EXHIBIT 10.53
NOTE : Portions of this document marked
“***” have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment of the omitted and separately filed
portions.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the
“Agreement”) is entered into as of January 26, 2006
(the “Effective Date”) by and between AVI BioPharma,
Inc., an Oregon corporation having its principal place of business
at One SW Columbia, Suite 1105, Portland, Oregon 97258, and Chiron
Corporation, a Delaware corporation having its principal place of
business at 4560 Horton Street, Emeryville, California 94608,
U.S.A. (“Chiron”).
BACKGROUND
WHEREAS, Chiron has developed
certain intellectual property rights with respect to HCV (as
hereinafter defined) which relate to the HCV genome and encoded
proteins;
WHEREAS, Licensee (as hereinafter
defined) is engaged in research and development of antisense
compounds for the treatment of HCV infection and desires to
commercialize such compounds, which activities may fall within the
scope of the Chiron Patent Rights (as hereinafter defined) as well
as under Licensee’s own issued and pending
patents;
WHEREAS, Licensee wishes to obtain a
license under the Chiron Patent Rights for such
purposes;
WHEREAS, Chiron is willing to grant,
and has offered to grant Licensee, a license under the Chiron
Patent Rights for a negotiable fully paid-up, one-time fee;
and
WHEREAS, as an alternative to the
arrangement whereby Licensee would secure a license under the
Chiron Patent Rights for a fully paid up one time fee, Licensee
wishes to enter into an arrangement pursuant to which Licensee
shall provide consideration for the license under Chiron Patent
Rights by paying to Chiron milestone and royalty payments, which
payments represent Chiron’s interest in the value contributed
by the licensure of Chiron Patent Rights to Licensee’s
program(s) for the research, development and commercialization of
Identified Products (as hereinafter defined).
NOW, THEREFORE, in consideration of
the above premises and the mutual covenants contained herein, the
parties hereto agree as follows:
1.
DEFINITIONS
For the purposes of this Agreement,
the following definitions shall apply, and the terms defined herein
in plural shall include the singular and vice-versa:
1.1.
“ Affiliate ” means, with respect to a
party hereto, any corporation, partnership, joint venture or other
business arrangement which is controlled by, controlling or under
common control with such party, and shall include any direct or
indirect beneficial ownership
of more than
fifty percent (50%) of the voting stock or participating profit
interest of such corporation or other business entity.
Without limiting the generality of the foregoing, the Affiliates of
Chiron expressly exclude Novartis A.G, a Swiss corporation, and any
Affiliate thereof not otherwise an Affiliate of Chiron
(collectively, “Novartis”) unless and until such time
as Novartis exercises its rights to control Chiron in accordance
with the terms and conditions of the November 20, 1994 Governance
Agreement between Chiron and Novartis’ predecessor in
interest, Ciba-Geigy Limited.
1.2.
“ Chiron Patent Rights
” means the patents or patent
applications owned by Chiron listed in Exhibit A attached hereto,
together with all patents issuing thereon, including any
divisionals, continuations, continuations-in-part, reissues,
reexaminations and extensions thereof, and foreign
counterparts. Upon request of Licensee, in the event that
Licensee demonstrates that any patent or patent application owned
by Chiron Corporation as of the Effective Date, but not listed in
Exhibit A, is necessary to conduct activities in the Research and
Development Field with respect to Identified Products, provided
that such patent or patent application is licensable by Chiron to
Licensee on the terms and conditions set forth herein, Exhibit A
shall be amended to include such patent or patent
application. For the avoidance of doubt, Chiron Patent Rights
expressly excludes patents that as of the Effective Date are owned
or controlled by any Third Party or Affiliate to which Chiron may
assign its rights and obligations under this agreement in
accordance with Section 10.4 of this Agreement.
1.3.
“ Clinical Trial ” means a Phase I Clinical
Trial, a Phase II Clinical Trial, or a Phase III Clinical Trial, as
the case may be.
1.4.
“
Confidential
Information ” means each
party’s confidential and/or proprietary information,
including but not limited to each party’s know-how, invention
disclosures, technology, libraries, targets, compounds, patents,
proprietary materials and/or technologies, economic information,
business or research strategies, trade secrets and material
embodiments thereof. The terms of this Agreement and the
Stock Purchase Agreement shall be considered the confidential
information of each party.
1.5.
“ FDA ” means the United States Food
and Drug Administration and any successor drug regulatory entity
thereto.
