LICENSE AGREEMENT

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1.  

DEFINITIONS

As used herein, the following terms shall have the respective meanings set forth below unless the context clearly requires other meanings

1.1.

“Affiliate” or “Affiliates” shall mean any corporation or business entity controlling, controlled by or under common control with a Party to this Agreement. For the purpose of the foregoing, “control” shall mean the direct or indirect ownership of more than fifty percent (50%) of the voting stock in such corporation or other entity, or the de facto decision-making power in such corporation or entity

1.2.

“Annex” or “Annexes” shall mean any document attached to this Agreement with the title of “Annex” which constitutes a part of this Agreement and is legally binding.

1.3.

“Authorization” shall mean an approval or a permit to market the Product, including

pricing and reimbursement approval where required, in any of the countries within the Territory which is granted by the Regulatory Authority.

1.4.

“Combination Product” shall mean a Finished Product sold by CONFORMA, its Affiliates or its Sublicensees that contains a Compound together with at least one other active pharmaceutical ingredient.

1.5.

“Commercially Reasonable Efforts” shall mean efforts consistent with those generally utilized by companies of a similar size for their own internally developed pharmaceutical products of similar market potential, at a similar stage of their product life taking into account the existence of other competitive products in the market place or under development, the proprietary position of the product, the regulatory structure involved, the anticipated profitability of the product and other relevant factors. It is understood that such product potential may change from time to time based upon changing scientific, business and marketing and return on investment considerations.

1.6.

“Compound” shall mean the compound known as Amrubicin (international nonproprietary name) hydrochloride which is generically known as (+)-(7S, 9S)-9-acetyl-9-amino-7-[(2-deoxy- b -D-erythro-pentopyranosyl)             oxy]-7,8,9,
10-tetrahydro-6,11-dihydroxy-5,12-naphthacenedione hydrochloride as more fully described in Annex 1.6 hereto.

1.7.

“Control” or “Controlled by” shall mean, with respect to any item of Information, Patent or Know-how, 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 Information, Patent or Know-how as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

1.8.

“Data Protection” shall mean certain data exclusivity and market exclusivity available to the Product under a pharmaceutical law, regulation or any other governmental decree or order of a certain country within the Territory.

1.9.

“Development” in the Territory shall mean all the activities necessary to obtain the Authorization, including, but not limited to, pre-clinical studies, clinical studies, and preparation of the documents for the submission to the Regulatory Authority.

1.10.

“Effective Date” shall mean the date on which this Agreement is executed.

1.11.

“EMEA” shall mean the European Medicines Agency, or any successor regulatory authority in Europe.

1.12.

“Europe” shall mean the countries comprising the European Union on the date of the first submission for the Authorization of the Product to EMEA or to the Regulatory Authorities of one of the Major European Countries.

1.13.

“Finished Product” shall mean a packaged and labeled Product for commercial sale under Authorization.

1.14.

“Generic Product(s)” shall mean any pharmaceutical products having the same active pharmaceutical ingredient and sold for the same indication and in same dosage form as the Compound.

1.15.

“Generic Product Entry” shall mean, for a given country of the Territory, the first day of the first calendar quarter for which publicly reported quantity of sales in units of Generic Product(s) during such quarter exceed twenty percent (20%) of the aggregate quantity of all units of Generic Product(s) and Product sold in the relevant country during the same calendar quarter.

1.16.

“Improvements” shall mean, whether patentable or not, new compositions and processes pertaining directly to the Compound and/or the Product, or new techniques of using, applying, administering, or manufacturing the Compound and/or the Product which are owned or Controlled by CONFORMA or its Affiliates during the term of this Agreement.

1.17.

“IND” shall mean an investigational new drug application filed with the FDA for authorizations to commence human clinical trials, or its equivalent in other countries within the Territory, as applicable.

1.18.

“Initial Period” shall mean, on a country-by-country basis and on a Product-by-Product basis, the period from the Effective Date through the later of:

1.19.

“Know-how” shall mean, whether patentable or not, all the proprietary information or data related to the research and development of the Compound and/or the Product, or those related to the marketing, using, sale or distribution of the Finished Product which is owned or Controlled by SUMITOMO or its Affiliates as of the Effective Date or during the term of this Agreement, including without limitation all the data, documentation and other information contained in or making up the regulatory filings made by SUMITOMO or its Affiliates for the Product outside the Territory.

