PRODUCT DEVELOPMENT AND

COMMERCIALIZATION AGREEMENT

 

THIS PRODUCT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT is made as of the 24th day of March, 2006 (the “EFFECTIVE DATE”) by and between SmithKline Beecham Corporation, doing business as GlaxoSmithKline, a Pennsylvania corporation having a principal place of business at One Franklin Plaza, 200 N 16 ^th Street, Philadelphia, PA 19102 (“SB Corp”), and Glaxo Group Limited, a company existing under the laws of England and Wales, having its registered office at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, England (“GGL”), SB Corp and GGL being collectively referred to hereinafter as “GSK”; and Pharmacopeia Drug Discovery, Inc., a Delaware corporation having a principal place of business at 3000 Eastpark Boulevard, Cranbury, New Jersey 08512 (“Pharmacopeia”). Pharmacopeia and GSK are each referred to herein by name or as a “Party” or, collectively, as the “Parties.”

 

RECITALS

 

A.      Pharmacopeia has developed certain capabilities for the discovery and development of pharmaceutical products for the treatment of human diseases or conditions.

 

B.       GSK possesses research, development, manufacturing and commercialization expertise for the development and commercialization of pharmaceutical products for the treatment of human diseases or conditions.

 

C.       GSK, through its Center of Excellence for External Drug Discovery (“CEEDD”),

 

desires to engage in a collaborative effort with Pharmacopeia, pursuant to which Pharmacopeia shall engage in research and development programs to discover and develop compounds with demonstrated efficacy in humans that will be available for commercialization by one of the Parties.

 

D.       PHARMACOPEIA desires to engage in a collaborative effort with GSK whereby GSK will, pursuant to the Options granted to GSK by this Agreement, have exclusive worldwide rights to complete the development and commercialization of certain compounds discovered and developed by Pharmacopeia.

 

E.       The Parties acknowledge that any rights GSK acquires under this Agreement, as defined below, will be held by GSK in accordance with GSK’s and its group’s inter-company agreements, as in effect from time to time.

 

F.       Contemporaneously with the execution of this Agreement, Pharmacopeia shall issue to GSK a Warrant to Purchase Common Stock substantially in the form attached hereto as Exhibit A (the “Warrant”), which will permit GSK to purchase shares of common stock of Pharmacopeia upon the fulfillment of the terms and conditions set forth in the Warrant and this Agreement.

 

Now, therefore, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

 

ARTICLE 1

 

DEFINITIONS

 

As used in this Agreement, the following terms shall have the meanings set forth in this Article unless context dictates otherwise:

 

1.1 “AFFILIATE” shall mean any Person, whether de jure or de facto, which directly or indirectly through one (1) or more intermediaries controls, is controlled by, or is under common control with, a Party to this Agreement. A Person shall be deemed to “control” another Person if it (i) owns, directly or indirectly, beneficially or legally, at least fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed to be owned by a Person in a particular jurisdiction) of such other Person, or has other comparable ownership interest with respect to any Person other than a corporation; or (ii) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of the Person.

 

1.2 “AGREEMENT” shall mean this Product Development and Commercialization Agreement together with the recitals and all exhibits, schedules and attachments hereto.

 

1.3 “BACK-UP COMPOUND” shall mean a compound whose principal mechanism of action is to modulate a Target in the manner determined by the JSC for such Target, that meets the Candidate Selection Criteria with respect to such Target and, with the JSC’s approval, is intended to supplant a particular Pharmacopeia Development Compound or GSK Development Compound if such Pharmacopeia Development Compound or GSK Development Compound is removed from development. A Back-Up Compound may also be intended to supplant another Back-Up Compound if such other Back-Up Compound is removed from development.

 

1.4 “BANKRUPTCY CODE” shall have the meaning assigned to such term in Section 12.3.2.

 

1.5 “BREACHING PARTY” shall have the meaning assigned to such term in Section 12.2.1.

 

1.6 “CALENDAR QUARTER” shall mean a period of three (3) consecutive months ending at midnight, Eastern Time on the last day of March, June, September, or December, respectively.

 

1.7 “CANDIDATE SELECTION COMPOUND” shall mean a compound resulting from a Program that the JSC determines meets all of the Candidate Selection Criteria as established by the JSC.

 

1.8 “CANDIDATE SELECTION CRITERIA” shall mean criteria established by the JSC for advancement of a Lead into pre-clinical development, based on the Target Product Profile ** and **. If a compound is advanced by either Party pursuant to the Agreement into pre-clinical development (i.e., beyond the stage of candidate selection), and if the **, then the compound will be deemed to have met the Candidate Selection Criteria irrespective of the actual attainment of all of the defined criteria.

 

1.9 “cGMP” shall mean current Good Manufacturing Practices as defined in Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be amended from time to time, or any successor thereto.

 

Execution Version

 

3

 

1.10 “CEDD” shall mean one or more of GSK’s “Centers of Excellence for Drug Discovery”; i.e., an organizational structure that oversees drug discovery and development being conducted internally at GSK. CEDD shall include any successor organizational structures to CEDD, whether or not possessing the same name, that is responsible for internal drug discovery and development at GSK.

 

1.11 “CEEDD” shall mean GSK’s “Center of Excellence for External Drug Discovery”; i.e., an organizational structure within GSK used by GSK to manage external drug discovery and development collaborations.  The term “CEEDD” when used herein shall also include any organizational structure within GSK whose functions are broadly similar to the CEEDD, to which management of the Programs under this Agreement may be subsequently assigned.

 

1.12 “CEEDD LEADERSHIP TEAM” shall mean the most senior member and head of the CEEDD, plus the CEEDD heads of biology, chemistry, pharmacology, operations management, business development, preclinical development, clinical development, commercial, legal, finance, and the CEEDD employee(s) assigned by the CEEDD to manage the collaboration with Pharmacopeia.

 

1.13 “COLLABORATION COMPOUND” shall mean a Tractable Hit, Lead, Candidate Selection Compound, Proof-of-Concept Compound, GSK Development Compound, Pharmacopeia Development Compound, Back-up Compound, or any compound derived from any of the foregoing. As used herein, a compound shall be deemed to have been “derived” from another compound if it (i) is the **, (ii) is otherwise **, (iii) is **, or (iv) is ** in category (i), (ii) or (iii) above. As used herein, a compound also shall be deemed to have been “derived” from another compound if it is the **. It is understood that this definition of “Collaboration Compound” shall **, in each case as evidenced by contemporaneous documentation.