1.6.
“ HCV ” means the Hepatitis C virus,
including any isolates, strains (natural or engineered) or
mutations thereof.
1.7.
“ Identified Products ” means siRNA or Antisense
Compounds, whether developed prior to, on, or after the Effective
Date, that:
1.7.1.
are designed to
inhibit HCV by hybridizing to the HCV genome or its complementary
RNA resulting in direct or indirect inhibition of HCV replication,
transcription, translation or modification of the HCV genome or its
complementary RNA, or reducing stability of HCV nucleic acids or by
similar methods of inhibition of host factors involved in HCV
expression or replication, with respect to which Licensed Processes
were employed at any time during the course of the research,
development of commercialization of such compounds; or
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1.7.2.
act on, whether
by modulation, stimulation, inhibition, or otherwise:
(a)
the HCV genome or its complementary RNA with respect to which
Licensed Processes were employed at any time during the course of
the research, development or commercialization of such compounds;
or
(b)
a molecule of which any portion of the HCV genome or its
complementary RNA is a component part, with respect to which
Licensed Processes were employed at any time during the course of
the research, development or commercialization of such compounds;
or
1.7.3.
act on, whether
by modulation, stimulation, inhibition, or otherwise, HCV and that
are derived from, synthesized using, based on data from, or
reasonably suggested by compounds described in Section 1.7.1 or
1.7.2 irrespective of whether Licensed Processes were utilized at
any time during the course of the research, development or
commercialization of such compounds.
1.8.
“
IND ” means (a) an
Investigational New Drug Application (as defined in the U.S.
Federal Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder) that is required to be filed
with the FDA before beginning clinical testing of an Identified
Product in human subjects, or any successor application or
procedure or (b) any counterpart of an Investigational New Drug
Application that is required in any other country or region in the
Licensed Territory before beginning clinical testing of an
Identified Product in human subjects in such county or
region.
1.9.
“
Licensee ” means AVI Biopharma,
Inc., an Oregon corporation, and any Affiliates
thereof.
1.10.
“ Licensee Facility ” means and is limited to the
facilities of Licensee and its Affiliates located at the locations
specified in Exhibit B. Licensee may add additional locations
to this list with prior written notice to Chiron.
1.11.
“ Licensed Composition ” means any composition, the
making, using, selling, keeping, offering for sale, importing or
exporting thereof would, but for the license granted herein,
infringe any Valid Claim within Chiron Patent Rights, if practiced
in a Reference Country.
1.12.
“ Licensed Method ” means any method or process,
the practice of which would, but for the license granted herein,
infringe a Valid Claim of the Chiron Patent Rights, (including the
manufacture, use, sale, keeping, offer for sale, importation or
exportation of a product which would infringe any such Valid
Claim), if practiced in a Reference Country.
1.13.
“ Licensed Processes ” means any process that
involves the use, practice or manufacture of a Licensed Composition
and/or Licensed Method, including: (a) the design, synthesis,
screening, identification, selection or improvement of compounds
(including mixtures thereof), bioactive “hits” or
research leads during drug discovery research; and (b) the
optimization, formulation, characterization or evaluation of lead
compounds or development candidates during preclinical research or
development.
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1.14.
“ Licensed Territory ” means (a) for purposes of
use of the Licensed Processes, any country in the world where
Licensee has a Licensee Facility and (b) for purposes of
development and commercialization of Identified Products means
worldwide.
1.15.
“ NDA ” means a New Drug Application
or a Biologics License Application, each as defined in the U.S.
Federal Food, Drug, and Cosmetics Act, as amended, and the
regulations promulgated thereunder, and any corresponding foreign
or domestic marketing authorization application, registration or
certification, necessary or reasonably useful to market a
Identified Product in the Licensed Territory, but not including
pricing or reimbursement approvals.
1.16.