1.20.

“Launch” shall mean, on a county-by-country basis, the date of the first commercial sale of the Finished Product by CONFORMA, its Affiliate or its Sublicensee in a given country after Authorization in such country. For the avoidance of doubt, the first commercial sale of the Finished Product shall mean the date on which CONFORMA, its Affiliates, and/or the Sublicensee ship the first Finished Product in such given country to distributors, wholesalers or other end users.

1.21.

“Licensee” shall mean any company or legal entity other than SUMITOMO’s Affiliates which is granted by SUMITOMO a right to import, use, develop, register, market, promote, distribute and/or sell the Compound and/or the Product outside the Territory.

1.22.

“Major European Countries” shall mean any or all of the United Kingdom, Germany, France, Spain and Italy.

1.23.

“Manufacturing Technology” shall mean all methods, processes, technology, information, data, results of tests, studies, and analyses, whether patentable or not which are specifically related to the manufacturing process of the Compound and/or Product, owned or Controlled by SUMITOMO or its Affiliates as of the Effective Date or during the term of this Agreement.

1.24.

“NDA” shall mean a new drug application filed with the FDA for authorization to market a pharmaceutical product or its equivalent in other countries within the Territory, as applicable.

1.25.

“Net Sales” shall be defined as the gross amount invoiced by CONFORMA, its Affiliates, and/or its Sublicensees upon sales of the Finished Product to unaffiliated Third Parties, less the following items pertaining to such Finished Product, consistent with U.S. GAAP:

(b)

commissions, discount, refunds, rebates, charge backs, retroactive price adjustment, and any other allowance paid to Third Parties that effectively reduce net selling price;

(c)

actual Finished Product returns and allowances;

(d)

freight, shipping, packing, and insurance charges;

(e)

use, sales or other taxes, duties or tariffs applicable to the import, export or sale of Finished Products (excluding taxes based on the selling party’s income); and

(f)

any other similar or customary deductions, as consistent with U.S. GAAP.

SUMITOMO, any of its Affiliates or Licensees or (b) CONFORMA, any of its Affiliates or Sublicensees.

1.35.

“Trademark” or “Trademarks” shall mean any or all trademarks or tradenames to be selected by CONFORMA pursuant to Section 7.1. for use on and in connection with the Finished Product in the Territory.

2.  

GRANT OF RIGHTS

2.1.

Exclusive Right

Subject to the terms and conditions of this Agreement, SUMITOMO (on behalf of itself and its Affiliates) hereby grants to CONFORMA and CONFORMA hereby accepts an exclusive right and license (even as to SUMITOMO and its Affiliates), with a right to sublicense as set forth in Section 2.2, under the Patents and the Know-how (a) to import and use the Compound and the Product, (b) to develop, register, import, use, market, promote, distribute and sell the Product or Finished Product, and (c) to use the Trademark, each of (a), (b) and (c) within the Territory. The right and license granted to CONFORMA under this Section 2.1. excludes the right to manufacture the Compound and the Product in Initial Period.

2.2.

Sublicense

CONFORMA may sublicense its rights hereof to its Affiliates and/or a Third Party, provided that in case of sublicense to a Third Party, CONFORMA shall obtain SUMITOMO’s prior written consent which shall not be unreasonably withheld, conditioned or delayed. CONFORMA shall ensure that any such Sublicensee complies with at least the same obligations as CONFORMA assumes under this Agreement and the Supply Agreement, and CONFORMA shall make to SUMITOMO the same milestone payments, bonus payments, payment for the Product, royalties for the Manufacturing Technology and the Trademark license, as those which CONFORMA should pay if it developed or marketed the Product by itself.

2.3.

License Grant Back to SUMITOMO

CONFORMA grants to SUMITOMO a non-exclusive, perpetual, royalty-free license, with a right to sublicense, of the Improvements to develop, register, manufacture, import, use, market, promote, distribute and sell the Compound and/or Product outside the Territory.

During the term of this Agreement, CONFORMA shall advise SUMITOMO as soon as commercially reasonable of any Improvements necessary or useful for the development or commercialization of the Product outside the Territory.

3.

