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Exhibit
10.3
NOTE: C ERTAIN C
ONFIDENTIAL I NFORMATION
HAS BEEN OMITTED
FROM THIS DOCUMENT
AND REPLACED BY
“[*]”. A COMPLETE COPY
OF THIS DOCUMENT
INCLUDING THE C
ONFIDENTIAL I NFORMATION
HAS BEEN FILED
SEPARATELY WITH THE S
ECURITIES AND E
XCHANGE C OMMISSION .
DISTRIBUTION AND LICENSE
AGREEMENT
BY AND BETWEEN
NPS ALLELIX CORP.
NPS PHARMACEUTICALS,
INC.
AND
NYCOMED GmbH
DATED
SEPTEMBER 24, 2007
Table of
Contents
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ARTICLE 1
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DEFINITIONS
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1 |
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ARTICLE 2
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MANAGEMENT OF COLLABORATIVE
ACTIVITIES
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11 |
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2.1
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Management Committee
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11 |
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2.2
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Joint Development Committee
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13 |
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2.3
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Additional Committees
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14 |
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2.4
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Minutes of Committee Meetings
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15 |
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2.5
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Independent Action
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15 |
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2.6
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Compliance with Law
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15 |
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ARTICLE 3
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LICENSE GRANTS AND
ASSIGNMENTS
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15 |
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3.1
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NPS Grants and Assignments
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15 |
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3.2
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Sublicenses
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16 |
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3.3
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Nycomed Grants
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16 |
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3.4
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NPS Retained Rights; Transfer of
Rights
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16 |
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3.5
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Nycomed Right of First
Negotiation
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16 |
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3.6
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Licenses under Existing Third Party
Agreements
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17 |
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ARTICLE 4
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DEVELOPMENT
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18 |
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4.1
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Development Rights
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18 |
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4.2
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Development Responsibilities
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18 |
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4.3
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Development Efforts; Manner of
Performance; Reports
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20 |
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4.4
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Right to Audit
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21 |
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4.5
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Regulatory Submissions and Regulatory
Approvals
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21 |
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ARTICLE 5
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COMMERCIALIZATION
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23 |
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5.1
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Commercialization in the
Territory
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23 |
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5.2
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Advertising and Promotional
Materials
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24 |
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5.3
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Sales and Distribution
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24 |
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5.4
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Complaints
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24 |
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5.5
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Adverse Event Reporting
Procedures
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24 |
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5.6
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Recalls, Market Withdrawals or
Corrective Actions
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25 |
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ARTICLE 6
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MANUFACTURE AND SUPPLY
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25 |
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6.1
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General
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25 |
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6.2
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Manufacture and Supply for the
Territory
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25 |
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6.3
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Transfer of Responsibility and
Technology
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26 |
Table of
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6.4
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Subsequent Information
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26 |
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6.5
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[*] Process
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26 |
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6.6
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Master Cell Bank and Working Cell
Banks
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27 |
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6.7
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Other Ongoing Rights and
Responsibilities
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27 |
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ARTICLE 7
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FINANCIAL PROVISIONS
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27 |
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7.1
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Signing Fee
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27 |
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7.2
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First Milestone Payment
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27 |
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7.3
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Milestone Payments
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28 |
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7.4
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Payment of Royalties on Net
Sales
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29 |
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7.5
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Existing Third Party Agreement
Payments
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30 |
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7.6
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Audits
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30 |
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7.7
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Tax Matters
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30 |
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7.8
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United States Dollars
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31 |
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7.9
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Currency Exchange
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31 |
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7.10
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Blocked Payments
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31 |
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7.11
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Late Payments
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31 |
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7.12
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Shared Development Costs
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31 |
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ARTICLE 8
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INTELLECTUAL PROPERTY OWNERSHIP,
PROTECTION AND RELATED MATTERS
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32 |
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8.1
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Ownership of Inventions
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32 |
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8.2
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Prosecution and Maintenance of Patent
Rights
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32 |
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8.3
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Third Party Infringement
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34 |
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8.4
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Patent Invalidity Claim
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35 |
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8.5
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Claimed Infringement
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36 |
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8.6
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Patent Term Extensions
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36 |
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8.7
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Patent Marking
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36 |
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8.8
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Trademarks
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36 |
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ARTICLE 9
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CONFIDENTIALITY AND PUBLICITY
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38 |
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9.1
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Confidential Information
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38 |
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9.2
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Employee, Consultant and Advisor
Obligations
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39 |
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9.3
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Publicity
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39 |
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9.4
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Publications
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39 |
ii
Table of
Contents
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ARTICLE 10
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REPRESENTATIONS AND WARRANTIES; CERTAIN
COVENANTS; INDEMNIFICATION
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40 |
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10.1
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Exclusivity Covenant
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40 |
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10.2
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Mutual Representations and
Warranties
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40 |
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10.3
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Additional NPS Representations and
Warranties
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41 |
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10.4
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Existing Third Party
Agreements
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42 |
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10.5
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Disclaimer of Warranties
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42 |
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10.6
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Indemnification
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42 |
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10.7
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Procedure for Indemnification
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43 |
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10.8
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Assumption of Defense
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44 |
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ARTICLE 11
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TERM AND TERMINATION
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44 |
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11.1
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Term
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44 |
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11.2
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Termination
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44 |
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11.3
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Effects of Termination
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45 |
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11.4
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Continuation of Agreement if NPS Becomes
Insolvent
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49 |
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11.5
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License Grant Effective Upon Expiration
of Term
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50 |
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11.6
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Survival
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50 |
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ARTICLE 12
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FINAL DECISION-MAKING; DISPUTE
RESOLUTION
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50 |
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12.1
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Arbitration
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50 |
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ARTICLE 13
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MISCELLANEOUS
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51 |
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13.1
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Choice of Law
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51 |
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13.2
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Notices
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51 |
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13.3
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Severability
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52 |
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13.4
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Captions
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52 |
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13.5
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Integration
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52 |
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13.6
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Independent Contractors; No
Agency
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52 |
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13.7
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Assignment; Successors
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53 |
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13.8
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Expenses
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53 |
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13.9
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Execution in Counterparts; Facsimile
Signatures
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53 |
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13.10
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No Consequential or Punitive
Damages
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53 |
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13.11
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Non-Solicitation
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53 |
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13.12
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Transfer of NPS Intellectual Property;
NPS Allelix No Longer a Party
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53 |
iii
DISTRIBUTION AND
LICENSE AGREEMENT
This Distribution and License
Agreement (this “Agreement” ) is made and
effective as of the 24th day of September, 2007 (the
“Effective Date” ) by and between NPS Allelix
Corp., a Canadian corporation ( “NPS Allelix” ),
having offices at MaRS Centre, 101 College Street, South Tower,
Suite 800, Toronto, ON MSG 1L8 Canada, NPS Pharmaceuticals, Inc., a
Delaware corporation ( “NPS US” , and, together
with NPS Allelix, collectively, “NPS” ), having
offices at Morris Corporate Center 1, 4th Floor, Building B, 300
Interpace Parkway, Parsippany, NJ 07054, and Nycomed GmbH, a German
corporation with company registration number Hrb Nr 701257 (
“Nycomed” ), having offices at Byk Gulden Str.
2, 78467 Konstanz.
INTRODUCTION
1. NPS Controls certain
patents, know-how and other rights related to the
Product;
2. Nycomed has considerable
knowledge and experience in developing, promoting and marketing
pharmaceutical products throughout the Territory;
3. NPS and Nycomed believe
that a distribution and license arrangement regarding the Product
in the Territory would be desirable; and
4. On the terms and subject
to the conditions set forth herein, NPS and Nycomed therefore
desire to provide for the development, manufacture and
commercialization of Product as described herein.