 

1.14 “COMBINATION PRODUCT” shall mean a Product incorporating two (2) or more therapeutically active ingredients, at least one of which is a Collaboration Compound. Notwithstanding the foregoing, ingredients or components other than active ingredients, including without limitation drug delivery vehicles, adjuvants, and excipients, shall not be deemed to be “therapeutically active ingredients,” and their presence shall not be deemed to create a Combination Product.

 

1.15 “CONFIDENTIAL INFORMATION” shall have the meaning assigned to such term in Section 9.1.

 

1.16 “CONTRACT YEAR” shall mean a year of 365 days (or 366 days in a leap year) beginning on the Effective Date and ending one (1) year thereafter and so on, year-by-year during the Term. “CONTRACT YEAR ONE” shall mean the first such year; “CONTRACT YEAR TWO” shall mean the second such year, and so on, year-by-year.

 

1.17 “CONTROL,” “CONTROLS,” “CONTROLLED” OR “CONTROLLING” shall mean possession by the granting Party of the ability to grant the licenses or sublicenses to the other Party, as provided in this Agreement, without violating the terms of any agreement or other arrangement with any Third Party.

 

1.18 “DISCLOSING PARTY” shall have the meaning assigned to such term in Section 9.1.

 

1.19 “DRAFTING PARTY” shall have the meaning assigned to such term in Section 2.2.4(a).

 

1.20 “EFFECTIVE DATE” shall have the meaning assigned to such term in the Preamble.

 

4

 

1.21 “EMEA” shall mean the European Medicines Evaluation Agency and any successor entity thereto.

 

1.22 “ENABLING STUDIES” shall have the meaning assigned to such term in Section 3.9.

 

1.23 “EXECUTIVE OFFICERS” shall have the meaning assigned to such term in Section 2.2.5.

 

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

 

1.25 “FIELD” shall mean the treatment, prevention or diagnosis of any disease or condition adverse to human or animal health.

 

1.26 “FIRST COMMERCIAL SALE” shall mean, with respect to each Product, the first sale for which payment has been received for use or consumption by the general public of such Product in any country in the Territory after all required Marketing Approvals have been granted, or such sale is otherwise permitted, by the Regulatory Authority in such country, excluding registration samples, compassionate use sales, inter-company transfers to Affiliates of a Party and the like.

 

1.27 “GSK” shall have the meaning assigned to such term in the Preamble.

 

1.28 “GSK DEVELOPMENT COMPOUND” shall mean a Candidate Selection Compound or Proof-of-Concept Compound that is selected by GSK for further development and commercialization by GSK and exclusively licensed to GSK pursuant to any one of the Options defined in Article 4 of this Agreement. A “GSK Development Compound” shall be **.

 

1.29 “GSK PATENTS” shall mean all Patents in the **. For the avoidance of doubt, no Patent shall be deemed to be a GSK Patent until the **.

 

1.30 “GSK TARGET” shall mean a protein target, and the related assay and and/or reagents, if any, provided to Pharmacopeia by GSK, and accepted by the JSC for Pharmacopeia to use pursuant to Programs hereunder.

 

1.31 “GSK TARGET IP” shall mean all Patents, Know-how, proprietary materials and other related intellectual property rights Controlled by GSK and covering a given GSK Target.

 

1.32 “GSK IP” shall mean Know-How controlled by GSK and any GSK Patents. “GSK IP” shall include, without limitation, any GSK Target IP.

 

1.33 “HSR ACT” shall have the meaning assigned to such term in Section 14.6.1.

 

1.34 “IND” shall mean any investigational new drug application filed with the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, including any amendments thereto. References herein to IND shall include, to the extent applicable, any comparable filing(s) outside the U.S. (such as a CTA in the European Union).

 

1.35 “INDEMNITEE” shall have the meaning assigned to such term in Section 11.3.

 

1.36 “INFORMATION” shall mean information and materials within the Control of GSK or its Affiliates or Pharmacopeia or its Affiliates, in either case that (i) is necessary for the discovery, development, manufacture or use of Collaboration Compounds and/or the development, manufacture, use, sale or commercialization of corresponding Products, and (ii) exists as of the Effective Date or is discovered, developed or acquired during the Term, and including, without limitation: (A) techniques and data, including, but not limited to, screens, models, inventions, methods, test data including, but

 

5

 

not limited to, pharmacological, toxicological and clinical test data, analytical and quality control data, marketing, pricing, distribution, costs, and sales data, manufacturing information (including any relevant Third Party manufacturing information to the extent Controlled by, and in the possession of, GSK or its Affiliates or Pharmacopeia or its Affiliates), and patent and legal data or descriptions (to the extent that disclosure thereof would not result in loss or waiver of privilege or similar protection); and (B) compositions of matter, including but not limited to compounds, biological materials, vectors and assays. As used herein, “CLINICAL TEST DATA” shall be deemed to include all information related to the clinical or preclinical testing of a Collaboration Compound or corresponding Product, including without limitation, patient report forms, investigators’ reports, biostatistical, pharmaco-economic and other related analyses, regulatory filings and communications, and the like.

 

1.37 “INITIAL SCREENING TERM” shall mean the period of time from the Effective Date until completion of screening by Pharmacopeia of the Initial Targets.

 

1.38 “INITIAL TARGETS” shall mean ** for Pharmacopeia to use pursuant to Programs hereunder. The first ** shall be agreed upon in writing by the Parties, together with the Tractable Hit Criteria, Lead Declaration Criteria and the Candidate Selection Criteria for each of such Targets, **, for use by Pharmacopeia pursuant to Programs hereunder.

 

1.39 “INITIAL TARGET PROPOSAL SCHEDULE” is as set forth in Section 3.2.1.

 

1.40  “JOINT IP” shall mean Know-How Controlled jointly by the Parties and any Joint Patents.

 

1.41 “JOINT PATENTS” shall mean all Patents in the **.

 

1.42 “JOINT STEERING COMMITTEE” or “JSC” shall have the meaning ascribed to such term in Section 2.2.

