GM-CSF License Agreement

Exhibit 10.40

***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2

GM-CSF License Agreement

     This GM-CSF License Agreement (the “ Agreement ”) is made and entered into effective as of November 21, 2005 (the “ Effective Date ”), by and between Micromet AG , having its principal offices at Staffelseestrasse 2, 81477 Munich, Germany (“ Micromet ”), and Enzon Pharmaceuticals, Inc. , having its principal offices at 685 Route 202/206, Bridgewater, New Jersey 08807, USA (“ Enzon ”). Micromet and Enzon each may be referred to herein individually as a “ Party ,” or collectively as the “ Parties .”

      Whereas , on the Effective Date the Parties have terminated that certain Collaboration Agreement, dated as of April 9, 2002, as amended on June 28, 2004 (the “Collaboration Agreement” );

      Whereas, the Parties performed certain research activities under the GM-CSF Program, as defined below, pursuant to the Collaboration Agreement;

      Whereas, the Parties desire to reallocate the rights and responsibilities of the Parties with respect to further research and development of the GM-CSF Target (as defined below);

      Now , therefore , in consideration of the foregoing premises and the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

1. Definitions

     When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement. Unless the context indicates otherwise, the singular will include the plural and the plural will include the singular. Any references herein to the Collaboration Agreement, including definitions defined by reference, will be construed as referring to the Collaboration Agreement as it existed immediately prior to its termination on the Effective Date.

      1.1 “ Affiliate ” means a legal entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a Party. For purposes of this definition only, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a legal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) the ownership, directly or indirectly, of more than 50% of the voting securities or other ownership interest of a legal entity; provided that, if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.

      1.2 “ Antibody ” means a molecule or gene encoding such a molecule comprising or containing at least one immunoglobulin variable domain or parts of such domain or any existing or future fragments, variants, modifications or antibody derivatives thereof.

      1.3 “ Antibody Product ” means any composition or formulation consisting of or comprising one or more Antibodies (other than Single Chain Antibodies) that is under development, approved or used for the diagnosis, prophylaxis or treatment of human or non-human diseases or conditions.

      1.4 “ Antigen ” means any structure with binding affinity to antibody variable domains.

      1.5 “ BiTE Product ” means any composition or formulation consisting of or comprising a bi-specific Single Chain Antibody expressed as a single polypeptide chain, binding to T-cells.

      1.6 “ BLA ” means a Biologics License Application, as defined in the U.S. Federal Food, Drug, and Cosmetics Act, as amended, and the regulations promulgated thereunder, or a foreign equivalent to such application.

      1.7 “ Collaboration Agreement ” has the meaning set forth in the recitals of this Agreement.

      1.8 “ Commercialization ” means the marketing, promotion, advertising, selling or distribution of a pharmaceutical product in a country after marketing approval has been obtained in such country for such product. The term “Commercialize” has a correlative meaning.

      1.9 “ Commercialization Partner ” means a Third Party that is a party to a Product License Agreement.

      1.10 “ Controlled ” means, with respect to any Know-How, Patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise, to assign, or grant a license, sublicense or other right to or under, such Know-How, Patent or right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party.

      1.11 “ Curis Cross-License Agreements ” means those certain cross-license agreements dated as of November 23, 1993, between Enzon and Creative BioMolecules, Inc., with respect to which Curis, Inc. was the assignee of Creative BioMolecules, Inc., and with respect to which Micromet was the assignee of Curis, Inc.

      1.12 “ Enzon GM-CSF Know-How ” means any and all Know-How in the Control or possession of Enzon or its Affiliates that was generated under the GM-CSF Program and that relates to the research and development of pharmaceutical products binding to the GM-CSF Target.

      1.13 “ Enzon Collaboration Patents ” has the meaning as defined in the Collaboration Agreement (which definition is hereby incorporated herein by reference).

      1.14 “ Enzon Licensed Patents ” means those Patents now owned by or licensed to Enzon which were the subject of a nonexclusive license to Micromet, as ultimate assignee of Creative BioMolecules, Inc., pursuant to the Curis Cross-License Agreements, including without limitation those Patents identified in Appendix A hereto.

      1.15 “ Enzon Licensed Technology ” means the Enzon Licensed Patents, Enzon Collaboration Patents and the Enzon GM-CSF Know-How.

      1.16 “ Exploit ” or “ Exploitation ” means to make, have made, import, use, sell, offer for sale, or otherwise dispose of a product, including all discovery, research, development, registration, modification, enhancement, improvement, manufacture, storage, formulation, exportation, transportation, distribution, promotion and marketing activities related thereto.

