COLLABORATION AND LICENSE AGREEMENT

Exhibit 10.1

REDACTED COPY—CONFIDENTIAL TREATMENT REQUESTED
Redacted portions have been marked with brackets containing asterisks ([***]).  The redacted portions are subject to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

COLLABORATION AND LICENSE AGREEMENT

THIS Collaboration and License Agreement (" Agreement ") is made effective as of February 9, 2007 (the " Effective Date ") by and among SELECT Vaccines Limited, ABN 25 062 063 692, a company incorporated under the laws of Victoria, Australia having its principal place of business at Suite 15, 545 St Kilda Road, Melbourne, Victoria 3004, Australia (" SVL "), and Hepgenics Pty Ltd, ABN 44 104 360 714, a wholly owned subsidiary of SELECT VACCINES, a company incorporated under the laws of Victoria, Australia having its principal place of business at Suite 15, 545 St Kilda Road, Melbourne, Victoria 3004, Australia (together with SELECT VACCINES, " SELECT "), and AVANT Immunotherapeutics, Inc., a Delaware corporation having a principal place of business located at 119 Fourth Avenue, Needham, Massachusetts 02494-2725 USA (" AVANT ").  SELECT and AVANT are each hereafter referred to individually as a "Party" and together as "Parties".

A. SELECT and AVANT desire to collaborate in the discovery and development of vaccines against certain disease targets, whereby SELECT will use its virus-like particle technologies to generate and characterize such vaccines and AVANT will use its expertise with respect to vaccines.

B. AVANT wishes to obtain from SELECT a license to the Licensed Subject Matter (hereinafter defined) and resulting discoveries on the terms set forth herein.

C. SELECT and AVANT desire to initiate the performance of the above-described activities by SELECT and AVANT and therefore agree to undertake the foregoing, all under the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and premises contained below, the parties agree as follows:

1 - DEFINITIONS

As used in this Agreement, the following terms have the meanings indicated:

• • 1.1   " Affiliate " means any business controlled by a Party, any business entity that controls a Party, or any business entity that is controlled by a business entity that is controlled by a Party. For the purposes of this Section 1.1, "control" means (i) the direct or indirect ownership of fifty percent (50%) or more of the voting stock or other voting interests or interest in the profits of the Party, or (ii) the ability to otherwise control or direct the decisions of board of directors or equivalent governing body thereof.

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• • 1.2      " Antigen " means at least one protein (including any glyco- or lipo-protein), carbohydrate, compound or other composition, and any fragment, peptide or epitope thereof, or combinations thereof that is capable of eliciting an immune response in humans.

    1.3      " AVANT Collaboration Invention " means a Collaboration Invention created or conceived solely by AVANT Employees.

    1.4      " Business Day " means a day other than a Saturday or Sunday on which banking institutions both in Melbourne, Australia and Boston, Massachusetts are open for business.

    1.5      " Candidate Antigen " means an Antigen that the JRC reasonably believes shows, or is likely to show, scientific and commercial promise for the development of a Vaccine Product.

    1.6      " Collaboration Invention " shall mean any discovery, invention, Know-How, Patent or trade secret, including an Improvement in the Licensed Subject Matter, first conceived or made in the performance of the Research Program.

    1.7      " Collaboration Patent " means a Patent that discloses or claims a Collaboration Invention.

    1.8      " Combination Product " means a Licensed Product that includes at least one additional active ingredient other than a VLP.  Drug delivery vehicles, adjuvants, and excipients shall not be deemed to be "active ingredients", except in the case where such delivery vehicle, adjuvant, or excipient is recognized as an active ingredient in accordance with 21 C.F.R. 210.3(b)(7).

    1.9      " Control " means possession of the ability to grant a license or sublicense as provided for herein without violating the terms of any agreement or other arrangements with any Third Party.

    1.10    " Dollars " or " $ " means U.S. dollars.

    1.11    " Employee " means (i) an employee or agent of a Party or Affiliate, and (ii) with respect to SELECT, an employee of the Burnet Institute as long as a service agreement exists between SELECT and the Burnet Institute that contains standard confidentiality and intellectual property assignment obligations requiring the Burnet Institute to cause that employee to agree to observe and comply with the confidentiality and intellectual property assignment obligations within that agreement.

    1.12    " Excluded Antigen " means an Antigen associated with [***].

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• • 1.13    " FDA " means the United States Food and Drug Administration or its equivalent governmental, regulatory or health authorities in any jurisdiction.