 

1.43 “KNOW-HOW” shall mean all Information, technical information, techniques, data, inventions, practices, methods, knowledge, skill, experience, test data or information necessary for the discovery, development, manufacture or use of one or more Collaboration Compounds and/or the development, manufacture, use, sale or commercialization of corresponding Products, which (a) is **, or (b) is **.

 

1.44  “LEAD” shall mean a compound that meets all of the Lead Declaration Criteria as determined by the JSC.

 

1.45 “LEAD DECLARATION CRITERIA” shall mean criteria established by the JSC for advancing a Lead into a Lead Optimization Program. A compound that is advanced into a Lead Optimization Program pursuant to the Agreement will be deemed to have met all of the Lead Declaration Criteria irrespective of the actual attainment of all Lead Declaration Criteria, if the JSC unanimously approves such action in advance.

 

1.46 “LEAD GENERATION PROGRAM” shall mean a chemical synthesis program conducted by Pharmacopeia to generate analogs of a Tractable Hit, designed to result in a Lead.

 

1.47 “LEAD OPTIMIZATION PROGRAM” shall mean a medicinal chemistry optimization effort conducted by Pharmacopeia with respect to a Lead, designed to result in a Candidate Selection Compound.

 

1.48 “LOSSES” shall have the meaning assigned to such term in Section 11.1.

 

6

 

1.49 “MAJOR MARKET” shall mean the United States, Japan, and the European Union.

 

1.50 “MARKETING APPROVAL” shall mean 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 a Product in a regulatory jurisdiction. “Marketing Approval” shall be deemed to occur upon first receipt of notice from a Regulatory Authority that a Product has been approved for commercial sale. For countries where governmental approval is required for pricing or for the Product to be reimbursed by national health insurance (i.e., other than the United States), “Marketing Approval” shall not be deemed to occur until such pricing or reimbursement approval is obtained. Marketing Approval shall be deemed to have occurred in such a country where government approval of pricing or reimbursement has not been obtained if, at any time, the Party begins the commercial sale of such Product in the country without obtaining pricing approval or reimbursement, with the date of such Marketing Approval to be deemed to occur on the date of the First Commercial Sale of the Product in the country.

 

1.51 “MARKETING APPROVAL APPLICATION” OR “MAA” shall mean a New Drug Application (as defined in Title 21 of the U.S. Code of Federal Regulations, Section 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 Product in the Territory.

 

1.52 “MATERIAL BREACH” shall have the meaning assigned to such term in Section 12.2.1.

 

1.53 “NDA” shall mean a New Drug Application (as defined in Title 21 of the U.S. Code of Federal Regulations, Section 314.50, et. seq.).

 

1.54 “NET SALES” shall mean the **. For purposes of this Section, **.

 

1.55 “NON-BREACHING PARTY” shall have the meaning assigned to such term in Section 12.2.1.

 

1.56 “OPTIONS” shall mean GSK’s rights under and subject to all the applicable provisions of this Agreement to elect to exclusively develop and commercialize any GSK Development Compound resulting from a given Program under the Candidate Selection Option or the PoC Option, as applicable, and as more fully set forth in Article 4.

 

1.57 [Intentionally left blank]

 

1.58 “PARTY” OR “PARTIES” shall have the meaning assigned to such term in the Preamble, or where the context requires, shall mean GSK and its Affiliates and/or Pharmacopeia and its Affiliates.

 

1.59 “PATENT” shall mean: (i) issued and unexpired letters patent, including any extension, registration, confirmation, reissue, continuation, supplementary protection certificate, divisional, continuation-in-part, re-examination or renewal thereof, (ii) pending applications for letters patent, and (iii) foreign counterparts of any of the foregoing; in each case to the extent the same has not been held, by a court, administrative body or governmental agency of competent jurisdiction, to be invalid or unenforceable in a decision from which no appeal can be taken or from which no appeal was taken within the time permitted for appeal.

 

1.60 “PATENT SUBCOMMITTEE” shall have the meaning assigned to such term in Section 2.2.6.

 

1.61 “PAYEE” shall have the meaning assigned to such term in Section 6.6.1.

 

7

 

1.62 “PAYOR” shall have the meaning assigned to such term in Section 6.6.1.

 

1.63 “PERSON” shall mean any corporation, firm, partnership or other entity.

 

1.64 “PHARMACOPEIA” shall have the meaning assigned to such term in the Preamble.

 

1.65 “PHARMACOPEIA DEVELOPMENT COMPOUND” shall mean a Tractable Hit, Lead, Candidate Selection Compound or Proof-of-Concept Compound for which Pharmacopeia retains the right to continue to research, develop or commercialize hereunder, and which Pharmacopeia elects to further progress, subject to GSK’s rights, as applicable. Any Pharmacopeia Development Compound shall **.

 

1.66  “PHARMACOPEIA IP” shall mean Know-How Controlled by Pharmacopeia and any Pharmacopeia Patents. “Pharmacopeia IP” shall include, without limitation, any Pharmacopeia Target IP.

 

1.67 “PHARMACOPEIA PATENTS” shall mean all Patents in the **. For the avoidance of doubt, no Patent shall be deemed to be a Pharmacopeia Patent until the **.

 

1.68 “PHARMACOPEIA TARGET” shall mean a protein target, and the related assay and reagents, if any, provided by Pharmacopeia and accepted by the JSC for Pharmacopeia to use pursuant to Programs hereunder.

 

1.69 “PHARMACOPEIA TARGET IP” shall mean all Patents, Know-How, proprietary materials and other related intellectual property rights Controlled by Pharmacopeia and covering a given Pharmacopeia Target.

 

1.70 “PHASE I,” “PHASE II” and “PHASE III” shall mean Phase I (or Phase I/II), Phase II (or Phase II/III) and Phase III clinical trials, respectively, in each case as prescribed by applicable FDA IND Regulations, or any corresponding foreign statutes, rules or regulations.

 

1.71 “PRODUCT” shall mean any product for the therapeutic or prophylactic treatment or prevention of any disease or condition in human beings, which contains a Collaboration Compound.

 

1.72 “PoC STUDIES” shall mean the particular clinical trials that will be employed with respect to a Candidate Selection Compound, GSK Development Compound or Pharmacopeia Development Compound to demonstrate the achievement of the Proof-of-Concept Compound Criteria.

 

1.73 “PROOF-OF-CONCEPT COMPOUND” shall mean a compound resulting from the PoC Studies that has demonstrated that it satisfies all of the Proof-of-Concept Compound Criteria.

