Exhibit 10.2
Confidential Materials omitted and filed
separately with the
Securities and Exchange Commission. Asterisks
denote omissions.
LICENSE AGREEMENT
AGREEMENT made this 3rd day of
February, 2000 (the “Effective Date”) by and between
VION PHARMACEUTICALS, INC., a Delaware corporation with its
principal office located at Four Science Park, New Haven,
Connecticut (“Licensor”), and ACHILLION
PHARMACEUTICALS, INC., a Delaware corporation with its principal
office located at 281 Chestnut Hill Road, Killingworth, Connecticut
(“Licensee”).
WITNESSETH:
WHEREAS, pursuant to the terms of a
certain License Agreement, dated as of August 31, 1994, as
amended, by and between Yale University (“Yale”) and
Licensor (the “Yale License Agreement”), Yale has
licensed to Licensor certain inventions relating to, among other
things, potential anti-viral compounds, including
ß-L-FD4C;
WHEREAS, pursuant to and in
accordance with the terms of the Yale License Agreement, Licensor
may grant sublicenses to Licensor’s rights in the licensed
inventions;
WHEREAS, pursuant to Amendment
No. 4 to the Yale License Agreement, dated as of the date
hereof, Yale and Licensor have agreed to grant Licensee a
sublicense in certain inventions relating to
ß-L-FD4C;
WHEREAS, Licensee wishes to obtain a
license to such inventions and certain related inventions, and
Licensor is willing to grant such a license to Licensee subject to
the terms and conditions hereof;
NOW, THEREFORE, in consideration of
the mutual covenants herein contained the parties agree as
follows:
As used in this Agreement, the
following terms shall be defined as set forth below
1.1 “ Act ” shall
mean the United States Federal Food, Drug & Cosmetic Act
(21 U.S.C. §§301 et seq. ) and the
regulations promulgated thereunder.
1.2 “ Affiliate ”
shall mean any person or entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or
is under common control with, a party. “Control” means
the direct or indirect (a) legal or beneficial ownership of
more than fifty percent (50%) of the outstanding voting rights
of such person or entity or (b) power or ability to direct the
management or policies of such person or entity.
1.3 “ Common Stock
” shall mean Licensee’s common stock, par value $.001
per share.
1.4 “ Compound ”
shall mean a single, defined chemical entity or
structure.
1.5 “ Designee ”
shall mean Yale, Licensor’s designee for the receipt of
Earned Royalties and License Fees.
1.6 “ Earned Royalties
” shall mean Royalties and Sublicense Income.
1.7 “ FDA ” shall
mean the United States Food and Drug Administration or any
successor agency having the administrative authority to regulate
the approval for testing or marketing of human pharmaceutical or
biological therapeutic products in the United States or the
comparable authority in any other country.
1.8 “ IND ” shall
mean an investigation new drug application filed with the FDA prior
to beginning clinical trials in humans or any comparable
application filed with regulatory authorities in or for a country
or group of countries other than the United States.
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1.9 “ Invention ”
shall mean each of the inventions claimed in the Licensed Patents
or included in the Licensed Technology.
1.10 “ License Fee
” shall have the meaning set forth in Section 3.1 of
this Agreement.
1.11 “ Licensed
Information ” shall mean designs, technical information,
trade secrets, information contained in manuscripts or invention
disclosure forms, data, specifications, test results and other
information, whether or not patentable, that are useful for the
development, commercialization, manufacture, use or sale of any
Licensed Products. For purposes of this Section 1.11 and
Section 1.12 below, “control” means the possession
of the ability to grant a license or sublicense thereto as provided
for herein without violating the terms of any agreement with, or
the rights of, any third party, in each case, in existence on the
date hereof.