    1.14    " First Commercial Sale " means the first commercial sale of a Licensed Product by AVANT or any of its Sublicensees under this Agreement.

    1.15    " First Licensed Product " means a Licensed Product containing a Target Antigen related to influenza virus, as specified in Appendix B.

    1.16    " FTE " means an Employee scientist working full-time on the Research Program, or, an equivalent amount of work on the Research Program performed by more than one such Employee scientists.  For purposes of this Section 1.15, "full-time" means not less than one thousand eight hundred and forty (1,840) hours per year.

    1.17    " Generic Equivalent " means a Vaccine Product sold by a Third Party without the consent or approval of AVANT and SELECT that addresses the same Target Disease as a particular Licensed Product and (i) the manufacture, use, or sale of such Vaccine Product would be covered or claimed by one or more claims within the SELECT Patents or Collaboration Patents but for the fact that: (a) all such claim(s) are contained within patent applications, filed in good faith, that have not yet issued, but have been pending for less than seven (7) years and have not been withdrawn, cancelled or abandoned, or (b) all such claims are within patents that have expired or been revoked or determined to be invalid or unenforceable; or (ii) is sold in a country in which no SELECT Patents or Collaboration Patents covering the manufacture, use or sale of such Licensed Product have been filed.

    1.18    " Improvement " means all improvements, enhancements, additions and adaptations to the Licensed Subject Matter conceived or created by either Party or any of their respective Affiliates that are sufficiently different to be separately patentable.

    1.19    " IND " means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. § 312.3 or its equivalent in any jurisdiction.

    1.20    " Joint Collaboration Invention " means a Collaboration Invention created or conceived jointly by AVANT and SELECT.

    1.21    " Know-How" means all information and data, technical information, trade secrets, specifications, instructions, processes, formulae, expertise and information relating to Licensed Products including, without limitation: (i) biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing,

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• • preclinical and clinical data, instructions, processes, formulae, expertise and information including Technology Rights that are relevant to the manufacture, use or sale or and /or which may be useful in studying, testing, developing, producing, formulating or using the Licensed Products; and (ii) copies of any IND or NDA or other health registration documents and amendments or supplements thereto filed with the FDA or other governmental, Regulatory Authority or health authority in the Licensed Territory and all correspondence to  and from such agency relevant to the Licensed Products which is known to and/or possessed and /or acquired by a Party or its Affiliates.

    1.22    " Licensed Field " means the development and commercialization of Vaccine Products for human therapeutic and prophylactic use.

    1.23    " Licensed Product " means a Vaccine Product that (i) is covered by or made using Licensed Subject Matter and (ii) contains a Target Antigen related to a Target Disease.

    1.24    " Licensed Subject Matter " means the (i) SELECT Know-How, (ii) SELECT Patents, and (iii) SELECT’s interest in any Joint Collaboration Inventions.

    1.25    " Licensed Territory " means worldwide.

    1.26    " NDA " means a New Drug Application and all supplements filed pursuant to the requirements of the FDA, including all documents, data and other information which are necessary for, or included in, FDA approval to market a Licensed Product as more fully defined in 21 C.F.R. § 314.50 et. seq, or its equivalent in any jurisdiction..

    1.27    " Net Sales " means, with respect to any Licensed Product, the gross revenues received from the sale of Licensed Products by AVANT and its Affiliates for bona fide sales of such Licensed Product to a Third Party (other than Sublicensees and AVANT’s Affiliates but including distributors for resale), less discounts (including cash, quantity and patient program discounts), retroactive price reductions, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers; credits or allowances actually granted upon claims, damaged goods or rejections of such Licensed Product, freight out, postage, shipping and insurance charges for delivery of such Licensed Product; and sales and/or use taxes actually paid, including value-added taxes, or other governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds, to the extent not paid by the Third Party, import and/or export duties actually paid, outbound transportation prepaid or allowed, and amounts allowed or credited due to returns, including such Licensed Product returned in connection with recalls or withdrawals (not to exceed the original

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• • billing or invoice amount).  Net Sales shall not include any payments among AVANT, its Affiliates and Sublicensees.

    1.28    " Patent " means any patent or patent application, whether domestic or foreign, and all divisions, provisional applications, continuations, continuations-in-part, reissues, reexaminations or extensions of any of the foregoing, and any letters patent that issue on any of the foregoing.