 

1.74 “PROOF-OF-CONCEPT COMPOUND CRITERIA” shall mean criteria ** (at or about the time of first-time-in-humans (“FTIH”) testing (i.e., at Phase I clinical trials) to determine if a Candidate Selection Compound, GSK Development Compound or Pharmacopeia Development Compound under study demonstrates a clinically meaningful benefit-to-risk profile in treating the applicable disorder. This shall include a ** hereunder. Any Candidate Selection Compound, GSK Development Compound or Pharmacopeia Development Compound advanced by GSK into Phase III clinical trials will be deemed to have met all of the Proof-of-Concept Compound Criteria and to be a Proof-of-Concept Compound.

 

8

 

1.75 “PROGRAM” shall mean any activities pursuant to one or more Work Plans that are approved hereunder by the JSC for a given Target, including for example, Screening Programs, Lead Generation Programs and/or Lead Optimization Programs.

 

1.76 “PROGRAM TERM” shall mean the period of time commencing with the approval by the JSC of a Screening Program with respect to a particular Target, and continuing until no further activity pursuant to this Agreement is being pursued by either Party with respect to the Program applicable to that particular Target.

 

1.77 “RECEIVING PARTY” shall have the meaning assigned to such term in Section 9.1.

 

1.78 “REGULATORY AUTHORITY” OR “REGULATORY AUTHORITIES” shall mean the FDA in the U.S., and any health regulatory authority(ies) in any country in the Territory that is a counterpart to the FDA and holds responsibility for granting regulatory marketing approval for a Product in such country, and any successor(s) thereto.

 

1.79 “RESEARCH TERM” shall mean the period of time that is ** (**) ** from the Effective Date, unless extended or earlier terminated by the mutual written agreement of the Parties.

 

1.80 “SCREENING PROGRAM” shall mean a Program for the screening by Pharmacopeia of Targets with the goal of generating Tractable Hits.

 

1.81 “SUBCOMMITTEE” shall have the meaning assigned to such term in Section 2.2.6.

 

1.82 “ SUBLICENSEE” shall mean, with respect to a particular Collaboration Compound or Product, a Third Party to whom GSK or Pharmacopeia, as applicable, has granted a sublicense under any intellectual property licensed to such Party pursuant to this Agreement.

 

1.83 “TARGET” shall mean a GSK Target or a Pharmacopeia Target.

 

1.84 “TARGET PRODUCT PROFILE” shall mean the projected product profile ** for adoption by the JOINT STEERING COMMITTEE that shall provide, with respect to each Target, a description of the commercially relevant range of acceptable product performance of a PROOF-OF-CONCEPT COMPOUND against key product characteristics, and which shall be used by Pharmacopeia and GSK to guide and shape the progression of and development decisions for such PROOF-OF-CONCEPT COMPOUND.

 

1.85 “TERM” shall have the meaning assigned to such term in Section 12.1.2.

 

1.86 “TERRITORY” shall mean anywhere in the world.

 

1.87 “THIRD PARTY” shall mean any entity other than Pharmacopeia, GSK or an Affiliate of Pharmacopeia or GSK.

 

1.88 “TRACTABLE HIT” shall mean a compound identified by Pharmacopeia and considered by the JSC to be active against a Target and meeting the Tractable Hit Criteria.

 

1.89 “TRACTABLE HIT CRITERIA” shall mean criteria set by the JSC for selecting hits that are amenable to chemistry optimization. Any compound advanced into a Lead Generation Program pursuant to the Agreement will be deemed to have met the Tractable Hit Criteria irrespective of the actual attainment of all Tractable Hit Criteria, if the JSC unanimously approves such action in advance.

 

9

 

1.90 “UNITED STATES” OR “U.S.” shall mean the United States of America.

 

1.91 “VALID CLAIM ” means a claim within an issued United States or foreign patent that has not expired, lapsed, or been cancelled or abandoned, and that has not been dedicated to the public, disclaimed, or held unenforceable, invalid, or cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal can be taken or was timely taken, including without limitation, through opposition, re-examination, reissue or disclaimer.

 

1.92 “WORK PLAN” shall have the meaning assigned to such term in Section 2.2.2(g).

 

1.93 “WRITTEN DISCLOSURE” shall have the meaning assigned to such term in Section 14.1.

 

ARTICLE 2

 

OVERSIGHT OF THE COLLABORATION

 

2.1     IN GENERAL. Subject to all the provisions of this Agreement, Pharmacopeia shall have principal responsibility for all research, discovery and development activities with respect to Pharmacopeia Development Compounds prior to exercise by GSK of one of its Options with respect to such Program and Pharmacopeia Development Compounds, and GSK shall have principal responsibility for all research, development and commercialization activities with respect to GSK Development Compounds, unless and until any such GSK Development Compound reverts to Pharmacopeia pursuant to the applicable provisions of the Agreement for any such reversion.

 

2.2      THE JSC. As soon as practicable after the Effective Date, the Parties shall establish a Joint Steering Committee (the “JSC”). The JSC shall have review and oversight responsibilities for all research and development activities performed under this Agreement during the Research Term, as more specifically provided herein; provided, however, that the JSC shall have no authority to amend this Agreement. Each Party agrees to keep the JSC reasonably informed of its progress and activities during the Research Term. If GSK elects to exercise one of its Options pursuant to Article 4 with respect to a Pharmacopeia Development Compound, the JSC (and any applicable Subcommittee including, but not limited to, the Patent Subcommittee) shall continue as a vehicle to maintain information flow between GSK and Pharmacopeia regarding the progression of such compound as a GSK Development Compound, including by administering Patent matters pursuant to Article 8. Notwithstanding the above, all decisions with respect to the development, progression or commercialization of any such GSK Development Compound after GSK has exercised one of its Options with respect to such compound shall be at the sole discretion of GSK as the Party responsible under this Agreement for developing such compound, subject to GSK’s obligations of diligence as set forth in this Agreement.