      1.17 “ GM-CSF Program ” means the program of research relating to the GM-CSF Target undertaken pursuant to the Collaboration Agreement.

      1.18 “ GM-CSF Target ” means the whole or part of the human granulocyte macrophage-colony stimulating factor identified by the SWISS-PROT entry name CSF2_HUMAN and accession number P04141.

      1.19 “ Industrial SCA Product ” means any composition or formulation consisting of or comprising one or more Single Chain Antibodies intended for any use other than for research or diagnosis, prophylaxis, or treatment of disease or conditions in humans and other animals.

      1.20 “ Know-How ” means (a) any scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and manufacturing process and development information, results and data, and (b) any biological, chemical, or physical materials.

      1.21 “ Licensed Antibody ” means any Antibody (including Single Chain Antibodies) that binds to the GM-CSF Target and: (i) is identified by or on behalf of Micromet through the use of any Enzon Licensed Technology, or (ii) the composition, manufacture, use or sale of which is embraced by any Enzon Licensed Technology.

      1.22 “ Licensed Product ” means any Antibody Product, SCA Product, Non-Human SCA Product, Research Product, Industrial SCA Product, or BiTE Product that consists of, comprises or contains a Licensed Antibody.

      1.23 “Losses” means all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) in connection with any and all liability suits, investigations, claims or demands.

      1.24 “ Net Sales ” has the meaning assigned to it in Appendix C .

      1.25 “ Non-Human SCA Product ” means any composition or formulation consisting of or comprising one or more Single Chain Antibodies under development, approved or used for the diagnosis, prophylaxis or treatment of non-human diseases or conditions, but excluding any BiTE Products.

      1.26 “ Other Patents ” means any Patents Controlled by Enzon as of the Effective Date as well as any Patents claiming inventions first conceived or reduced to practice by or on behalf of Enzon or its respective Affiliates as of the Effective Date or first filed within [***] thereafter, but excluding any Patent that is (i) a Collaboration Patent, or (ii) an Enzon Licensed Patent. For the avoidance of doubt, “Other Patents” excludes any Patents Controlled at the time of a Change of Control by a Third Party that is a party in the transaction resulting in a Change of Control of Enzon. “Change of Control” means the sale of more than [***]% of Enzon’s voting stock or more than [***]% of Enzon’s assets (on the basis of their book value) to a Third Party or group of Third Parties acting in concert, or a swap, contribution or merger including within the meaning of the Law on the Transformation of Companies ( Umwandlungsgesetz ) in respect of which more than [***]% of Enzon’s voting stock.

      1.27 “ Patents ” means (a) all patents and patent applications in any country or supranational jurisdiction, and (b) any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates and the like, and any provisional applications, of any such patents or patent applications.

      1.28 “ Product License Agreement ” means any agreement between Micromet and a Third Party under which such Third Party is granted the right to Commercialize a Licensed Product.

      1.29 “ Research Product ” means a product consisting of, comprising or containing one or more Single Chain Antibodies used for research purposes and not for the diagnosis, prophylaxis or treatment of human or non-human diseases or conditions.

      1.30 “Royalty Term” has the meaning ascribed to it in Section 3.1.

      1.31 “ SCA Product ” means any composition or formulation consisting of or comprising one or more Single Chain Antibodies that is under development, approved or used for the diagnosis, prophylaxis or treatment of human diseases or conditions, but excluding any BiTE Product.

      1.32 “ Single Chain Antibody ” means a single chain polypeptide having binding affinity for an Antigen and a defined amino acid sequence whereby such polypeptide comprises (i) a first polypeptide segment having a light chain variable region, (ii) a second polypeptide having a heavy chain variable region, and (iii) at least one peptide linker linking the first and second polypeptides into a single chain polypeptide.

      1.33 “ Term ” has the meaning assigned to it in section 7.1.

      1.34 “ Therapeutic SCA Product ” means an SCA Product under development or approved for the treatment or prophylaxis of human diseases or conditions.

      1.35 “ Third Party ” means any party other than Micromet, Enzon or their respective Affiliates.

      1.36 “ Valid Claim ” means (a) any claim of an issued and unexpired patent within the Enzon Licensed Patents which has not been held unenforceable or invalid by a court or other governmental agency of competent jurisdiction in an unappealed or unappealable decision, and which has not been disclaimed or admitted to be invalid or unenforceable through reissue or otherwise, or (b) a pending claim in a pending patent application within the Enzon Licensed Patents. Notwithstanding clause (b) above, in the event that a pending claim in a pending patent application does not issue as a valid and enforceable claim in an issued patent within [***] years after the earliest date from which such patent application claims priority, such a pending claim will not be a Valid Claim, unless and until such pending claim subsequently issues as a valid and enforceable claim in an issued patent, in which case such claim will be reinstated and be deemed to be a Valid Claim as of the date of issuance of such patent.