NOW, THEREFORE, for and in
consideration of the mutual covenants contained herein, NPS and
Nycomed, intending to be legally bound, hereby agree as
follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement,
the following terms, whether used in the singular or plural, shall
have the meanings set forth below:
1.1 “
Additional Indication ” shall mean any indication for
Product other than the Primary Indication.
1.2 “
Affiliate ” shall mean with respect to any Party, any
Person controlling, controlled by or under common control with such
Party. For purposes of this Section 1.2, “control”
shall mean (a) in the case of a Person that is a corporate
entity, direct or indirect ownership of fifty percent (50%) or
more of the stock or shares having the right to vote (or such
lesser percentage which is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction) for the election
of directors of such Person and (b) in the case of a Person
that is an entity, but is not a corporate entity, the possession,
directly or indirectly, of the power to direct, or cause the
direction of, the management or policies of such Person, whether
through the ownership of voting securities, by contract or
otherwise.
1
1.3 “ API
” shall mean the drug substance/active pharmaceutical
ingredient of the Compound.
1.4 “
Calendar Quarter ” shall mean for each Calendar Year,
each of the three (3) month periods ending
March 31, June 30, September 30 and
December 31; provided, however, that the first calendar
quarter for the first Calendar Year shall extend from the Effective
Date to the end of the first complete calendar quarter
thereafter.
1.5 “
Calendar Year ” shall mean, for the first calendar
year, the period commencing on the Effective Date and ending on
December 31 of the calendar year during which the Effective
Date occurs, and each successive period beginning on January 1
and ending twelve (12) consecutive calendar months later on
December 31.
1.6 “
CIGIM ” shall mean chemotherapy-induced
gastrointestinal mucositis.
1.7 “
Claims ” shall mean all charges, complaints, actions,
suits, proceedings, hearings, investigations, claims and
demands.
1.8 “ CMO
” shall mean a contract manufacturing
organization.
1.9 “
Commercialization ” or “ Commercialize
” shall mean any and all activities directed to obtaining
marketing, pricing and reimbursement approvals, marketing,
promoting, Detailing, distributing, importing, exporting, offering
for sale or selling a product. Commercialization shall not include
any activities related to Development or Manufacturing.
1.10 “
Compound ” shall mean the compound known as
teduglutide, as further described in Schedule 1.10 , and any
analogues, fragments, derivatives, receptors and compositions
thereof.
1.11 “
Control ” or “ Controlled ” shall
mean, with respect to any intellectual property right or other
intangible property, the possession (whether by license or
ownership, or by control over an Affiliate having possession by
license or ownership) by a Party of the ability to grant to the
other Party access and/or a license or sublicense as provided
herein without violating the terms of any agreement with any Third
Party.
1.12 “
Co-Owned Patent Rights ” shall mean the NPS Patent
Rights, to the extent that such NPS Patent Rights were solely owned
by NPS prior to the assignment in Section 3.1(b)
hereof.
1.13 “
Country ” shall mean any generally recognized
sovereign entity.
1.14 “
Cover ”, “ Covering ” or “
Covered ” shall mean, with respect to Product or
Compound, or with respect to technology, that, in the absence of a
license granted under a Valid Claim, the Manufacture, use,
Commercialization, Development or importation of Product or the
practice of such technology would infringe such Valid
Claim.
2
1.15 “
CPI ” shall mean the Consumer Price Index –
Urban Wage Earners Clerical Workers, U.S. City Average, All Items,
1982-84 = 100, published by the United States Department of Labor,
Bureau of Statistics (or its successor equivalent
index).
1.16 “
Development ” or “ Develop ” shall
mean non-clinical and clinical research and drug development
activities associated with development of Product for Regulatory
Approval as a drug product, including without limitation
toxicology, test method development and stability testing, process
development, formulation development, delivery system development,
quality assurance and quality control development, statistical
analysis, clinical studies (including pre- and post-approval
studies and Investigator Sponsored Clinical Studies), regulatory
affairs, and product approval and clinical study regulatory
activities (excluding regulatory activities directed to obtaining
pricing and reimbursement approvals).
1.17 “
Development Costs ” shall mean costs incurred by the
Parties after the Effective Date and specifically attributable to
Developing the Compound or a Product, and may include without
limitation:
(a) the out-of-pocket
costs and expenses incurred to the extent not covered by
(b) through (d);
(b) the costs of
internal scientific, medical, technical or managerial personnel
engaged in such efforts, which costs shall be determined based on
the applicable FTE Rate, unless another basis is otherwise agreed
by the Parties in writing;
(c) the costs and
expenses of clinical supplies for such efforts, including without
limitation, (i) direct costs and expenses incurred to purchase
and/or package comparator or combination drugs or devices, and
(ii) direct costs and expenses of disposal of clinical
samples; and
(d) the direct costs
and expenses incurred in connection with manufacturing process
development and validation, manufacturing scale-up and
improvements, stability testing and quality assurance/quality
control development, and qualification and validation of Third
Party contract manufacturers.
1.18 “
Development Plan ” shall mean the plan for the
Development of the Compound or a Product for any Indication
including, without limitation, the budget and nature, number and
schedule of Development activities.
1.19 “
Device ” shall mean the drug delivery device described
in Schedule 1.19 hereto and any future Improvements or replacements
thereof.
1.20 “
Diligent Efforts ” shall mean, with respect to
Product, the carrying out of obligations in a diligent and
sustained manner using efforts not less than the efforts a Party
devotes to a product of similar market potential, profit potential
or strategic value resulting from its own research efforts, but
excluding consideration of any obligation to the other Party under
this Agreement.
3
1.21 “
Drucker License Agreement ” shall mean the License
Agreement, dated September 28, 1995, by and among 1149336
Ontario Inc., Daniel J. Drucker, M.D. and Allelix
Biopharmaceuticals Inc.
1.22 “
EMEA ” shall mean the European Medicines Agency or any
successor agency thereto.
1.23 “
Equivalent Product ” shall mean any pharmaceutical
product (other than any branded non-generic versions but Equivalent
Product specifically includes any added-value generic versions)
containing a glucagon-like peptide-2 (GLP-2) or any analog,
homologue (including, but not limited to, teduglutide), or
derivative or fragment thereof, including compositions
thereof.
1.24 “
European Union ” or “ EU ” shall
mean the Countries of the European Union, as it is constituted as
of the Effective Date and as it may be expanded from time to
time.
1.25 “
Executive Officers ” shall mean the Chief Executive
Officer of NPS (or a senior executive officer of NPS designated by
NPS’ Chief Executive Officer) and Nycomed’s Chief
Executive Officer (or a senior executive officer of Nycomed
designated by Nycomed’s Chief Executive Officer).
1.26 “
Existing Third Party Agreements ” shall mean the
Drucker License Agreement, [*], the UTAUS License Agreement and the
Restoragen License Agreement.
1.27 “
FDA ” shall mean the United States Food and Drug
Administration or any successor agency thereto.
1.28 “
Field ” shall mean the treatment and diagnosis of all
Indications in humans and animals.
1.29 “ First
Commercial Sale ” shall mean, with respect to Product in
a Country, the first commercial sale of Product in such
Country.
1.30 “
FTE ” shall mean a full-time equivalent person year
(consisting of a total of 1,750 hours) of work.