 

2.2.1  Membership. The JSC shall be comprised of an equal number of representatives from each of GSK and Pharmacopeia. The exact number of such representatives shall be three for each of GSK and Pharmacopeia, or such other number as the Parties may agree. Each Party shall provide the other with a list of its initial members of the JSC. Each Party may replace any or all of its representatives on the JSC at any time upon written notice to the other Party in

 

10

 

accordance with Section 14.8 of this Agreement. Such representatives shall include individuals within the senior management of Pharmacopeia and the CEEDD, and those representatives of each Party shall, individually or collectively, have expertise in business, pharmaceutical drug discovery, development and commercialization. Any member of the JSC may designate a substitute to attend and perform the functions of that member at any meeting of the JSC. Each Party may, in its reasonable discretion, invite non-member representatives of such Party to attend meetings of the JSC. If the JSC chooses to designate a chairperson, such chairperson shall be appointed for a one (1) year term and the right to name the chairperson shall alternate between the Parties.

 

2.2.2         Responsibilities. The JSC shall be responsible for overseeing each Program performed pursuant to this Agreement unless and until GSK exercises one of its Options to a given Program, or unless and until Pharmacopeia acquires the right hereunder to independently progress and commercialize Products under a given Program. For avoidance of doubt, whenever any matter is presented to the JSC or to either Party for decision under Articles 2, 3 or 4 of this Agreement, such decision shall be communicated through the JSC within no more than thirty (30) days, unless a different time period is specifically stated in this Agreement or is otherwise mutually agreed in writing by the Parties with respect to such matter. Failure by either Party to communicate any such decision within the applicable thirty (30) day or other specific time period shall be deemed a positive decision and thus an approval by such Party with respect to such matter. Without limiting the foregoing, the JSC shall perform the following functions, some or all of which may be addressed directly at any given meeting of the JSC

 

(a)      determine the ** (other than the **, which shall be determined prior to the Effective Date pursuant to Section 3.2.1) which shall be pursued via Programs pursuant to this Agreement;

 

(b)      establish a Screening Program for each Initial Target;

 

(c)      establish the schedule under which GSK shall provide Pharmacopeia reagents and assays for each Initial Target, subject to Section 3.2.3;

 

(d)      approve all Programs under this Agreement and establish the Tractable Hit Criteria, the Lead Declaration Criteria and the Candidate Selection Criteria (collectively “Criteria”) applicable for each Program with respect to a given Target before the applicable Program is commenced by Pharmacopeia, it being understood that all such Criteria may be amended by the JSC;

 

(e)      determine when the Tractable Hit Criteria, the Lead Declaration Criteria, the Candidate Selection Criteria and the Proof-of-Concept Compound Criteria have been met for a Target;

 

(f)       establish Subcommittees as appropriate;

 

(g)      review and coordinate all of the Parties’ activities under this Agreement, including establishing an annual “Work Plan” for the Parties’ activities in each Program. The Work Plan shall describe the activities to be carried out by each Party; provided, however, that (i) the ** and (ii) each Party shall have the right to

 

11

 

determine and implement, in its sole discretion, **. It is further understood that if **;

 

(h)      assign relative priorities to the Programs; and

 

(i)       such other responsibilities as may be assigned to the JSC pursuant to this Agreement or as may be mutually agreed upon by the Parties in writing from time to time.

 

2.2.3         Meetings. The JSC shall meet during each Calendar Quarter during the Research Term, and more frequently as the Parties deem appropriate, on such dates, and at such places and times, as provided herein or as the Parties shall agree. Thereafter, the JSC shall meet, in person or otherwise, at least twice per Contract Year to provide Pharmacopeia an update regarding GSK’s progress in commercializing each Collaboration Compound and otherwise to perform the responsibilities assigned to it under this Agreement. Meetings of the JSC that are held in person shall alternate between the offices of the Parties, or such other place as the Parties may agree. The members of the JSC also may 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.

 

2.2.4         Minutes. Minutes of JSC meetings shall be effective only after approved by both Parties. With the sole exception of specific items of the meeting minutes to which the members cannot agree and which are escalated to the Executive Officers as provided in Section 2.2.4(d) below, definitive minutes of all JSC meetings shall be finalized no later than thirty (30) days after the meeting to which the minutes pertain, as follows:

 

(a)      Within ten (10) days after each JSC meeting, the Party responsible for preparing the minutes (the “DRAFTING PARTY”) shall prepare and distribute to all members of the JSC draft minutes of the meeting.

 

(b)      The non-Drafting Party shall then have ten (10) days after receiving such draft minutes to collect comments thereon from its members of the JSC and provide these to the Drafting Party.

 

(c)      Upon the expiration of such ten-day comment period, the Parties shall have ten (10) days to discuss each other’s comments and finalize the minutes. A member of the JSC from each Party shall sign and date the final minutes. The signature of each Party’s JSC member upon the final minutes shall indicate such Party’s assent to the minutes.

 

(d)      If at any time during the preparation and finalization of the JSC minutes, the Parties do not agree on any issue with respect to the minutes, such issue shall be resolved by the escalation process as provided in Section 2.2.5. The decision resulting from the escalation process shall be promptly recorded by the Drafting Party in amended finalized minutes for said meeting.

 

2.2.5         Governance. Except as otherwise provided herein, decisions of the JSC shall by made by **, and **. In the event that a **, then either Party may, by written notice to the other, have such issue referred to the Chief Executive Officer of Pharmacopeia, or such other person holding a similar

 

12

 

position designated by Pharmacopeia from time to time, and the Senior Vice President for External Drug Discovery of GSK, or such other person holding a similar position designated by GSK from time to time (collectively, the “EXECUTIVE OFFICERS”), for resolution. The Executive Officers shall meet promptly to discuss the matter submitted and to determine a resolution. If the Executive Officers are unable to determine a resolution in a timely manner, which shall in no case be more than sixty (60) days after the matter was referred to them, the issue shall be resolved as follows below. For clarity it is understood and agreed by the Parties that any final decision on any matter subject to the authority of the JSC and the dispute resolution and escalation process described in this Article 2 shall not be subject to further dispute resolution under Article 14 of this Agreement.

 

(a)    General. In the event that, after **, then the ** as set forth above. In the event that the **, then the **. Pharmacopeia and GSK shall **. If Pharmacopeia and GSK ** who shall be **. Subject always to the ** below, the **, and the **.

 

(b)    Determination by the Expert.

 

(1)    Tractable Hit Declaration; Lead Declaration. With respect to the Tractable Hit Criteria or the Lead Declaration Criteria, the Expert will be asked to decide whether any proposed further studies are meaningful and necessary and/or if the Criteria have been achieved, or may reasonably be deemed to have been achieved based on the overall properties of the applicable Collaboration Compounds.