    1.29    " Phase II " means that portion of the FDA submission and approval process which provides for the initial trials of a Licensed Product on a limited number of patients for the purposes of determining dose and evaluating safety and immunogenicity in the proposed therapeutic indication as more fully defined as 21 C.F.R. §213.21(b).

    1.30    " Product Royalty Term" means with respect to each Licensed Product in a country, the longer of (i) ten (10) years after the First Commercial Sale of such Licensed Product in the relevant country, or (ii) the life of Patents that claim the manufacture, use or sale of such Licensed Product in the relevant country.

    1.31    " Regulatory Approval " means, with respect to a country, any and all approvals, licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell or market a product in such country, including, where applicable and as required, (i) pricing or reimbursement approval in such country, (ii) pre- and post-approval marketing authorizations (including any prerequisite manufacturing approval or authorization related thereto), (iii) labeling approval, and (iv) technical, medical and scientific licenses.

    1.32    " Regulatory Authority " means any supra-national, federal, national, regional, state, provincial or local governmental regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the development, manufacture or commercialization of biological drug products, including the FDA, EMEA and Koseisho.

    1.33    " Second Licensed Product " means a second Licensed Product (i.e., a Licensed Product that contains a different Target Antigen that is related to a different Target Disease than the Target Antigen and Target Disease relating to the First Licensed Product) chosen by AVANT pursuant to Section 3.5a of this Agreement and to be specified in Appendix B hereto.

    1.34    " SELECT Collaboration Invention " means a Collaboration Invention created or conceived solely by SELECT Employees.

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• • 1.35    " SELECT Know-How " means Know-How that is Controlled by SELECT as of the Effective Date or during the term of this Agreement.

    1.36    " SELECT Patents" means all Patents that are Controlled by SELECT as of the Effective Date or during the term of this Agreement, which claim technology that is reasonably necessary or useful for the testing, developing, producing, formulating, using or exploiting of the Licensed Product in the Licensed Field, including those Patents that claim VLPs, Vaccine Products or the development or commercialization thereof.

    1.37    " Sublicensee" means any Third Party (other than an Affiliate) licensed by AVANT or its Affiliates to make, sell, import, export, advertise, promote and otherwise commercialize any Licensed Product.

    1.38    " Sublicense Fees " means all compensation received by AVANT from a Sublicensee that relate specifically to the grant of a sublicense by AVANT of the rights licensed hereunder by SELECT to AVANT, including (i) up-front cash payments made to AVANT in consideration of the sublicense; (ii) the fair market value of all non-cash consideration received by AVANT from a Sublicensee, including, without limitation, equity in other companies, the value of which is to be calculated as the average closing price for a share of stock from the class of stock involved for 5 consecutive days preceding the execution of the sublicense agreement; (iii) any premium over fair market value paid by a Sublicensee for an equity investment in AVANT; (iv) milestone payments paid by a Sublicensee; and (v) royalty payments on sales of Licensed Products received by AVANT from any Sublicensee.  Sublicensee Fees shall not include any of the following: (a) sponsored research payments; (b) payments for past research expenditures relating to development of Licensed Products; (c) payments made for an equity investment in AVANT by a Sublicensee to the extent that such payments do not exceed the fair market value of such equity; (d) payments made in consideration of the manufacture or supply of Licensed Products by AVANT to the extent that such payments do not exceed the costs of such manufacture and supply; and (e) loans made to AVANT.

    1.39    " Target Antigen " means an Antigen specified in Appendix B.

    1.40    " Target Disease " means a disease specified in Appendix B.

    1.41    " Technology Rights " means a Party’s rights in technical information, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, software, designs, drawings or data created before the Effective Date relating to a Party’s technology that are not covered by Patents but that are necessary for practicing any invention covered by Patents.

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• • 1.42    " Third Licensed Product " means a third Licensed Product (i.e., a Licensed Product that contains a different Target Antigen that is related to a different Target Disease than the Target Antigens and Target Diseases relating to the First Licensed Product and the Second Licensed Product) chosen by AVANT pursuant to Section 3.5b of this Agreement and to be specified in Appendix B hereto.

    1.43    " Third Party " means any entity other than SELECT or AVANT, excepting Affiliates of either.

    1.44    " VLP " means a virus-like particle.

    1.45    " Vaccine Product " means a vaccine (i) containing a VLP, or (ii) made using a VLP.

