops
drugs and, from time to time, requires the performance of certain
Pre-Clinical Development (as defined below), including pre-clinical
experiments in which a drug is analyzed in vitro and/or
administered to animal subjects, the results of which are intended
to be submitted to or held for inspection by a Regulatory
Authority, and KIT has substantial experience and expertise in
supporting and conducting such Pre-Clinical Development;
WHEREAS, Isis has amassed
significant experience and expertise in the science of preclinical
development studies with oligonucleotide therapeutics, a rapidly
expanding field of scientific inquiry and source of new drugs and
Isis is willing to share that expertise with KIT;
WHEREAS, the Parties wish to utilize
their respective expertise to collaborate and conduct Pre-Clinical
Development on antisense oligonucleotide drugs (ASOs) created by
Isis;
NOW, THEREFORE, in consideration of
both the foregoing premises and the terms and conditions set forth
below, the Parties hereto agree as follows:
1.
DEFINITIONS
1.1
Definitions
. When used in this Agreement or any
PCD Program (as defined below), capitalized terms not otherwise
defined in this Agreement or a PCD Program will have the meanings
set forth in Exhibit A , which is attached hereto and made a
part hereof.
2.
SCOPE OF COLLABORATION AND PCD
PROGRAMS
2.1.
Scope . The Parties wish to collaborate for
pre-clinical pharmacokinetic and toxicology Studies designed to
meet the safety regulations for filing an IND as well as any
additional Studies required by a Regulatory Authority, Ethics
Committee, or institutional review board as a prerequisite to
filing an IND (“Level 1 Development”). In the process
of running these Studies it is anticipated that Isis will provide
specific expertise and technical know-how to aid KIT in performing
these and other studies with oligonucleotide therapeutics agents
and biotechnology-derived drug candidates in the future. Isis has
initially selected its [***] drug for inclusion in this Level 1
Development collaboration and may propose additional drugs for
inclusion in the collaboration for Level 1 Development.
2.2.
Pre-Clinical Development Plan
(“PCD Plan”) . The Parties intend to conduct their
collaborative activities in accordance with the guidelines of the
PCD Plan attached hereto as Exhibit B .
2.3.
Pre-Clinical Development Program
(“PCD Program”) . A PCD Program is an agreement that sets forth
the particular Studies that will be performed by KIT for a specific
Study Drug agreed to by both Isis and KIT in writing. Exhibit
C attached to this Agreement contains a form PCD
Program. The PCD Program will
include Protocol(s) which sets forth with specificity how each
Study will be performed, which will be drafted by KIT and agreed to
by Isis.
3.
PERFORMANCE OF
RESEARCH
3.1.
Technology Transfer
. Isis will transfer to KIT
relevant expertise or experiences for running pre-clinical
toxicology and pharmacokinetics Studies for oligonucleotides and
other biotechnology-derived drug candidates, including the
bioanalytical methods technology that is necessary to successfully
perform the PCD Program(s), which the Parties expect will
include:
•
[***];
•
[***];
•
[***];
•
[***];
•
[***];
•
[***];
•
[***];
•
[***]; and
•
[***].
KIT will use certain of these
methods, technology and expertise to perform the PCD Program(s). In
addition, KIT will have the right to use the expertise acquired for
running toxicology studies for oligonucleotide therapeutics, and to
adapt Isis’ bioanalytical methods used in PCD Program(s) so
that KIT can [***].
3.2.
Performance
. KIT and Isis will each perform its
obligations under all PCD Programs in accordance with high
professional standards generally accepted in the
industry.
3.3.
Compliance with Protocol and
Laws . KIT will perform
its obligations under all PCD Programs in compliance with the
Protocol applicable to a Study, all applicable laws, rules and
regulations of the jurisdiction in which a Study is conducted or is
to be used, as well as the requirements of any Regulatory
Authority. KIT agrees to comply with all current applicable Good
Laboratory Practice regulations as set forth in 21 C.F.R. Part 58,
as amended (including retention/preservation obligations
thereunder).
3.4. Quality Control;
Personnel .
3.4.1.
Throughout the term of any PCD
Program, KIT will maintain appropriate internal and external
quality control and monitoring measures (including those required
by 21 C.F.R. Part 11) to ensure proper performance of Pre-Clinical
Development.
3.4.2.
When performing its obligations
under a PCD Program, KIT will use only those of its employees,
consultants and agents (including the Identified Employee) who
have
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sufficient experience, education,
training, expertise and other qualifications to perform
Pre-Clinical Development at the highest professional
level.
3.4.3.