“ Net Sales” shall be calculated in
accordance with U.S. generally accepted accounting principles and,
for each calendar year during the Term, means the gross amount
billed or invoiced for sales or other dispositions of all
Identified Products by Licensee or a Third Party Beneficiary
hereunder (other than sales or other dispositions to Affiliates
unless such Affiliate is the end user) less the following
deductions actually paid or incurred (to the extent they are not
already reflected in the amount invoiced and to the extent they are
not otherwise covered or reimbursed) during such calendar year: (a)
discounts, returns, allowances, and wholesaler chargebacks allowed
and taken in amounts customary in the trade; (b) import, export,
excise, sales or use taxes, value added taxes, and other taxes,
tariffs or duties directly imposed and properly allocable to
Identified Product sales, but not taxes assessed on income derived
from Identified Product sales; (c) separately itemized shipping,
freight charges or insurance paid; and (d) amounts allowed or
credited for retroactive price reductions or rebates. Where
Identified Product is sold in the form of a combination product
containing one or more active ingredients in addition to an
Identified Product, Net Sales for such combination product will be
calculated by multiplying actual Net Sales of such Combination
Product by the fraction A/(A+B) where A is the invoice price of the
Identified Product if sold separately, and B is the total invoice
price of any other active component or components, or devices, in
the combination, if sold separately. If, on a
country-by-country basis, the other active component or components
in the combination are not sold separately in said country, Net
Sales for the purpose of determining royalties of the combination
product shall be calculated by multiplying actual Net Sales of such
combination product by the fraction A/C where A is the invoice
price of the Identified Product, if sold separately, and C is the
invoice price of the combination product. If, on a
country-by-country basis, neither the Identified Product nor the
other active component or components of the combination product is
sold separately in said country, Net Sales for the purposes of
determining royalties of the combination product shall be
determined by the parties by mutual agreement. If Licensee
receives any consideration for the sale or other disposal of any
Identified Product or for the use of any Identified Product other
than monetary consideration under bona fide arm’s length
terms, then for the purposes of calculating the royalty payable
under this Agreement, such Identified Products shall be deemed to
be sold exclusively for money at the fair market price generally
achieved for such Identified Products in the country in which such
sale or other disposal or use occurred when such Identified
Products are sold alone and not with other products.
1.17.
“ Phase I Clinical Trial ” shall mean first human
dosing, such as pursuant to a clinical trial, conducted in
accordance with 21 C.F.R. 312.21(a) or other applicable regulatory
requirements outside the United States, designed to establish the
safety, and preliminary evidence of effectiveness, of a
pharmaceutical product for human use.
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1.18.
“ Phase II Clinical Trial ” shall mean first human
dosing pursuant to a clinical trial, conducted in accordance with
21 C.F.R. 312.21(b) or other applicable regulatory requirements
outside the United States, of appropriate size and designed to
evaluate the effectiveness of a pharmaceutical product in patients
with the disease for its intended use and in the dosage range to be
prescribed by identifying the proportion of patients within the
trial who respond to the pharmaceutical product.
1.19.
“ Phase III Clinical Trial ” shall mean first human
dosing pursuant to a clinical trial, conducted in accordance with
21 C.F.R. 312.21(c) or other applicable regulatory requirements
outside the United States, that is conducted after preliminary
evidence suggesting effectiveness has been obtained, that is of
appropriate size and design to establish that a pharmaceutical
product is safe and effective for its intended use, to define
warnings, precautions and adverse reactions that are associated
with the pharmaceutical product in the dosage range to be
prescribed, and to support regulatory approval of such
pharmaceutical product or label expansion of such pharmaceutical
product.
1.20.
“ Reference Countries ” means the United States of
America for any activities that are conducted in the United States
of America, and the United Kingdom for any activities that are
conducted outside the United States of America.
1.21.
“ Research and Development Field ”
means therapeutic
applications for HCV infection, and expressly excludes applications
in: (i) small molecules, including small molecular weight chemical
molecules other than oligonucleotide and nucleic acid-based
molecules , (ii) diagnostics, including nucleic acid testing
and immunodiagnostics, (iii) vaccines and (iv) peptide and protein
based products (collectively, the “Excluded
Applications”).
1.22.
“ siRNA or Antisense Compounds ”
means short,
linear nucleic acid oligomers or polymers, including nucleic acid
analogs, and conjugates of any of the foregoing with agents such as
polypeptides that act to enhance the uptake or therapeutic activity
of the nucleic acids or nucleic acid analogs.
1.23.
“ Term ” shall have the meaning set
forth in Section 8.1.
1.24.
“ Third Party ” means a person or entity
other than a party to this Agreement or its respective
Affiliates.
1.25.
“
Third Party
Beneficiary ” means any Third Party
receiving from Licensee, directly or indirectly, any beneficial
interest in an Identified Product or information enabling the
development of an Identified Product, and includes any sublicenses
or other rights granted in accordance with Section 2.2.
1.26.