CONSIDERATION

In partial consideration of the rights and licenses granted to CONFORMA hereof, CONFORMA shall pay SUMITOMO according to the schedule set forth in Section 3.1 and 3.2. The remaining consideration shall be paid as a part of the Purchase Price and as a royalty for the Trademark according to the Supply Agreement and Section 7.4. of this Agreement, respectively.

3.1.

Up-front and Milestone Payments

          [Events]            

[Payments]

USD [***] million

USD [***] million

USD [***] million

USD [***] million

3.2.

Bonus Payments

CONFORMA shall pay to SUMITOMO the following one-time bonus payments within ninety (90) days from the end of the first calendar year in which total annual Net Sales in the Territory exceeds:

         [Events]            

[Payments]

USD [***] million

USD [***] million

USD [***] million

In case foregoing two events occur in the same calendar year, CONFORMA shall pay both bonus payments to SUMITOMO at the same time.

3.3.

Sublicensee Payments

In the event that CONFORMA receives any up-front or milestone payments, excluding equity investment or reimbursement of expenses, from its Sublicensee as a consideration of the sublicense of CONFORMA’s rights granted hereof, (a) if received by CONFORMA during the period from the Effective Date through the Launch (the “Development Period”), CONFORMA shall pay to SUMITOMO [***] percent ( [***] %) of any such amounts received during the Development Period within thirty (30) days of receipt; and (b) if received by CONFORMA after the last day of the Development Period, the amount of such payments shall be deemed to be Net Sales.

3.4.

Non-Refundability

Unless otherwise agreed in this Agreement, all the payments set forth in this Section 3 are non-refundable once they have been paid, and are not creditable to other payment obligations of CONFORMA.

4.  

DEVELOPMENT

4.1.

Technology Transfer

a)

abstracts and summaries of the Development data, and at SUMITOMO’s request, copies thereof,

b)

copies of documents submitted to or filed with the Regulatory Authority,

c)

safety and efficacy data,

d)

new indication or new formulation which may be applied to the Product.

Subject to Section 13 of this Agreement, SUMITOMO, its Affiliates and its Licensees shall be free to use the foregoing information provided by CONFORMA for the purposes of developing or marketing the Product outside the Territory, pursuant to Section 2.3.

(iii)

SUMITOMO shall provide CONFORMA, free of charge, with the following information which SUMITOMO, its Affiliates and its Licensees obtain from the development or marketing activities outside the Territory, as soon as commercially reasonable after SUMITOMO acquires such information, or if specifically so designated below, at CONFORMA’s request:

Subject to Section 13 of this Agreement, CONFORMA, its Affiliates and its Sublicensees shall be free to use the foregoing information provided by SUMITOMO for the purposes of developing or marketing the Product in the Territory, pursuant to Sections 2.1 and 2.2.

(iv)

SUMITOMO shall disclose the Manufacturing Technology only to the extent necessary for CONFORMA to obtain Authorization in the Territory. In connection with the foregoing, if SUMITOMO establishes and maintains a Drug Master File (“DMF”) with the Regulatory Authority, SUMITOMO grants CONFORMA, its Affiliates and its Sublicensees a right to reference to the data included in the DMF for incorporation into the NDA and agrees to provide such further written authorizations as may be required to effectuate this right of reference.

4.2.1.

Implementation of Development

4.2.2.

Joint Steering Committee

SUMITOMO shall organize and hold a Joint Steering Committee meeting at least twice in each calendar year but no more than four times a year, unless required by exceptional circumstances. The meetings will be held in the form of face-to-face meeting, teleconference or videoconference. The Joint Steering Committee shall consist of two (2) representatives of each Party. The Parties shall hold the first Joint Steering Committee meeting within sixty (60) days of the Effective Date.

The Joint Steering Committee shall have responsibility to:

CONFORMA shall have the sole responsibility for designing and implementing the Development Plan in the Territory provided that such design and implementation is done using Commercially Reasonable Efforts. CONFORMA shall have the final decision making right with respect to the Development Plan, provided that such decisions are made in a commercially reasonable manner and that CONFORMA presents the draft of the Development Plan to SUMITOMO at least thirty (30) days prior to the Joint Steering Committee meetings, explains the draft to SUMITOMO and refers to SUMITOMO’s comments and opinions in the Joint Steering Committee meetings before finalizing the Development Plan, and provided further that in the event of a material delay in the Development, SUMITOMO has the rights described below.