In light of the mutual goal and
understanding between the Parties that the Pre-Clinical Development
will be used for submission(s) to Regulatory Authorities, Ethics
Committees, and institutional review boards, including for
registration of INDs for studies in humans, each Party further
represents and agrees that neither it, nor its respective
employees, Affiliates or agents have ever been (i) debarred, or
(ii) convicted of a crime for which a person can be debarred,
under subsection (a) or (b) of
21 U.S.C. § 335a, as amended, and each Party
agrees that it does not now and will not in the future use in
any capacity the services of any person debarred under
subsection (a) or (b) of 21 U.S.C. § 335a, as
amended. If during the term of this Agreement, a Party or any other
person performing Pre-Clinical Development hereunder (i) becomes
debarred or disqualified, or (ii) receives notice of an action or
threat of an action with respect to debarment or disqualification,
such Party will immediately notify the other Party.
3.5.
Destruction
. The Parties agree that
Confidential Information will be preserved and retained until
mutual agreement of the Parties to destroy or otherwise dispose of
it.
3.6.
Inquiries . In furtherance of the collaborative
relationship created by this Agreement, the Parties will promptly
respond to reasonable questions and requests from one another
regarding any Pre-Clinical Development and make available, upon
reasonable notice, its respective employees, consultants and agents
to meet with the other Party, its representatives and/or
representatives of any Regulatory Authority.
4.
CORESPONDENCE WITH REGULATORY
AUTHORITIES
4.1.
KIT will notify Isis immediately
(and in any event within 24 hours) in writing or by email (i) if
any Regulatory Authority inspects, requests an inspection, or makes
written or oral inquiries regarding any aspect of a Study and (ii)
of any violation or deficiency regarding a Study noted by any
Regulatory Authority.
4.2.
KIT will provide Isis as soon as
reasonably practicable (but in any event within 5 days) with a copy
of all correspondence between KIT and any Regulatory Authority
regarding any aspect of a Study. KIT will provide Isis a copy of
any proposed response to any Regulatory Authority that relates to a
Study for Isis’ review prior to submission, and KIT agrees to
incorporate Isis’ comments to such response.
5.
INSPECTIONS
KIT will allow Isis and any
Regulatory Authority (including their respective employees,
consultants and agents) to inspect each location at which
Pre-Clinical Development is performed.
6.
COMPENSATION; EXPENSES;
INSTRUMENTATION
6.1.
Compensation
. Subject to Section 12 below, as
consideration for timely performance of Pre-Clinical Development
under any and all PCD Program(s) and in support of the expense of
the Identified Employee, Isis will pay KIT, within fifteen (15)
days following execution of this Agreement, the sum of [***] and
thereafter, Isis will make an additional payment of [***] (the
“Isis Funding”). In addition, Isis will reimburse KIT
for certain costs and expenses as set forth in each applicable PCD
Program. Other than Isis Funding and reimbursement by Isis for
agreed
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upon costs and expenses, KIT will
pay any costs required to conduct the Pre-Clinical Development in
accordance with each PCD Program.
6.2.
Procedure . KIT will invoice Isis on each payment date,
and such invoice will be due within thirty (30) days of Isis’
receipt of such invoice.
6.3.
Currency . Amounts set forth in each PCD Program and all
invoices will be in U.S. dollars and payment by Isis will be made
in U.S. dollars.
6.4.
[***] . Isis agrees to provide to KIT, in
consideration for performance of Pre-Clinical Development under
this Agreement, the following [***] in Isis’ possession
(“[***]”) for use by KIT in performance of Pre-Clinical
Development:
(i) [***]; and
(ii) [***].
Isis is providing this [***] to KIT,
and KIT accepts such [***], in its “as is” condition.
Isis disclaims any and all warranties (whether expressed or
implied) with respect to the [***], including any warranties of
fitness for a particular purpose, merchantability, suitability for
use in performance of Pre-Clinical Development, or
non-infringement. KIT agrees to indemnify Isis from and against any
liability arising from use of the [***].
Isis will notify KIT when [***] is
available for shipment. The [***] will be shipped by Isis to KIT,
EXW (Incoterms 2000), Isis’ premises, to the destination
specified in writing by KIT. All shipping and insurance costs are
the responsibility of KIT.
7.
ROYALTIES; ROYALTY TERM; MILESTONE PAYMENT .
7.1.
Royalties . (a) If [***], then Isis will pay KIT a royalty
of [***]% of the Net Sales of any Product containing such Study
Drug.
(b) Alternate Royalty
Rate . If [***], the royalty rate will be less than [***]% and
will be specified in the PCD Program; provided, however , in
such event the PCD Program must be signed by Isis’ Chief
Executive Officer or Chief Financial Officer. If [***], the Parties
will negotiate an appropriate alternative royalty rate that is less
than a [***]% royalty rate and that is based on [***]. In any case,
if [***], Isis will not have an obligation to pay any royalty to
KIT.