“
Valid Claim
” means
any claim of an issued (or granted) and unexpired patent that (a)
has not been held unenforceable, unpatentable or invalid by a
decision of a court or governmental agency of competent
jurisdiction, which decision is unappealable or unappealed within
the time allowed for an appeal and (b) has not been admitted by
Chiron to be invalid or unenforceable generally through reissue or
disclaimer.
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2.
LICENSE
2.1.
Research and Development License Grant; Commercial
License . Subject to all of the terms
and conditions in this Agreement, Chiron hereby grants to Licensee,
a non-transferable, non-exclusive license, with the right to
sublicense solely as set forth in Section 2.2, under the Chiron
Patent Rights, to use Licensed Compositions and Licensed Methods in
the Research and Development Field at a designated Licensee
Facility in the Licensed Territory during the Term and to make,
have made, use, have used, sell, have sold, import, and export
Identified Products during the Term of this Agreement (the
“License”).
2.2.
Sublicenses . Licensee may grant
sublicenses under the licenses granted in Section 2.1 or other
rights to exploit Identified Products only as set forth
below.
2.2.1.
License may grant
sublicenses to Third Parties with which Licensee has a written
agreement under which Licensee and such Third Parties collaborate
on research within the Research and Development Field; provided
that, (i) Licensee has provided Chiron with prior written
notice identifying any such Third Party and the scope of the
collaboration (which notice may be provided prior to execution of
such agreement, provided that negotiations of such agreement have
commenced, or during the term of such agreement); (ii) that the
proposed scope of the sublicense is limited to the research in the
Research and Development Field, does not grant the right for
commercialization of any Identified Products, and, in any event,
does not exceed the scope or duration of the license granted to
Licensee under Section 2.1; (iii) Chiron does not within thirty
(30) days after its receipt of such written notice reasonably
object in writing to the grant of such sublicense; (iv) such Third
Party agrees to be bound by all of the applicable terms and
conditions of this Agreement (including Article 5); and (v) such
sublicense shall terminate upon the expiration or termination of
its written agreement with Licensee with respect to such
collaboration with Licensee. For the purposes of Section
2.2.1(iii), it shall not be unreasonable for Chiron to withhold or
delay consent if Chiron reasonably believes that the proposed Third
Party (a) has or is infringing any Chiron Patent Rights or (b) has
or is challenging the validity of any Chiron Patent
Rights.
2.2.2.
Notwithstanding
the foregoing, Licensee may sublicense, or otherwise grant or
authorize, Third Parties to market, distribute, sell or
otherwise commercialize any Identified Product, provided that (i)
Licensee shall remain obligated to make applicable milestone and
royalty payments under Section 3.1 for such Identified Products and
(ii) such Third Parties shall be subject to all obligations of
Licensee under this Agreement (including payment, reporting and
indemnity provisions); provided that neither Licensee nor any such
Third Party shall be required to make duplicate payments for any
one Identified Product for which payment has been received by
Chiron.
2.3.
Acquired Compounds . Licensee shall provide
Chiron prior written notice (the “Third Party Notice”)
if Licensee seeks to obtain from any Third Party to which Chiron
has not granted a license under Chiron Patent Rights to practice
Licensed Processes in the Research and Development Field (a
“Third Party Licensor”) a license or other right (an
“In-License”) to make, have made, use, have used, sell,
have sold, import, or export any compound owned or controlled by
such Third Party Licensor that (i) is a siRNA or Antisense Compound
that has therapeutic applications for HCV infection, (ii) is not
within the Excluded Applications, and
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(iii) is
reasonably likely to have been identified, discovered or generated
through the practice of Licensed Processes. The Third Party
Notice shall identify (a) each compound (but not structures) sought
from the Third Party Licensor, (b) the targets of action of such
compound to the extent known, (c) the date on which Licensed
Processes are believed to first have been used by such Third Party
Licensor, (d) the stage of development of such compound, (e) the
scope the license to be granted to Licensee (including degree of
exclusivity and territories included), and (f) the identity of such
Third Party Licensor. Chiron may, in its sole discretion,
approve or reject some or all of the In-Licenses set forth in the
Third Party Notice, and shall make such approval or rejection in
writing within thirty (30) days of receipt of the Third Party
Notice. Upon Chiron’s written approval of an In-License, each
compound that is the subject of the In-License (an “Acquired
Compounds”) shall become an Identified Product under this
Agreement for all purposes, including the obligations to make
milestone and royalty payment. Within ten (10) days of reaching a
binding agreement with the Third Party Licensor for such In-License
(“In-License Date”), Licensee shall pay to Chiron for
such Identified Product any milestone payments in accordance with
Section 3.1.1 for milestone events that occurred prior to the
In-License Date, and any royalty payments in accordance with
Section 3.1.2 and 3.1.3 for periods prior to the In-License
Date.
