Exhibit 10.5
CONFIDENTIAL TREATMENT REQUESTED
Information marked by [***] has been omitted pursuant to a request
for
confidential treatment. The omitted portion has been separately
filed with
the Securities and Exchange Commission.
EXCLUSIVE LICENSE AGREEMENT
This
Agreement is made and entered into as of the 25th day of
October, 2006 (“Effective Date”), by and between
the University of Pittsburgh – Of the Commonwealth
System of Higher Education, a non-profit corporation organized
and existing under the laws of the Commonwealth of
Pennsylvania, with an office at 200 Gardner Steel Conference
Center, Thackeray and O’Hara Streets, Pittsburgh,
Pennsylvania 15260 (“University”), and Arno
Therapeutics, Inc., with its principal business at 689 Fifth
Avenue, 14th Floor, New York, NY 10022
(“Licensee”).
WHEREAS,
University and The University of Kentucky
(“Kentucky”) are joint-owners by assignment of
certain Patent Rights, entitled “Camptothecin Analogs
and Methods of Preparation Thereof,” developed by Drs.
Dennis Curran and others of University faculty and Dr. Thomas
Burke and others of Kentucky faculty;
WHEREAS,
University and Kentucky have executed an Inter-Institutional
Agreement, dated as of December 15, 2000, which grants
University certain rights with respect to the licensing of
Patent Rights which are jointly owned;
WHEREAS,
both University and Kentucky desire to have the Patent Rights
utilized in the public interest;
WHEREAS,
Licensee has represented to University that Licensee is
experienced in the development, production, manufacture,
marketing and sale of products and/or the use of similar
products to the Licensed Technology and that Licensee shall
commit itself to a thorough, vigorous and diligent program of
exploiting the Patent Rights so that public utilization
results therefrom; and
WHEREAS,
Licensee desires to obtain a license under the Patent Rights
upon the terms and conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE 1 – DEFINITIONS
For
purposes of this Agreement, the following words and phrases
shall have the following meanings:
|
1.1
|
“Affiliate”
shall mean, (a) with respect to the University, any clinical or
research entity that is operated or managed as a facility under the
UPMC Health System, whether or not owned by University, and (b)
with respect to the Licensee, any corporation or non-corporate
business entity which controls, is controlled by, or is under
common control with the Licensee. A corporation or non-corporate
business entity shall be regarded as in control of another the
Licensee if Licensee owns, or directly or indirectly controls, at
least fifty percent (50%) of the voting stock of the other
corporation, or (i) in the absence of the ownership of at least
fifty percent (50%) of the voting stock of a corporation or (ii) in
the case of a non-corporate business entity, or non-profit
corporation, if it possesses the power to direct or cause the
direction of the management and policies of such corporation or
non-corporate business entity, as applicable.
|
|
1.2
|
“Change
of Control” shall mean a merger, consolidation, acquisition
or the transfer of all, or substantially all, of the business
interests of Licensee to which this Agreement relates to which
Licensee is a party where the shareholders of Licensee immediately
prior to effective date of such merger or consolidation
beneficially own, immediately following the effective date of such
merger, consolidation, acquisition or other transaction, securities
representing less than fifty percent (50%) of the combined voting
power of the surviving corporation’s then outstanding voting
securities.
|
|
1.3
|
“FDA”
shall mean the United States Food and Drug Administration or
successor entity.
|
|
1.4
|
“Field”
shall mean all therapeutic uses in humans and animals.
|
|
1.5
|
“First
Commercial Sale” shall mean the first sale of a Licensed
Technology to a third party after approval of an NDA for a Licensed
Technology by the FDA.
|
|
1.6
|
“Licensee”
shall mean Arno Therapeutics, Inc., a Delaware corporation, and all
entities at least fifty percent (50%) owned or controlled by such
company.
|
|
1.7
|
“Licensed
Technology” shall mean any product or part thereof or process
which is:
|
| |
(a)
|
Covered
in whole or in part by an issued, unexpired or pending claim
contained in the Patent Rights in the country in which any such
product or part thereof is made, used or sold or in which any such
process is used or sold; and
|
| |
(b)
|
Manufactured
by using a process or is employed to practice a process which is
covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights in the country in
which any such process that is included in Licensed Technology is
used or in which such product or part thereof is used or
sold.
|
|
1.8
|
“NDA”
shall mean a New Drug Application filed in the United States with
the FDA.