1.12 “ Licensed Patents
” shall mean the patents and patent applications listed on
Exhibit A and any other United States or foreign patent
applications(s) and patents(s) licensed to Licensor by Yale
pursuant to the Yale License Agreement during the term of this
Agreement pertaining specifically to the compound, ß-L-FD4C,
together with any foreign counterparts, continuations,
continuations-in-part, divisional or substitute patents, any
reissues or reexaminations of any such applications or patents, and
any extension of any such patents including the patents and patent
applications listed on Exhibit B ; and all patents and
patent applications filed on or on behalf of Yale or Licensor or
issued during the term hereof to Yale or Licensor for any
improvements on, or derivations from, the Inventions that pertain
specifically to the compound ß-L-FD4C and are useful for the
development, commercialization, manufacture, use or sale of any
Licensed Products.
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1.13 “ Licensed
Products ” shall mean all products that may derive from
or which result from the manufacture and production or use of a
claim of the Licensed Patents or incorporate Licensed Technology,
wherever sold.
1.14 “ Licensed
Technology ” shall mean Licensed Information and Licensed
Patents.
1.15 “ NDA ”
shall mean a new drug application for a Licensed Product filed with
the FDA to obtain marketing approval in the United States or any
comparable application filed with regulatory authorities in or for
a country or group of countries other than the United
States.
1.16 “ Net Sales
” shall mean gross revenues from the sales, lease or other
disposition of the Licensed Products actually received by Licensee,
its Affiliates, or permitted sublicensees on such disposition to
unaffiliated third parties, less, to the extent actually paid or
allowed: (a) repayments, allowances or credits to such
unaffiliated third parties for returned or defective Licensed
Products; (b) freight, transportation, delivery, taxes and
insurance costs incurred in transporting such Licensed Products to
such unaffiliated third parties; (c) quantity and other trade
discounts fairly attributable to the Licensed Products;
(d) rebates or chargebacks attributable to the Licensed
Products; (e) sales, value-added, use and other direct taxes
(other than income); and (f) customs and tariff duties and
surcharges and other governmental charges incurred in connection
with the exportation or importation of the Licensed
Products.
1.17 “ Phase I
” shall mean a human clinical trial approved by the FDA with
the aim of establishing the pharmacokinetic, pharmacodynamic and
early safety profile of a Licensed Product.
1.18 “ Phase II
” shall mean the first human clinical trial approved by the
FDA where a Licensed Product is tested in a number of either sick
or healthy patients and the data from which
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can be established in the aggregate efficacy of
the Licensed Product for the indication for which regulatory
approval is sought.
1.19 “ Proprietary
Information ” shall mean: all know-how, inventions, and
trade secrets, whether or not patentable, preclinical and clinical
test data, and marketing information that is disclosed by either
party or one of its Affiliates to the other party, either
(i) in writing and marked “Confidential,”
“Proprietary,” or the like, or (ii) orally, and
confirmed in writing within sixty (60) days after such
disclosure, unless such information: (a) is or becomes public
knowledge through no fault of the receiving party; (b) is in
the future legally received by the receiving party from a third
party free of any obligation of confidentiality; (c) is
legally in the possession of the receiving party free of any
obligation of confidentiality and prior to receipt from the
disclosing party, which possession shall be proven by documentary
evidence; or (d) is independently developed by the receiving
party, which independent development shall be proved by documentary
evidence.
1.20 “ Registration
” shall mean the written approval of the FDA or the
comparable authority in any other country required for the
marketing and sale of the first Licensed Product.
1.21 “ Royalty ”
shall have the meaning set forth in Section 3.2(a).
1.22 “ Royalty Year
” shall mean each twelve-month period commencing
January 1 and ending December 31 during the term of this
Agreement. For the first year of this Agreement, the Royalty Year
shall be the period of time between the signing of this Agreement
and December 31.
1.23 “ Sublicense Fees
” shall have the meaning set forth in
Section 3.3(a).
1.24 “ Sublicense
Income ” shall have the meaning set forth in
Section 3.3(a).
1.25 “ Sublicense
Royalties ” shall have the meaning set forth in
Section 3.3(a).