7.2.
Royalty Term
. (a) With respect to Product(s)
that are subject to a bona fide agreement between Isis and a
third-party for the commercialization of such Product(s),
Isis’ obligation to pay royalties to KIT under Section 7.1
above will begin upon [***] and will continue so long as [***]. In
addition, the specific aspects of royalty payment timing, payment
method, currency, records retention, audit rights, and other
material commercial terms customarily applicable to royalties will
be handled by the Parties in the manner set forth in applicable
underlying contracts between Isis and third-parties for Product(s),
and the Parties agree to cooperate in good faith, using the spirit
and intent of such underlying contracts, to address any issues
between the Parties relevant to royalties that are not otherwise
dealt with in such contracts.
(b)
With respect to Product(s) that Isis
is commercializing on its own and not pursuant to a bona fide
commercialization agreement with a third-party, Isis’
obligation to pay royalties to KIT under Section 7.1 above, will
(on a country-by-country basis) begin upon [***] and will continue
so
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long as [***]. The specific aspects
of royalty payment timing, payment method, currency, records
retention, audit rights, and other material commercial terms
customarily applicable to royalties will be handled in accordance
with Exhibit D .
7.3
Milestone Payment
. If [***], then Isis will pay KIT
a milestone payment of $[***]. This $[***] milestone payment to KIT
will be fully creditable toward any future royalties payable by
Isis to KIT.
8.
MATERIALS
8.1.
Ownership . All right title and interest in to and under
any material, compound, or product (including any derivation
thereof) provided by Isis or its employees, consultants and/or
agents under this Agreement or any PCD Program or acquired by KIT
in the course of providing Pre-Clinical Development
(“Materials”) will be and remain the property of
Isis.
8.2.
Obligations
. KIT will (a) hold all Materials in
strict confidence and take all reasonable precautions to protect
the Materials, (b) not transfer the Materials or divulge any
information derived therefrom to any third person, including any
affiliated entity, (c) not make any use whatsoever at any time of
the Materials (other than to perform Pre-Clinical Development) and
(d) not analyze the composition of matter or sequence of the
Materials. Any employees, consultants and agents of KIT given
access to the Materials must have a legitimate need for access and
will be bound in writing to restrictions no less restrictive than
those set forth in this Section 8.2. KIT will be responsible to
Isis for any violations of this Section 8.2 by such
individuals/entities.
9.
STUDY INVENTIONS AND
DATA
9.1.
Existing Property
. All Inventions, Intellectual
Property Rights and other technology owned by a Party as of the
Effective Date will remain the separate property of such Party and
no licenses or other rights (whether by implication, estoppel or
otherwise) with respect to such Inventions, Intellectual Property
Rights or other technology are granted to any other party except as
expressly set forth in this Agreement. All employees, consultants
and agents of KIT will be bound in writing to substantially the
same obligations imposed on KIT as set forth in this Section
9.1.
9.2.
Ownership . All right title and interest in to and under
(a) any Inventions conceived, created, discovered or developed
(whether directly or indirectly) solely by either Party or jointly
by the Parties from performing under this Agreement or a PCD
Program and (b) any results, information or documents arising,
resulting or generated (whether directly or indirectly) solely by
either Party or jointly by the Parties from performing under this
Agreement or a PCD Program (collectively, the “Program
Data”) will be and remain the property of Isis, except for
KIT Methods. KIT and Isis agree that they will each execute and
deliver or cause the execution and delivery of all such documents,
certificates, assignments and other writings, and take such other
actions as may be necessary or desirable or requested by the other
Party, to vest in such Party the ownership rights granted
hereunder. All employees, consultants and agents of KIT will be
bound in writing to substantially the same obligations imposed on
KIT as set forth in this Section 9.2. KIT will be responsible to
Isis for any violations of this Section 9.2 by any employees,
consultants and agents of KIT.
9.3.
Disclosure
. KIT agrees that it will (a) notify
Isis, promptly following conception, creation, discovery,
development or reduction to practice, and in any event upon the
request of Isis, of any
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Inventions or KIT Methods conceived,
created, discovered, developed or reduced to practice by KIT or any
of its employees, consultants or agents arising or resulting from
performing under this Agreement or any PCD Program and (b) disclose
to Isis, on at least an annual basis, or promptly following
Isis’ earlier written request, the progress of all Studies
and all Program Data.
9.4
Pre-Clinical Development
License . KIT hereby
grants to Isis a non-exclusive, fully paid, royalty-free, license
under KIT’s rights in KIT Methods for Isis’
use.
10.
CONFIDENTIAL INFORMATION;
PUBLICATION
10.1.