 

(2)    **. With respect to the **, and will only have the ** (i) **, or (ii) **. In ** for the applicable Program.

 

(c)      Establishment of Proof-of-Concept Compound Criteria. ** or ** of such Criteria. If ** to such proposed Criteria in writing within such thirty-day period, such failure to respond shall automatically be deemed an acceptance of such Criteria.

 

(d)      Achievement of Proof-of-Concept Compound Criteria. In the event that a unanimous vote is not obtained by the JSC regarding the achievement of Proof-of-Concept Compound Criteria, and the Executive Officers fail to resolve such disagreement between Pharmacopeia and GSK as provided above, then **.

 

(e) ** by **.

 

(1)    In the event that ** or to ** shall not be **. However, in such a case, ** under this Agreement. It is further understood that, in any case where ** that have been **. In such case, such **.

 

(2)    (i)  In the event that, for a period of one (1) year after receiving the Expert’s written decision with respect to necessary studies in a Program in the case of Tractable Hit Criteria or Lead Declaration Criteria, and with respect to **, then Pharmacopeia shall ** , or any such longer period as **. In the event that ** under this Agreement.

 

(ii)  In the event that the **.

 

13

 

(3)    Subject to subparagraph (1) above, in the event **, and shall **. If the **, then such ** ; provided, however, that in no event shall **.

 

(4)    In the event **, then **. If **. If **. If ** under this Agreement.

 

(5)    In the event **, or **. If **. If **. If ** under this Agreement.

 

(6)    With respect to **. Pharmacopeia shall have the **. If **, it shall **. If **. At the conclusion of **. If **, under this Agreement.

 

2.2.6 Subcommittee(s). From time to time, the JSC may establish subcommittees to oversee particular projects or activities, as it deems necessary or advisable (each, a “Subcommittee”). GSK and Pharmacopeia shall each have one (1) vote on each Subcommittee. Each Subcommittee shall consist of such number of members of each Party as the JSC determines is appropriate from time to time. Such members shall be individuals with expertise and responsibilities in the areas of preclinical development, clinical development, intellectual property, process sciences, manufacturing, regulatory affairs, product development and/or product commercialization, as applicable to the stage of development of the project or activity. One such Subcommittee (the “Patent Subcommittee”) shall be responsible for overseeing and recommending the strategy for patent filings and coordinating patent-related matters including, but not limited to, the determination of inventorship according to U.S. Patent Law (for Joint IP), the preparation, filing and prosecution of all patent applications covered under this Agreement, and the decision as to the countries where each such patent application will be filed and prosecuted. Each Subcommittee shall meet with such frequency as the JSC shall determine.

 

Each Subcommittee shall operate by unanimous vote in all decisions. If, with respect to a matter that is subject to a Subcommittee’s decision-making authority, the Subcommittee cannot reach unanimity, the matter shall be referred to the JSC, which shall resolve such matter in accordance with Section 2.2.5.

 

2.2.7 Expenses. Each Party shall bear its own travel-related expenses and other costs with respect to its activities relating to membership on the JSC or any Subcommittee.

 

2.2.8 The Joint Program Committee. In the event that GSK has not exercised its Candidate Selection Option with respect to a particular Target, but has preserved its PoC Option with respect to the applicable Collaboration Compounds under a Program active against such Target by making the requisite milestone payments pursuant to Section 6.2.1, due upon achievement of the applicable Candidate Selection Criteria, then, after the first dosing in the first FTIH study, but no later than forty-five (45) days after such first dosing, ** shall present to ** the proposed Proof-of-Concept Compound Criteria with respect to such Collaboration Compound. Within forty-five (45) days after the completion of the first FTIH study, the JSC shall establish a Joint Program Committee (the “Joint Program Committee”) for such Pharmacopeia Development Compound, with equal representation and input from both GSK

 

14

 

and Pharmacopeia, for the purpose of developing and agreeing upon the applicable PoC Studies in accordance with Section 2.2.9 with respect to such Proof-of-Concept Compound Criteria.

 

2.2.9 PoC Studies. GSK shall have the right to participate equally with Pharmacopeia in the design and planning of the PoC Studies via the Joint Program Committee. In the event that the JSC fails to approve the PoC Studies as submitted by the Joint Program Committee within forty-five (45) days, then the Chief Executive Officer of Pharmacopeia and the Senior Vice President of External Drug Discovery of GSK shall meet to resolve such matter within thirty (30) days. Notwithstanding the above, ** shall have the **.

 

ARTICLE 3

 

DEVELOPMENT PROGRAM

 

3.1 INITIAL SCREENING TERM.

 

3.1.1         Screening. During the Initial Screening Term, Pharmacopeia will screen each of the Initial Targets against that portion of Pharmacopeia’s compound library as established under a Work Plan pursuant to a Screening Program approved by the JSC for each Target.

 

3.1.2         Development. During the relevant Screening Program, Pharmacopeia will conduct activities as described in the Work Plan for the relevant Program with the objective being to identify Tractable Hits and develop Leads from such Tractable Hits. Pharmacopeia will then conduct activities as described in the Work Plan for the relevant Program, with the objective being to develop such Leads into Candidate Selection Compounds and then clinical Proof-of-Concept Compounds, subject to GSK’s Options.

 

3.2 SELECTION OF INITIAL TARGETS.

 

3.2.1         Initial Target Proposal Schedule. The first ** shall be ** and **. The Parties shall agree in writing, on or before the Effective Date, upon the Tractable Hit Criteria, Lead Declaration Criteria and provisional Candidate Selection Criteria applicable for the **. The ** shall be ** and accepted through the JSC within **. The ** shall be ** and accepted through the JSC within **. The ** shall be ** and accepted through the JSC within **. The ** shall be ** and accepted through the JSC within not more than **, upon a reasonable schedule agreed by the JSC such that there is a continuous flow of Targets into Programs. Notwithstanding the foregoing, if Pharmacopeia cannot, or does not, in its reasonable discretion **, GSK shall **.

 

3.2.2         In the event either Party identifies any issued patent **, the **. The **. The **. If **, (i) ** or (ii) **. Notwithstanding the **. If **.