2. Grant Of License

      2.1 License Grant.

           2.1.1 Enzon hereby grants to Micromet an exclusive, worldwide, royalty-bearing (as set forth in section 3.1) license under the Enzon Licensed Technology to Exploit Licensed Products.

           2.1.2 Enzon hereby grants to Micromet a worldwide, non-exclusive, fully paid-up, royalty-free, perpetual, irrevocable and non-terminable license under the PEG Collaboration Patents (as defined in the Collaboration Agreement, which definition is hereby incorporated in this Agreement by reference), with the right to grant and authorize the grant of sublicenses, to Exploit Licensed Products.

           2.1.3 The licenses set forth in this section 2.1 shall be subject to the field limitations set forth on Appendix B .

           2.1.4 Freedom to Operate. Enzon hereby grants Micromet a worldwide, royalty-free, non-exclusive license under its Other Patents, with the right to grant and authorize the grant of sublicenses, to Exploit Licensed Products.

      2.2 Amending Field Limitations. The field limitations listed in Appendix B set forth the understanding of the Parties as of the Effective Date regarding the scope of such limitations arising from license agreements under which licenses to Patents within the Enzon Licensed Patents were granted to Third Parties prior to the Effective Date. Upon request of a Party, the Parties will amend Appendix B as necessary to include additional or different limitations of which the requesting Party in good faith was unaware as of the Effective Date.

Furthermore, upon expiration or termination of a license agreement that was the basis of a limitation listed in Appendix B , such limitation will be deemed stricken from Appendix B as of the date of such expiration or termination.

      2.3 Technology Transfer. Enzon will provide or make available to Micromet any Enzon GM-CSF Know-How or other materials or data relating to the GM-CSF Program that exist as of the Effective Date and that are necessary or useful for the development of Licensed Products, as reasonably requested by Micromet. Enzon will transfer such materials in accordance with procedures agreed upon by the Parties.

      2.4 Exclusivity. Enzon hereby covenants during the [***]year period commencing on the Effective Date not to commence or perform, itself or with or through an Affiliate or any Third Party, any research program or other activities directed at identifying, developing or commercializing any Antibody (including Single Chain Antibodies) that binds to the GM-CSF Target.

3. Financial Terms

      3.1 Royalty on Net Sales. Micromet will pay to Enzon a royalty equal to [***]% of Net Sales of Licensed Products. The term of such royalty payment obligation (the “ Royalty Term ”) will commence as of the first commercial sale of a Licensed Product by Micromet, its Affiliates or sublicensees in a particular country and will expire, on a country-by-country basis, [***] years after such first commercial sale. Such royalty will be due within [***] ([***]) days following the end of each calendar quarter during which Net Sales occurred or, if later, within [***] ([***]) days after receipt of the royalty payment with respect to such Net Sales from a sublicensee.

      3.2 Payment Terms.

           3.2.1 Reporting. On or before January 30 of each year during the Term until the first receipt of Net Sales, Micromet will provide to Enzon a written annual report on the development activities undertaken by Micromet with respect to Licensed Products. Micromet will inform Enzon in writing upon the first receipt of any amount of Net Sales. After the first receipt of Net Sales, Micromet will provide together with the payment of the royalty (but in no event later than [***] after each calendar quarter during which Net Sales accrued) a written report showing the gross revenues and the calculation of Net Sales. In addition, each such report will include information on revenues and expenses in such detail as may be reasonably required to determine the accuracy of such calculation, including information on costs deducted from revenues in the calculation of Net Sales.

           3.2.2 Payment Method. All amounts due hereunder will be paid in U.S. Dollars by wire transfer in immediately available funds to an account designated by Enzon. Any payments or portions thereof due hereunder which are not paid on the date such payments are due under this Agreement will bear interest at the lower of (i) [***]% over the overnight LIBOR

rate in effect on the due date, and (ii) the maximum rate permitted by law, calculated on the number of days such payment is delinquent, compounded monthly.

           3.2.3 Currency Conversion. For any currency conversion required in connection with any payment hereunder, such conversion will be made at the prevailing commercial rate of exchange for purchasing the currency into which an amount is to be converted as publicly announced by Citibank N.A. (or its successor) in New York on the last business day of the calendar quarter to which such payments relate. The calculation of Net Sales will be made in accordance with Micromet’s standard accounting procedures applied by Micromet in its operations.

           3.2.4 Records Retention. Micromet will maintain complete and accurate books, records and accounts in sufficient detail to confirm the accuracy of any payments required hereunder, which books, records and accounts will be retained by Micromet until [***] years after the end of the period to which such books, records and accounts pertain.