Ownership . All rights to Confidential Information will be
and remain the property of Isis.
10.2.
Obligations
. KIT will (a) hold the Confidential
Information in strict confidence and take all reasonable
precautions to protect the Confidential Information, (b) not
divulge the Confidential Information to any third person, including
any affiliated entity, without Isis’ written consent, and (c)
not make any use of the Confidential Information (other than to
perform Pre-Clinical Development). Any employees, consultants and
agents of KIT given access to any Confidential Information must
have a “need to know” and will be bound in writing to
restrictions no less restrictive than those set forth in this
Section 10.2. KIT will be responsible to Isis for any violations of
this Section 10.2 by such individuals/entities.
10.3.
Return . After the expiration or earlier termination of
this Agreement, a particular PCD Program, or upon the written
request of Isis, KIT will turn over to Isis all Confidential
Information and all documents or media containing Confidential
Information (including all Program Data).
10.4.
Authorized Disclosure
. If KIT is required to disclose
Confidential Information to comply with an applicable law,
regulation, legal process, or court order of a government
authority, KIT may disclose such Confidential Information only to
the person required to receive such disclosure; provided,
however , that KIT will (a) to the extent permitted by such
law, regulation, process, order or rules, first have given prompt
(but in no event less than five (5) business days) advance notice
to Isis to enable it to seek any available exemptions from or
limitations on such disclosure requirement and will reasonably
cooperate in such efforts by Isis, (b) furnish only the portion of
the Confidential Information which is legally required; (c) use all
reasonable efforts to secure confidential protection of such
Confidential Information, and (d) continue to perform its
obligations of confidentiality set out herein.
10.5.
Use of Name
. Unless required by law, rule or
regulation, neither Isis nor KIT will be permitted to use the name
of the other Party in any news or publicity release or other
commercial fashion without the prior written consent of the other
party; provided, however , that Isis will be permitted to
use, and KIT hereby grants prior approval for Isis to use, the name
of KIT in connection with disclosure of the data and results of a
Study. Nothing in this Section 10.5 will be construed as
prohibiting Isis from submitting reports with respect to a Study to
any Ethics Committee or Regulatory Authority. For purposes of
clarification, KIT acknowledges that Isis may be required under
federal and state securities laws to disclose the existence and
certain basic terms of this Agreement and certain PCD
Programs.
10.6.
Publication
.
10.6.1. KIT may publish Program Data
if (i) KIT proposes a publication containing Program Data and Isis
consents in writing to such proposed publication, or (ii) Isis
notifies KIT that Isis does not intend to publish certain Program
Data and such Program Data is published by KIT in
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accordance with the terms of this
Article 10.6. Further, Isis and KIT agree that publications of
Program Data will be produced in accordance with the Consolidated
Standards of Reporting Trials (CONSORT) Guidelines.
10.6.2. A copy of any proposed KIT
publication or presentation materials, including manuscripts,
slides, overheads, outlines, summaries, abstracts or posters will
be provided to Isis for Isis’ written review and comment at
least 30 days prior to the scheduled presentation or publication
submission date. If Isis informs KIT within such 30 day time period
that postponement of KIT’s publication or presentation is
necessary in order to protect Isis’ patent or other
proprietary rights, KIT will postpone such publication or
presentation, but KIT will not be required to do so for a period of
longer than 3 months.
10.6.3. Notwithstanding the
foregoing, Isis will have the absolute right to demand deletion of
any Confidential Information (except Program Data) and KIT will
delete such information upon written notice from Isis. However,
Isis will not request deletions that will preclude the meaningful
publication of the Program Data in accordance with CONSORT
Guidelines.
11.
INDEMNIFICATION
11.1
Indemnification by KIT
. KIT will indemnify and hold
harmless Isis from any and all liability, loss (including
reasonable attorneys’ fees) or damage it may suffer
(including as a result of claims, demands, costs or judgments
against it) that arise or are alleged to arise out of (a) the
negligence or willful misconduct of KIT or any of its employees,
consultants or agents, (b) the failure of KIT or any of its
employees, consultants or agents to comply with Isis’ written
instructions, (c) KIT’s handling, storage or disposal of
Materials, or (d) the material breach of this Agreement or any PCD
Program by KIT or any of its employees, consultants or agents
(including premature cancellation or termination of Pre-Clinical
Development).
11.2
Indemnification by
Isis . Isis will
indemnify and hold harmless KIT from any and all liability, loss
(including reasonable attorneys’ fees) or damage it may
suffer (including as a result of claims, demands, costs or
judgments against it) that arise or are alleged to arise out of
Isis’ clinical or commercial use of Program Data, except to
the extent KIT has an obligation to indemnify