1.31 “ FTE
Rate ” shall mean [*], increased or decreased by the
percentage increase or decrease in the CPI as of the then most
recent December 31 over the level of the CPI on
December 31, 2006.
1.32 “ Future
Partner ” shall mean a Third Party to whom NPS grants
rights to Commercialize or distribute Product in North
America.
1.33 “
GAAP ” shall mean United States generally accepted
accounting principles.
1.34 “
Governmental Authority ” shall mean any court,
tribunal, arbitrator, agency, legislative body, commission,
official or other instrumentality of (a) any government of any
Country, (b) a federal, state, province, county, city or other
political subdivision thereof or (c) any supranational
body.
4
1.35 “ [*]
Process ” shall mean the process for manufacturing
Compound currently being Developed by NPS which, for the avoidance
of doubt, is a different process than the secreted
process.
1.36 “
Indications ” shall mean the Primary Indication and
the Additional Indications.
1.37 “
Investigator Sponsored Clinical Study ” shall mean a
human clinical study of Product that is sponsored and conducted by
a Third Party under an agreement with a Party pursuant to which
such Party provides clinical supplies of Product and/or funding for
such clinical study.
1.38 “ Joint
Intellectual Property ” shall mean Joint Know-How and
Joint Patent Rights, collectively.
1.39 “ Joint
Know-How ” shall mean any Know-How that is developed or
acquired jointly by the Parties or their Affiliates or sublicensees
in connection with their collaborative activities pursuant to this
Agreement during the Term including Joint Inventions.
1.40 “ Joint
Patent Rights ” shall mean Patent Rights that Cover Joint
Inventions or Joint Know-How.
1.41 “
Know-How ” shall mean any information and materials,
whether proprietary or not and whether patentable or not, including
without limitation ideas, concepts, formulas, methods, procedures,
designs, compositions, plans, documents, data, inventions,
discoveries, trade secrets, works of authorship, compounds and
biological materials, solely to the extent such know-how is
directly related to the research, Development, Manufacture or
Commercialization of Compound or Product in the Field.
1.42 “
Losses ” shall mean any and all damages (including all
incidental, consequential, statutory and treble damages), awards,
deficiencies, settlement amounts, defaults, assessments, fines,
dues, penalties, costs, fees, liabilities, obligations, taxes,
liens, losses, lost profits and expenses (including without
limitation court costs, interest and reasonable fees of attorneys,
accountants and other experts) incurred by or awarded to Third
Parties and required to be paid to Third Parties with respect to a
Claim by reason of any judgment, order, decree, stipulation or
injunction, or any settlement entered into in accordance with the
provisions of this Agreement, together with all documented
out-of-pocket costs and expenses incurred in complying with any
judgments, orders, decrees, stipulations and injunctions that arise
from or relate to a Claim of a Third Party.
1.43 “ Major
EU Country ” shall mean the United Kingdom, Germany,
France, Italy and Spain.
1.44 “
Manufacturing ” or “ Manufacture ”
shall mean activities directed to producing, manufacturing and
processing Product.
5
1.45 “ Master
Cell Bank ” means NPS’ master cell banks containing
the host cells (with the plasmid incorporated therein) used in the
fermentation process for the production of recombinant
glycine2-human glucagon-like peptide-2(ALX-600(Teduglutide)) as a
secreted material in the fermentation culture broth and as a fusion
peptide for the inclusion bodies in the host cell. The Master Cell
Bank for the secreted process is designated [*] and is used to
generate the Working Cell Bank for such process. The Master Cell
Bank for the [*] Process is designated [ * ] and is used to
generate the Working Cell Bank designated [ * ].
1.46 “
NDA ” shall mean a new drug application or
supplemental new drug application or any amendments thereto
submitted to the FDA in the United States.
1.47 “
NEC ” means necrotizing enterocolitis.
1.48 “ Net
Sales ” shall mean, with respect to Product, the gross
invoiced commercial sales of Product by Nycomed, its Affiliates and
sublicensees to Third Parties in the Territory (and for the
purposes of Section 4.5 only, sales of Product by NPS, its
Affiliates or Future Partners, in Canada and/or Mexico, as
applicable), less the following deductions to the extent included
in the gross invoiced sales price for Product or otherwise directly
paid, allowed, accrued, or incurred by Nycomed, its Affiliates or
sublicensees with respect to the sale of Product:
(a) quantity or cash
discounts, credits, retroactive price reductions, rebates,
allowances and adjustments granted, to the extent usual and
customary in the pharmaceutical industry and consistent with
Nycomed’s usual course of dealing for its products other than
Product (including, without limitation, government mandated and
managed healthcare negotiated rebates);
(b) amounts repaid,
credited or written off by reason of rejections, recalls, billing
errors and returns;
(c) sales, excise,
turnover, inventory, value-added, and similar taxes assessed on the
sale of Product (other than income taxes of Nycomed, its Affiliates
or sublicensees), and import and customs duties; and
(d) transportation,
importation, shipping insurance and other handling
expenses.
Notwithstanding the foregoing, in any
case where Product is sold or otherwise disposed of in a
transaction that is not an arm’s length sale of Product
exclusively for cash that is separate from any sale or disposition
of other products or of services, Net Sales shall mean the greatest
of:
(x) the Net Sales amount for
Product sold in such transaction determined as provided above, with
any non-cash consideration attributable to such transaction valued
at fair market value;
(y) if there has been any
arm’s length sale of Product separate from any sale or
disposition of other products or of services to a non-sublicensee
Third Party, the Net Sales amount, determined as provided above,
for the most contemporaneous such sale; or
6
(z) if there has been no such
arm’s length sale, the fraction of the overall value of such
transaction reasonably attributed to Product sold in such
transaction, with any non-cash consideration attributable to such
transaction valued at fair market value.
For sake of clarity, sales by
Nycomed, its Affiliates or sublicensees to distributors and
wholesalers shall be considered sales to Third Parties.
1.49 “ North
America ” shall mean the United States, Mexico and
Canada.
1.50 [*].
1.51 “ NPS
Intellectual Property ” shall mean NPS Know-How and NPS
Patent Rights.
1.52 “ NPS
Know-How ” shall mean any Know-How that is Controlled by
NPS on the Effective Date, but shall not include Joint
Know-How.
1.53 “ NPS
Patent Rights ” shall mean Patent Rights, to the extent
that they (a) Cover NPS Know-How or are directly related to
the Manufacture, use, Commercialization or Development of Compound
or Product in the Field, and (b) are Controlled by NPS, but
shall not include Joint Patent Rights.
1.54 “ NPS
Royalty Term ” shall mean the NPS Initial Royalty Term
and the NPS Secondary Royalty Term.
1.55 “ NPS
Initial Royalty Term ” shall mean the period commencing
on the Effective Date and ending on the later of, on a
Country-by-Country and Product-by-Product basis, (a) ten
(10) years from First Commercial Sale of Product in such
Country and (b) the expiration or termination of the last to
expire Valid Claim of a Patent Right listed on Schedule 1.55
Covering such Product in such Country.
1.56 “ NPS
Secondary Royalty Term ” shall mean the period commencing
at the end of the NPS Initial Royalty Term, on a Country-by-Country
and Product-by-Product basis, and ending twenty (20) years
from First Commercial Sale of Product, on a Country-by-Country and
Product-by-Product basis.
1.57 “
Nycomed Intellectual Property ” shall mean Nycomed
Know-How and Nycomed Patent Rights.