The Development Plan shall contain an estimated timeline for clinical studies and the filing of NDA or its equivalent documents in the Territory [***] .

The draft for the Development Plan as of the Effective Date is attached hereto as Annex 4.2.3.

CONFORMA shall use Commercially Reasonable Efforts to implement the Development Plan, contingent on SUMITOMO fulfilling its obligations under Sections 4.1(i), 4.1(iii) and 4.3.1 of this Agreement. Any revision of the Development Plan requires the discussions in the Joint Steering Committee meetings as described above.

If CONFORMA foresees or becomes aware of any material delay in the Development Plan that would delay the planned NDA filing date, CONFORMA shall provide SUMITOMO with a description of the nature of the delay and a revised Development Plan within thirty (30) days after becoming aware of such delay and CONFORMA and SUMITOMO shall hold a Joint Steering Committee meeting within thirty (30) days thereafter.

If there is a material delay in the implementation of the Development Plan and CONFORMA is not able to demonstrate to SUMITOMO’s reasonable satisfaction that it used Commercially Reasonable Efforts in carrying out the Development Plan under this Section 4.2.3., SUMITOMO may terminate the rights granted to CONFORMA under thisAgreement pursuant to Section 14.3. However, in case such material delay would occur only in Europe, SUMITOMO may terminate this Agreement only with respect to Europe, and upon such termination, all the member states of the Europe shall be excluded from the Territory.

If the delay is attributable to CONFORMA’s negligence or willful misconduct with respect to Section 4.2.3, SUMITOMO may, at its discretion, terminate this Agreement in its entirety pursuant to Section 14.3., but upon shorter notice period of thirty (30) days.

In addition to the draft of the Development Plan, CONFORMA shall send to SUMITOMO all the draft of the study protocols before finalization and refer to SUMITOMO’s comment.

4.3.

Clinical Supplies for Development

SUMITOMO shall supply CONFORMA, its Affiliates’ and/or Sublicensees’ with their requirements for Product for use in Development. Product supplied by SUMITOMO for Development purposes shall be provided free of charge in quantities not to exceed eight thousand (8000) 50mg vials. If CONFORMA requires supplies of the Product in excess of this amount, SUMITOMO shall supply such excess amounts of Product to CONFORMA at the Minimum Price as defined in Section 6.2.1 or the Supply Agreement.

CONFORMA shall place its first order for clinical supplies no later than thirty (30) days following the Effective Date, to be delivered no later than January 15, 2006. CONFORMA shall place subsequent orders for clinical supplies at least six (6) months prior to the desired delivery date. SUMITOMO will use commercially reasonable efforts to meet CONFORMA’s requested quantities and delivery dates. SUMITOMO shall notify CONFORMA of the specific delivery date and quantity for each subsequent order no later than (2) months following CONFORMA’s order.

Additionally, SUMITOMO shall use commercially reasonable efforts to deliver one hundred (100) 50mg vials of Product no later than September 30, 2005 which CONFORMA will use for the purposes of certifying Third Parties who will conduct release testing, labeling and packaging.

The trade term which applies to the transaction of the Compound and the Product under this Section 4.3 shall be FCA (INCOTERMS 2000) Kansai International Airport, Japan.

All the Product for clinical trials supplied by SUMITOMO shall conform to the Specifications and cGMP of the USA.

CONFORMA shall label and package the Product for Development.

5.

MARKETING AND PROMOTION

5.1.

Commercially Reasonable Efforts to Market

CONFORMA shall use Commercially Reasonable Efforts to commercialize the Finished Product in the Territory as soon as reasonably practicable given applicable business and market conditions and the regulatory environment and contingent on SUMITOMO fulfilling its obligations under Sections 4.1.(i) and 4.1.(iii) of this Agreement and to supply the Product under Section 6 or the Supply Agreement.

5.2.