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1.26 “ Successful
Completion of Phase II ” shall mean the conclusion
of an end of Phase II meeting that results in a determination
by the FDA that Licensee may proceed to Phase III clinical
trials of a Licensed Product subject only to the development and
refinement of Phase III protocol.
2.1 License Grant . Licensor
hereby grants to Licensee a non-transferable, worldwide, exclusive
license under the Licensed Technology to make, have made, import,
export, use, sell and have sold Licensed Products and practice the
Inventions.
2.2 Sublicenses . Licensee
shall have the right to sublicense the rights granted hereunder to
third parties subject to Yale’s prior written consent which
shall not be unreasonably withheld or delayed; provided ,
that, (a) prior notice shall be given to Licensor;
(b) Licensee shall remain primarily liable for the performance
of such sublicensees; and (c) each sublicensee shall enter
into a written sublicense agreement having substantially the same
obligations toward Licensor and Yale as those provided herein. All
sublicenses hereunder granted by Licensee shall be coterminable
with this Agreement.
2.3 Yale’s Retained
Rights . Licensee hereby acknowledges that Yale has retained
the right to make, use and practice the Inventions for its own
non-commercial purposes.
2.4 Publication . The parties
recognize that Yale may wish to publish scientific papers or
otherwise disseminate results arising from its research.
Notwithstanding this, should the content of any proposed submission
for publication, or dissemination relate to the Inventions, Yale
shall provide a copy (or in respect of an oral disclosure, a
summary of the intended disclosure) to Licensee at least thirty
(30) days before the proposed submission, publication or
dissemination. Yale shall delay submission, publication, or
dissemination for a period of up to 30 days from the date on which
details of the matter to be disseminated were disclosed
to
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Licensee, at the request of Licensee, in order
to permit Licensee to review the publication or dissemination to
determine (i) whether such publication contains potentially
patentable material pursuant to Section 2.3 herein, or
(ii) whether such publication contains Proprietary Information
of Licensor and/or Licensee; provided , however ,
that any portions of the publication or dissemination that do not
contain such information shall not be subject to any delay in
submission, publication or dissemination. Any request for a delay
shall be within thirty (30) days of receipt of such
information. In any event, the parties shall use reasonable efforts
to keep such delays to a minimum. If the parties fail to agree on
any further delays beyond the initial period, Yale shall be free to
proceed with submission, publication or dissemination.
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3.
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LICENSE FEES
AND ROYALTIES
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3.1 License Fees and
Milestones . As partial consideration for the rights granted
hereunder, Licensee shall make the following payments:
(a) Licensee shall issue to Licensor
50,000 shares of Common Stock on the Effective Date;
(b) a non-refundable initial license
fee of Ten Thousand US dollars ($10,000) on the Effective
Date;
(c) a non-refundable milestone
payment of [**] US dollars ($[**]) upon the first IND filing of
each Licensed Product; provided , however , that this
milestone payment shall be paid by Licensee only for the first
Licensed Product based on a particular Compound and not for any
other Licensed Product based on the same Compound;
(d) a non-refundable milestone
payment of [**] US dollars ($[**]) upon any Successful Completion
of Phase II of each Licensed Product;
(e) a non-refundable milestone
payment of [**]US dollars ($[**]) upon the first NDA filing of each
Licensed Product; and
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(f) a non-refundable milestone
payment of [**] US dollars ($[**]) upon Registration of each
Licensed Product.
The payments listed in Sections 3.1(b) -
(g) above shall be referred to herein as the “License
Fees”. All payments listed in this Section 3.1 (in cash
or stock) shall be separate from and not credited against any
Earned Royalties. The License Fees shall be paid directly to
Designee.
3.2 Royalties on Sales by
Licensee and/or Affiliates .
(a) Licensee shall pay directly to
Designee a royalty for the sale of Licensed Products by Licensee
and/or its Affiliates (including distributors that are Affiliates)
to unaffiliated third parties at a royalty rate of [**] percent
([**]%) of Net Sales (the “Royalty”).