1.58 “
Nycomed Know-How ” shall mean any Know-How that either
(a) is Controlled by Nycomed on the Effective Date or
(b) comes within Nycomed’s Control during the Term,
including Nycomed Sole Inventions, but shall not include Joint
Know-How.
1.59 “
Nycomed Patent Rights ” shall mean Patent Rights, to
the extent that they (a) Cover Nycomed Know-How or are
directly related to the Manufacture, use, Commercialization or
Development of Compound or Product in the Field, and (b) are
Controlled by Nycomed, but shall not include Joint Patent
Rights.
7
1.60 “
Nycomed Royalty Term ” shall mean the Nycomed Initial
Royalty Term and the Nycomed Secondary Royalty Term.
1.61 “
Nycomed Initial Royalty Term ” shall mean the period
commencing on the Effective Date and ending, on the later of, on a
Country-by-Country and Product-by-Product basis, (a) ten
(10) years from First Commercial Sale of such Product in such
Country on a Country-by-Country and Product-by-Product basis and
(b) the expiration or termination of the last to expire Valid
Claim of a Patent Right Covering such Product in such
Country.
1.62 “
Nycomed Secondary Royalty Term ” shall mean the period
commencing at the end of the Nycomed Initial Royalty Term, on a
Country-by-Country and Product-by-Product basis, and ending twenty
(20) years from First Commercial Sale of Product, on a
Country-by-Country and Product-by-Product basis.
1.63 “
Ongoing Studies ” shall mean the following clinical
studies: (a) CL0600-004 entitled “A Study of the
Efficacy of Teduglutide in Subjects with Parenteral
Nutrition-Dependent Short Bowel Syndrome”,
(b) CL0600-005 entitled “A Study of the Efficacy of
Teduglutide in Subjects with Parenteral Nutrition-Dependent Short
Bowel Syndrome Who Completed Protocol CL0600-004”, and
(c) CL0600-017 entitled “Pharmacokinetics of 20mg
Teduglutide in Subjects with Moderately Impaired Hepatic Function
Compared to Healthy Subjects with Normal Hepatic
Function”.
1.64 “
Parties ” shall mean NPS and Nycomed.
1.65 “
Party ” shall mean either NPS or Nycomed.
1.66 “ Patent
Rights ” shall mean patents and patent applications and
all substitutions, divisions, continuations, continuations-in-part,
any patent issued with respect to any such patent applications, any
reissue, reexamination, renewal or extension (including any
supplemental protection certificate) of any such patent, and any
confirmation patent or registration patent or patent of addition
based on any such patent, and all counterparts thereof in any
Country.
1.67 “
Person ” shall mean any natural person, corporation,
firm, business trust, joint venture, association, organization,
company, partnership or other business entity, or any government,
or any agency or political subdivisions thereof.
1.68 “ Phase
III Clinical Study ” shall mean a clinical study of
Product in human subjects to confirm with statistical significance
the efficacy and safety of Product performed to obtain Regulatory
Approval for Product in any Country, which shall be deemed
commenced when the first patient in such study has received his or
her initial dose of Product.
1.69 “ Phase
IV Clinical Study ” shall mean a clinical study initiated
after Product has been granted Regulatory Approval in any Country,
and which is aimed at strengthening the clinical evidence for
Product to be used in the Commercialization of Product.
1.70 “
Primary Indication ” shall mean SBS.
8
1.71 “
Product ” shall mean any pharmaceutical formulation,
dosing and administration form containing the Compound as an active
ingredient.
1.72 “
Regulatory Approval ” shall mean, with respect to a
particular Indication for Product, any approval (including price
approvals), registration, license or authorization from any
Governmental Authority required for the Manufacture, Development,
Commercialization, distribution, sale, storage or transport of
Product for such Indication in any Country of the Territory, and
shall include, without limitation, an approval, registration,
license or authorization granted in connection with any Regulatory
Approval Application.
1.73 “
Regulatory Approval Application ” shall mean, with
respect to a particular Indication for Product, the submission to
the relevant Governmental Authority of an appropriate application
seeking any Regulatory Approval, and shall include, without
limitation, a marketing authorization application, supplementary
application or variation thereof, NDA or any equivalent
applications in any Country of the Territory.
1.74 “
Regulatory Authority ” shall mean any federal,
national, multinational, state, provincial or local regulatory
agency, department, bureau or other governmental entity with
authority over the marketing and sale of a pharmaceutical product
in a Country, including without limitation FDA in the United States
and EMEA in the EU.
1.75 “
Restoragen License Agreement ” shall mean the
Exclusive License Agreement, dated November 21, 2002, by and
between Restoragen, Inc. and NPS Pharmaceuticals, Inc.
1.76 “
SBS ” shall mean short bowel syndrome.
1.77 “ SBS
Clinical Supply Cost ” shall mean, with respect to
Product or the Device, as applicable, for Development for the
Primary Indication, [*].
1.78 “
Successful Proof of Concept Study ” shall mean proof
of efficacy in a particular Indication in the form of a clinical
study that generates, confirms or otherwise provides an adequate
benefit-risk for Product through statistically meaningful
endpoints, which may be derived from one or more doses in
accordance with the statistical analysis plan described in a
Development Plan and which is used as the basis for a decision to
move forward with a Regulatory Approval strategy for an Indication
or a label change for a previous Indication for Product.
1.79 “
Territory ” shall mean the entire world and all
Countries, territories and possessions therein, except for North
America.
1.80 “ Third
Party ” shall mean any Person other than a Party or any
of its Affiliates.
1.81 “ United
States ” shall mean the United States of America and its
territories and possessions.
1.82 “ UTAUS
License Agreement ” shall mean the Non-Exclusive Patent
License Agreement, UTAUS Agreement No. 02-073, dated
May 15, 2004, by and between the Board of Regents of the
University of Texas System and NPS Allelix Corp.
9
1.83 “
Validation Batch ” shall mean any one of each of three
(3) consecutive batches of API or dosage form which conform to
the critical parameters described in the process and which are
Manufactured according to the Manufacturing process.
1.84 “ Valid
Claim ” shall mean, with respect to any Country, a Claim
of an issued and unexpired patent or a Claim included in a pending
patent application within the NPS Intellectual Property, Nycomed
Intellectual Property or Joint Intellectual Property in such
Country Covering the Compound or Product which has not been held
unenforceable, unpatentable or invalid by a decision of a court or
other Governmental Authority of a competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and
which has not been admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise.
1.85 “
Working Cell Banks ” means NPS’ working cell
banks containing the host cells (with the plasmid incorporated
therein) used in the fermentation process for the production of
recombinant glycine2-human glucagon-like
peptide-2(ALX-0600(Teduglutide)) as a secreted material in the
fermentation culture broth and as a fusion peptide for the
inclusion bodies in the host cell. The Working Cell Banks for the
secreted process are designated [*] and are generated from the
Master Cell Bank for such process. The Working Cell Bank for the
[*] Process is designated [*] and is generated from the Master Cell
Bank designated [ * ].