    1.46    Terms defined elsewhere in this Agreement .   The following terms are defined in the applicable Sections of this Agreement:

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2 - RESEARCH COLLABORATION

• • 2.1      SELECT and AVANT agree to jointly research and develop Candidate Antigens and Licensed Products under a research program (the " Research Program ") in accordance with the initial research plan set forth in Appendix A (the " Research Plan "). Each Party shall use diligent efforts to perform its respective responsibilities under and for the Research Plan, and shall cooperate with and provide reasonable support to the other Party in such other Party’s performance of its responsibilities thereunder.

    2.2      Joint Research Committee .

    • • a.     Promptly after the Effective Date, SELECT and AVANT shall establish a joint research committee (" JRC ") to (i) oversee the Research Program, (ii) establish, plan and coordinate the activities under the Research Plan, and (iii) facilitate the exchange of information regarding the Research Program.  The JRC will set specific research goals of the Research Program, evaluate the results of the Research Program, discuss information relating to the Research Program and will ensure that there is appropriate scientific direction for the Research Program.

        b.     Within thirty (30) days following the Effective Date, the JRC will evaluate the Research Plan and modify it if necessary.  The JRC shall thereafter periodically modify the Research Plan as it deems necessary.

        c.     The JRC shall be comprised of two (2) representatives from each Party.  The chairperson of the JRC shall be designated by AVANT.

        d.     If the JRC fails to reach unanimous agreement on any matter before it for consideration, representatives of AVANT shall have sole authority to decide the matter.

        e.     Meetings of the JRC shall be held at such times as agreed to by the Parties (but no less than once each calendar quarter). Such meetings may be in-person, via videoconference, or via teleconference, provided that at least one meeting per calendar year shall be held in person. The location of in-person JRC meetings will alternate between Needham, Massachusetts, and Melbourne, Australia, or in such other manner or location as the Parties mutually agree.  SELECT and AVANT shall each bear all expenses of their respective JRC representatives related to their participation on the JRC and attendance at JRC meetings. SELECT will

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• • • • provide AVANT with a proposed agenda for each JRC meeting at least five (5) Business Days prior to the scheduled meeting date. AVANT shall record all decisions made, and otherwise take minutes as appropriate.  JRC meeting minutes will be sent to each member of the JRC for review within five (5) Business Days after a meeting; such minutes shall be deemed approved by both of the Parties unless a Party objects to the accuracy of such minutes by providing written notice to the other Party within ten (10) Business Days of receipt of such minutes by such Party’s primary JRC contact.  A Party may, with the prior consent of the other Party (such consent not to be unreasonably withheld or delayed), invite a reasonable number of Employees, consultants or scientific advisors to attend a meeting of the JRC, provided, however, that such attendees shall participate only as observers and advisors and shall not have a decision-making role.  Those invitees must be bound by appropriate confidentiality obligations.

    2.3      Collaboration Term .

    • • a.     The Research Program begins on the Effective Date and shall expire two (2) years after the Effective Date, unless extended as provided below, or unless this Agreement is earlier terminated by either Party pursuant to the provisions of Section 7 (the " Research Term "). In no event, however, will the Research Term extend beyond three years after the date of the First Milestone.  Upon the end of the Research Term, SELECT will not have any obligation to perform any activities with respect to the development or optimization of Candidate Targets or Licensed Products.

        b.     The Research Program and the Research Term may be extended at the option of AVANT for two additional one (1) year periods by providing written notice to SELECT within thirty (30) days of the then-current expiration date of the Research Term and, thereafter, by mutual agreement of the Parties.

    2.4      SELECT Research Efforts.   During the Research Term, SELECT shall support the research and other activities to be undertaken by SELECT under the Research Plan and as part of the Research Program with an annual resource commitment to provide [***] FTEs.  SELECT may not subcontract or outsource any work or any activities under the Research Plan, except that SELECT may fulfill its commitment to provide FTEs to the Research Program by having work performed by Third Party individual contractors or consultants upon AVANT’s prior written approval (each, a " Third Party FTE ").  As a condition to obtaining AVANT’S approval with respect to a Third Party FTE, that individual must: (i) have appropriate experience and qualifications, (ii) be under SELECT’s direct supervision and control, (iii) be obligated to observe the limitations and

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• • restrictions respecting SELECT’s Confidential Information and Know-How with the same degree and care as required under this Agreement, (iv) be obligated to assign to SELECT of all the right, title and interest in and to any intellectual property (and intellectual property rights) created or discovered by such Third Party FTE.  SELECT is responsible for compliance by such Third Party FTEs with the terms and conditions of this Agreement.  In no event, shall SELECT be obligated to incur costs in performing activities under the Research Program in excess of the amounts provided under Section 2.5.