|
|
1.9
|
“Net
Sales” shall mean the
total invoice price for sales of a Licensed Product
by
or on behalf of the Licensee, its Affiliates, and/or their
sublicensees, and gross receipts from leasing, renting, or
otherwise making a Licensed Product available to others for profit
without sale or other dispositions, whether invoiced or not, less
the following:
|
(a)
discounts, returns and allowances actually granted to
customers;
(b)
commissions actually paid to third-party distributors and
other third-party sales agencies;
(c)
sales, tariff duties and/or use taxes directly imposed and
with reference to particular sales (but excluding any income
taxes paid by Licensee);
(d)
outbound transportation prepaid or allowed; and
(e)
transportation insurance separately stated on the
invoice.
|
1.10
|
“Non-Commercial
Education and Research Purposes” shall mean use of Patent
Rights (including distribution of biological materials covered by
the Patent Rights) for academic research or other not-for-profit
scholarly purposes which are undertaken at a nonprofit or
governmental institution that does not use the Patent Rights in the
production or manufacture of products for sale or the performance
of services for a fee or is under any obligation to use the Patent
Rights in connection with or on behalf of a for-profit entity.
University shall include Licensee as an indemnified party in any
Material Transfer Agreement that distributes materials covered by
the Patent Rights.
|
|
1.11
|
“Non-Royalty
Sublicense Income” shall mean execution fees, maintenance
fees, milestone fees and all other non-royalty payments received by
Licensee from its sublicensees pursuant to any sublicense granted
pursuant to Section 2.3 hereunder. Â!
|
|
1.12
|
“Patent
Rights” shall mean University intellectual property described
below and assigned to the University:
|
| |
(b)
|
United
States and foreign patents issued from the applications listed in
Exhibit A and from divisionals and continuations and continuations
in part of these applications; and
|
| |
(c)
|
Claims
of U.S. and foreign continuation in part and divisional
applications, and of the resulting patents, which are directed to
subject matter specifically described in the U.S. and foreign
applications listed in Exhibit A.
|
|
1.13
|
“Territory”
shall mean worldwide.
|
ARTICLE 2 - GRANT
|
2.1
|
Subject
to the terms and conditions of this Agreement, University hereby
grants to Licensee, to the extent it may lawfully do so, the right
and exclusive license in the Territory to make, have made, use,
import, and sell the Licensed Technology in the Field and to
practice under the Patent Rights in the Field to the end of the
term for which the Patent Rights are granted, unless this Agreement
is terminated sooner as provided herein. University reserves the
royalty-free, nonexclusive right to practice under the Patent
Rights and to use the Licensed Technology for Non-Commercial
Education and Research Purposes.
|
|
2.2
|
The
license granted hereby is subject to the rights of the United
States government, if any, as set forth in 35 U.S.C. §200, et
seq. Pursuant to this law, the United States government may have
acquired a nonexclusive, nontransferable, paid up license to
practice or have practiced for or on behalf of the United States
the inventions described in the Patent Rights throughout the world.
Pursuant to 35 U.S.C. §200, et seq. Licensed Technology
produced
for sale in the United States shall be substantially manufactured
in the United States (unless a waiver under 35 U.S.C. §204 is
granted by the appropriate United States government
agencies).
|
|
2.3
|
Licensee
shall have the right to enter into sublicensing arrangements for
the rights, privileges and licenses granted hereunder upon prior
written approval of each sublicensee by University, which approval
shall not be unreasonably withheld. Additionally, sublicensees
shall not have rights to sublicense, without prior written approval
of the University. Licensee will notify the University of such
sublicense agreement within ten (10) days following execution of
such sublicense. Such sublicense agreements shall include a royalty
rate upon sublicense Net Sales in an amount at least equal to the
rate set forth in Section 4.l(c). Provided that a sublicensee
agrees to assume all of the obligations of the Licensee under this
Agreement, such sublicense shall survive the termination of this
Agreement.
|
|
2.4
|
Licensee
agrees that any sublicense granted by it shall provide that the
obligations to University of Articles 2, 7, 8, 9, 10, and 13 of
this Agreement shall be binding upon the sublicensee as if it were
party to this Agreement. Each sublicense granted by Licensee
pursuant to this Agreement shall include an audit right by
University of sublicensee of the same scope as provided in Section
5.2 with respect to Licensee.
|
|
2.5
|
Licensee
agrees to forward to University a copy of any and all sublicense
agreements promptly upon execution thereof, but in no event later
than thirty (30) days after each such sublicense agreement has been
executed by both parties thereto.