(b) In the event that Licensee must
pay royalties to an unaffiliated third party on a Licensed Product,
Licensee may credit up to [**] percent ([**]%) of the royalties due
to the unaffiliated third party on the Licensed Product against
royalties payable to Designee for the sale of the same Licensed
Product; provided, that, in no event shall the royalties due
Designee from Licensee on any Licensed Product be less than [**]%
of Net Sales.
(c) In the event that Licensee must
pay royalties to Emory University (“Emory”) on a
Licensed Product incorporating ß-L-FD4C technology contained
in United States Patent Number 5,703,058, licensed to Licensee by
Emory, then such royalties shall be credited against the royalties
due Designee by Licensee on the same Licensed Product, provided,
that such credited amount shall not exceed: (i) [**]% of Net
Sales; or (ii) the royalty rate payable to Licensee by Emory
on a Licensed Product incorporating ß-L-DDA technology
contained in United States Patent Application Number [**] licensed
to Emory by Licensee (the “ß-L- DDA Technology”).
In the event royalties are payable by Emory on a Licensed Product
incorporating
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ß-L-DDA Technology, then Licensee shall
cause Emory to pay such royalties directly to Designee.
(d) Licensed Products shall be
deemed to have been sold when payment is received by Licensee;
provided , however , that any payment or other like
benefit received by Licensee, in cash or otherwise, constitutes Net
Sales and is therefore subject to Royalties; and provided ,
further , that no Royalties shall be due on Licensed
Products that are distributed for clinical testing or promotional
purposes. In the event that Licensee shall transfer Licensed
Products to an Affiliate, then the price charged by the Affiliate
to third parties shall be included in Licensee’s gross sales
(instead of the transfer price by the Licensee to such
Affiliate).
3.3 Sublicense Income
.
(a) In the event Licensee
sublicenses rights hereunder to one or more unaffiliated third
parties, Licensee shall pay directly to Designee: (i) [**]
percent ([**]%) of the Gross Amounts Received by Licensee, directly
or indirectly, for or on account of the sublicenses, without
deduction of any kind (the “Sublicense Fees”); and
(ii) a royalty for the sale of Licensed Products by the
permitted sublicensee(s) to unaffiliated third parties equal to
[**] percent ([**]%) of the payments made by the permitted
sublicensee(s) to Licensee but not less than [**]percent ([**]%) of
each sublicensees’ Net Sales (the “Sublicense
Royalties” and collectively with the Sublicense Fees, the
“Sublicense Income”). For purposes of this
Section 3.3(a), “Gross Amounts Received” shall
include all cash and equity payments made in connection with the
sublicense (other than royalty payments which are addressed in
Section 3.3(a)(ii)), including, but not limited to, license
initiation fees and milestones but shall exclude full-time
equivalent scientist support.
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(b) In addition, if [**] enters into
an agreement as a commercial partner for Licensed Product within
[**] of the Effective Date, Sublicense Income will increase by [**]
percent ([**]%) (that is, Licensee will pay Designee [**]5x the
amounts set forth in Section 3.3(a) above).
(c) In the event that Licensee
transfers Licensed Products to a permitted sublicensee, then the
price charged by the sublicensee to third parties shall be included
in the permitted sublicensee’s gross sales for purposes of
Sections 3.3(a) and (b) above (provided that no amount
shall be included in such gross sales more than once).
4.1 Royalty Term . In the
event that any Licensed Patent expires, lapses or if all of its
claims are finally declared invalid by a non-appealable decision of
a court of competent jurisdiction through no fault or cause of
Licensee in any country or countries, this Agreement shall
terminate on a country-by-country basis on the fifteenth (15
th
) anniversary of
the Effective Date of this Agreement with respect to those Licensed
Products covered by said Licensed Patents if the Licensed Product
is not covered by any remaining Licensed Patents or claims
thereunder, but the Licensed Product continues to incorporate
Licensed Technology. This Agreement shall remain in effect as to
any other Licensed Products covered by any remaining Licensed
Patents or claims thereunder.