 

15

 

3.2.3         Provision of Reagents and Assays. The reagents and assays for screening of the Initial Targets shall be provided by ** on a reasonable schedule to be established by the JSC, **. ** after the Effective Date. In the event **.

 

3.3 RESTRICTION ON TARGETS / NONCOMPETE.

 

3.3.1  General Restrictions. Subject to all applicable other provisions of this Agreement, Pharmacopeia shall not use GSK Target IP or any Information developed or provided by GSK hereunder for any purpose other than fulfillment of Pharmacopeia’s rights and responsibilities with respect to Collaboration Compounds and Products under this Agreement. Subject to all applicable other provisions of this Agreement, GSK shall not use Pharmacopeia Target IP or any Information developed or provided by Pharmacopeia hereunder during Pharmacopeia’s performance of a Program for any purpose other than fulfillment of GSK’s rights and responsibilities with respect to Collaboration Compounds and Products under this Agreement.

 

3.3.2   Basic Research Use of Targets. Subject to Section 3.3.1, both GSK and Pharmacopeia shall be free to use any Target at any time for basic research purposes (e.g., basic biological research, target validation studies, target mechanism studies, performance of selectivity screens, counterscreens, secondary or confirmatory screens, and the like) outside the scope of this Agreement, either independently or with/for a Third Party, provided that such use does not materially impair the commercial or research value of any Program conducted pursuant to this Agreement.

 

3.3.3   Restrictions During **. Subject to Section 3.3.2, during any Screening Program with respect to a particular Target, **.

 

3.3.4 Failure to Attain Tractable Hit. Subject to Section 3.3.1, GSK shall be free immediately to use independently or with/for any Third Party an Initial Target for any purpose whatsoever, without any obligation or payment of any kind to Pharmacopeia if, after a period of one (1) year from the commencement by Pharmacopeia of actual screening of its compound library against such Initial Target (or such extended time as may be determined and agreed in writing by the JSC, it being understood by both Parties that approval to such extension shall not be unreasonably withheld in the event of reasonable progress resulting in substantial completion by Pharmacopeia of the applicable Screening Program), Pharmacopeia has not succeeded in attaining a Tractable Hit against such Initial Target. In such case, the JSC shall have the right to immediately terminate the applicable Screening Program; Pharmacopeia shall not be required to undertake any further work with respect to such Target pursuant to this Agreement; and Pharmacopeia shall promptly return to GSK all applicable GSK Know-How and GSK Information and all remaining reagents and assays relating thereto provided by GSK under this Agreement. In addition, in such case, all licenses under Section 5.1.1(a) or Section 5.2.1(a), as the case may be, pertaining thereto shall terminate. Further, during the ** (**) ** immediately following the JSC’s termination (if any) as described above of the applicable Screening Program, Pharmacopeia shall **. Subject to (i) any GSK IP, (ii) the obligation to return all GSK Know-How, GSK Information, assays and reagents, and (iii) the ** (**) ** ** described in this Section 3.3.4, Pharmacopeia will have no other obligations whatsoever to GSK with respect to such Target.

 

16

 

3.3.5 Attainment of Tractable Hit. If Pharmacopeia succeeds in attaining a Tractable Hit under a Screening Program for an Initial Target during the first one (1) year period from the commencement by Pharmacopeia of actual screening of its compound library against such Initial Target (or such extended time period as may be determined and agreed in writing by the JSC), then, subject to Article 9 and Section 3.3.1, **. Beyond such **. The scope of any such continued period of exclusivity (i.e. beyond the ** described above) between the Parties shall be expressly limited to apply only to **. As used herein, the **. Notwithstanding the foregoing and subject to Section 3.3.1 and Article 9, it is understood that, after the expiration of the ** (if applicable as described above in this Section 3.3.5), (i) **, and (ii) **.

 

3.4 RESTRICTION ON COMPOUNDS. Any compounds in **.

 

3.5 PHARMACOPEIA PROGRAM EXCLUSIVITY. Subject to all the other provisions of this Agreement, Pharmacopeia shall have the exclusive right to undertake the activities of each Program, including all scientific, legal and regulatory activities, until such time, if ever, as GSK exercises an Option with respect to such Program.

 

3.6 SUBCONTRACTING. Pharmacopeia may engage Third Party subcontractors (including contract research organizations) to perform certain of its obligations under this Agreement. Any Third Party subcontractor to be engaged by Pharmacopeia to perform Pharmacopeia’s obligations set forth in this Agreement shall meet the qualifications typically required by Pharmacopeia for the performance of work similar in scope and complexity to the subcontracted activity. The activities of any such Third Party contractors shall be considered activities of Pharmacopeia under this Agreement. Pharmacopeia shall be responsible for ensuring compliance by any such Third Party contractors with the terms of this Agreement. In any case in which Pharmacopeia engages a Third Party subcontractor, Pharmacopeia shall obtain sole ownership of all inventions, data, Information and related intellectual property rights made or developed by such Third Party subcontractor involving the manufacture or use of any Target or Pharmacopeia Development Compound or other Collaboration Compound.

 

3.7 REPORTS; PUBLICATION OF CLINICAL TRIALS RESULTS.

 

3.7.1 Reports. During the Research Term and for such time thereafter that any Collaboration Compound is being actively researched or developed by either Party or its Sublicensee(s), Pharmacopeia and GSK shall provide to the JSC each Calendar Quarter written progress reports on the status of the Programs, data associated with the Parties’ respective research and development efforts, as applicable, and the likelihood of and timetable for completion of the respective Programs or development activities and advancement of compounds to the next phase of research or development, as applicable.

 

3.7.2 Publication of Clinical Trials Results. Each of GSK and Pharmacopeia shall have the right to publish summaries of results from any human clinical trials conducted by such Party or conducted by the other Party under this Agreement, without requiring the consent of the other Party. The Parties shall discuss and reasonably cooperate in order to facilitate the process to be employed in order to ensure the publication of any such summaries as required on the clinical trial registry of each respective Party, and shall provide the other Party via submission to the Patent Subcommittee established under Section 2.2.6, at least thirty (30) days prior notice to review the clinical trials results to be published for the purposes of preparing any necessary Patent filings.