    2.5      Research Program Funding.

    • • a.     AVANT agrees to fund the Research Program at the following rates:

        • • (1)   During the first year of the Research Program, such funding shall be [***], which shall be paid in cash to SELECT in advance in equal installments on a quarterly basis.

            (2)   During the second year of the Research Program, such funding shall be [***], which shall be paid in cash to SELECT in advance in equal installments on a quarterly basis.

            (3)   If AVANT elects to extend the Research Program and Research Term in accordance with Section 2.3b, the amount of funding shall be mutually decided by the Parties, taking into account the current FTE rates and shall be paid in cash to SELECT in advance in equal installments on a quarterly basis.

        b.     In addition to AVANT’s Research Program funding set forth in Section 2.5a, SELECT shall support the research and other activities to be undertaken by the FTEs under the Research Plan and as part of the Research Program with a first-year resource commitment of [***].

    2.6      Limited Use of Research Program Funding.   AVANT’s Research Program funding set forth in Section 2.5a shall be used by SELECT only in connection with the research and other activities to be undertaken by the FTEs under the Research Plan and as part of the Research Program.

    2.7      Records.

    • • a.     SELECT will maintain complete and accurate records which are relevant to (i) work performed by FTEs, and (ii) its expenditure of Research Program funding under this Agreement.  Such records shall be available for inspection during reasonable business hours for a period of two (2) years from creation of individual records for examination at

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• • • • AVANT’s expense and not more often than once each year by AVANT for the sole purpose of verifying SELECT’s compliance with Section 2.6.

        b.     The Parties shall prepare and maintain records of the activities performed hereunder in sufficient detail and generally in a manner sufficient for purposes of establishing intellectual property rights in any inventions conceived of or reduced to practice in connection with the Research Program.

    2.8      Within thirty (30) days after the end of each calendar quarter in which activities are performed under the Research Plan, SELECT shall provide to the JRC a written progress report, which report shall (i) describe the activities SELECT has performed or caused to be performed under the Research Plan during such calendar quarter, (ii) evaluate the work performed in relation to the goals of the Research Plan, and (iii) provide such other information as may be required by the Research Plan or reasonably requested by the JRC with respect to SELECT’s activities under the Research Plan.

3 - LICENSES

• • 3.1   Licenses for Research Program

    • • a.     SELECT grants AVANT a nonexclusive, royalty-free, fully paid-up worldwide license, with no right to grant sublicenses (except as set forth in Section 3.3c, under the Licensed Subject Matter solely to carry out AVANT’s obligations under the Research Plan during the Research Term.

        b.     AVANT grants SELECT a nonexclusive, royalty-free, fully paid-up worldwide license, with no right to grant sublicenses, under the AVANT Collaboration Inventions and AVANT’s interest in the Joint Collaboration Inventions solely for SELECT to carry out its obligations under the Research Plan during the Research Term.

    3.2      Licenses for Collaboration Patents

    • • a.     SELECT grants to AVANT a nonexclusive, fully paid-up worldwide license, with the right to sublicense, under any Collaboration Patents that are owned solely by SELECT.

    3.3      License to AVANT for Licensed Products

    • • a.     SELECT hereby grants to AVANT a royalty-bearing, exclusive (even with respect to SELECT) license under the Licensed Subject Matter to develop, make, have made, use, offer to sell, sell, have sold and import Licensed Products within the Licensed Territory for use within the

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• • • • Licensed Field. This license is subject to (i) the continued effectiveness of this Agreement and (ii) the rights retained by SELECT to perform its obligations under the Research Program.  As of the Effective Date, the First Licensed Product is the only Licensed Product.

        b.     AVANT may extend the license granted in this Agreement to any of its Affiliates if that Affiliate consents to be bound by this Agreement to the same extent as AVANT, and SELECT approves such Affiliate.  Any approval granted by SELECT under this Section 3.3b must be in writing and must be granted before the extension.

        c.     AVANT may grant sublicenses (through multiple tiers) consistent with the scope of the rights and licenses granted to AVANT pursuant to Sections 3.1a or 3.3.  AVANT will be responsible for the operations of its Sublicensees relevant to this Agreement as if carried out by AVANT. AVANT must deliver to SELECT a true and correct copy of each sublicense granted by AVANT, and any modification or termination of the foregoing, within 30 Business Days after executing, modifying or terminating a sublicense. When this Agreement is terminated, all e