4.2 Royalty Adjustment on Loss of
Patent Coverage . In the event that a Licensed Patent expires,
lapses or if all of its claims are finally declared invalid by a
non-appealable decision of a court of competent jurisdiction
through no fault or cause of Licensee in any country or countries,
the obligation to pay Earned Royalties on any Licensed Product
covered by that Licensed Patent shall be reduced on a
country-by-country basis by one-half if the Licensed Product is not
covered by any remaining Licensed Patents or claims thereunder, but
the Licensed
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Product continues to incorporate Licensed
Technology. This Agreement shall remain in effect as to any other
Licensed Products covered by any remaining Licensed Patents or
claims thereunder.
4.3 Royalty Reports . Within
[**] after the end of each calendar quarter, Licensee shall furnish
to Licensor a written report (the “Royalty Report”)
setting forth (i) the gross sales of Licensed Products,
(ii) the deductions allowable under Section 1.15 in
calculating Net Sales, (iii) Net Sales, (iv) the Royalty,
and (v) the Sublicense Income, accompanied by full payment of
the Earned Royalty due and payable thereon.
4.4 Payment of License and
Sublicense Fees . All License Fees shall be paid to Designee,
at Licensee’s discretion, either in Common Stock at the Fair
Market Value or in cash in U.S. dollars. Each of the Sublicense
Fees shall be paid to Designee directly out of the sublicense fees
received by Licensee and in the same form as the consideration
received by Licensee. For purposes of this Section 4.3,
“Fair Market Value” means, as of any date, the value of
Common Stock determined as follows: (i) if the Common Stock is
listed on any established stock exchange or a national market
system including without limitation the National Market of the
National Association of Securities Dealers, Inc. Automated
Quotation (“NASDAQ”) System, its Fair Market Value
shall be the average closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or
exchange for twenty (20) consecutive trading days ending
(3) trading days before the date of such computation, as
reported in The Wall Street Journal; (ii) if the Common Stock
is quoted on the Nasdaq System (but not on the National Market
thereof) or regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the
average mean between the high bid and low asked prices for the
Common Stock for twenty (20) consecutive trading days ending
(3) trading days before the date of such determination; or
(iii) in the absence of an established market for
the
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Common Stock, the Fair Market Value thereof
shall be the amount mutually agreed to by the parties in good faith
but in no event higher than the valuation per preferred share set
in the Licensee’s last round of venture financing.
4.5 Currency . All Royalties
and Sublicense Royalties shall be paid by Licensee in cash in U.S.
dollars. All Royalty and Sublicense Royalty payments due hereunder
shall be translated at the rate of exchange at which U.S. dollars
are listed in The Wall Street Journal for the currency of
the country in which the Royalty or Sublicense Royalty is accrued
for the last business day of the calendar quarter in which such
sales were made.
4.6 Taxes . In each case, the
payment of all License Fees shall be made without deductions for
taxes, assessments, fees or charges of any kind. In the event that
Licensee is required to withhold any tax to the tax or revenue
authorities in any country regarding any Royalty or Sublicense
Income due to the laws of such country, such amount shall be
deducted from the Royalty or Sublicense Income to be paid by
Licensee hereunder, and Licensee shall notify Yale and Licensor and
promptly furnish Yale and Licensor with copies of any tax
certificate or other documentation evidencing such withholding.
Each party agrees to cooperate with the other parties in claiming
exemptions from such deductions or withholdings under any agreement
or treaty from time to time in effect.
4.7 Books and Records .
Licensee and its sublicensees shall keep and maintain complete and
accurate records and books of account in sufficient detail and form
so as to enable verification of Earned Royalty payable by Licensee
hereunder. Such records and books of account shall be maintained
for a period of no less than three (3) years following the
Royalty Year to which they pertain. Licensee shall permit such
records and books of account to be examined by an independent
accounting firm who agrees to hold the information
disclosed
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