1.86 Additional
Definitions . Each of the following definitions is set
forth in the Section of this Agreement indicated
below:
|
|
|
|
Definition
|
|
Section |
|
1974 Convention
|
|
13.1 |
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Active Party
|
|
4.2(g) |
|
Additional Committees
|
|
2.3 |
|
Agreement
|
|
Preamble |
|
ATCC
|
|
6.6 |
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Breaching Party
|
|
11.2(c) |
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[*]
|
|
6.6 |
|
CIGIM Proposal
|
|
4.2(e) |
|
Code
|
|
11.3(c) |
|
Competing Product
|
|
10.1 |
|
Confidential Information
|
|
9.1 |
|
Controlling Party
|
|
6.4 |
|
Developing Party
|
|
6.5(b) |
|
Effective Date
|
|
Preamble |
|
Improvement
|
|
8.1(c) |
|
IND
|
|
4.2(e) |
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Indemnified Party
|
|
10.7(a) |
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Indemnifying Party
|
|
10.7(a) |
|
Initial Development Plan
|
|
4.2(c) |
|
Initial Enforcement Rights
Party
|
|
8.3(c) |
|
Invalidity Claim
|
|
8.4 |
10
|
|
|
|
Definition
|
|
Section |
|
Joint Development Committee
|
|
2.2(a) |
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Joint Inventions
|
|
8.1(b) |
|
Joint Development Plans
|
|
2.2(b)(v) |
|
Litigation Condition
|
|
10.7(b) |
|
Management Committee
|
|
2.1(a) |
|
Milestone Data
|
|
4.5(b)(i) |
|
Negotiation Period
|
|
3.5 |
|
Non-Breaching Party
|
|
11.2(c) |
|
NPS
|
|
Preamble |
|
NPS Allelix
|
|
Preamble |
|
NPS US
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|
Preamble |
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NPS Sole Inventions
|
|
8.1(a) |
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Nycomed
|
|
Preamble |
|
Nycomed Offer
|
|
3.5 |
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Nycomed Royalty Term
|
|
4.5(b)(i) |
|
Nycomed Sole Inventions
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|
8.1(a) |
|
Offer Period
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3.5 |
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Passive Party
|
|
4.2(g) |
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Primary Indication
Announcement
|
|
4.5(b)(i) |
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Product Trademarks
|
|
8.8(a) |
|
Promotional Materials
|
|
5.2(a) |
|
Product Trademark Infringement
Claim
|
|
8.8(e)(i) |
|
Secondary Enforcement Rights
Party
|
|
8.3(c) |
|
Severed Clause
|
|
13.3 |
|
Shared Development Costs
|
|
7.12(a) |
|
Sole Inventions
|
|
8.1(a) |
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Term
|
|
11.1 |
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Termination Notice
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|
7.2 |
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Termination Period
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|
7.2 |
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Third Party Claim
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|
10.7(a) |
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Trademark Infringement Notice
|
|
8.8(e)(ii) |
ARTICLE 2
MANAGEMENT OF
COLLABORATIVE ACTIVITIES
2.1 Management
Committee.
(a) Composition and
Responsibilities. The management committee (the “
Management Committee ”) shall consist of two
(2) members, one of which shall be an Executive Officer of NPS
and one of which shall be an Executive Officer of Nycomed. Upon
reasonable prior written notice to the other Party, a Party may
designate a substitute to temporarily attend and perform the
functions of such Party’s designee at any meeting of the
Management Committee. NPS and Nycomed each may, on advance written
notice to the other
11
Party, invite non-member
representatives of such Party to attend meetings of the Management
Committee. The Management Committee shall perform the following
functions:
(i) Manage and oversee
the Development and Commercialization of each Indication for
Product in the Territory pursuant to the terms of this
Agreement;
(ii) Review and
approve the Development Plan for any Indications of Product in the
Territory and any material amendments to such Development
Plan;
(iii) Approve any
Development Plan and budget for the Primary Indication or any
Additional Indication for both the Territory and North America
where the Parties mutually agree to share Development
Costs;
(iv) Review and
approve the Promotional Materials;
(v) Review and approve
the progress of the other committees;
(vi) In accordance
with the procedures established in Section 2.1(c) resolve
disputes, disagreements and deadlocks unresolved by the other
committees; and
(vii) Have such other
responsibilities as may be assigned to the Management Committee
pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(b) Meetings. The
Management Committee shall meet in person at least once during
every Calendar Year, and more frequently as NPS and Nycomed deem
appropriate or as required to resolve disputes, disagreements or
deadlocks in the other committees, on such dates, and at such
places and times, as the Parties shall agree; provided that the
Parties shall endeavor to have the first meeting of the Management
Committee within thirty (30) days after the Effective Date.
The Management Committee shall arrange to meet in person or convene
otherwise to assess and approve any Development Plan submitted to
the Management Committee in each Calendar Year so that such plans
will be reviewed and approved within thirty (30) days
following submission to the Management Committee. To the extent any
such Development Plan is not approved and needs to be reformulated
by the Joint Development Committee, such plans shall be reviewed by
the Management Committee as soon as reasonably practicable after
resubmission of same. Meetings of the Management Committee that are
held in person shall alternate between offices of NPS and Nycomed,
or such other place as such Parties may agree. The members of the
Management Committee 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.
(c) Decision-Making.
The Management Committee may make decisions with respect to any
subject matter that is subject to the Management Committee’s
decision-making authority and functions as set forth in
Section 2.1(a). With respect to any issue relating to the
Development or Commercialization of Product, if the Executive
Officers cannot resolve such issue after good faith negotiations
within ten (10) business days after the matter has been
brought to the Management Committee’s attention, then such
matter shall be decided by the Executive Officer of Nycomed;
provided that, to the extent such issue relates to a
Development
12
Plan for both the Territory
and North America where the Parties mutually agree to share
Development Costs, any such decision may not change or otherwise
affect in any material respect the key parameters of such
Development Plan, including, without limitation, the resources to
be provided by NPS, the expenditures to be incurred by NPS and the
design and expected outcomes to achieve regulatory approval in
North America.
2.2 Joint Development
Committee.
(a) Establishment and
Composition. Within thirty (30) days after the Effective
Date, the Parties shall establish a joint development committee
(the “ Joint Development Committee ”), and NPS
and Nycomed shall designate an equal number of representatives, up
to a maximum total of six (6) members on such Joint
Development Committee. Each of NPS and Nycomed may replace any or
all of its representatives on the Joint Development Committee at
any time upon written notice to the other Party. Such
representatives shall include individuals who have clinical trial
and regulatory experience and expertise in pharmaceutical drug
development. A Party may designate a substitute to temporarily
attend and perform the functions of such Party’s designee at
any meeting of the Joint Development Committee. NPS and Nycomed
each may, on advance written notice to the other Party, invite
non-member representatives of such Party to attend meetings of the
Joint Development Committee. The Joint Development Committee shall
be chaired by a representative appointed by Nycomed. The
chairperson shall appoint a secretary of the Joint Development
Committee.
(b) Responsibilities.
The Joint Development Committee shall perform the following
functions:
(i) Prepare and
implement the Development Plans, including the budget, in the
Territory for each Indication;
(ii) As early as
necessary in each year beginning with the first full Calendar Year
after the Effective Date, update and amend the Initial Development
Plan and prepare the Development Plans for the Primary Indication
and for any Additional Indications in the Territory for the
following Calendar Year so that it can submit such proposed
Development Plans to the Management Committee no later than
September 30 of such year for review and approval;
(iii) Prepare the
Development strategy and develop protocols for clinical studies for
Indications for Commercialization;
(iv) Review and
recommend to the Management Committee any material amendments or
modifications to the Development Plans;
(v) Prepare any
Development Plans for the Primary Indication or any Additional
Indication for both the Territory and North America where the
Parties mutually agree to share Development Costs, including any
Development Plans relating to the [*] Process (the “ Joint
Development Plans ”);
(vi) Coordinate use of
Product Trademarks on a Country-by-Country and global
basis;
13
(vii) Coordinate and
monitor regulatory strategy and activities for Product;
and
(viii) Have such other
responsibilities as may be assigned to the Joint Development
Committee pursuant to this Agreement or as may be mutually agreed
upon by the Parties from time to time.