           3.2.5 Audit. Enzon will have the right to have an independent certified public accounting firm of internationally recognized standing, reasonably acceptable to Micromet, to have access during normal business hours, and upon reasonable prior written notice, to such of the records of Micromet as may be reasonably necessary to verify the accuracy of amounts reported and payments required hereunder (“ Payment Information ”) for any calendar quarter ending not more than 36 months prior to the date of such request; provided , however , that Enzon will not have the right to conduct more than [***]. The accounting firm will disclose to both Parties whether such Payment Information is correct or incorrect and the specific details concerning any discrepancies. Enzon will bear all costs of such audit, unless the audit reveals an underpayment of more than [***]% of the amount paid, in which case Micromet will bear the cost of the audit.

           3.2.6 Payment of Additional Amounts. If, based on the results of any audit, additional payments are owed by Micromet under this Agreement, then Micromet will make such additional payments promptly after the accounting firm’s written report is delivered to both Parties. If, based on the results of any audit, payments made pursuant to section 3.1 exceeded payments indicated by the audit as being due thereunder, such excess will be credited against future amounts owed by Micromet under section 3.1.

           3.2.7 Confidentiality. Enzon will treat all information subject to review under this section 3.2 in accordance with the confidentiality provisions of section 6 and will cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with Micromet obligating such firm to maintain all such financial information in confidence pursuant to such confidentiality agreement.

4. Filing, Prosecution and Maintenance of Patent Rights

      4.1 Responsibility. Enzon will be solely responsible and bear all costs for the preparation, filing, prosecution and maintenance of the Enzon Licensed Patents in its sole and absolute discretion.

      4.2 Enforcement. Enzon will be solely responsible and bear all costs for (and enjoy all recovery from) any inter partes actions concerning the Enzon Licensed Patents, including but not limited to reexaminations, oppositions, interferences, and infringement actions, all in its sole and absolute discretion.

      4.3 Notice. Enzon will (i) promptly notify Micromet of any actions that may arise pursuant to section 4.2 and (ii) upon reasonable request by Micromet, provide Micromet a report on the status of its activities described in section 4.1.

5. Representation and Warranties

      5.1 Enzon. Enzon hereby represents and warrants to Micromet that: (i) it has the right to grant the licenses granted by it pursuant to this Agreement; and (ii) the licenses so granted do not conflict with or violate the terms of any agreement, assignment, or encumbrance between Enzon and any person or company.

      5.2 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTIONS 5.1, ENZON AND MICROMET MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND ENZON AND MICROMET EACH SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

6. Confidentiality

      6.1 Definition. “ Confidential Information ” means any scientific and manufacturing information and plans; marketing and business plans; and financial and personnel matters relating to a Party or its present or future products, sales, suppliers, customers, employees, investors or business disclosed by one Party to the other pursuant to this Agreement.

           6.2.1 Notwithstanding the foregoing, information of a Party will not be deemed Confidential Information with respect to a receiving Party for purposes of this Agreement if such information:

                (a)  was already known to the receiving Party or its Affiliates, other than under an obligation of confidentiality or non-use, at the time of disclosure to the receiving Party;

                (b)  was generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to the receiving Party;

                (c)  became generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise became part of the public domain, after its disclosure to the receiving Party through no fault of or breach of its obligations under this section 6 by the receiving Party;

                (d)  was disclosed to the receiving Party other than under an obligation of confidentiality or non-use, by a Third Party who had no obligation to the Party that Controls such information and know-how not to disclose such information or know-how to others; or

                (e)  was independently discovered or developed by the receiving Party or its Affiliates, as evidenced by their written records, without the use of, and by personnel who had no access to, Confidential Information belonging to the Party that Controls such information and know-how.

           6.2.2 Specific aspects or details of Confidential Information will not be deemed to be within the public domain or in the possession of a Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of such Party. Further, any combination of Confidential Information will not be considered in the public domain or in the possession of a Party merely because individual elements of such Confidential Information are in the public domain or in the possession of such Party unless the combination and its principles are in the public domain or in the possession of such Party.

      6.3 Disclosure and Use Restriction. Except as expressly provided herein, the Parties agree that, for the Term and for [***] thereafter, each Party and its Affiliates and sublicensees will keep completely confidential and will not publish or otherwise disclose and will not use for any purpose except for the purposes contemplated by this Agreement any Confidential Information of the other Party, its Affiliates or sublicensees.

      6.4 Authorized Disclosure. Each Party may disclose Confidential Information of the other Party to the extent that such disclosure is:

           6.4.1 made in response to