|
|
2.6
|
The
license granted hereunder shall not be construed to confer any
rights upon Licensee by implication, estoppel or otherwise as to
any intellectual property not specifically set forth in Exhibit A
hereof.
|
ARTICLE 3 – DUE DILIGENCE
|
3.1
|
Licensee
shall use its best efforts to bring the Licensed Technology to
market as soon as practicable, consistent with sound and reasonable
business practice and judgment, and to continue active, diligent
marketing efforts for the Licensed Technology throughout the term
of this Agreement.
|
|
3.2
|
Licensee
shall recruit a management team of experienced professionals to
lead product development within twelve (12) months of the Effective
Date of this Agreement. Thereafter, Licensee, its Sublicensee, or
their Affiliates, shall demonstrate ongoing engagement of clinical
development for Licensed Products by conducting at least one of the
following activities within each yearly anniversary of the
Effective Date:
|
| |
(a)
|
Expending
at least [***] dollars ($[***]) per year for the for development of
Licensed Products until the approval of an NDA of a Licensed
Product;
|
| |
(b)
|
Manufacturing
or having manufactured Licensed Products for clinical trials under
an approved IND;
|
| |
(c)
|
Enrolling
at least one patient, or being actively engaged in a Phase I
Clinical Trial;
|
| |
(d)
|
Enrolling
at least one patient, or being actively engaged in a Phase II
Clinical Trial or the material preparation for a Phase II Clinical
Trial;
|
| |
(e)
|
Enrolling
at least one patient, or being actively engaged in a Phase III
Clinical Trial or the material preparation for a Phase III Clinical
Trial;
|
| |
(f)
|
Submitting
an NDA filing for a Licensed Product;
|
| |
(g)
|
Following
the submission of an NDA, actively pursuing NDA approval for a
Licensed Product; or
|
| |
(h)
|
Following
NDA approval of a Licensed Product, launching, marketing or selling
a Licensed Product; and
|
| |
(i)
|
Following
first commercial sale of a Licensed Product, actively maintaining
marketing and selling efforts of Licensed Products.
|
|
3.3
|
Licensee’s
failure to perform in Sections 3.1 and 3.2 hereof shall be
considered a material breach of Agreement the License and grounds
for University to terminate this Agreement pursuant to Section
11.1(a) unless such failure is through no fault of the Licensee,
including without limitation: a change in regulatory guidelines,
opinions or standards; the introduction of a new standard of care
during the development of Licensed Products.
|
ARTICLE 4 – LICENSE CONSIDERATION
|
4.1
|
In
consideration of the rights, privileges and license granted by
University hereunder, Licensee shall pay royalties and other
monetary consideration as follows:
|
| |
(a)
|
Initial
license fee, nonrefundable and noncreditable against royalties,
of three hundred fifty thousand dollars ($350,000) due
within fifteen (15) days of the date of University’s invoice
therefor;
|
| |
(b)
|
One
million Five Hundred Thousand dollars ($1,500,000)upon the
acceptance by the FDA of the first New Drug Application
(“NDA”) for a Licensed Technology;
|
| |
(c)
|
Two million
Five Hundred Thousand dollars ($2,500,000) upon the approval by the
FDA of the first NDA for a Licensed Technology;
|
| |
(d)
|
Annual
maintenance fees, non-refundable and non-creditable against
royalties, as follows:
|
| |
(i)
|
[***]
dollars ($[***]) on the first and second anniversary of the
Effective Date of the Agreement;
|
| |
(ii)
|
[***]
dollars ($[***]) on the third and fourth anniversary of the
Effective Date of the Agreement;
|
| |
(iii)
|
[***]
dollars ($[***]) on the fifth and sixth anniversary of the
Effective Date of the Agreement; and
|
| |
(iv)
|
[***]
dollars ($[***]) on the seventh anniversary of the Effective Date
of the Agreement and each anniversary thereafter.
|
| |
(e)
|
Royalties
in an amount equal to [***] percent ([***]%) of Net Sales of the
Licensed Technology per calendar quarter;
|
| |
(f)
|
Following
the year in which Licensee makes its First Commercial Sale, Minimum
royalty in the amount of [***] dollars ($[***]) per calendar year
if such minimum royalty is greater than the aggregate annual
royalty computed in accordance with Section 4.1(c) above;
and
|
| |
(g)
|
A
share of Non-Royalty Sublicense Income as follows:
|
| |
(i)
|
[***]
percent ([***]%) of the Non-Royalty Sublicense Income for
sublicenses executed before the third anniversary of the Effective
Date of this Agreement;
|
|