(c) Meetings. The
Joint Development Committee shall meet in person at least two
(2) times during every Calendar Quarter, and more frequently
as NPS and Nycomed deem appropriate or as reasonably requested by
either such Party, on such dates, and at such places and times, as
such Parties shall agree; provided that the Parties shall endeavor
to have the first meeting of the Joint Development Committee within
thirty (30) days after the establishment of the Joint
Development Committee. Meetings of the Joint Development Committee
that are held in person shall alternate between the offices of NPS
and Nycomed, or such other place as the Parties may agree. The
members of the Joint Development Committee 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.
(d) Decision-Making.
The Joint Development Committee may make decisions with respect to
any subject matter that is subject to the Joint Development
Committee’s decision-making authority and functions as set
forth in Section 2.2(b). All decisions of the Joint
Development Committee shall be made by unanimous vote or written
consent, with NPS and Nycomed each having collectively, among its
respective members, one vote in all decisions. If the Joint
Development Committee cannot reach consensus within ten
(10) business days after it has first met and attempted to
reach such consensus, then such issue shall be decided by
Nycomed’s representatives in the Joint Development Committee;
provided, however, that any issue relating to material changes in
budgets, Development Plans or other material matters shall be
referred on the eleventh (11th) business day to the Management
Committee for resolution.
2.3 Additional
Committees. The Parties may mutually agree to establish
additional committees (“ Additional Committees
”) at any time after the Effective Date, including but not
limited to (a) a joint commercialization committee to oversee
the Commercialization of Product in the Territory and (b) a
joint manufacturing committee to develop strategies for dosage
forms and strength, presentation and commercial sourcing of Product
and to identify and implement, whether through Nycomed or a Third
Party, any additional Development studies with respect to Product
that may be required to support any filings for Regulatory Approval
in the Territory. Each Party shall designate an equal number of
representatives, up to a maximum to be agreed by the Parties. Such
representatives shall include individuals who have experience and
expertise in pharmaceutical product marketing, sales and regulatory
matters. All such Additional Committees may make decisions with
respect to any subject matter that is subject to their
decision-making authority and functions as mutually agreed between
the Parties. All decisions of any Additional Committees shall be
made by unanimous vote or written consent, with NPS and Nycomed
each having collectively, among its respective members, one vote in
all decisions. If any Additional Committee cannot reach consensus
within ten (10) business days after it has first met and
attempted to reach such consensus, such issue shall be decided by
Nycomed’s representatives in any Additional Committee;
provided, however, that any issue relating to material changes in
budgets, commercialization or manufacturing plans or other material
matters shall be referred on the eleventh (11th) business day
to the Management Committee for resolution.
14
2.4 Minutes of Committee
Meetings. Definitive minutes of all committee meetings shall be
finalized by Nycomed’s representatives in the applicable
Committee no later than thirty (30) days after the meeting to
which the minutes pertain as follows:
(a) Distribution of
Minutes. Within ten (10) days after a committee meeting,
the secretary of such committee shall prepare and distribute to all
members of such committee draft minutes of the meeting. Such
minutes shall provide a list of any issues already resolved and yet
to be resolved, either within such committee or through the
relevant resolution process.
(b) Review of Minutes.
The Party members of each committee shall have ten (10) days
after receiving such draft minutes to collect comments thereon and
provide them to the secretary of such committee. If no comments are
provided the minutes shall deemed to be approved by both
Parties.
(c) Discussion of
Comments. Upon the expiration of such second ten (10) day
period, the Parties shall have an additional ten (10) days to
discuss each other’s comments and finalize the minutes. The
secretary and chairperson(s) of such committee shall each sign and
date the final minutes. The signature of such chairperson(s) and
secretary upon the final minutes shall indicate each Party’s
assent to the minutes.
(d) Expenses. Each
Party shall be responsible for all travel and related costs and
expenses for its members and other representatives to attend
meetings of, and otherwise participate on, a committee.
2.5 Independent
Action. Subject to the terms of this Agreement, the activities
and resources of each Party shall be managed by such Party, acting
independently and in its individual capacity.
2.6 Compliance with
Law. Each Party hereby covenants and agrees to comply in all
material respects with all laws and regulations applicable to its
activities in connection with the Development, Manufacture and
Commercialization of Product.
ARTICLE 3
LICENSE GRANTS AND
ASSIGNMENTS
3.1 NPS Grants and
Assignments.
(a) Exclusive License to
Develop and Commercialize. Upon the terms and subject to the
conditions of this Agreement and the Existing Third Party
Agreements, NPS hereby grants to Nycomed an exclusive,
royalty-bearing right and license, with the right to grant
sublicenses solely as set forth in Section 3.2, under the NPS
Intellectual Property and NPS’ rights in the Joint
Intellectual Property to the extent necessary or useful to Develop
and Commercialize the Compound and Product in the Field in the
Territory.
15
(b) Assignment of Co-Owned
Patent Rights. Upon the terms and subject to the conditions of
this Agreement, NPS hereby assigns to Nycomed, and Nycomed accepts
from NPS, an undivided fifty percent (50%) interest in the
Co-Owned Patent Rights, solely to the extent and for the purpose of
prosecuting and maintaining such Co-Owned Patent Rights in the EU
during the Term. Upon Nycomed’s request, NPS shall execute an
assignment of such Co-Owned Patent Rights for the purpose of filing
such assignment with the relevant patent offices.
(c) Manufacturing
License. Upon the terms and subject to the conditions of this
Agreement and the Existing Third Party Agreements, NPS hereby
grants to Nycomed a co-exclusive right and license, with the right
to grant sublicenses solely as set forth in Section 3.2, under
the NPS Intellectual Property and NPS’ rights in the Joint
Intellectual Property to the extent necessary or useful to
Manufacture the Compound and Product in the Field in the Territory
for Development and Commercialization by Nycomed in the
Territory.
3.2 Sublicenses. Under
the rights granted in Section 3.1, Nycomed shall (i) be
entitled to sublicense to its Affiliates, and (ii) subject to
the following sentence, be entitled to grant sublicenses to Third
Parties, solely for purposes relating to the Development,
Manufacture or Commercialization of Compound or Product in the
Field in the Territory in accordance with this Agreement. To the
extent Nycomed sublicenses Development and Commercialization rights
to a country of the European Union, such sublicense shall be
subject to NPS consent, which shall not be unreasonably withheld.
Nycomed shall ensure that each of its Affiliates and permitted
sublicensees or subcontractors accepts and complies with all of the
terms and conditions of this Agreement as if such Affiliates or
permitted sublicensees or subcontractors were a party to this
Agreement and Nycomed shall guarantee its Affiliates’ and
permitted sublicensees’ or subcontractors’ performance
under this Agreement.
3.3 Nycomed
Grants.
(a) License to Manufacture
and Develop. Upon the terms and subject to the conditions of
this Agreement, Nycomed hereby grants to NPS a co-exclusive,
non-royalty-bearing right and license, with the right to grant
sublicenses to its Affiliates, under the Nycomed Intellectual
Property, the Co-Owned Patent Rights and Nycomed’s rights in
the Joint Intellectual Property, to Manufacture and Develop the
Compound or Product in the Field.