 

17

 

3.8 GSK GUIDANCE. During the Lead Generation Program and the Lead Optimization Program, GSK, through the JSC, may provide Pharmacopeia with reasonable guidance and consultation in the conduct of such Programs if the Parties so desire. If Pharmacopeia develops a compound as a Pharmacopeia Development Compound, GSK shall provide, through the JSC, in vivo preclinical and toxicology guidance to Pharmacopeia to assist Pharmacopeia in developing its own clinical trials. In addition, GSK shall grant Pharmacopeia access to GSK’s annual clinical updates for all Candidate Selection Compounds which GSK elects to develop as GSK Development Compounds pursuant to the Candidate Selection Option.

 

3.9 ENABLING STUDIES. GSK shall have the right at all times during the Research Term, at its own expense, to conduct enabling activities (“Enabling Studies”) which the JSC deems necessary or useful for the purpose of pre-clinical and clinical activities relating to the Pharmacopeia Development Compounds. Pharmacopeia shall offer GSK reasonable cooperation in relation to such enabling activities including, subject to availability, the transfer of quantities of compounds, if necessary.

 

3.10 PHARMACOPEIA DILIGENCE. Pharmacopeia shall, and shall ensure that its Sublicensees, Affiliates and subcontractors, if any, ** in an effort to meet Pharmacopeia’s commitments with respect to such Programs and any development activities as established by the JSC. With respect to any Program, the Parties understand and agree that, so long as Pharmacopeia has satisfied its responsibilities under the applicable Work Plan with respect to such Program, then Pharmacopeia shall be deemed to have been diligent in its performance of such Program, regardless of the final result of such Program. For example, if Pharmacopeia has performed a Screening Program as specified by the JSC, Pharmacopeia shall be deemed to have been diligent in its performance of such Screening Program, whether or not Pharmacopeia succeeded in attaining a Tractable Hit. It is further understood and agreed that, in the event the Parties are unable to agree on the content of a particular Work Plan, such failure to agree shall not be deemed a lack of diligence on the part of either Party under this Agreement.

 

ARTICLE 4

 

GSK’S OPTIONS

 

4.1      (a)  For the avoidance of doubt, the Parties understand and agree that GSK’s Option rights, as described more fully below and subject to the terms of Section 4.2, shall be exclusive Options over the Programs hereunder, and unless and until the earliest of such time (if any) as (i) GSK fails to maintain its Option rights under a given Program, or (ii) GSK declines to exercise all its outstanding Options with respect to any such Program, or (iii) the Program Term ends, Pharmacopeia shall not have the right to offer or negotiate with any Third Party with respect to the grant to such Third Party of any right or license or other encumbrance of any kind in or to any Collaboration Compound or any related Pharmacopeia IP or Joint IP under such Program.

 

(b)  CANDIDATE SELECTION OPTION. On a Target–by-Target basis, if GSK has timely paid the milestone payment(s) pursuant to Section 6.2.1 due upon achievement of the applicable Lead Declaration Criteria, Pharmacopeia shall notify the JSC when it believes it has successfully developed a compound that meets the Candidate Selection Criteria. If the JSC agrees that such

 

18

 

compound is a Candidate Selection Compound, subject to Section 4.2, GSK shall have the exclusive option (“Candidate Selection Option”), exercisable in its sole discretion within sixty (60) days after the written declaration by the JSC that the compound is a Candidate Selection Compound, to select and progress such Candidate Selection Compound (and, at GSK’s sole discretion, any corresponding Back-up Compounds) for all further development and commercialization, subject to the requirements that GSK use commercially reasonable diligence efforts as set forth for GSK in this Agreement, and subject to GSK’s obligation to pay the milestone payments set forth in Sections 6.2.1(b) and 6.2.2.

 

4.2      DEVELOPMENT BY PHARMACOPEIA. Each time that GSK has progressed ** as a result of its exercise of the Candidate Selection Option, Pharmacopeia shall have **, subject to GSK’s PoC Option below and GSK’s obligation to pay the milestone payments set forth in Sections 6.2.1(b)(2), 6.2.1(c) and 6.2.3; provided that the JSC agrees that Pharmacopeia has the capacity on its own (or through the use of a contract research organization) to complete development activities until the Proof-of-Concept Compound Criteria have been met for such Candidate Selection Compound.

 

4.3      PoC OPTION. In the event that GSK elects not to exercise its Candidate Selection Option when triggered for a given Pharmacopeia Development Compound, or if Pharmacopeia is progressing a Candidate Selection Compound pursuant to Section 4.2, Pharmacopeia may, at its sole discretion, continue to progress, up to the completion of the PoC Studies, the development of such Pharmacopeia Development Compound or Candidate Selection Compound in order to satisfy the Proof-of-Concept Compound Criteria. If GSK has timely paid all of the milestone payments pursuant to Sections 6.2.1 and 6.2.3, due upon (i) **, (ii) **, (iii) **, and (iv) ** then, once the compound has been demonstrated to satisfy the Proof-of-Concept Compound Criteria **, GSK shall have the exclusive option (“PoC Option”), exercisable in its sole discretion within sixty (60) days after such compound has been demonstrated to so satisfy the Proof-of-Concept Compound Criteria, to progress the development of such Proof-of-Concept Compound (and, at GSK’s sole discretion, any corresponding Back-up Compounds) from Phase III (post-proof of concept) through to completion, ** in this Agreement, and subject to GSK’s obligation to pay the remaining milestone payments set forth in Section 6.2.3. If GSK declines to exercise the PoC Option within such sixty-day period, Pharmacopeia may, at its sole discretion, independently pursue development of such Pharmacopeia Development Compound subject to its obligations of Right of First Negotiation and milestone and royalty payments to GSK under this Agreement.

 

4.4      GSK RIGHTS AND OBLIGATIONS UPON EXERCISE OF AN OPTION.

 

4.4.1         License. If GSK exercises any of its Options for a given Pharmacopeia Development Compound, GSK shall have the exclusive, fully sublicensable, worldwide right and license to further research, develop and commercialize such compound (as a GSK Development Compound) together with, at GSK’s sole discretion, any corresponding Back-up Compounds, and shall make payments, as applicable, to Pharmacopeia as provided in this Agreement.

 

4.4.2         GSK Diligence. Upon GSK’s exercise of the Candidate Selection Option or PoC Option, as applicable, GSK shall use, and shall ensure that its Affiliates, Sublicensees and subcontractors use, ** consistent with the manner in which GSK would develop one of its own products having a similar technical and scientific profile,

 

19

 

level of development complexity and potent