Commercialization Plan

Within sixty (60) days after completion of the last clinical trial for the NDA for the first country in which an NDA is to be made, CONFORMA shall provide SUMITOMO with a three (3) year commercialization plan (“Commercialization Plan”) which will be updated by the end of third quarter every year. The Commercialization Plan shall include CONFORMA’s launch plans, such as publication planning, opinion development, positioning and pricing strategies, campaign development and annual marketing strategy for the Product as well as annual sales forecast of the Product in value separately for North America and Europe. CONFORMA’s commercialization plans shall set forth that CONFORMA will launch the Finished Product in the USA within three (3) months from the date on which the Authorization is granted in the USA and launch the Finished Product at least in three of five Major European Countries within one (1) year after receipt of Authorization in each such country.

If CONFORMA foresees or becomes aware of any material delay in the commercialization plan that would delay the actual Launch date of the Finished Product more than ninety (90) days, CONFORMA will provide SUMITOMO with a description of the nature of the delay and a revised Annual Commercialization Plan for the impacted countries within sixty (60) days after becoming aware of such delay.

If CONFORMA is not able to demonstrate to SUMITOMO’s reasonable satisfaction that there are reasonable commercial reasons for the material delay of the Launch date such as reasons related to pricing and reimbursement, SUMITOMO may terminate the rights granted to CONFORMA under this Agreement pursuant to Section 14.3. However, in case such material delay would occur only in Europe, SUMITOMO may terminate this Agreement only with respect to Europe, and upon such termination, all the member states of the Europe shall be excluded from the Territory

If the delay is attributable to CONFORMA’s negligence or willful misconduct with respect to this Section 5.2., SUMITOMO may, at its discretion, terminate this Agreement in its entirety pursuant to Section 14.3., but upon shorter notice period of thirty (30) days.

5.6.

Competing Product

During the Initial Period, CONFORMA shall not market, promote or sell any pharmaceutical product which contains an anthracycline anti-cancer agent as an active ingredient which is directly competitive in the market (“Competing Product”) in any country within the Territory.

Notwithstanding the above, in case CONFORMA acquires any Competing Product marketed, promoted and/or sold in any country within the Territory as a result of merger, acquisition or transfer of business, then CONFORMA shall divest or license out the right to such Competing Product to a Third Party within one hundred and eighty (180) days of the acquisition of such Competing Product.

The failure to comply with the provision in this Section 5.6. will give SUMITOMO:

In the event that SUMITOMO elects to exercise the right of the foregoing clause (ii), CONFORMA will provide reasonable support to SUMITOMO or its designee in their efforts to obtain additional Authorizations in such country. CONFORMA is not entitled to receive any compensation in relation to such support.

6.  

SUPPLY OF PRODUCT

6.1.

Supply of Product

Within six (6) months of the Effective Date the Parties shall enter into a separate document (“Supply Agreement”) which, unless otherwise agreed by both Parties, restates the terms and conditions set forth in this Section 6. and is supplemented by such other terms and conditions as are customary in the supply of pharmaceutical products. In the event the Parties fail to agree on the terms and conditions of the Supply Agreement within such six (6) month period, the provisions of Section 6. shall control.

SUMITOMO will supply CONFORMA with the Product to be sold by CONFORMA, its Affiliates and Sublicensees. CONFORMA shall purchase from SUMITOMO all the Product to be sold by CONFORMA, its Affiliates and Sublicensees in the countries during the Initial Period.

In the event that CONFORMA desires to purchase the Product from Third Parties or to manufacture the Product itself for use by CONFORMA, its Affiliates or Sublicensees in countries where the Initial Period has expired, CONFORMA shall provide SUMITOMO with two (2) years’ prior notice thereof.

All of the Product supplied by SUMITOMO shall conform to the Specifications and cGMP of the USA. With respect to the GMP of other relevant countries, CONFORMA shall inform SUMITOMO of the specific requirements thereof in writing in a timely manner if such requirements are different from cGMP of the USA. SUMITOMO shall use its Commercially Reasonable Efforts to satisfy such special requirements.

All the Product shall be delivered to CONFORMA FCA (Incoterms 2000) at Kansai International Airport, Japan.

6.2.

Payment

The price for the Product shall be calculated semiannually based on Net Sales of the Product for each of the first six months and second six months of each calendar year (the “Semiannual Periods”) with respect to the Product to be sold in the countries during the Initial Period in the following manner:

The price at which the Product should be sold by SUMITOMO to CONFORMA, its Affiliates or Sublicensees (the “Purchase Price”) shall be the higher of the following:

(i) The amount resulting from the application of the following formula (the “Calculated Price”):