(b) Grant-Back License to
Commercialize. Upon the terms and subject to the conditions of
this Agreement, Nycomed hereby grants to NPS a co-exclusive,
non-royalty-bearing right and license, with the right to grant
sublicenses, under the Nycomed Intellectual Property, the Co-Owned
Patent Rights and Nycomed’s rights in the Joint Intellectual
Property, to Commercialize Compound or Product in the Field outside
the Territory.
3.4 NPS Retained Rights;
Transfer of Rights. Any rights of NPS not expressly granted to
Nycomed under the provisions of this Agreement shall be retained by
NPS.
3.5 Nycomed Right of First
Negotiation. NPS shall have the right to license its rights in
the Product outside the Territory to a Future Partner. If NPS
decides to license such rights, NPS shall first offer such license
to Nycomed by delivering a written notice to Nycomed of its intent
to license such rights. Nycomed shall have [*] from its receipt of
such notice (the
16
“ Offer Period ”) to
submit a written offer (the “ Nycomed Offer ”)
to NPS for such license rights, setting forth the material terms
and conditions of the proposed license. If Nycomed submits the
Nycomed Offer within the Offer Period, NPS shall have [*] to
evaluate the Nycomed Offer and to provide written notice to Nycomed
of its acceptance or rejection of the Nycomed Offer. NPS shall
consider the Nycomed Offer in good faith. If NPS accepts the
Nycomed Offer, the Parties shall negotiate in good faith to enter
into a definitive license agreement within [*] from the date of
acceptance (the “ Negotiation Period ”). If
(a) the Parties have not entered into a definitive license
agreement upon the expiration of the Negotiation Period,
(b) NPS rejects the Nycomed Offer or (c) Nycomed does not
submit the Nycomed Offer within the Offer Period, then NPS shall
have [*] from the end of the Negotiation Period to consummate an
agreement with a potential Future Partner on terms at least as
favorable to NPS as the Nycomed Offer. Upon consummation of such
agreement with a Future Partner and subject to any confidentiality
obligations relating thereto, if Nycomed requests, NPS shall
disclose the material terms of such agreement to Nycomed (or, in
the case of such confidentiality obligations, to an independent
auditor selected by Nycomed and reasonably acceptable to
NPS).
3.6 Licenses under
Existing Third Party Agreements.
(a) Stand-By Licenses.
At any time during the Term after the Termination Period, Nycomed
may enter into stand-by licenses with any Third Parties to the
Existing Third Party Agreements to ensure the survival or
substitution of licenses or sublicenses granted to Nycomed under
this Agreement. If Nycomed decides to seek to obtain a stand-by
license from any such Third Party to an Existing Third Party
Agreement, Nycomed shall notify NPS of such decision and shall
provide NPS with regular updates regarding such ongoing
negotiations. NPS agrees to provide reasonable assistance to
Nycomed in obtaining such stand-by licenses and any amendments to
the Existing Third Party Agreements required to obtain such
stand-by licenses; provided however, that (i) any stand-by
license shall provide that such license is effective only upon the
termination of the license granted to NPS pursuant to the
applicable Existing Third Party Agreement and (ii) NPS shall
have no obligation to agree to any amendments to an Existing Third
Party Agreement that are substantially less favorable to NPS than
the terms existing on the Effective Date. Nycomed shall be solely
responsible for making any and all payments owed to Third Parties
under such stand-by licenses (other than, for the avoidance of
doubt, the existing licenses to NPS under the Existing Third Party
Agreements, except as otherwise specified in this Agreement). For
clarity, any stand-by licenses obtained pursuant to this
Section 3.6(a) shall not be subject to the terms of
Section 7.5(b).
(b) Step-In Right.
Subject to the provisions of the Existing Third Party Agreements,
if NPS fails to take any action under an Existing Third Party
Agreement that would be reasonably likely to result in an event of
default and subsequent termination of the licenses under such
Existing Third Party Agreement, such as a failure to make payments
when due, then Nycomed may, in its discretion, provide NPS with
written notice of its intent to take such action in the place of
NPS. In any event, NPS shall promptly inform Nycomed of any such
failure to take action and shall request that each Third Party to
an Existing Third Party Agreement send a copy of any notice of
material breach or other similar notice required to be sent under
such Existing Third Party Agreement simultaneously to NPS and
Nycomed upon any such occurrence. If NPS fails to take such action
within ten (10) days (or such shorter period if necessary to
prevent an event of default) after receipt of such notice, then
Nycomed shall have
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the right to take such action
that it believes is reasonably required to prevent such event of
default and termination under such Existing Third Party Agreement.
Any payments made in connection with an Existing Third Party
Agreement by Nycomed on behalf of NPS pursuant to this
Section 3.6 may be offset against any payments owed by Nycomed
to NPS under Sections 7.2 and 7.4(a) hereof. For clarity, the terms
of this Section 3.6(b) shall not in any way limit NPS’
obligations under Section 10.4.
ARTICLE 4
DEVELOPMENT
4.1 Development
Rights. Either Party shall have the right to Develop the
Compound and Product at its discretion, subject to the rights and
obligations set forth in this Article 4.
4.2 Development
Responsibilities.
(a) Ongoing Studies for
the Primary Indication. NPS shall be responsible for
completion, at its sole expense, of the Ongoing Studies. If
required to obtain Regulatory Approval in the Territory, Nycomed
shall be responsible, at its sole expense, for undertaking an
additional Phase III Clinical Study for the Primary Indication;
provided, however, that to the extent Nycomed conducts any such
additional Phase III Clinical Study for the Primary Indication and
such data is also required to obtain regulatory approval or
approval for label expansion of Product in the United States, then
NPS may elect to utilize such data for such purpose and in such
case shall reimburse [*] of Nycomed’s expenses for such
additional Phase III Clinical Study.
(b) Additional
Indications. At any time after the Effective Date, if either
Party desires to Develop an Additional Indication, such Party shall
submit a proposal for such Additional Indication to the Joint
Development Committee for its review and subsequent approval by the
Management Committee. Such proposal shall include, at a minimum,
(A) any data and other information supporting the rationale
for Developing each Additional Indication from a scientific,
regulatory and Commercial standpoint, (B) a reasonably
detailed outline of the major Developmental activities for such
Additional Indication, and (C) an estimate of the timeframe
for and cost of such Development. In the event that the Management
Committee does not approve any NPS suggestion for the Development
of any Additional Indication, NPS or any Future Partner of NPS
shall have the right to Develop, at its sole expense, the Compound
for such Additional Indication for North America. Notwithstanding
the foregoing, if the Joint Development Committee decides to
Develop any Indication for Product for the Territory, NPS or any
Future Partner of NPS shall not be obligated to Develop such
Indication (other than SBS to the extent provided in
Section 4.2(a)) for North America.
(c) Initial Development
Plan; Annual Review. The initial Development Plan for the
Primary Indication in the Territory shall be approved by the Joint
Development Committee by February 15, 2008 and attached to
this Agreement as Schedule 4.2(c) (the “ Initial
Development Plan ”). The Joint Development Committee
shall review any Development Plans no less frequently than annually
and shall develop detailed and specific Development updates for
each Calendar Year until the completion of the Product Development
activities covered by any Development Plans. The Joint Development
Committee shall submit all such updates to the
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Management Committee for
review and approval no later than September 30 of the prior
Calendar Year. The Joint Development Committee may also develop and
submit to the Management Committee from time to time other proposed
modifications to any Development Plans. The Management Committee
shall review such proposed modifications presented by the Joint
Development Committee and may approve such proposed modifications
and/or any other proposed modifications that the Management
Committee may consider from time to time in its discretion and,
upon such approval by the Management Committee, any Development
Plans shall be amended accordingly.