2.4.
No Rights by Implication . Licensee’s
rights under the Chiron Patent rights shall be limited to those
rights specified in Sections 2.1 and 2.2, and Chiron retains all
other rights related thereto.
3.
PAYMENTS
3.1.
Payments . In consideration of
Chiron’s grant of the License to Licensee, Licensee shall, in
addition to the other Licensee obligations referenced herein, make
to Chiron the payments referenced in this Section 3.1.
3.1.1.
Milestone Payments . With respect to each
and every Identified Product developed by Licensee or any Third
Party Beneficiary that reaches the milestone events referenced in
this Section 3.1.1, Licensee shall pay to Chiron the following
milestone payments within thirty (30) days following the occurrence
of each such milestone event:
(a)
Upon filing of an IND or commencement of Phase I Clinical Trials,
whichever occurs first: *** (“First Milestone
Payment”); and
(b)
Upon commencement of Phase II Clinical Trials: ***; and
(c)
Upon commencement of Phase III Clinical Trials: ***;
and
(d)
Upon filing of an NDA: ***; and
(e)
Upon approval of an NDA: ***.
For the avoidance of doubt, each
payment pursuant to clause (a), (b), (c), (d) or (e) above shall be
non-refundable, non-creditable, non-cancelable and payable once
(and only once) with respect to each Identified Product regardless
of the number of countries in which clinical trials are conducted
or the number of NDA registrations filed or
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approved with respect to such
Identified Product. If a milestone event occurs and Licensee
has not made any milestone payments due for previous milestone
events (regardless of whether such milestone events have occurred),
Licensee shall pay to Chiron the amounts due for such previous
milestone events in conjunction with the payments for the current
milestone events. For purposes of this Section 3.1.1,
“commencement” of particular Clinical Trial shall mean
the earlier of (i) the date of first such dosing of Identified
Product in humans as part of such Clinical Trial and (ii) the date
upon which Licensee makes a public announcement that such Clinical
Trial has commenced.
3.1.2.
Royalty Payments . Licensee shall pay
Chiron royalty payments with respect to Net Sales of Identified
Products in accordance with the following royalty payment
schedule:
|
For Aggregate Annual Worldwide
Net
Sales of Identified Products:
|
Royalty
Rate
|
|
Above $0 and up to *** million
|
***%
|
|
Above *** million
|
***%
|
Following the first commercial sale of an
Identified Product, Licensee will make royalty payments to Chiron
on a quarterly basis. Payments will be due within forty-five
(45) days of the end of each calendar quarter.
3.1.3.
No Valid Claim . If during any time
period, an Identified Product is exploited in a country of the
Licensed Territory and is not covered by a Valid Claim under any
Chiron Patent Rights in such country, the Royalty Rate payable by
Licensee during the time period in which there is no such coverage
by a Valid Claim for such Identified Product shall be as
follows:
For Aggregate Annual Worldwide Net
Sales of Identified Products
|
Royalty Rate
|
Above $0 and up
to *** million
|
***%
|
Above ***
million
|
***%
|
3.1.4.
Prior Activity . Any Identified
Products that have been developed prior to the Effective Date by
Licensee or its sublicensees shall be set forth in Exhibit C
hereto, and shall include the latest stage of clinical achievement
for such Identified Products. On the Effective Date, Licensee
shall pay to Chiron any milestone or royalty payments under
Sections 3.1.1, 3.1.2 and 3.1.3 for such Identified Products
related to periods prior to the Effective Date; provided ,
however , that in lieu of receiving the First Milestone
Payment with respect to that certain Identified Product described
on Exhibit C
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as HCV AUG
(AVI-4065) and described therein as having commenced a phase I/II
trial, Chiron has agreed to receive from Licensee certain common
stock of Licensee as set forth in that certain Stock Purchase
Agreement between the parties dated of even date herewith.
Any breach of such agreement by Licensee shall constitute a
material breach of this Agreement.
3.2.
Manner of Payment . All payments
hereunder shall be in United States dollars in immediately
available funds and shall be made by wire transfer to
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