(d) Joint Development
Plans. If the Parties agree to jointly Develop any Indications
on a global basis, the Parties shall consider the specific sales
potential and regulatory requirements on an
Indication-by-Indication and Country-by-Country basis in designing
any studies and in selecting the primary investigators, the key
opinion leader and the trial centers used to Develop such
Indication in such Country; provided that any such Joint
Development Plans may not adversely affect the commercial potential
of Product outside the Territory. Each Party shall be responsible
for fifty percent (50%) of all costs and expenses associated
with such joint Development of any Indication. If Nycomed desires
to change any Joint Development Plan previously agreed by the
Parties and NPS does not agree to such change, then NPS may elect
not to participate in such Joint Development Plan and shall not be
obligated to pay any costs or expenses associated with such Joint
Development Plan; provided, however, that any such changes to a
Joint Development Plan may not adversely affect the commercial
potential of Product outside the Territory. In the event of such an
election not to participate by NPS, NPS may subsequently opt-in to
such Development Plan in accordance with
Section 4.2(g).
(e) Development of
CIGIM. Notwithstanding anything herein to the contrary, if NPS
desires to conduct clinical Development of the Compound for CIGIM
prior to having a meeting with the FDA regarding an Investigational
New Drug (an “ IND ”) application for clinical
studies for CIGIM to the FDA, NPS shall submit a proposed clinical
plan (the “ CIGIM Proposal ”) to Nycomed for its
review. Such CIGIM Proposal shall include, at a minimum,
(A) any data and other information supporting the rationale
for Developing CIGIM from a scientific, regulatory and Commercial
standpoint, (B) a reasonably detailed outline of the major
clinical Developmental activities for CIGIM, and (C) an
estimate of the timeframe for and cost of such clinical
Development. Nycomed shall have [*] from its receipt of the CIGIM
Proposal to evaluate the CIGIM Proposal and shall provide written
notice to NPS of its approval or disapproval of the CIGIM Proposal
within such [*] period. Nycomed shall consider the CIGIM Proposal
in good faith. During such period, NPS shall use commercially
reasonable efforts to respond in a timely manner to Nycomed’s
reasonable requests for further information regarding the CIGIM
Proposal. NPS shall consider Nycomed’s comments to the CIGIM
Proposal in good faith and shall take into consideration the
potential results of any clinical studies conducted for CIGIM on
the approvals of Product for other Indications. If Nycomed does not
give written notice of its approval or disapproval to NPS within
the [*] period, then Nycomed shall be deemed to have approved of
the CIGIM Proposal. Notwithstanding the foregoing, NPS agrees not
to perform any clinical studies in humans prior to having an
effective IND for clinical studies pursuant to 21 CFR 312.40(b).
For the avoidance of doubt, after an IND for clinical studies
becomes effective, Nycomed shall no longer have a right of approval
as set forth in this Section 4.2(e).
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(f) Phase IV Clinical
Studies. Nycomed shall be responsible for conducting any Phase
IV Clinical Studies in the Territory and shall be responsible for
all costs related to such Phase IV Clinical Studies. NPS shall be
responsible for conducting any Phase IV Clinical Studies outside
the Territory and shall be responsible for all costs related to
such Phase IV Clinical Studies.
(g) Buy-In Rights for
Clinical Studies. In the event that a Party (the “
Active Party ”) is conducting or has completed Phase
III Clinical Studies for any Additional Indication without the
sharing of costs from the other Party (the “ Passive
Party ”), the Passive Party shall be offered the rights
to utilize the results from such studies for such Additional
Indication in the Passive Party’s territory by reimbursing
the Active Party an amount equal to [*] of the Active Party’s
costs incurred after the Effective Date for all such studies
conducted by the Active Party after the Effective Date for such
Additional Indication plus interest on such amount equal to an
annual compound rate of [*] of such amount beginning on the date
the Active Party began incurring costs for such studies up to the
date of payment. The Active Party shall submit such offer promptly
after the publishing of data by the Active Party from such Phase
III Clinical Study. The Passive Party shall have no other rights to
such results. For the avoidance of doubt, any reimbursements made
pursuant to this Section 4.2(g) are in addition to any
milestone payments due pursuant to Section 7.2 for events
occurring prior to the exercise of such buy-in which, in the case
of Nycomed exercising such buy-in right, shall be paid together
with such buy-in reimbursement.
(h) Clinical Site
Management. In the case of Joint Development Plans, the
intention of the Parties is that each Party shall manage clinical
trials under such Joint Development Plan that are conducted in its
respective territory.
(i) Investigator-Initiated
Trials. If any clinical trials are initiated by a Third Party
in connection with an Investigator Sponsored Clinical Study
involving a Party, then such Party shall promptly notify the other
Party of such clinical trial and shall provide the other Party with
such information about such clinical trial as the other Party shall
reasonably request.
4.3 Development Efforts;
Manner of Performance; Reports.
(a) Efforts. Each of
NPS and Nycomed shall use Diligent Efforts to execute and to
perform, or cause to be performed, the Development activities
assigned to it herein and to cooperate with the other in carrying
out such Development activities, in each case in good scientific
manner and in compliance with all applicable laws and regulations
and good clinical and laboratory practice.
(b) Progress Reports.
Within thirty (30) days after the end of each Calendar Quarter
in which Development activities are performed, each Party will
provide to the Joint Development Committee a written progress
report, which will describe the Development activities such Party
has performed or caused to be performed during such Calendar
Quarter, evaluate the work performed in relation to the goals of
such Development activities, and provide such other information as
may be reasonably requested by the Joint Development Committee with
respect to such Development activities.
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(c) Termination of
Development. Subject to Section 4.2(a), Nycomed shall have
the sole discretion with respect to Development of Product in the
Territory, including the right to decide whether to develop the
Product in a particular Indication and whether to continue such
Development. If at any time prior to First Commercial Sale Nycomed
ceases all activities in connection with Development or
Commercialization of Compound or Product in the Territory for a
period of at least two (2) years for reasons within
Nycomed’s reasonable control, then NPS may deem a
constructive termination at will pursuant to Section 11.2(a)
to have occurred and all effects of termination in
Section 11.3(a) shall apply. For the purposes of this
Section 4.3(c), acts of government, Regulatory Authorities or
price reimbursement bodies, measures taken for reasons of patient
safety or reasonable expected risk of infringement of Third Party
intellectual property shall not be deemed within Nycomed’s
control.
4.4 Right to Audit.
Each Party shall use Diligent Efforts to ensure that the other
Party’s authorized representatives, and shall ensure that
Regulatory Authorities, in both cases to the extent permitted by
applicable law, may, during regular business hours,
(a) examine and inspect its facilities or, subject to any
Third Party confidentiality restrictions or obligations, the
facilities of any subcontractor or any investigator site used by it
in the performance of Development of Product, and (b) subject
to applicable law and any Third Party confidentiality restrictions
or obligations, inspect and copy all data, documentation and work
products relating to the activities performed by it, the
subcontractor or investigator site, including, without limitation,
the medical records of any patient participating in any clinical
study. This right to inspect and copy all data, documentation, and
work products relating to Product may be exercised at any time
during the Term (subject to each Party’s record retention
policies then in effect), or such longer period as shall be
required by applicable law.
4.5 Regulatory Submissions
and Regulatory Approvals.
(a) Ownership of
Regulatory Submissions.
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